A drastic fall in productive activity, outflows of investments and the disappearance of thousands of formal jobs are some of the consequences a year after the political and economic crisis in Nicaragua.
In March 2018, CentralAmericaData reported the figures that reflected the economic boom that Nicaragua was experiencing: formal employment grew at a year-on-year rate of close to 3%, economic activity each month recorded year-on-year growth rates of between 4% and 5%, while consumption and imports increased. Only a month later, on Friday, April 19, a series of events occurred that determined a radical change in the trend observed until then. The announcement of the reform of the Nicaraguan Social Security Institute triggered a social, political and economic crisis that the country is suffering so far.
The union has reported that five months after the outbreak of the social and political crisis in Nicaragua, the country has lost about 68,000 of the 120,000 jobs generated by the sector.
The National Chamber of Tourism (Canatur) presented a report highlighting the impact of the country's social and political crisis on the tourism sector.
The complicated situation happening in the country since mid-April has forced nearly 70% of SMEs in the textile and clothing industry to suspend their operations.
According to information from the Chamber of Industries of Nicaragua (Cadin), 30% of small and medium size textile and clothing companies that are producing are doing so at 25% of their capacity.The situation in the sector has led to the temporary suspension of eight out of ten workers.
In the optimistic scenario, which foresees an end to the crisis in Nicaragua by the end of July, economic growth at the end of 2018 would be only 1.7%, with $400 million losses in added value.
The Nicaraguan Foundation for Economic and Social Development projects that a possible first scenario would be one where "...the government accepts an early exit negotiated and implemented no later than the end of July, thus achieving a framework of understanding focused on the issues of justice and democratization, putting an end to repression, violence and citizen insecurity."
Due to the crisis in the country, the Central Bank has reduced the estimate of economic growth for this year from the range of 4.5% to 5%, to the range of 3% to 3.5%.
Ovidio Reyes, president of the Central Bank of Nicaragua (BCN), explained that "... the hardest and most regrettable thing about this is the generation of employment.We are expecting the loss of 58,300 new jobs as a result of the lower economic dynamics."
A study conducted in July by the Chamber of Commerce of Honduras shows that extortion has caused the closure 1,600 companies.
Crime that has been affecting the country's economic development, discourages investment and generates job losses, said Mario Bustillo, president of the Chamber of Commerce of Tegucigalpa.
"The result is alarming, 1,600 companies mostly from the commercial sector, have been the victim of extortionists who started with small amounts, then after charging the ‘war tax’ weekly, they demanded payment every day", eeported Laprensa.hn.
Hewlett-Packard is to lay off 27,000 of its employees around the world, and it has not yet been announced whether offices in Costa Rica will be affected.
According to an article in Nación.com the operations of Hewlett-Packard in Costa Rica employ 7,000 people, making it the second largest employer in the country after the supermarket chain Walmart.
The understandable concern over the impact of a considerable part of the planned layoffs possibly occurring in the multinational offices in Costa Rica, has not been cleared up by executives of Hewlett-Packard at their headquarters in Palo Alto, United States who in response to queries answered: "Because we have not yet announced specific plans, we have nothing more to share other than the fact that the workforce reduction will affect almost all regions and businesses".
Restructuring plans involve up to 8% of the workforce of the multinational being discharged, which could affect its operations in Costa Rica.
Hewlett Packard plans to cut its global workforce of more than 300,000 employees by 8%. Some twenty-five thousand jobs could be eliminated.
Meg Whitman, the CEO of HP, is trying to stop the decline in the growth of the corporation, which led to the departure of his predecessor Leo Apotheker.
The construction sector has failed to retrieve the 15 thousand jobs it lost since September 2008.
The Salvadoran Chamber of Construction (CASALCO) projected for this year that the industry will close with negative growth of 3%.
CASALCO Executive Director noted that this year, besides the lack of private sector investment, there was almost no public investment projects implemented.
As of October, about 50,000 jobs were lost in the construction sector.
The Honduran Chamber of Construction Industry (CHICO), identified as the main cause the economic crisis in the country.
Digital Process publishes, "Another factor which has influenced reduction of employment in the construction sector is the lack of interest by the government to generate investments, and the delay in the adoption of renewable energy projects, said Juan Carlos Sikaffy, member of Chico”.
Despite a mild recovery in some sectors, the economy has shredded 5.000 jobs in the first four months of the year.
Carlos Acevedo, president of the Central Bank of El Salvador (BCR), noted that the figure is an improvement when compared to the same period of 2009, when the economy lost 40,000 jobs.
According to Acevedo, the employment market will recover no earlier than October 2010.
The latest business survey carried out by Asies reveals that expectations of a recovery in the second half of 2010 have been postponed to 2011.
In the previous survey from the Association for Investigation and Social Studies (ASIES) the perception was that the Guatemalan economy would recover in the last six months of this year. However, the results of the latest survey cast doubt on this recovery with the main indicators of business activity showing unfavorable behavior relative to the previous study.
The manufacturing industry of El Salvador was the hardest-hit by the global economic crisis.
The textile industry was the worst performing, losing 14.000 jobs, followed by the food industry (1.600 jobs), pharmaceutics, rubber, minerals and iron.
A report developed by the Salvadoran Industry Association (ASI) states: "As for production, industry will close 2009 with a 2.5% drop, in line with GDP projections...".
From January to August, 63.917 workers have been fired, according to data from the Work Secretary.
The actual figure could be much higher, warned Work Minister Nicolás García, who explained that "... many fired workers do not report to the Ministry, and they settle termination conditions directly with their employers".
Small and medium companies were the hardest hit: "...this sector has lost thousands of jobs; it is hard to measure accurately, as many micro entrepreneurs are not affiliated with any union".
Asies latest business survey reveals the loss of 29.000 jobs between July 2008 and July 2009.
Out of the 914 companies who participated in the survey, 7% reduced their installed capacity.
"68% of the companies reduced their production, 15% increased it and for the remaining 17%, it remained unchanged" explained Violeta Hernández, Asies consultant.