Nicaragua country brief

Overview

Australia and Nicaragua enjoy warm relations, based on trade, investment and cooperation on a range of international issues, including the environment, agricultural development, climate change, human rights/gender, transnational crime and disarmament.

Diplomatic relations were established in 1987, when Australia’s first Ambassador to Nicaragua, William Farmer, presented credentials.

The Australian Embassy in Mexico City, is accredited concurrently to Nicaragua. Australia has an Honorary Consul in Managua. Nicaragua’s Ambassador to Australia is resident in Tokyo.

Nicaragua is situated in the southern half of the Central American isthmus between the Caribbean and Pacific coastlines. Nicaragua shares borders with Honduras in the north and Costa Rica in the south. Nicaragua, Honduras and El Salvador share a coastline along the Gulf of Fonseca, a closed sea under international law. Nicaragua is tropical in the lowland and cooler in the highlands.

Nicaraugua’s population is approximately 6.0 million (2016 est). Roman Catholicism is the main religion with around half of the population identifying as Catholic and one third Evangelical. Spanish is the official language of Nicaragua.

Political overview

Explored and settled by the Spanish in the 16th century, Nicaragua broke with Spain in 1821 and joined the First Mexican Empire. It was part of the United Provinces of Central America in 1823 and then became an independent republic in its own right in 1838. In 1855, an American adventurer, William Walker, declared himself King but was driven out in 1867. In 1894, a long-running dispute with the United Kingdom over the Atlantic Coast ended with the full incorporation of the Mosquito Coast into Nicaragua.

From 1912 to 1933, US marines were stationed in Nicaragua except for a nine-month period in 1925. In 1914, the United States was given control over a proposed canal. From 1936 to 1979, members of the Somoza family ruled Nicaragua. Following the collapse of the Somoza’s, the Sandanistas under President Daniel Ortega ruled Nicaragua. Ortega lost the 1990 elections but was re-elected in November 2006.

System of government

Nicaragua has a democratically elected representative government with a strong executive. The President, who is the head of state and government, is elected for a five-year term with no term limits. The 92-member unicameral National Assembly is elected for a five-year term. The assembly includes 70 members is multi-seat constituencies and 20 members in a single nationwide constituency directly elected by a proportional representation vote; and two seats reserved for the previous president and runner-up candidate.

Recent developments

President Daniel Ortega and his wife (the vice-president), Rosario Murillo, were last elected on 6 November 2016. The next election is due to be held in November 2021.

Foreign and trade policy

Nicaragua is a member of the Organisation of American States, the Community of Latin American and Caribbean States (CELAC) and the Central American Integration System (SICA), the Bolivarian Alliance for the Peoples of Our America (ALBA) and Petro Caribe.

On 16 January 2017, Nicaragua was the subject of a claim filed by Costa Rica at the International Court of Justice (ICJ). The new claim follows on from a prior riverine dispute, on which the ICJ ruled in 2009 but that continues to cause friction. Costa Rica claims that dredging of the river caused environmental damage in the wetlands of Isla Calero, which is part of an island nature reserve, in an area owned by the Costa Rican Ministry of the Environment.

In 2012, the ICJ expanded Nicaragua’s maritime territory in the Caribbean Sea but upheld Colombia’s sovereignty over San Andres y Providencia and other islands in the sea.

Nicaragua recognises Taiwan as the Republic of China, one of 12 countries to do so in the Americas.

Nicaragua, collectively with Central America and the Dominican Republic, has FTAs with the United States (since 2009) and the European Union (since 2012).

Bilateral relations

Australia and Nicaragua both participate in the Forum for East Asia-Latin America Cooperation (FEALAC). Australia is an observer of SICA.

In 2001, the Australian Government established the Council on Australia-Latin America Relations (COALAR) which aims to enhance commercial, political and cultural relations between Australia and Latin America. Since its inception, COALAR has been active in promoting business, education, tourism and cultural links between Australia and Latin America. For updates on COALAR activities and information on the annual grants program, follow COALAR on Facebook.

People to people links

Around 85 Australians live in Nicaragua and 3,000 visit annually. 672 Nicaraguans live in Australia.

Nicaraguans are eligible to apply for Australia’s Endeavour Awards Scholarships and Fellowships. The program opens annually in April and closes in June.

Development assistance

Since 2010, Nicaragua has been eligible to receive Australia Award Fellowships. One Fellowship was granted in 2017.

From 2010 to 2014, Australia provided $100 million in official development assistance to Latin America, including 250 Australia Awards scholarships. Nicaragua received 12 Australia Awards Scholarships. The regional program has now closed, though some activities that have already been funded will continue until 2018.

The Australian Embassy in Mexico City manages a Direct Aid Program (DAP), which provides financial support to a broad range of projects in Nicaragua, including community development projects and those designed to address challenges in vulnerable communities. Recent projects have included equipping 12 firefighter stations with hoses; and installing a solar-powered water cleaning system in the rural community of Nagarote.

Economic overview

For latest economic data refer to Nicaragua [PDF 30 KB]

Economic directions

Nicaragua is the poorest country in Central America and the second poorest in the Western Hemisphere. Nicaragua suffers from widespread underemployment and poverty. Textiles and agriculture account for nearly 50 per cent of Nicaragua’s exports. Beef, coffee and gold are Nicaragua’s top three exports. Nicaragua’s economy has grown by more than four per cent annually in recent years.

Nicaragua, collectively with Central America and the Dominican Republic, has FTAs with the United States (since 2009) and the European Union (since 2012).

Economic outlook

Spending restraint and growth in agriculture, investment and consumption are forecast to support a continuation of growth around four per cent in coming years. Inflation is forecast to rise to 5.2 per cent at the end of 2017.

Trade and investment

Economic and trade relationship

In 2016, Australia’s trade with Nicaragua was $26 million, mostly imports of coffee. Two Australian companies operate in Nicaragua.

Export opportunities

Despite the modest nature of two-way trade, Australian companies are taking advantage of niche opportunities to provide professional services throughout the region. The Australian Government, through our post in Mexico City and our Austrade representation there, helps raise the profile of Australian companies and ensures that Australian businesses and exporters are well positioned to make the most of emerging opportunities. Australia’s Honorary Consul also assists the Australian Embassy in Mexico to identify commercial opportunities in the region.

High level visits

  • June 2017: Ambassador for Women and Girls, Dr Sharman Stone, visited Nicaragua
  • January 2016: COALAR board member Robyn Archer AO visited Nicaragua
  • December 1985: Foreign Minister Fr Miguel D’Escoto Brockman visited Australia
  • September 1984: Foreign Minister Bill Hayden visited Nicaragua

Last updated July 2017.

Last Updated: 6 March 2018