While Nicaragua has enjoyed a decade of macroeconomic stability and sustained economic growth, the current political crisis is taking its toll on the economy. GDP growth is expected to slow on account of the reduced activity in the agricultural, construction, tourism and retail sectors.
The current crisis aside, centralised decision making and weak institutional capacity, coupled with strong scepticism on the part of the government to work with certain external actors has typically complicated the implementation of EU projects in Nicaragua. Similarly, donors and cooperation agencies operating in the country have suffered from an excessive desire by the government to control every detail of cooperation programmes, both with respect to partner organisations and to the content of aid projects.
The EU and its Member States present in Nicaragua carried out a Joint Programming exercise for 2015-2018. On the basis of EU global priorities and its experience of over three decades of cooperation with Nicaragua, existing analysis and projections for the country, areas of joint interest with the Member States and like-minded actors, and participatory consultations carried out by the delegation over the past years, two priority and complementary areas have been proposed.
The two priority areas that are proposed in the Multiannual Indicative Programme (MIP):
Environment and climate change mitigation and adaptation
The combination of high exposure to natural disasters, climate change, poverty, and conflict, with few resources to adapt or to increase communities’ resilience, as well as the recent COVID-19 pandemic, has reduced the survival capacity of local populations that depend heavily on natural resources. This situation translates into domestic and international migration, poverty, public health problems, and environmental degradation. Therefore, we believe that addressing climate change from a mitigation and adaptation perspective is essential for the country’s sustainable development and the implementation of its policies and NDC goals. The EU's international cooperation supports mitigation and adaptation measures in line with the Green Deal, the Paris Agreement, and the Sendai Framework, with an emphasis on limiting adverse climate consequences.
Sustainable economic growth
Nicaragua is one of the poorest countries in Latin America, with 47.1% of the population living in poverty and 18% in extreme poverty in 2019, while agriculture is a key sector for contributing to several SDGs. The reports on greenhouse gases highlight the fact that the main sources are related to land use, land-use change, and forestry. Promoting a transition to greener agriculture will not only benefit food production but will also contribute to reaching the NDC’s goals. A specific focus on value chains will help improve local access to and local consumption of nutritious food by all. In terms of human development, there are three aspects that need to be tackled in Nicaragua so that its human capital is prepared to address the country’s development as well as other 21st century challenges such as migration, climate change, conflict, and shifts towards digital economies: low education standards, equity, and gender inequality, and the skills and jobs mismatch.
The Multiannual Indicative Programme(MIP) for Nicaragua for 2021-2024 amounts to €82 million.
Priority area 1: ‘Environment and climate change mitigation and adaptation’ plans to increase environmental and biodiversity protection for sustainable ecological development, responding to climate change. It also aims to strengthen inclusive conservation and sustainable management of water resources to adapt to climate-related impact and inclusive access to water and sanitation and increase community resilience with a disaster risk reduction, prevention, and preparedness approach to face climate-related impact.
Priority area 2: ‘Sustainable economic growth’ promotes sustainable chains with the potential for economic recovery and social inclusion and female empowerment to be more inclusive and climate-sensitive. It further encourages the increase of resilience to food crises and climate change and the improvement of green economy practices and standards.
It is expected that civil society actively participates in and contributes to each of the MIP priority areas. International and local Civil Society Organisations (CSO)' specific expertise and knowledge position them as key partners in the implementation of efforts in climate change, economic growth, and human development. We will support CSO capacities and skills development and facilitate networking to boost their ability to meaningfully contribute to the country’s development, with a particular focus on geographic priorities and vulnerable groups.