Nicaragua’s Main Export Products

tourism’s role in the economy of the countries in the region, and with the help of the private sector to implement strategies for promoting the image of Central America, these countries agreed to:

“We are committed to facilitate conditions for tourism development by improving infrastructure; the establishment of a modern and appropriate legal framework; and the training of human resources for the conservation and sustainable management of our natural and cultural heritage and improving environmental quality. Similarly, we reaffirm our commitments made at the various meetings we have held, aimed at strengthening and adapting policies and necessary legal instruments of migratory nature to facilitate the free movement of people, key element for tourism development.”

This summit marked an important starting point in the development of regional tourism, where the Presidents declared for the first time that tourism is one of the strategic aim and priorities for the regional economy. In 1997, the Nicaraguan Tourism Institute (INTUR) was created, a State Autonomous Body, being successor of the Ministry of Tourism (MITUR) and it is in charge of the tourism policy in Nicaragua until today.

Tourism perceived as a key industry to economic development, social welfare and an engine to reduce poverty in LDCs. Therefore, Nicaragua declared tourism as an industry of national interest and established the Law 306 (1999), entitled Law of Incentives for the Tourism Industry, this law provides incentives to individuals or corporations, national or foreign, invest directly and engage in tourism services and activities authorized by INTUR. This law provides incentives such as:

exemption from duties and taxes on imports, Value Added Tax (VAT), Income Tax (IT), Land Value Tax (LVT), among other incentives all this to promote investment in the tourism sector (República de Nicaragua, 1999).

As a result of these policies, investment in the country began to increase. Between 2000 and 2010, the hotel tourist offer increased 353% going from 135 to 611 hotels and establishments across the country, as well as an increase in the number of rooms going from 3,320 to 8,880. During this period, international tourist arrivals to Nicaragua increased from 485,909 to 1,011,251 tourists and revenues generated from tourism increased from US$111.3 million to US$308.5 million. During the period between the passing of this law (in 1999) and until 2014, 676 projects were approved (related to new hotels, art events and transportation) representing an amount equivalent to US$1,017.56 million.

5.3 Nicaragua’s Main Export Products

During the period 1990-1997, 18.1 million tourists traveled to Central America distributed as follows: 29.6% traveled to Costa Rica, Guatemala 23.8%, Panama 13.8%, Honduras 11.6%, El

Source: INTUR

Salvador 11.4% and Nicaragua 9.8%, generating an income of US$9,638,100 for the region, which 44.7% were for Costa Rica, Panama 21.7%, Guatemala 21.3%, Honduras 5.8%, El Salvador 3.4%

and 3.1% for Nicaragua (Barrera Pérez, 1998). From 1990 to 1997 Nicaragua received 1,796,852 international visitors, which means an average of 256,693 annual arrivals, of which 61% were Central Americans, 21% were North American and 11% European, being the three major tourism markets of Nicaragua until today. However, Nicaragua still was not seen as a tourist destination country for international tourists, most tourists came to Nicaragua for business rather than pleasure, 60.6% came for business, while 30.6% came for pleasure in 1997, this trend has changed over time.

In 2000, the 581,706 international visitors who visited Nicaragua, 49% were for business purposes and 39.5% for pleasure.

Despite nearly 10 years of war, it did not prevent tourism in Nicaragua from growing. In 1990, Nicaragua received US$12 million in tourist revenue. In 1995, this amount increased to US$50 million. In 2000, tourism revenue had more than doubled to US$111.3 million, which represented an increase of 827.5% in just 10 years. After the Contra War in Nicaragua, tourism has increased meaningfully, overtaking traditional product exports, as meat, seafood, golden, sugar and others, becoming one of the main products that generate more foreign exchange to the country in just a decade (Table 8).

Table 8: Tourism and Main Export Products 1990-2000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Coffee Cotton Coffee Meat Coffee Coffee Coffee Coffee Coffee Coffee Coffee Meat Meat Meat Coffee Meat Seafood Seafood Seafood Tourism Tourism Seafood Sugar Coffee Cotton Tourism Seafood Meat Tourism Tourism Seafood Seafood Tourism

Cotton Sugar Sugar Seafood Tourism Tourism Meat Sugar Meat Meat Meat

Banana Banana Tourism Gold Sugar Sugar Sugar Meat Sugar Sugar Gold

Gold Tourism Seafood Sugar Sesame Banana Banana Banana Gold Gold Sugar Tourism Seafood Banana Sesame Banana Sesame Gold Sesame Banana Banana Banana Seafood Gold Molasses Banana Cotton Gold Sesame Gold Sesame Sesame Sesame

Nicaragua is a country rich in resources and natural attractions, has 7% of global biodiversity, manifested in the diversity of ecosystems, species, genes and indigenous peoples that are part of the biodiversity of the country. Nicaragua has 68 ecosystems, this represents 60% of the 114 ecosystems existing in Central America, it has 71 protected areas (this represents 17% of the national territory) and 53 private wildlife reserves (MARENA, 2010). The country also has two monuments declared by UNESCO as a World Cultural Heritage, which are: Ruins of León Viejo (2000) and Leon Cathedral (2011), as Intangible Cultural Heritage are Language, Dance and Music of the Garifuna (2008) and the literary work El Güegüense (2005). It also has the largest forest

reserve in Central America and the third largest globally declared by UNESCO as Biosphere Reserve in 1997, Bosawas Biosphere Reserve, also known as “The Lung of Central America”, experts recommend that in this area could be developed sustainable tourism in a responsible way, where tourists who love nature could make tourist activities such as bird watching, kayaking, hiking, fishing and other environment related activities, through the income generated could benefit local communities for the conservation of resources.

Nicaragua has jumped as a new tourist destination gaining ground among international tourists who love adventure and ecology. International tourists’ behavior related to reason of travel had changed dramatically: in 2000, 49% came for business purposes and/or work and 39.5% came for holidays, compared to 2015, only 18% did it for business and/or work, while 45.7% did it for vacation. As well as a total of 4,241,763 domestic and foreign guests demand accommodation services between 2005 and 2013, 64.3% of these were foreigners and 35.7% were national tourists.

The latter is due to a low purchasing power in the population, where GDP per capita is among the lowest in Latin America of just US$2,027 in 2015, 29.5 percent of households live and poverty and 8.3 percent in extreme poverty on less than USD$1.25 a day (World Food Programme, 2016), this generates low accommodation demand and low revenue for the tourism sector. Besides, the government gives priority to international tourism because of the exchange earnings the industry generates for the host country, but domestic tourism can also lead to a wider redistribution of national income, it could also raise the level of culture and tourism education providing an impetus for the preservation of cultures, landscapes and ancient monuments.

Table 9: Total National and Foreign Guests Requesting Accommodation 2005-2013

Year Overall Guest Foreign Guest National Guest

2005 338,269 220,500 117,769

2006 372,675 230,364 142,311

2007 404,653 276,967 127,686

2008 459,686 309,449 150,237

2009 410,021 266,164 143,857

2010 464,017 284,752 179,265

2011 547,793 357,269 190,524

2012 615,602 387,732 227,870

2013 629,047 395,740 233,307

Total 4,241,763 2,728,937 1,512,826

Source: INTUR, taken from the Statistical bulletin for 2005 and 2013

The achievement of tourism growth was due to policies imposed by the Government of Nicaragua to encourage tourism investment, promote the country’s image in international markets to attract more tourists, this with the help of all Central American countries through the Central

American Tourism Council (CCT) as a single objective to establish strategies for sustainable tourism development in Central America, implementing strategic actions to widely project the promotional image of Central America as a tourist multi-destination in the source markets, especially Europe. Thus, the Central American Presidents during the XXII Summit of Heads of State and Government of Central America held in San Jose, Costa Rica on December 13th, 2002, they instructed the CCT in coordination with the Federation of Tourism Chambers of Central America (FEDECATUR) to establish the Tourism Promotion Agency of Central America (known as CATA), whose primary purpose is to plan, coordinate, assist and encourage the tourist promotion of Central America (SITCA).

According to this plan, the Central American Tourism Integration Secretariat (SITCA) was funded by the German Government through the FODESTUR Program, the Central American brand

“Centroamérica…tan pequeña, tan grande” was created in order to promote the region, which aims to strengthen a brand image for sustainable tourism that represents a tourist area of tropical nature, which has landscapes of indescribable beauty, with a fauna and flora of great variety. Despite already being supported by the Central American brand, in 2004 as a need to identify the country's own image and differentiate it from other Central American countries, Nicaragua, like the other countries in the region, created its own country brand “Nicaragua, a country with heart”, this as a result of a survey made by asking international visitors about the image they had of the country, the colonial historical memory, the volcanoes on the Cordillera del Pacifico, lakes and cathedrals excelled in this result (López, 2004).