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Positive signs in Nicaragua

Wednesday, January 20, 2016


 

Nicaragua may be the poorest country in Latin America.

But the economy grew by an estimated 4.5% last year, only slightly below the 2014 figure of 4.7%, while foreign direct investment was a robust $1.5 billion, mainly in textile and light manufacturing.

In the region, Nicaragua mainly competes for this type of investment with Honduras, where labor costs are often higher.

In addition, Nicaragua has considerably better security, with Central America’s second lowest homicide rate, after Costa Rica.

Tourism has in recent years shown solid growth, in a country which has tropical attractions similar to those in regional leaders Costa Rica and Panama.

While service standards still need improvement, Nicaragua effectively competes on price.

The number of visitors this year is expected to reach to 1.5 million.

Plans for an interocean supercanal, intended to rival the expanded Panama Canal, for now seem to be on hold, as the project’s Chinese backers are busy dealing with turbulence in their domestic economy.

On the other hand, geopolitical issues behind a Nicaraguan canal – mainly a conflict between China and U.S.-backed neighbors with a stake in natural resources in the South China Sea – could result in a revival of the project.