Settled as a colony of Spain in the 1520s, Nicaragua gained its independence in 1821. Violent opposition to governmental manipulation and corruption spread to all classes by 1978 and resulted in a short-lived civil war that brought the Marxist Sandinista guerrillas to power in 1979. Nicaraguan aid to leftist rebels in El Salvador caused the US to sponsor anti-Sandinista contra guerrillas through much of the 1980s. Free elections in 1990, 1996, and again in 2001 saw the Sandinistas defeated. The country has slowly rebuilt its economy during the 1990s, but was hard hit by Hurricane Mitch in 1998.

PEOPLE
Most Nicaraguans have both European and Indian ancestry, and the culture of the country reflects the Ibero-European and Indian heritage of its people. Only the Indians of the eastern half of the country remain ethnically distinct and retain tribal customs and languages. A large black minority, of Jamaican origin, is concentrated on the Caribbean coast. In the mid-1980s, the central government divided the eastern half of the country--the former department of Zelaya--into two autonomous regions and granted the people of the region limited self-rule.

HISTORY
Nicaragua takes its name from Nicarao, chief of the indigenous tribe then living around present-day Lake Nicaragua. In 1524, Hernandez de Cordoba founded the first Spanish permanent settlements in the region, including two of Nicaragua's two principal towns: Granada on Lake Nicaragua and Leon east of Lake Managua. Nicaragua gained independence from Spain in 1821, briefly becoming a part of the Mexican Empire and then a member of a federation of independent Central American provinces. In 1838, Nicaragua became an independent republic.

ECONOMY
Nicaragua began free market reforms in 1991 after 12 years of economic free-fall under the Sandinista regime. Despite some setbacks, it has made dramatic progress: privatizing more than 350 state enterprises, reducing inflation from 13,500% to 8%, and cutting the foreign debt in half. The economy began expanding in 1994 and grew 2.5% in 2001, with overall GDP reaching 2.44 million in 2001. In 2001, the global recession, combined with a series of bank failures, low coffee prices, and a drought, caused the economy to retract.

Full country name: Republic of Nicaragua
Area: 129,494 sq km (50,180 sq mi)
Population: 5,603,000  (growth rate 2.6%)
Capital city: Managua (pop 1 million)
People: 69% mestizo, 17% European descent, 9% African descent, 5% indigenous peoples
Language: Spanish, English Creole, Miskito
Religion: Roman Catholic 73%, Protestant 16%
Government: Republic
President: José Daniel Ortega Saavedra
GDP: US$2.2 billion
GDP per capita: US$452
Inflation: 11%
Major industries: Coffee, seafood, sugar, meat, bananas, food processing, chemicals, metal products, textiles, clothing, petroleum refining and distribution, beverages, footwear
Major trading partners: Canada, Japan, Germany, Venezuela, USA, the rest of Central America