Emily Polson
Dr. Baugus
ECON 360
4 September 2021
Milestone 1: Introduction to Nicaragua
For my project in ECON 360, I will devise a plan to "fix" Nicaragua. Of course, the work I do on this project will not actually overcome the developmental roadblocks the country faces, but I wish it could. Today, Nicaragua is the poorest country in Central America. Many Nicaraguans lack access to basic services like water and electricity (World Bank, 2017). Furthermore, the nation also lags behind the regional average on key social factors, including education access, graduation rates, and teenage pregnancy (World Bank, 2017). Until the start of the recession in 2018, Nicaragua averaged 4.6% growth per year. The World Bank (2021) attributed this growth to “sound macroeconomic management and a series of reforms aimed at transforming the country into a market economy” (Nicaragua Overview, para. 1). However, social and political unrest in the country caused economic contraction from 2018-2020. Growth forecasts for 2021 indicate that the nation will resume expansion this year, growing by 0.9% (World Bank, Nicaragua Overview, 2021). The raw data I collected this week about Nicaragua gave me an outline for understanding the country's developmental situation; however, additional research about the country's political and economic institutions added color to my understanding of Nicaragua's condition.
Government.
Freedom House surveyed Nicaragua, observed a startling lack of political rights and civil liberties among the citizenry, and deemed the country “not free.” The Index reports that democracy has deteriorated since President Daniel Ortega came to power in 2006 (Freedom House, 2021). In the past 15 years, Ortega has consolidated all branches of government under his party’s control, limited fundamental freedoms, and allowed corruption to run rampant (Freedom House, 2021). The government regularly violates the Nicaraguan people’s freedom of speech/expression, assembly, and due process (Freedom House, 2021). Under the current circumstances, the government in Nicaragua holds the country back from its development potential.
Economy.
The Heritage Foundation’s Economic Freedom Index provides context which helps to explain Nicaragua’s low GDP. The country’s weak rule of law makes property rights vulnerable to violation and contracts virtually unenforceable. The Heritage Foundation (2021) reports that “corruption pervades every element of government from top to bottom” (para. 2). The lack of access to basic needs, namely water and electricity, makes starting a business complicated and costly. Furthermore, aspiring business owners must struggle through a tangle of bureaucratic red tape to obtain necessary permits, abide by government regulations on what percentage of their employees must be native Nicaraguans, and adapt to government price controls on key resources. Finally, tariff and non-tariff barriers and a systemic preference for state-owned enterprises hinder market openness.
In the coming weeks, I hope to gain a greater understanding of the factors that hold Nicaragua back from development. I am eager to see Nicaragua develop into a flourishing state where citizens are free from the widespread poverty and unemployment so many face today.
References
Freedom House. (2021). Nicaragua: Freedom in the World 2021 country report. Retrieved September 04,
2021, from https://freedomhouse.org/country/nicaragua/freedom-world/2021
Heritage Foundation. (2021). Nicaragua. Retrieved September 04, 2021, from
https://www.heritage.org/index/country/nicaragua
World Bank. (2021). Nicaragua Overview. Retrieved September 04, 2021, from
https://www.worldbank.org/en/country/nicaragua/overview#1
World Bank Group. (2017). “Nicaragua: Systematic Country Diagnostic.” Washington, D.C.
http://documents.worldbank.org/curated/en/365991498843795990/Nicaragua-Systematic-Country-
Diagnostic
A 4.6% growth rate is respectable I am very much looking forward to see what you develop .
Hi Emily,
It looks like your project is well on the way; you have collected good info and data so far. Nicaragua is a good choice. According to World Bank (2021) they have an annual 2020 GDP growth rate of -2.0%. If corruption didn’t reign is so many places, I don’t believe there would be rampant poverty anywhere in the world, but corruption and greed go hand in hand, so the innocent suffers, and poverty grows. The bible warns against robbing the poor. “Rob not the poor, because he is poor: neither oppress the afflicted in the gate: For the Lord will plead their cause, and spoil the soul of those that spoiled them” (Proverbs 22:22-23, King James Version).
Blessings!
References
World Bank. (2021). Country profile: Nicaragua. Grupo Banco Mundial. https://databank.worldbank.org/views/reports/reportwidget.aspx?Report_Name=CountryProfile&Id=b450fd57&tbar=y&dd=y&inf=n&zm=n&country=NIC
Emily,
Very comprehensive outline of the ECON 360 project. I'm excited to hear more, as I've been to Honduras and have friends that have lived for periods of time in Nicaragua, and know that they have had governmental struggles which have attributed largely to the breakdown in the nation's economic status. Was Nicaragua's GDP at a competitive level before the political unrest?
Cowen and Tabarrok describe several institutions which stimulate economic growth: property rights, honest government, political stability, a dependable legal system, and competitive and open markets (521). Nicaragua is missing several of these elements, which certainly seem to be contributing to the lower GDP. It seems that many of the countries in that region struggle with similar challenges, but I wonder what would make Nicaragua's situation better and/or worse than others around it? Honduras, for example, had the highest murder rate in the world in 2012, and this was recognized as one of the nation's largest hurdles to overcome (Facts of Mozambique - History, Climate, Geography, n.d.). Today, that rate has reduced to half that rate, which has no doubt played a large role in the country's GDP (ibid). Nicaragua is not the same as Honduras, so I wonder what solutions will be needed to uplift this nation.
References:
Cowen, T., & Tabarrok, A. (2015). Modern Principles of Economics (3rd ed.). Worth Publishers.
Facts of Mozambique—History, Climate, Geography. (n.d.). Retrieved September 3, 2021, from https://www.mozambique.co.za/About_Mozambique-travel/mozambique-facts.html
Tinesha Howell
Dr. Baugus
ECON 360
5 September 2021
Milestone 1: The Nation of Kenya
For my project in ECON 360 I will be highlighting the strengths and weaknesses of the nation of Kenya and devising a plan to essentially fix many of its problems. I choose Kenya because I was born in Guyana which is a nation who experiences many of the same drawbacks as Kenya. Kenya is the leading nation in Eastern and Central Africa but most of its population lives beneath the poverty line, and Kenya’s unemployment rate is extremely high (Odhiambo, 2019). Additionally, to many people Kenya is doing fairly well but in retrospect the nation is struggling. One-third of the nation’s GDP is credited to agriculture since most Kenyans are working in the agricultural sector to make a living. This exposes a long-term drawback for Kenya because delays in the rain season shows an economic weakness. (Bakhtsiyarava et al., 2018).
Moreover, although Kenya has managed to raise assets in the global bond market, it has not been able to successfully address poverty and unemployment within the nation. Donors and financial institutions are the principal reason why Kenya’s economy has managed to remain stable. Also, since the government took over three small unethical banks in 2016, the interest rate of banks became limited which has caused a decline of credit within the economy. Kenya is a nation who has great potential and deserves a chance to rise up and achieve its potential. My goal is to provide optimism within Kenya’s economic prospects and provide measures to reduce poverty, constructively distribute funds within the health and education sector, and ultimately provide a plan to eliminate the effects of wealth concentration within the nation.
References
Bakhtsiyarava, M., Grace, K., & Nawrotzki, R. J. (2018). Climate, Birth Weight, and Agricultural Livelihoods in Kenya and Mali. American Journal of Public Health, 108(S2), S144–S150. https://doi.org/10.2105/ajph.2017.304128.
Odhiambo, F. O. (2019). Assessing the Predictors of Lived Poverty in Kenya: A Secondary Analysis of the Afrobarometer Survey 2016. Journal of Asian and African Studies, 54(3), 452–464. https://doi.org/10.1177/0021909618822668.