It is always difficult to know if one's own perception of the state of things is representative of that of the majority of the population in the area or country where one lives. So many unknowns and variables can positively or negatively affect the lives of different parts of the population.

In as much as any subjective perception is valuable in terms of evaluating the national situation, though, there is no reason why life in the rural farming community where I live should be significantly easier than the average campesino experience in Nicaragua. The impression I have of my family's and friends' lives, is that, things have not changed dramatically for better or for worse since the onslaught of the worst economic crisis since the Great Depression.

It is true, I do not live in an area affected by a wave of sudden mass dismissals due to the closure of free trade zone factories. If I did this article may well have been written very differently. But, a brief analysis of the recent economic and social indicators confirms that the international economic crisis has not by any means provoked what could be described as a devastating impact on the Nicaraguan economy.

Since the crisis began to affect the national economy during the second half of 2008 exports have not fallen as much as some analysts anticipated thanks to newly established trade links with countries like Venezuela and Russia. Despite a significant reduction in the value of overall exports during the second semester of 2008 and the first few months of 2009, the figure is still higher than in 2007, and since April this year has actually begun to ascend again Simultaneuosly, Nicaragua's trade deficit has been reduced significantly compared to last year and slightly compared to two years ago (see table below).

International trade figures
(in US$ millions)

	2007 (Jan - May)	2008 (Jan - May)	2009 (Jan - May)
Exports	510.4	664.2	590.4
Imports	1,215.7	1,679.2	1,277.7
Trade deficit	705.3	1,015.0	687.3

source: Coyuntura de la Economía Nicaragüense Julio 2009

Another sign that the government's economic policy is proving to be far more prudent than the opposition would have us believe is that, despite the Treasury Ministry being obliged to take US$40 million from Nicaragua's international reserves in January in order to cover the budget deficit created as a result of European countries' decision to suspend a certain amount of aid, the country's reserves have since recovered and superseded the level registered in December 2008. At the end of 2008 the country's international reserves were worth US$1,141 million. By July 15th 2009 this figure had risen to US$1,178 million according to a recent Central Bank publication.

In order to measure the extent to which ordinary Nicaraguan have been affected by the impact of the international economic crisis, and consequentially, how the crisis may have affected the government's popular support, it is important to bear in mind that the majority of the population pays little attention to the relentless smear campaign against everything the government does, promoted by the corporate media and the opposition parties. Someone observing Nicaragua from outside the country with access only to the Nicaraguan corporate media's version of reality, could be forgiven for thinking that the country's economy is on its knees and that widespread and passionate opposition to the government is growing. 

The way most Nicaraguans measure their well-being, though, is almost entirely based on their day to day experience - whether or not they have access to some form of employment, to what extent their income covers the cost of living, whether their kids are able to attend school, to what extent they are able to overcome ill health, whether the basic infrastructure they depend on (roads, transport, electricilty, sanitation) is in a better or worse state that last year, etc.

With this in mind, one of the most significant and damaging impacts of the crisis has been the closure of a number of transnational owned factories in Nicaragua's Free Trade Zones resulting in the loss of over 20,000 jobs. Nevertheless, the record levels of direct foreign investment recorded in Nicaragua since 2007, along with the government's successful policy of making credit available for micro and small enterprise and agricultural production have, to a large certain extent, mitigated what would otherwise have threatened to become a dramatic unemployment crisis.

As is demonstrated in the table below, the number of workers registered with the Nicaraguan Social Security Institute, INSS (which includes all public employees and workers employed by publicly registered enterprises) has steadily increased each year since 2006. (The 2009 average is based on monthly figures published until May of this year).

2006	420.3
2007	459.0
2008	493.4
2009	498.3

     
It is a well known fact that the great majority of Nicaraguan workers work in the informal sector, and therefore will mostly not be registered with the INSS. Obviously it is much more difficult to measure the number of informal sector workers. As part of President Daniel Ortega's 2008 end of year report, however, official figures demonstrating the impact of government coordinated programs aimed at facilitating work within the informal sector were published.

The table below shows the number of direct and indirect jobs created as a result of the four main government coordinated informal sector support programs in 2007 and 2008. (As yet the government has not presented the relevant figures for 2009 but the programs have continued to benefit large numbers of informal sector workers during the first eight months of 2009). 

	Direct permanent jobs	Indirect temporary jobs	Accumulated
Zero Hunger	48,802	97,604	146,406
Credit for small farmers	199,438	398,876	593,314
Zero Usury	71,526		71,526
Credit for small tourism enterprises	6,378		6,378
Total	326,144	496,480	822,624

In terms of the extent to which workers' salaries have maintained their value during the last couple of years, Central Bank figures show that the real value of private sector workers' wages (in relation to the US dollar) was devalued significantly during 2008 but during the first four months of 2009 restored and superseded its value compared to 2007. (The significant volatility of the US dollar over the last five or six years, however, makes it difficult to gauge the real change in purchasing power of Nicaraguan salaries.)
                         

2007	84.5
2008	77.0
2009 (Jan - Apr)	85.5

Another way in which the government has successfully reduced the potentially devastating effects of the crisis for ordinary people is by reducing the government's administration costs and the amount spent servicing the public debt (thanks to the renegotiation of the onerous internal debt) and increasing social spending (see table below).

	2006	2007	2008
Social spending	587.6	668.4	781.5
Government administration	204.5	146.4	172.8
Public debt	115.0	96.7	74.6

Figures for 2009 are as yet unavailable. It is important to point out, however, that, since the beginning of 2009, the government has implemented a rigid policy of austerity involving all State institutions aimed at significantly reducing administration costs in order not to reduce spending on critical areas like health and education. 

One consistent characteristic of the FSLN government's management of funds has been its ability to do more with less. The government is pretty much obliged to maintain an economic program with the IMF in order to guarantee the liquidity it needs to carry out its program. In doing so, however, its sovereignty over the budget details is, to a certain extent, limited.

One example of how the government is able to do significantly more than previous neo-liberal governments in areas like health and education is how, with only slight increases in the percentage of the GDP spent on those sectors, a significantly larger amount per capita is spent on the population making use of those services (see table below). This is possible thanks to public sector policies like a limit on salaries for top positions and a general reduction in government bureaucracy. 

	2004	2005	2007	2008
% of GDP spent on education	4.4	4.7	5.0	5.3
amount (US$) spent per student	79.8	92.2	164.3	203.1
% of GDP spent on healthcare	3.2	3.4	3.7	3.7
amount (US$) spent per cápita	24.9	29.1	37.8	41.6

When considering the impact government coordinated programs are having on the Nicaraguan population, it is essential to bare in mind that the social spending registered within the budget represents only a part of the overall funding for social projects managed by the government. 

Thanks to Nicaragua's membership of the regional energy integration program Petrocaribe, made possible thanks to the Venezuelan government, 50% of the value of petroleum imported from Venezuelan company PDVSA (equivalent to 5.9 million barrels in 2008) is made available as a loan to be paid back over 25 years with 1% annual interest. The funds made available (over US$270 million in 2008) are used for different social and infrastructure projects.

The petroleum is imported by ALBANISA, a mixed company of Nicaraguan and Venezuelan capital, which also manages the social project funds in accordance with conditions set by Petrocaribe's 19 regional governments. So far in Nicaragua the funds have been used to carry out a vast array of projects including housing projects, a nationwide literacy campaign, local infrastructure projects (neighbourhood roads, bridges, sewers, etc.) and the provision of low interest loans for small enterprise and agricultural production.

It is thanks to Nicaragua's involvement in the regional integration initiatives ALBA and Petrocaribe that the government has had the resources with which to implement its food sovereignty and security policy so successfully.

The reactivation of ENABAS (the State company responsible for guaranteeing basic food supply) since 2007 has had an increasing presence across the country, enabling the company to exercise growing influence on basic grain markets resulting in much greater stability of both the price paid to basic grain producers and the price paid by consumers.

Low interest rate loans-in-kind of certified seeds and fertilizer provided by, among others, the Rural Development Institute and the Ministry of Agriculture, along with guaranteed purchase and fixed price agreements with ENABAS have permitted tens of thousands of small and medium farmers to increase yields and reinsert themselves as players into local and national markets. 

The government's food policy has been the object of praise by the UN's Food and Agriculture Organization (FAO) on a number of occasions. Recently FAO country representative, Gero Vaagt, confirmed that the Nicaraguan government's food security program had been identified as one of the two most successful programs (along with Sierra Leone's) of over 60 such programs monitored and supported by the FAO around the globe. 

The FSLN government's food policy, which as well as the above mentioned measures involves free school meals for all primary school children and support of community and school run vegetable gardens, has significantly reduced the percentage of the Nicaraguan population suffering from chronic malnutrition according to Vaagt. This is a stunning achievement at a time when the international organization is registering record levels of malnutrition worldwide. (1)

The international corporate media's suggestion that the worst of the crisis is over, is regarded as inaccurate and over-optimistic by many respected economists. Certainly, it would be wishful thinking to assume that from now on things will become gradually easier for a vulnerable economy like Nicaragua's. So far the government's crisis mitigation policies have been commendable, though, and there is no apparent reason why this should change in coming months.

Undoubtedly opposition forces at home and abroad would have hoped that the impact of the economic crisis would weaken popular support for the FSLN government. At this point, there is no reason to suggest this is the case. With presidential elections just two years away, the FSLN has maintained its position of favourite against an unconvincing and divided opposition.