Labor Force

Agriculture employs 42 percent of Nicaragua’s labor force, which in 2000 totaled 2.1 million.

Service area employs 38 percent of these, and manufacturing, construction, and mining accounting for another 15 percent.

Participation in labor unions is very common and encouraged; in the mid-1990s more than half of the labor force was affiliated. These labor unions have much political power, because of their “ability to paralyze vital areas of the economy, especially transportation,” where strikes are common and a few become violent during the late 1990s

As found in many Latin American countries, by law all employees working in Nicaragua are entitled to the “13th month” payday, paid at the beginning of December, and equal to the full salary of the month of November.

Foreign investment has been a priority and high encouraged since the end of the Sandinista era, even more so since the 1996 election of Arnoldo Aleman.

The Foreign Investment Law, “guarantees foreign investors the right to remit 100 percent of profits through the official exchange market and, 3 years after the initial investment, repatriation of original capital.”(U.S. Embassy)

Also included in the law are allowances for foreign investors to have 100 percent ownership in all sectors of the economy, including the formerly state-owned telephone, water, and power companies, which are now all owned by foreign businesses. - Import and export policies are just as lax, and there are “no onerous visa, residence, or work permit requirements which inhibit foreign investment” in most other countries in Latin America and around the world.

A large “zona franca” or duty-free zone is home to a growing number textile factories, many owned by private Taiwanese investors, where brand name garments are assembled for companies around the world, including Lee jeans, Bugle Boy, and the Gap.

Increased foreign investments, as well as the growth of locally owned businesses and the recent opening of the Bolsa de Valores de Nicaragua, the Nicaraguan stock exchange, signal a strengthening and maturing economy.

Side Note: Although most foreign businesses will be welcomed with “Open Arms”, the new slogan used by the Tourism Ministry, some resistance may be found from competing businesses. Some larger businesses have enjoyed little competition for most of their lifetimes, and may use their political influence to create problems for companies seeking to open shop in Nicaragua. Over the last few years, however, many foreign companies have found success in Nicaragua by offering better prices and services than the older Nicaraguan companies. This has created a welcoming atmosphere for foreign products and businesses from Nicaraguan consumers, which has outweighed any pressure from Nicaraguan companies or the government.