Nicaragua faces a host of problems as it continues to recover from the economic problems of the Sandinista period. Despite some debt relief and forgiveness through the HIPC and other aid programs, the nation continues to have one of the highest debt per capita ratios in the world. The nation's main opposition party, the Sandinistas, actively seeks to undermine economic reforms.
On the other hand, there are a variety of positive signs that the economy will continue to improve. Inflation and unemployment have decreased dramatically over the past decade. From 1998-2000, the economy added 250,000 new jobs. In addition, a number of foreign companies have begun to invest in Nicaragua, especially in the services sector. The government's aggressive development of free trade zones will also continue to attract more foreign companies. One of the most promising potential developments for the nation would be the construction of a railway linking the Caribbean and Pacific coasts and offering an alternative to the overburdened Panama Canal.
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