Nicaragua

Nicaragua

Updated April 26, 2024
Nicaragua
Nicaragua, a Central American country bordering Honduras
mass protests. The Ortega administration’s repressive
and Costa Rica, is experiencing significant political
response—which resulted in over 300 dead, thousands
repression under the authoritarian rule of President Daniel
injured, and hundreds detained and tortured—generated
Ortega and his wife, Vice President Rosario Murillo. The
global condemnation.
erosion of democracy under the Ortega-Murillo government
Despite domestic and international calls for greater social
has strained relations with the United States and raised
and political freedoms in Nicaragua, the Ortega
congressional concerns. Congress may continue to monitor
the Biden Administration’s approach to Nicaragua and could administration has continued to employ antidemocratic
practices. Between 2007 and March 2024, the Ortega
consider legislative initiatives to guide U.S. policy.
government closed more than 3,500 nongovernmental
organizations focused on issues such as human rights,
Nicaragua at a Glance
medical care and resources, religion, education, and civil
and social matters. It also has closed 28 universities since
Population: 6.74 mil ion (2023, IMF)
December 2021, including the Jesuit-run University of
Area: 46,883 square miles, slightly smaller than Mississippi
Central America, seized in August 2023. More than 200,000
Gross Domestic Product (GDP)/Per Capita GDP:
Nicaraguans have fled the country for political and
$17.4 bil ion/$2,600 (2023, current prices, IMF)
economic reasons since 2018. A majority of those displaced
Real GDP Growth: -1.8% (2020); 10.3% (2021); 3.8% (2022);
have sought asylum in neighboring Costa Rica, and some
4.7% (2023, est.); 3.5% (2024, est.) (IMF)
have sought entry into the United States.
Key Trading Partners: Exports: United States (50.2%),
In February 2023, the Ortega administration released 222
Mexico (13.7%), El Salvador (6.5%); Imports: United States
political prisoners to the United States. A week after the
(24.8%), China (12.7%), Mexico (9.4%) (2023, TDM)
prisoner release, the Nicaraguan government stripped 94
Sources: International Monetary Fund (IMF); Trade Data
political opponents of their citizenship, describing them as
Monitor (TDM).
“traitors to their homeland.” As of October 2023, 91
political prisoners remained in Nicaragua, 81 of whom were
Political Situation
detained since the start of the 2018 protests. In addition, at
least 46 Catholic clergy were under arrest in Nicaragua at
Daniel Ortega first rose to prominence as a leader of the
some point during 2023.
leftist Sandinista National Liberation Front (FSLN), which
toppled the U.S.-aligned Somoza family dictatorship that
Economic Environment
ruled Nicaragua from 1936 to 1979. Ortega was elected
Nicaragua has the second-lowest per capita income in the
president in 1984 but was defeated in 1990 after more than a Western Hemisphere, according to the International
decade of armed conflict between the FSLN government and Monetary Fund (IMF). The Ortega administration has
U.S-backed Contra insurgents. From 1990 to 2001,
generally maintained market-oriented economic policies,
Nicaragua held three relatively free and fair elections in
and economic growth averaged 4.2% from 2007 to 2017,
which power changed hands peacefully between non-
according to the IMF. Nicaragua’s GDP contracted by 1.8%
Sandinista presidents. Ortega returned to power in 2006,
in 2020, however, and unemployment nearly doubled, from
following elections that many observers also judged to be
6.2% in 2019 to an estimated 11% in 2021. Economists
free and fair.
attributed the economic downturn to the effects of the
In the ensuing years, Ortega’s FSLN government
country’s political crisis, the COVID-19 pandemic, and two
increasingly manipulated democratic processes. Subsequent
major hurricanes.
elections won by Ortega in 2011 and 2016 were widely
The Nicaraguan economy began to recover with 10.3%
judged to be seriously flawed. In 2021, the Organization of
growth in 2021, followed by 3.8% and 4.7% growth in 2022
American States (OAS) adopted a resolution asserting that
and 2023, respectively. The IMF projects that growth will
Ortega’s most recent election (his fifth overall and fourth
slow to 3.5% in 2024. High consumer price inflation and
consecutive term), had “no democratic legitimacy,” as all
interest rates, limited public sector expenditures, and
viable opposition candidates and parties were barred from
slowing remittances from migrant workers abroad are
participation.
reportedly contributing to the slowdown.
The Ortega government’s social welfare programs initially
Gold is Nicaragua’s largest export. The country appears to
helped improve Nicaraguans’ standard of living and
export more gold than it officially produces, which some
maintained a strong support base for the FSLN, which
observers argue is likely due to domestic illegal mining and
Ortega used to consolidate power. In April 2018, however,
the country serving as a transit point for gold mined in other
government-approved tax reforms that included tax
countries, such as Venezuela. Despite the threat of U.S.
increases and a reduction of social security benefits sparked
https://crsreports.congress.gov

Nicaragua
sanctions on Nicaragua’s gold sector, announced in October
including the Attorney General. Entities designated for
2022, Nicaragua exported $1.13 billion worth of gold in
economic restrictions include the Government of Nicaragua,
2023, including $719.8 million in gold exports to the United
the Nicaraguan Petroleum Distributor, the state-owned
States, according to the Nicaraguan Central Bank.
mining company Empresa Nicaraguense de Minas, and the
U.S. Policy
General Directorate of Mines.
U.S. policy toward Nicaragua aims to promote the
In October 2022, the Biden Administration announced
reestablishment of democratic practices, including free and
further action to hold the Nicaraguan government
fair elections, support for human rights, and attention to
accountable for its antidemocratic actions. The
humanitarian needs. The Biden Administration, with support Administration amended Executive Order (E.O.) 13851,
from Congress, has provided foreign assistance and
which authorized asset blocking sanctions targeting
enhanced U.S. sanctions against Nicaraguan officials in an
individuals contributing to the situation in Nicaragua, with
effort to advance those policy goals. In the remainder of the
E.O. 14088, “Taking Additional Steps to Address the
118th Congress, Members may continue to monitor the
National Emergency with Respect to the Situation in
Administration’s approach toward Nicaragua, and could
Nicaragua.” E.O. 14088 expands the authorities available to
consider additional legislation to shape U.S. policy.
the U.S. Treasury Department, including sectoral sanctions,
further restrictions on trade, and restrictions on new
U.S. Assistance
investment in certain sectors of the Nicaraguan economy,
The United States provides foreign assistance to Nicaragua,
including the gold sector. To date, the Biden Administration
primarily to support sectors of Nicaraguan civil society
has not imposed any sanctions pursuant to E.O. 14088.
seeking to restore democratic governance. The Biden
Congress may assess the Administration’s use of its existing
Administration allocated $16.96 million for foreign
authorities and consider whether to enact additional
assistance programs in Nicaragua in FY2022 and an
legislation. For example, the Restoring Sovereignty and
estimated $17.2 million in FY2023. The FY2023 estimate
Human Rights in Nicaragua Act of 2023, introduced in the
included $15 million in Development Assistance (DA) for
House (H.R. 6954) and Senate (S. 1881), would reauthorize
democracy programs and $2.2 million in Global Health
and amend the Nicaraguan Investment Conditionality Act of
Programs aid. The United States also obligated $23.8
2018 (P.L. 115-335, NICA Act) and the Reinforcing
million in humanitarian assistance to Nicaragua in FY2022
Nicaragua’s Adherence to Conditions for Electoral Reform
(latest comprehensive data available).
Act of 2021 (P.L. 117-54, RENACER Act), which expired
The Department of State, Foreign Operations and Related
in December 2023. Among other provisions, the bills would
Programs Appropriations Act, 2024 (P.L. 118-47, Division
seek to enhance sanctions on sectors of the economy that
F) appropriated “not less than” $15 million for democracy
generate revenue for the Ortega family and expand the
and religious freedom programs in Nicaragua. H.Rept. 118-
activities that trigger the imposition of targeted sanctions.
146, incorporated into the explanatory statement
accompanying the act, directed the Secretary of State to
Migration
submit a report to the committees on appropriations within
Nicaragua’s limited entry requirements for Haitians and
30 days of enactment regarding the expenses incurred from
Cubans, among others, make it an attractive transit country
the February 2023 transfer of Nicaraguan political prisoners
for irregular migration to the United States. From June 2023
to the United States. The report was to include a justification to November 2023, more than 500 charter flights, mainly
for the use of the funds and an explanation of “how such
from Haiti and Cuba, arrived in Nicaragua. Such flights
funds are promoting democracy in Nicaragua.”
reportedly pay landing fees and carry passengers who pay
thousands of dollars per seat and entry taxes to the Ortega
Congress may consider whether or not to meet the Biden
government with the intention of migrating to the United
Administration’s FY2025 budget request of $15 million in
States. In addition to profiting from these flights, some
DA for Nicaragua. The funds would aim to “support and
observers assert that the Ortega administration is
build the capacities of civil society, human rights activists,
“weaponizing migration” to exert pressure on the United
independent media, and other democratic actors to protect
Nicaraguans’ basic rights and freedoms.”
States. In November 2023, the State Department launched a

new visa restriction policy “targeting individuals running
U.S. Sanctions
charter flights into Nicaragua designed primarily for
irregular migrants,” using the authority provided in the
The United States has imposed numerous targeted sanctions, Immigration and Nationality Act (8 U.S.C. §1182).
including asset blocking sanctions and visa restrictions, on
members of the Nicaraguan executive, legislature, and
Nicaragua is also a source country for U.S.-bound migrants.
judiciary, along with others determined to be undermining
In FY2022, U.S. Customs and Border Protection
democracy and threatening stability in Nicaragua. As of
encountered nearly 164,000 Nicaraguans at the Southwest
April 2024, the Department of the Treasury has imposed
border. Enforcement encounters declined to 99,496 in
asset blocking sanctions on 47 individuals and 12 entities.
FY2023, potentially due, in part, to the implementation of a
Additionally, the U.S. State Department has imposed visa
new humanitarian parole program through which more than
restrictions on more than 1,000 Nicaraguan individuals and
36,000 Nicaraguans arrived in the United States in FY2023.
their family members.
Congress may assess these developments as part of its
ongoing oversight of U.S. immigration policy.
Individuals who have been sanctioned by the United States
include Vice President Rosario Murillo; four of the Ortega-
Karla I. Rios, Analyst in Latin American Affairs
Murillo children; and numerous government officials,
https://crsreports.congress.gov

Nicaragua

IF12247

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https://crsreports.congress.gov | IF12247 · VERSION 6 · UPDATED