Deep poverty persists despite signs of economic improvement in Nicaragua.
| Autor | Witte-Lebhar, Benjamin |
While hundreds of thousands of people descended on the Nicaraguan capital, Managua, last month for a pro-government rally commemorating the overthrow, on July 19, 1979, of the Somoza family dictatorship (1936-1979), a much smaller gathering--but also focused entirely on Nicaragua--took place 2,100 miles away in New York City, in the offices of the credit rating agency Moody's Investors Service.
In Managua, onlookers cheered and waved the red-and-black flags of the Frente Sandinista de Liberacion Nacional (FSLN) as the powerful president and party leader, Daniel Ortega, delivered his annual Liberation Day speech. "We've made progress in the fight against poverty, but there's still a long way to go. And to reach our goal, we need to maintain cohesion, national unity," the 71-year-old Ortega said in what proved to be his shortest July 19 oration--just 15 minutes--since returning to power in 2007.
Ortega, one of the heroes of the Sandinista revolution, first led the country as head of the 1979-1985 junta government. He then served as president for five years before losing unexpectedly to Violeta Chamorro (1990-1997), in the 1990 elections.
Like the colorful commemoration event in the capital, the meeting at Moody's, it turned out, also gave Ortega an opportunity to shine, as agency analysts decided that day to upgrade Nicaragua's B2 rating from "stable" to "positive." Moody's based its "positive outlook," it explained in a July 20 press release, on "continued fiscal stability and favorable economic prospects relative to peers" and on the "expectation that authorities' macroeconomic policies will mitigate the impact of potential future external shocks."
Two years earlier, the same agency upped its rating for Nicaragua from B3 to B2 in a signal to investors that while risks remain, economic conditions in the historically impoverished Central American nation are improving. In both cases, Moody's praised Nicaragua's relatively strong economic growth numbers and responsible fiscal management approach. The Ortega government, the agency suggested in last month's press release, has implemented a "policy framework geared towards maintaining macro-economic stability."
The Nicaraguan economy grew by 4.7% last year, 4.9% in 2015, and 4.8% in 2014, according to the World Bank. In Central America, only Panama, at 6%, saw faster growth of Gross Domestic Product (GDP) during that span. And in Latin America and the Caribbean as a whole, the economies, on...
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