TITLE VI. NATIONAL ECONOMY, LAND REFORM AND PUBLIC FINANCES
Chapter I. National Economy
Article 98
The principal function of the State in the economy is to achieve the sustainable human development in the country; to improve the living conditions of the people and to realize a more just distribution of wealth in the pursuit of a good life.
The State must play the role of facilitator in the production sector which creates the conditions which allow the private sector and the workers to pursue their economic, productive and labor activities in a framework of democratic governance and full legal certainty, so that they may contribute to the economic and social development of the country.
Through the promotion of public and social policies the State must perform a role in the development of the private sector which permits to improve the functioning and the efficiency of the public institutions, to simplify procedures, to reduce entry barriers to the formal sector of the economy, to extend the coverage of social security and welfare services, and to facilitate the functioning of existing companies in the formal sector.
This shall be promoted by means of an alliance of the government with small, middle-sized and large businesses and the workers through a permanent dialogue which seeks to achieve consensus.
Article 99
The State is responsible for promoting the country’s integral development; as the manager of the general well-being, it shall guarantee the individual, social, sectorial and regional interests and needs of the nation. It is the responsibility of the State to protect, foment, and promote private, public, cooperative, associative, communitarian, family-owned, communal and mixed forms of ownership and economic and business management, in order to guarantee economic and social democracy.
The State shall promote and supervise the culture of free and fair competition between economic agents, with the objective of protecting the rights of consumers and users, in accordance with the legal provisions governing these matters.
The conduct of economic activities is primarily a matter for individuals. The leading role of private initiative which includes in a broad sense large, middle-sized, and small businesses, mini-enterprises, cooperative, associative, and other enterprises is recognized.
The Central Bank is the State entity regulating the monetary system. State banks and other State financial institutions shall be the financial tools for economic promotion, investment, and development, and they shall diversify their credits with an emphasis on small- and medium-sized producers. It is the duty of the State to guarantee their existence and functioning in an unassailable manner.
The State guarantees the freedom of enterprise and the establishment of banks and other private and State financial institutions which shall be regulated in conformity with the laws on the matter; they shall be supervised, regulated and audited by the Superintendence of the Banks and Other Financial Institutions. Foreign trade activities, insurance and reinsurance, both public and private, shall be regulated by law.
With the support of the private, cooperative, associative, communitarian and mixed sector the State shall, within the framework of free enterprise and free markets, promote public and private policies which stimulate a broad access to financing, including alternative financial instruments which increase and extend microcredits to the rural and urban sectors.
Article 100
The State guarantees national and foreign investments in order to contribute to the socio-economic development of the country without prejudice to national sovereignty and the rights of workers, as well as the legal framework to encourage public-private partnerships, which facilitates, regulates and stimulates medium and long term investments necessary for the improvement and development of infrastructure, in particular in the areas of energy, roads, and ports.
Article 101
Workers and other productive sectors, both public and private, have the right to participate in the elaboration, execution and control of economic plans, in accordance with the dialogue, alliance and consensus promoted by the State, with the objective of raising productivity through better education and training, better forms of organization for production, adoption of modern technologies, and investment modernized productive capital, better infrastructure and public services.
Article 102
The natural resources are national patrimony. The preservation of the environment, and the conservation, development and rational exploitation of the natural resources are responsibilities of the State; the State may sign contracts for the rational exploitation of these resources in a transparent, public procedure when required by the national interest.
In view of the favorable geographical position of the country, the State may, on the basis of a law, sign a contract or grant a concession for the construction and rational exploitation of an interoceanic canal which must consider, when an investment with a foreign company is under consideration, the possibility of forming a joint venture with national companies to promote employment. The approval, reform or repeal of the laws on the matter require the vote of sixty percent of all members of the National Assembly of Nicaragua.
Article 103
The State guarantees the public, private, cooperative, associative, communitarian, communal, family-owned and mixed forms of property; they form part of the mixed economy, are subject to the higher interests of the nation and fulfill a social function. They shall enjoy the same rights and prerogatives in accordance with the legal provisions, and the legal enjoyment and use of any of these forms of property shall not be perturbed, except in the cases provided for by the applicable law.
Article 104
Enterprises organized in any of the forms of ownership established in this Constitution shall have equal standing before the law and the economic policies of the State. Economic initiative is free.
The full exercise of economic activities is guaranteed without any other limitations than those which, due to social or national interest reasons, the law imposes.
Article 105
It is the obligation of the State to promote, facilitate, and regulate the provision of basic public services of energy, communications, water, transportation, road infrastructure, ports, and airports to the people, and access to these is their inalienable right. Private investments and their modalities and the concessions of exploitation to private individuals in these areas shall be regulated by law in each case.
The services of education, health, and social security are non-transferable duties of the State, which is obligated to provide them without exclusions, to improve and broaden them. The installations and infrastructure of these services owned by the State may not be alienated in any manner. The workers in the education and health sector shall take part in the elaboration, execution and monitoring of the plans, programs and projects addressed to the sector, and shall be governed by the corresponding legal provisions.
Free health care is guaranteed for the vulnerable sectors of the population, giving priority to the completion of programs benefiting mothers and children. Specific family and community health programs shall be developed.
State public health and education services shall have to be expanded and reinforced. The right to establish private health and education services is guaranteed.
It is the responsibility of the State to guarantee quality control over goods and services and to prevent speculation and the monopolization of basic goods of consumption. The State shall guarantee the promotion and protection of the rights of consumers and users through the relevant legislation on the matter.
Concessions for the exploitation of public services assigned to private bidders must be granted in transparent and public procedures, in conformity with the law on the matter, and must ensure that their operation follows criteria of efficiency and competitiveness, satisfaction of the public and fulfilment of the employment laws of the country.
Chapter II. Land Reform
Article 106
The land reform is the fundamental instrument for the democratization of ownership and the just distribution of land; it is a means constituting an essential part for the global promotion and strategy of ecological reconstruction and the sustainable economic development of the country. The land reform shall take into account the socially necessary man-land relationship. Property is also guaranteed to peasants benefiting from the reform, in accordance with the law.
Article 107
The land reform shall eliminate large uncultivated farmlands and shall be implemented primarily with lands of the State. Should the expropriation of large uncultivated farmlands affect private owners, it shall be implemented in conformity with the provision of Article 44 of this Constitution. The land reform shall eliminate any form of exploitation of the peasants and the country’s indigenous communities and shall promote forms of ownership compatible with the economic and social objectives of the country established in this Constitution. The land ownership system of indigenous communities shall be regulated according to the law on this matter.
Article 108
Ownership of their land is guaranteed to all those owners who productively and efficiently work it. The law shall establish specific regulations and exceptions in conformity with the goals and objectives of the land reform.
Article 109
The State shall promote the voluntary association of peasants in agricultural cooperatives, without discrimination based on sex, and in accord with its resources, it shall facilitate the material means necessary to raise their technical and productive capacity in order to improve the standard of living of the peasants.
Article 110
The State shall promote the voluntary incorporation of small and medium agricultural producers, into the economic and social development plans of the country, both in associative and individual forms.
Article 111
The peasants and other productive sectors have the right to participate, through their own organizations, in defining the policies of agricultural transformation.
Chapter III. Of Public Finances
Article 112
The General Budget Law of the Republic has annual validity and its object is to regulate the Public Administration’s ordinary and extraordinary revenues and expenditures. The law shall determine the limits of the expenditures of the State organs and shall indicate the various sources and purposes of all revenues and expenditures, which must correspond to each other.
The National Assembly may modify the Bill of the Budget sent by the President of the Republic, but no extraordinary expenditures may be created except by law and through the creation and determination at the same time of the resources to finance it. The Law of the Budgetary Regime shall regulate this matter.
Any modification of the General Budget of the Republic involving an increase or decrease of credits, reduction of revenues or transfers among different institutions shall require the approval of the National Assembly. The Annual Budget Law may not create taxes.
Article 113
It is the responsibility of the President of the Republic to formulate the Bill of the Annual Budget Law which he/she shall submit to the National Assembly for its debate and approval, in accordance with the law on this matter.
The Bill of the Annual Budget Law shall include, for information of the National Assembly, budgets of the autonomous and governmental entities and of State enterprises.
Article 114
The National Assembly has the exclusive and inalienable power to create, approve, amend, or suppress tax levies. The Tax System must take into account the distribution of wealth and of income.
Tax levies of a confiscatory nature are prohibited.
Medicines, vaccines, and serums for human consumption, orthopedics, and prostheses and the ingredients and materials necessary to produce them shall be exempt from paying any forms of taxation, in conformity with the clarification and procedures established.
Article 115
Taxes must be created by a law that establishes their incidence, taxation type and guarantees of taxpayers. The State shall not force payment of taxes that have not been previously established by a law.
