MANAGUA – Despite years of drought, the onset of a coffee crisis and the devastation of Hurricane Mitch, overall poverty in Nicaragua fell from 50.3% in 1993 to 45.8% in 2001, according to the World Bank’s Nicaragua Poverty Assessment, released last week. But the macro-economic numbers offer little comfort to Nicaraguans living in rural areas of the country – especially in the coffee-producing sector – where two out of three people live in poverty and more than 25% of the population struggles to survive on less than $1 a day, according to the report.
“Nicaragua’s advances in poverty reduction over the past 10 years are encouraging, but we also realize there is much to be done, particularly in improving the conditions of the poor in rural areas,” said Amparo Ballivián, World Bank Country Manager for Nicaragua.
The report found a stark contrast in the livelihoods of urban and rural societies, and that poverty reduction varied substantially by region. For example, in the Pacific Rural area, poverty rates fell by 10% between 1998 and 2001, with less significant reductions reported in the Atlantic Rural, Pacific Urban, and Central Urban areas.
Since 1998, poverty has increased in Managua by 1.7%, but the biggest increase in poverty was in the coffee-producing sector, which represents 23% of Nicaragua’s rural population. Extreme poverty shot up 5.7% in the coffee-dependent Central Rural region, while the incidence of poverty among “coffee households” increased by more than 2% (and those numbers represent just the first year of the coffee crisis). In contrast, overall rural households saw a 6% decline in poverty since 1998.
The World Bank report also found that most social indicators have not improved in the last decade. A high teen-pregnancy rate, stagnant education efficiency indicators, and insufficient improvement in basic water and sanitation infrastructure all contribute to the greater panorama of poverty in Nicaragua.
Investment in productive infrastructure also has stagnated since the early 1990s, the report found. The result is decreased access to electricity and a deterioration of roads in rural areas, despite recent efforts by the administration of President Enrique Bolaños to invest in electrification and brick road construction in rural areas.
The report also warns that some of the factors that contributed to the reduction in overall poverty, such as international relief aid following Hurricane Mitch, are not sustainable. “Sustaining Nicaragua’s progress in poverty reduction will require increased productivity,” said Florencia Castro-Leal, World Bank Senior Economist and author of the report.
“The report outlines policy actions to boost productivity, including expanding the coverage and improving the quality of education, and increasing access to productive and basic infrastructure and financial services.” The Nicaragua Poverty Assessment report suggests the government should prioritize maternal and child health services for a broader base of families, especially reproductive health and prenatal care.
The report also says expanded access to social protection interventions linked to situations of crisis can help protect the welfare of the poor, break the poverty trap, and reduce the vulnerability of the poor during difficult times.
