Introduction
Nicaragua
A day in the life of a Nicaraguan would be influenced by so many factors especially the social-economic status of the individual. With its capital city as Managua located in the southwestern part of the country and its monetary unit the gold Cordoba, the country is situated in Latin America as one of the largest in the Central American countries.
The country has areas covered by both water and land. Nicaragua is has a Caribbean coast that is heavily infested by mosquitoes and also there are mountains, plateaus, and plains in its topography.
It lies in an area that is prone to many earthquakes and volcanic eruptions especially on the Cerro Negro situated on the northwest of Managua. The climatic conditions in Nicaragua are warm and very humid except for the areas in the central highlands. In this country, there are extensive forests in the highlands regions but for the lower elevations in the valley, one can see extensive damage from the agricultural activities and fire.
The country has major problems especially on the soil erosion that is caused by the cultivation of annual crops on the highlands steep slopes and also the depletion of the forests for wood products and human settlement.
There is also an aspect of environmental contamination that has resulted from excessive and ineffective use of pesticides to control malaria.
Brazil
Similarly a Brazilian would wake up and face similar challenges socially, politically, and economically because of the prevailing poor living standards for the majority of people living in Brazil. With the major cities in Brazil being Sao Paulo a Rio de Janeiro majority of the people living in this country are in extreme poverty. The infrastructure is also very poor and this hinders the communication network. The country has vast forested areas that are exploited for their timber and other wood sources. The majority of the plants are unemployed and the few that have employment receive very little income to make them live comfortably and have decent lives. (Wheeler, 1992)
Most of the citizens are involved in farming activities and children are forced to also work on the farms even though it is illegal whereas some of them are street vendors in major cities so that they can also contribute to the family income. The country on the other hand has various industries that are monopolized by the state which manufactures goods such as textiles, metal products, and also petroleum products. Brazil has made tremendous improvement in the economic growth thus it has greatly attracted foreign investors but this is dependent on its ability to comply with the demands of the IMF program.
Relations to the European Union
Brazil
Brazil has a second strategy paper (CSP-country strategy paper) which provides the strategic framework for the European community cooperation with the country during the specified period of 2007-2013. The CSP is a result of the consultation process that involved the various stakeholders who represented the civil society, the state, and the societal actors mainly from Brazil.
The relationship that exists between the European community and brazil is majorly based on the cooperation agreement framework that was signed in 2004. There was also another agreement between brazil and the European Union which is the European union –Mercursor, a cooperation agreement framework that was signed in 1995 whose main aim was the preparation of the interregional association between Mercusur and the European Union.
The funds of the cooperation have been set aside to support the last objective. Research in the recent past shows that Brazil is a democratic stable country and it still has room for further improvement. It is also an emerging political power on both the international and the regional scenarios and the country’s economic power is stabilized and growing steadily. Brazil however still has a society that is very unequal although the indicators socially show that there is an improvement over the past few years and that the country has a very rich but fragile environment.
Through its past cooperation with Brazil, the European Union has supported a very wide range of projects in the country’s different sectors. However, the experience recently shows that there exist limits in the traditional cooperation model. Some projects have a questionable impact given the degree of the problems that have been tackled in such a vast and complementary country like Brazil making it necessary to envision the bilateral cooperation in different terms.
Rather than allocating the moderately modest European community cooperation funds to only individual projects, there is an alternative that was proposed in the CSP that was to support the soft measures expected to have positive multiplier effects on the economic, political, poverty reduction and environmental situation in the country of Brazil. Based on this new approach, the first major priority in the CSP stimulating exchanges, transfer of know-how, and contacts between Brazil and the European community. The main objective of these exchanges will be the provision of input that is valuable for the improvement of social inclusion and the achievement of greater equality in Brazil. There is also the improvement of knowledge mutually in areas of specified interests in the enhancement of the bilateral European community and Brazil relations. (Woodward, 1985)
There is another positive impact that is expected from the given priority which will be raising the European community’s profile in Brazil at the same time raising the Brazilian profile in the European Union.
There is a lot that has been learned from the past cooperation between Brazil and the European Union. First and foremost there has been a positive experience gained in the field of the environment by protecting, improving, and also protecting the environment. This is virtually important for the present and the future generations of brazil and also the promotion of sustainable developments which are very fundamental in the objectives strategically set for the European Union. (Wei, 1997).
Brazil is endowed with vast natural wealth and it also has a lot of commitment to its environment thus making it an in the European community. As a second priority, the European community intends to support the projects in Brazil to promote the environmental aspect of the development that is sustainable in the country, and most preferably the coordination of the European Union with other donors would maximize the impact.
Nicaragua
Nicaragua as a country takes part in the San Jose dialogue between the Central American countries and the European Union. These conferences have gradually been building a platform for closer economic links, regional integration, and closer cooperation. During the European union-Latin America and the Caribbean summit held in Madrid, there was an agreement in negotiating new political dialogue and cooperation with six of the six countries in Central America.
Just like Brazil, the trade relations between the European Union and Nicaragua exist in a general system preferences framework. (GSP). Nicaragua is also a beneficiary of a special program aimed at combating drug trafficking and production in the country. Nicaragua has been receiving funding from donors and the European Union is the main donor as the United States and Japan are also significant contributors.
The European Union community aid was mainly focused on poverty alleviation and the resettlement of returnees, refugees, and persons displaced while playing a significant role in the restoration of peace in most parts of the country. (Vanden, 1993)
The 2006-2013 European community strategy has already been designed to follow through the consultation process with the multi-stakeholder. The European Community has been supporting the country’s governance particularly in the consolidation of democracy and the implementation of the rule of law.
It has also played a significant role in the betterment of the education system in the country and it has also invested a lot in the human capital to reduce the inequalities socially and other prejudices. Through the European Union, the country’s economic status has stabilized since its integration in the global economy which contributes to equitable and sustainable economic growth.
Extreme Socialism
There is feasible socialism in Nicaragua and also Brazil. This is mainly indicated by various features such as in both countries in the economically active populations are only above 20%in the working-class people. The unions are very weak and they have very few members and also there are very few social and political developments. (Walker, 1982).
In Nicaragua, there are socialist parties that are weak and they further concentrate on the light industry. Democratic socialism in both countries has ideally affected the country’s economies with the advocating that the means of production be owned by the entire population whereas the political power is bestowed in the hands of the people through democracy.
Through socialism there have been very poor housing for the people and also wage levels have been extremely low not forgetting that the education opportunities have also been very scarce and the healthcare facilities in very poor conditions.
Most of those living in both these countries are illiterate as there exists a wide gap between the minority who are the rich and the majority who are in extreme poverty. In Nicaragua for instance, the Sandinistas made a comeback in the 2006 general elections with their leader being elected as the country’s president for a second term. They have further promised wealth redistribution to those who are in extreme poverty. The same case applies to Brazil which has also experienced center-left governments which do not support globalization. (Stanislawski, 1983).
Geographic Factors Affecting the Local and International Businesses
Nicaragua has a Caribbean coast that is known for the mosquitoes infesting the area. This reduces the level of tourists who visit the country locally and internationally which further reduces the economic benefits from tourists. In Brazil similarly, the country has a very unstable political and economic climate which discourages several trade partners both locally and internationally. (Spalding, 1987)
The topography of Brazil does not encourage trade transactions since there is poor transport and communication network influenced by the plateaus and highland areas that are also impossible to access. The country of Nicaragua on the other hand has plateaus and mountain ranges that have been affected by soil erosion caused by ineffective farming practices. The transport and communication network in the country is very poor and this affects the trade relations between Nicaragua and other neighboring or other countries located internationally.
Most of the rivers and lakes in the country are not navigable and there are also no proper navigation tools and modernized equipment that can be used to effectively transport the goods from the interior parts of the country. It is very little and even inaccessible in the interior parts of the country such that any trade procedures or even the trade processes are done in the country’s capital which has better facilities.
The country is also located in a high seismic area and thus it is prone to fatal earthquakes which lead to the loss of life and also the collapse of buildings. This further causes the international and local investors to fear investing in the country for the fear of the losses that they might incur in case of any calamity. (Pezzullo, 1993).
Another factor that may affect the country’s trade relations with other countries is the fact that the rainfall is averagely very high during the year, especially along the infested Mosquito Coast. This is not conducive for most of the trade partners who do business in Nicaragua. The road network in Brazil is very poor which makes it difficult for trade transactions to effectively be carried out.
Brazil also has soils with poor drainage which encourages flooding during the periods of the wet seasons and this further cuts the linkages between the flooded regions and the outside world. This makes it hard to carry out any business transactions between Brazil and other outside countries. It is also important to note that Brazil is located in a high seismic region and this means that earthquakes are recurrent in the country causing a lot of harm and loss f life to the residents.
This situation makes a lot of local and international business partners fear investing in the country since they could risk losing a lot of their investments in case such a catastrophe would occur. (Nolan, 1984).
The existence of a road network that is very poor in both countries greatly affects the transportation of goods and services to most parts of the country. There are a lot of delays involved when it comes to the communication network since only the major cities in these two countries have an access to modern facilities for communication purposes. Both countries also do not have a variety of other means for transport and communication and they solely depend on the poor roads which tend to waste a lot of time during transportation. (Norsworthy, 1990)
Social and Political Factors in Both Countries
The welfare social systems of both countries are similar since they both are under the socialist system. In Nicaragua however, there has been an establishment of the insurance social law that looks into the covering of the employees in various sectors such as; employment injury, unemployment, sickness, maternity, occupational disease, and even death. (Luciak, 1995)
Similarly, in Brazil, there is a law that was enhanced to ensure that the employees have benefits such as access to healthcare facilities and other provisions affecting them socially. In both countries, women are discriminated against the men and they tend to hold low positions in the government and the health sectors even though there is no official discrimination against women. (Kagan, 1996)
Most key positions are held by the men who control a larger part of the country’s economic and social factors. In these countries, there is rampant sexual and domestic violence against women and girls but unfortunately, it is seldom that the perpetrators are prosecuted. In Nicaragua, the children are subjected to child labor as they also make contributions towards household incomes.
However, in both countries, there has been a dramatic decline in the abuses of human rights. There are many organizations in these countries that act as the major employers to the poor majority and the pay is equally very low. The religion that is predominant in both countries is Catholicism even though there are other evangelical churches not forgetting that the Muslims are also there but in scarcity.
The political instabilities especially in Nicaragua have adverse effects on the country’s social-economic status. This is so because the political climate of a country determines its economic and social developments. (Dijkstra, 1992)
Open Markets
Brazil and Nicaragua have had their countries growing faster and achieving good aggregate results in the area of trade and its integration. Amongst the large cities in the two countries there is little foreign investment and very poor export activity this is because of the poor infrastructure. The governments in both countries have been providing a regulatory framework for good infrastructure thus enabling their countries to have access to the international markets. (Brentlinger, 1995)
Nicaragua began to initiate the free-market reforms after 12 years of the economic free fall in the Sandinista regime in 1991. The open markets have made dramatic progress despite some major setbacks. The open markets in both countries have encouraged the privatization of the enterprises owned by the state and also the rate of inflation has been reduced significantly thus reducing the amount of the foreign debt.
Since the foreign debt has declined the account balance in both of the countries declined in the GDP. The open markets have further led to the expansion and the growth of their economies and the countries have been experiencing significant reforms in the social and economic sectors. (Borge, 1982)
Both countries encourage private investment and there are minimal restrictions that are imposed on capital repatriation and the remittance of profits. Even though the political climate in both countries influences foreign investors the countries are making efforts to improve and make their countries favorable for foreign investors as they also initiate favorable investment terms. (Wei, 2000)
Reference
Borge, T (1982): The Sandinistas Speak Speeches and Writings of Nicaragua’s Leaders, New York. Pathfinder.
Brentlinger, J (1995): The Best of What We Are; Reflections on the Nicaraguan Revolution. Amherst. Mass University of Massachusetts Press.
Dijkstra, G (1992): Industrialization in Sandinista Nicaragua; Policy and Practice in a Mixed Economy, Boulder, Colo.Westview.
Kagan, R (1996): A Twilight Struggle; American Power and Nicaragua. 1977-1990, New York, Free Press.
Luciak, I (1995): A. The Sandinista Legacy; Lessons from a Political Economy in Transition. Gainesville, University Press of Florida.
Nolan, D (1984): The Ideology of the Sandinistas and the Nicaraguan Revolution. Miami, University of Miami North-South Center.
Norsworthy, K (1990): A Country Guide. 2d ed, Albuquerque, Inter-Hemispheric Education Resource Center.
Pezzullo, L (1993): At the fall of Somoza. Pittsburgh, University of Pittsburgh Press.
Spalding, R (1987): The Political Economy of Revolutionary Nicaragua. Boston; Allen & Unwin publishers.
Stanislawski, D (1983): The Transformation of Nicaragua. Berkeley, University of California Press.
Vanden, H (1993): Democracy and Socialism in Sandinista Nicaragua. Boulder. Colo, L. Rienner publishers.
Walker, T (1982): Nicaragua in Revolution. New York, Praeger.
Woodward, R (1985): Central America; A Nation Divided. 2nd ed. New York: Oxford University Press.
Wei, S (1997): Why Is Corruption So Much More Taxing Than Tax? Arbitrariness Kills, oxford press, London.
Wei, S (2000): How Taxing Is Corruption to International Investors? The Review of Economics and Statistics, oxford press, London. pgs. 1-11.
Wheeler, D (1992): International Investment Location Decisions, the Case Of U.S. Firms, Journal of International Economics pgs, 57-76.
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