Following the peace agreement which ended the Nicaraguan Civil war in the late 1980s, Nicaragua, with pressure from internal and external actors, opened up to the international community by adjusting to new policies of Neoliberal free-market economics, promoting tourism as its leading development industry. These policies were aimed at addressing wealth inequality and poverty, two of Nicaragua's largest development problems, through economic gain. Despite initial economic and social progress, these policies have not adequately addressed the problems Nicaragua is currently facing. Although indicators of progress do exist, restructuring current policies, along with creating additional policies, is necessary for successful development.
Introduction: A Country under Change
Recently I spent a number of weeks with a family in San Juan del Sur, a small coastal village in Southwestern Nicaragua (see figure one) which has recently come under a barrage of tourists and international investment, due to the 1990 change in economic policy which opened up Nicaragua to the international community. Since the Civil War ended in the late 1980s Nicaragua has adjusted to the new terms of a neoliberal economy by turning to tourism development as a leading industry (Babb). I couldn't help but notice as I traveled throughout the country that the effects this change in government policy had are now profoundly evident; rented SUVs crowd pothole-dented roads alongside horse-drawn carts; pristine tourist accommodations tower over nearby shanties, and international tourists, unbelievably rich through the eyes of locals, invest in land and purchase local commodities at a growing rate. As I witnessed generation, technology, and wealth gaps collide, interact and communicate, one thing was clear; Nicaragua is changing at a profound pace.
“War, natural disaster, and foreign interference have shaped Nicaragua's history” (Nielsen). In 1522 Spaniards arrived on the Eastern coast of Nicaragua to find a relatively prosperous, subsistence-based society which they quickly colonized. Since Nicaragua's independence in 1838, the country has been under the influence of another world power, the United States which currently provides $471 million in economic aid per year to the country (The World Factbook). An enormous earthquake in 1972, which leveled an estimated 75% of the capital Managua, left the country in shambles. A Marxist-Leninists organization dubbed the Frente Sandinista de Libeeracion Nacional (FSLN), or better known as the “Sandinistas,” gained support in the late 1970s due to the general dissatisfaction with the current economic policies and social situation. In fear of a Soviet presence in the Americas, the Reagan Administration armed counter-revolutionaries, the “Contras,” and placed economic embargoes on the Sandinistas resulting in an incredible inflation rise of 13,500%. A cease fire in 1988 sponsored by Costa Rica returned relative peace to the region (Nielson).
Since the Sandinistas lost the democratic elections in 1990 there has been a program of neoliberal free-market development (Babb), emphasizing opening up tourism and international investment (IMF Country Report) so that Nicaragua can address its development needs, the primary of which are extreme wealth inequality and poverty. In a country where “the wealthiest 10% of the population receive 45% of the total income of the country, while the poorest 40% receive only 10%” (Rios-Morales) poverty alienation and equality increases are a priority. Can tourism, which many view as the “potential goldmine for Nicaragua” (Weaver, et al), along with economic gain promoted via the free market, benefit local populations, increase social well-being, promote equality, and function as the driving force behind development? Or should the Nicaraguan government and other international actors diversify and rely less on tourism for development? Are tourism, international investment, and a neo-liberal economy the best answer to Nicaragua's development needs?
Methods: Inquiry, Research and Assessment
In visiting Nicaragua, where I spent significant time in the San Juan del Sur region, as well as taking trips North to Rivas, Managua and Jinotega, the extreme differences in wealth struck me profoundly. I was amazed at how prosperous some areas were in San Juan del Sur; for example the Pelican Eyes resort overlooking the bay has a nicely paved entrance, armed guards, multiple fine restaurants, pools and flat screen televisions, compared to how poor others were where large families housed throngs of shoeless children in dirt huts. The Nicaraguans, or “Nicas” as they are commonly called, were friendly and welcoming; I used this opportunity to ask children in various areas about school, what activities they do for fun, and what life was like for them. All the children I asked attended school, and the people I talked to seemed content with their lives, but despite this fact I couldn't help but noticed some Nicas seemed healthier and happier than others.
Those with whom I spent the most time, locals integrated into Christopher Robertson's community development project “Finca las Nubes” (FLN), which means “Farm in the Clouds,” seemed more prosperous than many others I met. Tourism in Nicaragua has risen 300% since 1994, making it Nicaragua's top source of income (Nielsen). Since tourism has been identified by the Insituto Nicaraguense de Turismo (INTUR), the government's tourism office, as the main component of Nicaraguan economic development (Babb), I couldn't help but wonder, after experiencing first hand the effects of the free-market, driven by tourism, what economic development and international tourism would bring to those in need throughout Nicaragua, especially in San Juan del Sur, one of “Nicaragua's most popular beach towns” (Rogers).
