According to businesscarriers, Nicaragua is one of the poorest countries in Latin America. In 2002, its GDP was $2,522 million, or $472 per capita. GDP structure: agriculture 29.1%, industry 28.1% (including manufacturing – 19.2), services – 42.8%. 64% of the country’s population lives below the poverty line. The Sandinista government expropriated the property of the dictator’s clan (2,200 agricultural farms with a total area of about 700 thousand hectares, or 43% of the property of the latifundists, and 120 industrial enterprises), nationalized private banks and insurance companies, monopolized foreign trade and reorganized the banking system. As a result of the transformation, a large public sector emerged, which was tasked with becoming the leader in a mixed economy. The investment policy was aimed at its comprehensive strengthening. Agriculture was reformed: on the basis of expropriated land ownership, a public sector was created (“the sphere of people’s property” 23% of land, 19% of production) and cooperatives (1327 production and 1185 credit). The economy acquired a planned and regulated character with active state intervention in production, trade and pricing. The consequence of the course towards etatization was hyperinflation. 1980s The transition to an open market economy after the removal of the Sandinistas from power was accompanied by an adjustment in macroeconomic policies. The state took a course towards the protection and development of all forms of property, freedom of enterprise, the creation of banks and other private financial institutions, and the state monopoly in foreign trade was abolished. Privatization began in the electric power industry, telephone communications, oil industry, ports and transport, banking and warehousing. To restructure the economy approx. 350 state-owned industrial enterprises and agricultural farms were merged into a holding for further privatization. By 1992, 38 of them were liquidated, 189 were privatized. To improve public finances, a program has been put in place to reduce the state apparatus. In 2000, a law on pension reform was adopted, according to which the general rate of contributions is 10.5%, with a decrease in three years to 10%, and for employees – to 7.5%. Agriculture remains the main branch of the Nicaraguan economy. The agrarian reform of 1981 covered 1/3 of the land area suitable for cultivation, 45% of the rural population received land or a document for land ownership. As a result of the reform, the share of large latifundia by 1989 decreased from 41 to 6.5%. The sown area occupies 2.5 million hectares (2.4% of the country’s territory), another 0.3 million hectares are occupied by perennial plantings. Main cash crops: coffee, sugarcane, bananas. During the reign of the FSLN, agriculture did not develop, and for a number of items (coffee, cotton) experienced a noticeable decline in production. From the beginning 1990s the situation improved: the renewal of plantations and the increase in world prices for coffee led to an increase in its yield and collection. The areas under sugar cane are expanding, and the recovery of cotton production has begun. Production of basic food crops is concentrated between the lakes and the Pacific coast, coffee is grown on the coast and in the highlands. Pastures occupy 4.8 million hectares (about 4% of the country’s territory). The main livestock areas are located north of the lakes and along the borders with Honduras and Costa Rica. Animal husbandry provides less than 10% of GDP. The main industry is the breeding of cattle, mainly for meat: in 2000, the number of livestock was estimated at 1660 thousand, incl. slaughter – 370 thousand, dairy – 235 thousand. Production of basic agricultural products (2000, thousand tons): coffee 82, sugar cane 4000, bananas 92, pineapples 47, corn 364, rice 285, meat 95, incl. beef – 49. Nicaragua has reserves for the development of fisheries. More than 37,000 hectares on the Pacific coast are estimated to be suitable for aquaculture (shrimp farming). Fisheries are one of the most promising sources of non-traditional exports. Nicaragua remains one of the least industrialized countries despite the convergence of the share participation of agriculture and industry in the formation of GDP. As a result of the privatization of enterprises nationalized in the 1980s, the liberalization of trade and financial activities, and the resumption of the country’s access to the US market, a gradual recovery of industrial production began. In the presence of a variety of mineral raw materials, only deposits of gold and silver are being developed; out of 8 mines, only 3 are active. In 2000, the mining industry contributed only 1.4% of GDP. All mineral resources are the property of the state. More than 3/4 of the added value of the manufacturing industry is accounted for by the food industry (production of alcoholic and non-alcoholic beverages, cigarettes), textile, chemical industry and the production of non-metallic minerals. 2/3 of industrial enterprises are concentrated on the Pacific coast, more than 1/2 of them in the department of Managua. The largest enterprises are an oil refinery and a meat processing plant in Managua, metalworking and woodworking enterprises in Tipitapa, textile factories in Managua and Leon. There are also shoe, cement and paper industries. The production of petroleum products, metal products, rubber and paper is carried out on imported raw materials; in other industries, imports provide 60% of production. In recent years, there has been an increase in assembly plants in the Las Mercedes Free Trade Zone for re-export. To attract foreign investment, the government passed laws that allowed 100% repatriation of foreign capital and profits, 100% foreign participation, exempted imports of machinery and equipment from taxes, reduced taxes on loans in the production of products for non-traditional exports. Nicaragua has bilateral investment protection agreements with the US, UK, the Netherlands, Denmark, Spain, Taiwan and Chile. The share of electricity, gas and water supply in 2000 accounted for 2.9% of GDP. Most of the electricity is produced at the stations of the Nicaraguan company ENEL. In 1996, its capacity was estimated at 383 MW, but the real capacity does not exceed 290-310 MW with a demand of 340-360 MW. In 1996, ENEL provided the production of 3725 kWh (in 1992 – 1528), of which 57.8% accounted for by thermal power plants, 25.9% by hydroelectric power plants, 13.7% by geothermal and 2.6% by gas turbines.. In 1994, rail transport ceased to exist. The main means of communication are highways, 18 thousand km, of which 10% are paved (1996). The main transport artery – the Pan-American Highway (368.5 km) connects Nicaragua with the Atlantic ports of Puerto Cortes in Honduras and Puerto Limon in Costa Rica, through which the country exports most of the fruit. Ports on the Atlantic coast serve coastal navigation with small fishing boats. On the Pacific coast there are 2 ports suitable for large ships: Puerto Corinto in the northwest and Puerto Sandino in the southwest. River transport (mainly along the Rio Escondido) is of great importance for communication with the Atlantic coast, there is navigation to Lake Nicaragua. The main international airport of S.A. Sandino is suitable for receiving Boeing 747 aircraft. There are 3 airports on the Atlantic coast suitable for receiving international cargo aircraft. In the 1990s telephone communications experienced a big rise in connection with the growth of foreign investment. Attempts to privatize it 100% ran into the resistance of the trade unions and the FSLN. The US trade and economic blockade and the armed conflict have damaged Nicaragua’s foreign trade. After the blockade was lifted, she began to recover. In 2002, foreign trade turnover amounted to 2391.8 million US dollars, but was reduced to a large deficit (-1199.2 million US dollars). Of the $596.3 million of exports, 30% are manufactured goods, 12.3% each are coffee and meat, 6.9% are lobsters, and 5.9% is gold. In imports (in %), consumer goods account for 31.2, raw materials and semi-finished products 29.9, machinery 24.7 and fuel 14.2. The main foreign trade partner is the USA (32.2% in exports and 27.4% in imports) and the CAOR countries (31.4 and 46.5%). Trade with the EU (12.3 and 7.6% in 2002) and with Mexico (6.4% of imports) plays a significant role. Nicaragua’s foreign exchange reserves as of February 2003 were $420.1 million. In 2001, external debt (6.4 billion US dollars) amounted to 250.6% of GDP (in 1993 – 574.4%).