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Rural poverty approaches, policies and strategies in Nicaragua

The civil war from 1980 to 1990 devastated Nicaragua 's economy. Per capita income fell to 33.5 per cent below the 1980 level. Gross domestic product (GDP) decreased by two thirds and export volume fell to one half of pre-1980 levels. External debt increased tenfold, soaring to US$11 billion, more than six times the country's GDP.

In 1990, peace was re-established and the new government began a transition to democracy and a market-based economy. The transformation process resulted in increased poverty that was not always offset by social safety net policies.

A national strategy for poverty reduction presented in 2001 marked the Government of Nicaragua's commitment to tackling poverty in the country by increasing productive employment, investing in human capital, improving governance and protecting vulnerable poor people. In January 2004, Nicaragua became eligible for relief of 72 per cent of its debt under the Debt Initiative for Heavily Indebted Poor Countries (HIPC). The Initiative was developed by the International Monetary Fund and the World Bank to reduce the external debt of the world's poorest, most heavily indebted countries. In order to be eligible, countries had to commit to implementing poverty reduction and economic reform programmes.

The Government of Nicaragua recently presented the first draft of the National Development Plan for 2005 to 2009. The objective of the plan is to reduce poverty by:

• modernizing the public sector
• strengthening governance
• improving access to social services for the poorest segment of society
• improving partnerships with and among international development agencies

Various government agencies are working to coordinate development activities and ensure that policy objectives are aligned with the Millennium Development Goals. The government's Productive Rural Development Programme promotes competitive and environmentally friendly agricultural products and services, as well as improved access to national and international markets. Programme goals include implementing a strategy for sustainable forestry development, accelerating technology innovations, improving plant and animal health standards, modernizing public institutions and formulating rural development policies.

Source: IFAD