The purpose of this Poverty Assessmentis to provide background material and analysis that willassist the Government in designing this strategy, but it isnot itself designed to formulate the strategy. Chapter 1looks at the macro situation in historical perspective,including structural reform during the 1990s, and thecurrent debt and balance of payments situation. Chapter 2examines poverty in Nicaragua today and during 1993-98 andincludes the results of a qualitative assessment of poverty.Chapter 3 looks at public expenditures in the social sectorsand their impact on poverty. Chapter 4 looks at ruralpoverty and agriculture, while Chapter 5 lays out key issuesthat would be important to address in a poverty reductionstrategy. Some key priorities emerge from the analysis thatshould be considered: 1) Broad-based growth is essential toreduce poverty. 2) Poverty reduction is limited bypopulation growth. 3) Sustaining rural income growth. 4)Improvements are needed in the public sector to build strongprograms that reach the poor. 5) Foreign capital inflowsdistort expenditures. 6) Donors share the responsibilitywith the Government to reconsider priorities in order toensure greater impact of development assistance on povertyreduction. 7) Sustaining the provision of basic socialservices and building human capital. 8) Establishingeffective social protection mechanisms for the poor.
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