Though Nicaragua still suffers today from the physical and economic destruction of the 20th century, it appears to have secured a modest level of domestic tranquility. Chamorro’s presidency saw an effective restoration of peace in the early 1990s after she reintegrated former fighters into society with unconditional amnesties and an extensive campaign to buy back and destroy weapons used in the war. The end of the fighting also brought relative economic stability. Unfortunately, this stability did not lead to prosperity. In 1998, Hurricane Mitch dealt the country another devastating blow by wreaking a billion dollars of damage, killing 3000, and displacing 870,000 Nicaraguans from their homes. Though President Arnoldo Aléman managed to lead the country through the storm, he was convicted after leaving office of embezzling US$100 million with the help of his family and was sentenced to 20 years in prison in 2003.
In 2006, Daniel Ortega was re-elected President at the head of the still-powerful Sandinista party. Though Ortega had run as the Sandinista candidate in every presidential election since 1990, this marked the first time he and his party had captured the nation’s highest office since the end of the civil war. Despite gaining only 38% of the vote, Ortega held a ten-point lead over his closest opponent, a margin that enabled him to narrowly avoid a runoff, one of the electoral reforms introduced in 2000.
As his commitment to the capitalist economic status quo demonstrates, the socialist Ortega has moved towards the political center since the 1980s. Such policies have not, however, removed this president from the scrutiny of the United States: his friendly overtures to Iran and socialist Venezuela have invited deep suspicion in Washington. Ortega has endeavored to craft a more prominent international persona for Nicaragua in other ways as well. In June 2008, he led a failed diplomatic bid for Nicaragua to assume the presidency of the United Nations General Assembly.
Ortega’s international ambitions have done little to quell domestic tensions. Only a few months after the failed UN maneuver, riots erupted in the streets after opposition parties claimed that the Sandinistas had rigged hundreds of mayoral elections across the country. The governing party incited further controversy in January of 2009 when the Nicaraguan Supreme Court overturned former President Aléman’s corruption conviction. Opponents claimed the ruling had been rigged in a political deal which let Aléman off in exchange for congressional support from his Liberal Party.
Despite a massive influx of international aid in the 21st century, Nicaragua’s economy is still on the rocks. Unemployment afflicts more than half of the country’s population. The per capita income of the country is one of the lowest in the Western Hemisphere, with Haiti’s falling just above. The Heavily Indebted Poor Countries Initiative provided around US$4.5 billion in debt relief for Nicaragua in 2004, followed by more help from a Poverty Reduction and Growth Facility program headed by the International Monetary Fund in 2007. Agriculture remains important, employing a third of the country’s working population even after the damage reaped by human and natural disasters from 1980 to 2000. Coffee exports and tourism constitute the nation’s top two industries. The textile and clothing industry—together comprising almost 60% of Nicaragua’s exports—round out the list of Nicaragua’s most profitable economic endeavors.
The political scene in Nicaragua is currently dominated by the socialist Sandinistas , who hold the presidency and a plurality of seats in the legislative National Assembly. Their main rivals are the two liberal parties, the Constitutionalist Liberal Party (PLC) and the Nicaraguan Liberal Alliance (ALN). The latter split from the PLC in 2005 over controversy concerning Aléman’s continued power despite his corruption conviction and the political alliance (named “El Pacto”) with Ortega. Recent proposals to transform the Nicaraguan government into a parliamentary government with a separate president and prime minister may enable both men to run Nicaragua simultaneously.
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