Economic Growth: Why is Panama Succeeding and Nicaragua is Failing?

About 1 billion people in the world live in extreme poverty. Paul Collier believes that people in this group live in countries that have been plagued by the environment of the 14th century (civil war, illness, ignorance, etc.), so "at least 1 billion people". At the same time, the majority of the remaining 5 billion people live in countries that have experienced unprecedented level of economic growth and happiness (Collier, pages 3-5). The purpose of this paper is to a) identify two major positive factors and two major negative factors to promote economic growth, b) compare and analyze the economic growth indicators of Panama and Nicaragua, and compare the three It is to discuss important lessons.

Nicaragua is the largest country in Central America (excluding Mexico) and is considered as a complement to Panama's sea canal. Mainly agricultural culture (60% of Nicaraguan exports) from 2007 to 2009, tourism growth has affected Nicaragua's foreign direct investment by about 79%. Nicaragua has many cultural norms and values ​​in the majority of Central America, but still has a unique culture. The culture of Nicaragua is divided into a more traditional Hispanic formal culture, a new revolutionary equalityism and an informal culture. Like most Central America, the Roman Catholic Church also has most of its supporters and minimal political influence, giving social structure and hierarchy.

When it becomes Central America, the countries included are Nicaragua, Honduras, El Salvador, Guatemala and Costa Rica. Belize and Panama are occasionally included, but Belize is a very small country with little economic meaning, Panama has not yet participated in Central America's common market. In the 1950s Central America exported cash crops such as coffee, banana, sugar, cotton and began to grow rapidly. That growth continued until the end of the 1970s when the world demand, which was affected by the two oil crises, shrank and the economy collapsed suddenly. In the 1980s they were at a difficult and critical stage because the economy depended on exports and there was not enough demand to sustain economic growth. The Central American economy is not only not growing, it is dramatically shrinking. The most important thing is that the political turmoil made the Central American citizens extremely poor. The 1990s was the time of recovery and reorganization. Costa Rica is the major country to rebuild the economy

Is it really worthwhile to build a canal in Nicaragua? Since Nicaragua employs the idea of ​​transporting a canal, the first question to be borne out is whether building a canal in Nicaragua is really worthwhile. A lot of people say that Nicaragua needs a canal, looking at Panama's enviable economy, but they do not recognize the problem that it brings. Many people know exactly the history of the Panama Canal, but few people know how many people died to make it, and how much trouble it caused to Panama. The canal can promote national tourism and economic growth, and even the work it creates can be mentioned, but not all. To build such a canal requires a great deal of effort and dedicated effort. Many companies went bankrupt and tried to build the Panama Canal Many famous architects and engineers lost their jobs after "Great Ditch" destroyed the reputation.