Geography
Nicaragua is the largest country in Central America and has a population of over 5.5 million people. Bordered by Honduras to its north and Costa Rica to its south, Nicaragua is one of the most biologically diverse countries in the region and boasts the largest freshwater lake in Central America, the Lago de Nicaragua.
Poverty
Although Nicaragua is a stunningly beautiful country with extensive natural resources and wonderfully generous people, it is also one of the poorest countries in the Western Hemisphere. About 50% of the population of Nicaraguan lives below the poverty line; nearly 20% live in extreme poverty (World Bank, 2004).
In a country with the third highest poverty rate in the Western Hemisphere, combined un- and under-employment rates of over 50%, one third of children suffering from chronic malnutrition, and more than 30% of the population being illiterate, something as seemingly insignificant as outdated machinery has ramifications that extend into the health and education sectors, to name a few (Unicef, 2005). It is our hope that by working to secure donations for new machinery that we might also indirectly support the economic and social development of the community around Comamnuvi.
Foreign Debt
In addition to being one of the poorest countries in Latin America, Nicaragua is also considered a Highly Indebted Poor Country (HIPC) by the International Monetary Fund (IMF). This designation signified the country’s level of per capita debt as one of the world's highest and made the government eligible for a debt “forgiveness” program. In order to be eligible for the program, however, Nicaragua had to implement rigorous Structural Adjustment reform that included spending less money on social programs, eliminating tax breaks for local producers, and privatizing state utilities. These policies, along with the legal fine print of the HIPC framework, have led critics to claim that Nicaragua’s debt relief program may be “too little, too late.”
For example, prior to 2003, the government’s debt payments were consistently detracting from investments in public health and social infrastructure. After forgiving a percentage of Nicaragua’s debt, the country is still not permitted to spend what is needed on health and social services, further disadvantaging the poorest of the country. Furthermore, without state oversight of electricity production, many Nicaraguans experience daily rolling blackouts and unpredictable access to running water. For the Nueva Vida Cooperative, this means relying heavily on a generator and paying for potable water—both of which result in additional expenses. Nonetheless, the worker-owners at Comamnuvi still manage to produce high-quality clothing despite the lack of infrastructure.