Nicaragua remains the second poorest country in the Western Hemisphere with significant social inequities, particularly in rural areas. According to the International Monetary Fund, Nicaragua’s economy contracted 3.8 percent in 2018, 5.8 percent in 2019, and an estimated 3.5 percent in 2020. The World Bank expects the economy to grow 0.9 percent in 2021.

About 30 percent of the population (2 million people) lived below the poverty line in 2020. The 2005 national household income survey found the average number of years of schooling in urban areas was seven. In contrast, in rural areas, schooling was slightly over 3.5 years. Unemployment rose from 5.5 percent in 2019 to 6.2 percent in 2020. However, this figure does not include three-quarters of all employment in the informal economy.

Daniel Ortega has been in power since 2007. In 2018, state forces responded to peaceful protests with violence and repression. Several human rights concerns also remain, including limits of freedom of expression and press freedom, the closing of civil society spaces, and arbitrary detentions. In recent years, the National Assembly has approved constitutional changes and laws that further weakened democratic institutions by consolidating all branches of government under the ruling party's control. Within this context, national elections are scheduled for November 2021.

USAID/Nicaragua's strategic development objective is to support Nicaraguans in their efforts to restore democratic norms and practices; support a free and vibrant press; strengthen civil society organizations; and promote and defend human rights.

In addition, USAID’s regional activities provide HIV assistance to Nicaragua and USAID's Bureau for Humanitarian Assistance (BHA) provides humanitarian aid for hurricane assistance and COVID-19 recovery.

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