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The Role of Private Wildlife
Reserves in Nicaragua's
Emerging Ecotourism
Industry
M.E. Barany , A.L. Hammett , L.J. Shillington
& B.R. Murphy
Published online: 29 Mar 2010.
To cite this article: M.E. Barany , A.L. Hammett , L.J. Shillington & B.R.
Murphy (2001) The Role of Private Wildlife Reserves in Nicaragua's Emerging
Ecotourism Industry, Journal of Sustainable Tourism, 9:2, 95-110, DOI:
10.1080/09669580108667392
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The Role of Private Wildlife Reserves in
Nicaragua s Emerging Ecotourism Industry
’
M.E. Barany, A.L. Hammett, L.J. Shillington and B.R. Murphy
College of Natural Resources, Virginia Tech, 210 Cheatham Hall (mail
code 0323), Blacksburg, Virginia 24061 USA
Ecotourism promises to be the fastestgrowing segment of Nicaragua’s fledgling tourist
industry, which is already the country’s second highest generator of foreign exchange.
Development of a lucrative ecotourism industry offers a unique opportunity for Nica-
ragua to unify economic growth with natural resource stewardship in a single
sustainable development strategy. However, as ecotourism is largely dependent on
protected area systems, the current condition of Nicaragua’s public protected area
systemisa major obstacleto the industry’s development. Limitedby inadequatepublic
financing, the establishment of private wildlife reserves can compliment Nicaragua’s
under-developed public protected area system, further enhancing the desirability of
Nicaragua as an ecotourist destination. The opportunities and constraints of private
reserve establishment are examined in this study of Nicaragua’s first legally recog-
nised private wildlife reserve.
Introduction
Nicaragua’s tourist industry lags behind that of other countries in the region.
However, the country’s recent political stability, natural resource richness, and
proximity to Costa Rica has recently made tourism Nicaragua’s second highest
source of foreign exchange, with ecotourism playing an expanding role (US
Embassy, 2000b). In need of sustainable rural development strategies, establish-
ment of a successful ecotourism industry can offer Nicaragua important
economic, environmental, and socialbenefits. Currently, the industry’s potential
is threatened by environmental degradation and the inability of the government
to finance its expansive, but under-managed, protected area system (Figures 1
and 2).
In developing nations, protected area systems account for a substantial share
of the overall revenue accumulated from tourism (Weaver, 1998). In a survey of
visitors to Latin American airports, 48% of the respondents said that protected
areas were a very important reason for travel to the region (Boo, 1990). In Costa
Rica, protected areas were visited by 66% of the 780,000 tourists in 1996 (M.
Mejia, pers. comm., 5 October 1999). This evidence represents the major influ-
ence that protected area systems have on tourists’ choice of country
destinations. Development of ecotourism in the region thus depends in part on
the condition of national protected area systems. However, countries such as
Nicaragua lack the financial resources necessary for a developed national
system.
Where the public sector is too financially constrained to effectively manage
protected areas, sustainable tourism can be a direct way to generate a revenue
0966-9582/01/02 0095-16 $16.00/0
© 2001 M.E. Barany et al.
JOURNAL OF SUSTAINABLE TOURISM
Vol. 9, No. 2, 2001
95

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Journal of Sustainable Tourism
Figure 1 Country Map (LANIC, 2000)
Figure 2 Protected Areas of Nicaragua (UdSi, 2000)
base that can financially support management of protected area systems. If
promoted, an ecotourism industry could increase finances for the underdevel-
oped Nicaraguan protected area system, contributing to the overall quality of
Nicaragua’s environment, and increasing the desirability of the country as a
tourist destination. When ecotourism to developing countries is largely
dependent on established protected area systems, how can developing countries

Private Wildlife Reserves and Ecotourism in Nicaragua
97
with underdeveloped protected area systems, such as Nicaragua, capitalise on
the growing demand for ecotourism?
Justification
This paper will examine the potential of private wildlife reserves to comple-
ment public protected area systems, thus contributing to the development of a
nationalecotourism industry. Private reserves are defined as ‘sites owned free-
hold or formally leased by individuals, corporations and other private bodies
in which wildlife conservation is a primary activity and the responsibility of
such owners or leaseholders’ (Watkins
, 1996). As private initiatives are
et al.
becoming increasingly important to biodiversity conservation (Langholz,
1996), partial privatisation of park management and the number of privately
owned small ecotourism reserves are increasing throughout Central America
(Barborak, 1992).
Nicaragua recently passed legislation that officially recognises private
reserves, making Domitila Private Wildlife Reserve Nicaragua’s first legally
recognised private reserve. This paper presents the development of this private
reserve and emphasises the methods by which private reserves can greatly affect
thesuccessofNicaragua’s ecotourismindustryin the initial stagesofits develop-
ment. This is an important study as very little attention has been given to the role
of private nature reserves in sustainable tourism development. It was also found
that there is a deficiency of research on Nicaragua’s efforts to develop a private
reserve system. The constraints and opportunities for private reserve establish-
ment experienced by Domitila and addressed in this paper are novel
contributions to the development of Nicaragua’s ecotourism industry.
Methodology
Based on the need of developing countries to generate foreign exchange, we
explored various models of sustainable development strategies. Nicaragua was
chosen as a focus point. The country’s recent transition from a closed economy to
a liberalised market has magnified both the challenges of resource management
in a globalised economy and the potential for adopting innovative strategies.
First we conducted a detailed literature search hoping to locate research and
development work concerning Nicaragua’s protected area systems, ecotourism,
and private reserve development. This was followed up by visits to several
public protected areas in the southern Pacific region and to the Domitila site.
Throughout this visit we conducted unstructured interviews with government
officials, non-governmental organisations (NGOs) involved in natural resource
management, and members of the private sector (including the owners of
Domitila). These interviews were followed up through e-mail correspondence,
as policies affecting the development of private reserves in Nicaragua have
recently changed.
Layout of the paper
The results from our research are presented in the following sections. First, we
argue that there exists a potentially positive relationship between Nicaraguan
private nature reserves and the development of a successful nationalecotourism

98
Journal of Sustainable Tourism
industry. Second, we emphasise some criteria in private reserve establishment
and management that increase the likelihood of it becoming a sustainable
ecotourism enterprise. We then provide a case study to illustratethe assimilation
of these criteria in the field and to evaluate the opportunities and constraints
associatedwith privatereserve establishment in Nicaragua.This is followed by a
discussion concerning the recent legislation passed by the Nicaraguan govern-
ment to facilitate the establishment of a national private reserve system and
recommendations for future development of this system. We conclude by high-
lighting the international importance of private reserve establishment to
national sustainable tourism efforts.
Background
Is ecotourism a sustainable development strategy?
While ecotourism is often defined in an experiential context emphasising
travel to natural areas that benefits local ecosystems and communities,
ecotourism is rarely defined in a commercial context. In a commercial context,
there are three main tenants that define ecotourism. First, ecotourism is a form
of tourism that is economically sustainable (Gauthier, 1999; Scace, 1999).
Second, ecotourism involves resourceconservation,asitseconomicsustainability
is directly dependent on the sustainability of the product base, the local
ecosystem (Scace, 1999; Wight, 1994). And third, the tourist receives environ-
mentally benign utility from this ecosystem such as wildlife observation,
environmental education, etc. (Nelson, 1999). Economic sustainability, conser-
vation of natural resources, and non- consumptive utility form the conceptual
foundation of an ecotourism industry.
Efforts of the private andnon-profit sectoraremainly responsible for theinitial
development of this rapidly growing segment of the international tourist
industry(Gauthier, 1999,Higgins, 1996;Scace, 1999;Weaver 1994).Only recently
havepublic agencies begun to thoroughly addressecotourism’s potential asboth
an economically and ecologically sustainable development strategy. Ideally,
ecotourism can be considered an environmentally and socially benign develop-
ment policy; however, there are reasons to question the industry’s capacity to
abide by ecotourism’s informal code of ethics.
Critics of ecotourism argue that it often exhibits a conflict between short-term
profit and long-term sustainability. The focus on meeting demands of tourism
and profits can supercede the conservation of resources (Nelson, 1999).
Commercial operators often use ecotourism as a marketing ploy to enlarge their
market share (McLaren, 1998; Minca & Linda, 2000; Wight, 1994). Indeed, in
Nicaragua some companies disguise mass tourism as ‘nature tours’ (T. Fletcher,
pers. comm., 27 July 2000). According to Tom Fletcher, president of one of Nica-
ragua’s first ecotourism operations, ‘everything from natural history to off-road
motorcycles has been touted in the local press as shining examples of
“ecotourism”’.
Even when ecotourism is carried out with a sincere interest in conservation,
resource degradation can occur. Ecosystems are complex and often managers
lack thorough understanding of ecosystem processes (Nelson, 1999). Small-

Private Wildlife Reserves and Ecotourism in Nicaragua
99
scale, low-intensity impacts can have cumulative long-term effects on the
ecosystem. Demands on local resources, creation of social inequities, and
dependencies on external forces can also lead to negative effects within the
human community (Honey, 1999;McLaren, 1998;Minca & Linda, 2000).Regard-
less of these potential drawbacks, many communities realise that implementing
ecotourism as a development strategy is one way to avoid other, more destruc-
tive, development (McLaren, 1998).
Small-scale ecotourism operations have proved to be more benign than other
modern economic alternatives that could dominate the landscape (Weaver,
1994). Ideally, ecotourism internalises the costs and benefits of local natural
ecosystems because these ecosystems are the product base for the direct
economic benefits of tourism (Woodley, 1999). This means that investors and
developers of ecotourism activities have a direct stake in the integrity of the
local environment and community. Since ecotourism occurs in rural areas, it
can lead to economic development and diversification in otherwise neglected
areas, giving rural communities economic stakes in the ecotourism operation
and creating a new value for the ecosystem (Alderman, 1992; Brandon, 1996;
Wight, 1994). In this sense, ecotourism can actually benefit natural resources by
creating a market incentive to conserve them. And since ecotourists are often
more tolerant of rustic, basic facilities, expansion of the industry can be
increased with relativelyminor additionalexpense. For these reasons,develop-
ment of an ecotourism industry offers a rational strategy for sustainable
development.
Nicaragua’s need for sustainable development strategies
Emerging from war and adjusting to the global economy, Nicaragua’s
economic policy has depended on large-scale resource exploitation. In 1990, the
newly elected Violetta Chamorro government redirected Nicaragua’s economic
policies by promoting exports and creating incentives for foreign investments,
and fostering programmes geared towards commercialisation of under-
exploited natural resources including forests, fisheries, and mines (Castilleja,
1993). Deregulated trade and export incentives designed to encourage foreign
capital investment in resource exploitation discouraged sustainable forest
management. Modernisation of the agribusiness sector has caused a ‘decrease in
employment opportunities on the large farms, a squeezing out of small inde-
pendent farms, and the emigration of landless peasants searching for a way to
support their families’ (Chamorro,1998).The WashingtonPostrecently reported
‘Nicaragua remains poorer than ever and deeply splintered between haves and
have-nots’ (Moore, 1999).
It has been argued thatthese policies, which leave impoverished people on the
fringes of unstable lands, are partly to blame for the large human toll exacted by
Hurricane Mitch in November 1998(Bendana, 1999).This region wasatgreat risk
from such a natural disaster due to years of environmental mismanagement
(USAID, 1999). Shortly after Hurricane Mitch, Nicaraguan NGOs promoted a
major effort to reduce the social and ecological vulnerability of the country
(Vukelich, 1999). Post-hurricane assessments have emphasised the importance
of a comprehensive environmental protection strategy to Nicaragua’s long-term
development (EIU, 1999).

100
Journal of Sustainable Tourism
One way that Nicaragua can begin to fuse resource conservation with rural
development is by developing its ecotourism industry. Ecotourism requires
limited capital investment and is capable of producing sizeable flows of foreign
exchange, generating employment in rural areas, and generating income to help
manage and protect parks and reserves (Barborak, 1992). In 1999the Nicaraguan
tourism industry generated approximately $105 million, placing tourism as the
nation’s number-two earner of foreign exchange after coffee (US Embassy,
2000a).
Ecotourism: A potential solution
Ecotourism is becoming a sizeable segment of the expanding Nicaraguan
tourist industry. Our research did not uncover any quantitative data regarding
ecotourism in Nicaragua, but the general consensus among those we inter-
viewed is that ecotourism is the fastest growing segment of the Nicaraguan
tourist industry. Using protected area visitor information it is estimated that
there were 50,000–75,000 ecotourists in 1998 (T. Fletcher, pers. comm., 27 July
2000). This is between 13.1% and 19.6% of all tourists to Nicaragua that year.
Furthermore, Nicaragua’s rich resource endowment makes it a candidate for
becoming a prime ecotourist destination.
Though very few studies have been conducted inside Nicaragua pertaining
to the potential of its biological diversity, it has the region’s (Central America’s)
greatest abundance of natural resources (Elizondo, 1997). About one-third of
the country consists of forests (CIA, 2000; FAO, 2000). The lowland tropical
rainforests in the south-east, shared with Costa Rica, make up the largest
lowland rainforest north of the Amazon. Likewise, the coastal lagoons,
wetlands and pine savannasof the north-east are the largest and best preserved
of such ecosystems in the region (WCMC, 1992). Its standing forests total more
than four times the area covered of its much-discussed neighbour, Costa Rica
(Sanchez, 1999). According to David Zurick’s ‘adventure travel model’ this
resource richness is likely to attract tourists from the more frequented Costa
Rican tourist zone (Weaver, 1998).
The greatest potential for Nicaragua’s ecotourism industry is along the Pan
American highway that links south-western Nicaragua with Costa Rica. At a
recent national development conference, the corridor that passes from Lake
Managua south to the San Juan River was recognised as the best opportunity for
ecotourismdevelopment (Aviles, 2000).This idea is supported by theMinistry of
Tourism (INTUR), which acknowledges that one of the best opportunities over
the next few years will be projects involving ecotourism in the Lake Nicaragua
basin (Ometepe Island, Solentiname Islands, and the San Juan River) (US
Embassy, 1997). Offering a diversity of destinations and having a supportive
infrastructure, this part of Nicaragua already serves as a corridor of travel from
the popular tourist destination of Costa Rica.
Nicaragua’s under-developed ecotourism infrastructure
While the government wishes to develop Nicaragua into a popular regional
ecotourism destination, it has few resources to develop and manage its public
protected area system.Though 17% ofthe land area ofNicaraguais designatedas
publicly protected land (Sanchez, 1999),lackoffinancing fortheNationalSystem

Private Wildlife Reserves and Ecotourism in Nicaragua
101
of Protected Areas (SINAP) has left most protected areas without adequate regu-
lation and/or management. Only seven of SINAP’s 76 protected areas are
actively managed, and 11 more have only minimal levels of infrastructure and
management (Sanchez, 1999).
Because Nicaragua’s current infrastructure is inadequate to absorb projected
rises in ecotourism, there is an effort to build the capacityof the Ministry of Envi-
ronment and Natural Resources (MARENA) to manage the 76 protected areas
with private, scientific, and conservation-based interests. While this will be diffi-
cult to achieve, private reserves can provide infrastructure for the expanding
Nicaraguan ecotourism industry. They can also offer a rural development tool
that could contribute to community-based conservation requiring little money
from the government. Most importantly, successful private reserves can be
economically sustainable, providing a reliable financing mechanism for land
conservation.
Private reserves can be profitable ventures. A study of Latin American private
reserves found that 72% of the respondents believe that they are able to generate
more income as a private reserve than they could through alternative land uses,
such as logging, cattle ranching, and agriculture (Langholz, 1996). Contributing
to this profitability is the efficiency of private reserves to respond to market
changes (Weaver, 1998). Private reserves are financially efficient and maximise
budget allocations for conservation by avoiding bureaucratic money sinks,
leaving more money flowing back into the reserve (Weaver, 1998). Private sector
operations can offer lower costs, greater efficiencies and a range of market
responses (Wells, 1997).
In March 1999, a new law established regulations for private reserves in
Nicaragua (M. Mejia, pers. comm., 5 October 1999). ‘Private wildlife reserves’
are defined as private areas dedicated to conservation by their landowners
and recognised by MARENA, on the basis of certain criteria and the potential
for the conservation of biodiversity. This decree states that the landowner
assumes the responsibility for the management of the reserve but rules and
procedures established by MARENA must be followed. Before presenting a
case study of Nicaragua’s first private wildlife reserve, some criteria for the
successful establishment and operation of private wildlife reserves will
briefly be described.
Some criteria for establishing successful private reserves
There are key points that are important to the establishment of successful
private nature reserves. First, private reserves need to be economically viable.
While there are a number of activities to generate revenue, the most remunerable
is ecotourism (Langholz, 1996; Alderman, 1992). Because there are many factors
affecting the potential success of an ecotourism industry, a marketing study
should be conducted to determine demand. Accessibility should be a significant
consideration as proximity to tourist gateways and corridors is necessary to
capture the ecotourism market. Also, the reserve should have a point of interest
that offers unique and diverse experiences. This could be wildlife, views, and
access to national parks and reserves.
In order to ensure a sustainable ecotourism industry and perpetuity of revenue
generation, conservation of the ecosystem product base is a requirement. Private

102
Journal of Sustainable Tourism
reserves should abide by the rules and regulations of public conservation institu-
tions(Brandon,1996;Lees, 1995).Effortsshouldbe madetoinclude environmental
education of local populaces, research, and promotion of conservation and
protected area systems. Conclusions drawn from a survey conducted by the
Regional Wildlife Management Program for Meso-America and the Caribbean
verify that responsible private reserves can definitely contribute to biodiversity
protection in the region (M. Mejia, pers. comm., 5 October 1999).
A major way that private reserves can achieve conservation is by fostering
community development. One of the most tangible links between private
reserves and neighbouring communities is job creation (Durbin
&
Ratrimoarisaona, 1996; Langholz, 1996). Both the Alderman’s (1992) and
Langholz’ (1996) studies of private reserves in Africa and Latin America found
that over 80% of the individuals employed by the sample group originated
from communities near the reserve. Aside from providing employment for
staff, guides and suppliers, researching local natural resources can provide a
sound scientific basis for management and development of rural areas (Schabel,
1997).
By adhering to these criteria of profitability, natural resource conservation,
and community development, private reserves provide a vehicle through which
tourism can enhance local environments (Minca & Linda, 2000). The following
case study examines how one private reserve contributes to the development of
Nicaragua’s ecotourism industry by enhancing the ecotourism infrastructure
and ensuring biodiversity conservation through community development. If
tourism is integrated into a well-structured economic and social web, it is likely
to become a powerful and attractive strategy for development (Minca & Linda,
2000).
Case Study: Domitila Private Wildlife Reserve
Domitila is a 420-hectare parcel of land located on the north-western shores of
Lake Nicaragua, separated from Zapatera Island National Park by a 2.5 km wide
strait (Figure 3). The property was settled in 1881 and has been owned by the
family ever since. Though it was the site of a productive cattle operation, the
current owner first conceived the idea of a nature reserve in 1974. However, due
to war and political instability that plagued the country in the 1970s and 1980s,
the owners left Nicaragua for 20 years. During this time the resources in the area
were intensively over-utilised.
The owners returned in 1998 faced by three options for management of the
land. The first option was to reactivate the commercial cattle farm. The second
option was to invest in rice production. And, third, they had the option of gener-
ating revenue through ecotourism. As the first two options were not economical
and would lead to further depletion of the property resources, the owners
decided to work with the local population in establishing a nature reserve.
According to the owners, the main reason for the destruction of the region’s
biodiversity is poverty. Ecotourism can be a vehicle of sustainable development
for the vicinity of Domitila and contribute to biodiversity conservation at the
same time.

Private Wildlife Reserves and Ecotourism in Nicaragua
103
Figure 3 Location of Domitila Private Wildlife Reserve (Johnson, 2000)
Profitability
Domitila has great potential to be a prime ecotourist destination. It is located
in a highly travelled corridor that offers a wide array of unique experiences. At
71 km south of Managua by road and 80 km north of Costa Rica, Domitila lies
just off the Pan-American Highway. Zapatera National Park, Volcan Mombacho
Natural Reserve, and Río Manares Natural Reserve are protected areas, near or
adjacent to Domitila, offering the ecotourist a variety of experiences.
Domitila’s own ecosystem diversity provides a variety of experiences that are
both recreational and educational. A population of howler monkeys (
Aloutta
), 150 species of tropical and migratory birds, a dry tropical forest, over 500
palliata
species of butterflies, wetlands, and Lake Nicaragua offer plenty of opportunity
for unique experiences. Experiences that the owners are planning on offering
include: interpretive trails, a boardwalk and wetland wildlife observation deck,
horse trails, and boating on Lake Nicaragua. Domitila can also serve as a
launching site for excursions to the nearby-protected areas such as Zapatera
National Park.
The owners expect ecotourism to become the main source of revenue genera-
tion. To accommodate ecotourists, the owners will provide all the services and
facilities that are needed by students, scientists, and visitors. A central lodge and
cabanaswillhavethecapacitytohouse25people. Thesiteofthislodgeisontheedge
of the dry forest, with a panoramic view of Zapatera Island, Lake Nicaragua, and
MombachoVolcano.Withintheplanned lodgethere willbe akitchen where Nicara-
guan cuisine will be served. Bathing facilities will also be provided. Water and
electrical services will be available and powered by a solar energy system.
To ensure that Domitila remains a desirable ecotourist destination, the owners
have formulated a set of regulations keeping within the theme of ‘take only
photographs, leave only footprints’. These regulations include:

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Journal of Sustainable Tourism
·
·
·
·
prohibition of vehicles within the reserve;
restriction of foot traffic to trails;
prohibition of wildlife and wildlife habitat disturbance; and
restricted harvesting of vegetation for natural souvenirs.
This abbreviated list illustrates the owner’s commitment to operating an
economically sustainable ecotourist destination by minimising visitor-use
impacts and ensuring a quality experience. The owner’s commitment to natural
resource conservation is expressed in the following section.
Natural resource conservation
While most of the land is either dry tropical forest or savanna, Domitila also
includes two small rivers and wetlands adjacent to Lake Nicaragua. This
ecosystem diversity provides habitat for a variety of wildlife and vegetation.
Some of the more notable species inhabiting the dry forest include: howler
monkeys (
), wild cats (
), coyotes (
Aloutta palliata
Urocyon cinereoargenteus
). The forest also contains numerous tree
Canis
), and tucans (
latrans Collared aracari
species and medicinal plants. One tree species ‘tempate’ (
) is rare
Jatropha curcas
and has economic value as a bio-fuel for its extract. The abundance of water
makes Domitila a refuge for migratory birds of both South and North America.
This water (Lake Nicaragua in particular) also has endemic fish species, and is
inhabited by freshwater sharks. Though ecologically diverse, Domitila has been
subjugated to activities of timber extraction, agriculture, and cattle grazing that
are typical forces rapidly altering Nicaragua’s environment.
The owners feel a responsibility to conserve the biodiversity of Domitila as a
link within the biological corridor created by the three public protected areas. In
achieving localbiodiversity conservation, the owners have three focuses: protec-
tion of habitat, protection of the flora and reforestation of highly degraded areas,
and protection of the riparian ecosystems. By officially declaring their land a
private wildlife reserve, the owners are legally bound to follow natural resource
conservation rules and procedures established by MARENA. The owners are
also contributing to regional biodiversity conservation by declaring Domitila’s
dry forest a genetic reserve for tempate, and planning to develop a research
station.
As a research station, Domitila is well situated to host investigations of the
region’s flora and fauna. There has been little research on the ecology of the area.
This research station will provide a chance for national and international
students to study, and at the same time, advance the knowledge of the region’s
natural resources. By employing local residents, the research station will also
contribute to the localknowledge of naturalresources. This community involve-
ment aspect of Domitila’s management plan may be the most important
contribution to resource conservation by relieving some of the poverty that is
responsible for the unsustainable extraction of the area’s resources.
Community development
Within an hour’s walk of the reserve’s boundary live approximately 300
people. They conduct small-scale agriculture, raise cattle, and many find work
on large farms. Compared to the rest of Nicaragua, the local population around

Private Wildlife Reserves and Ecotourism in Nicaragua
105
Domitila is under-employed and earns less than the country average. The
monthly income varies from $32 to $48 with a high level of unemployment espe-
cially among the women. The community infrastructure is minimal, with no
potable waterservices, poor sanitationfacilities, and no electric or transportation
services. Schools are over five km away and the hospital is 18 km away.
With a low standard of living, there is a strong reliance on intensive and often
unsustainable use of the local natural resources. The resources of Domitila have
been a source of subsistence and income for this population. Some of the extrac-
tive activities include the harvesting of wood for crafting or selling as woodfuel,
the harvesting of wildlife for food and sale, and the extraction of medicinal
plants. The success of Domitila thus depends on the creation of alternative
incomes for these people.
By including the community, Domitila provides a novel alternative to the
unsustainable use of natural resources. The local population has been repre-
sented in every aspect of planning. A committee of the area’s residents was
formed to take part in the decision-making process. This committeewas selected
from the owners’ first development programme. In 1999 this development
programme started a grain farm for the local population. This created a partner-
ship with the local community and was a step towards alleviating pressure on
Domitila’s resources. This committee has since helped organise and determine
the needs of the rest of the community.
With community needs in mind, the owners have planned some sustainable
uses of the reserve and region’s natural resources. The owners plan to establish
local organic farming efforts that will provide food for visitors as well as for sale
in localmarkets. A chicken hatchery will alsoprovide food and products for sale.
A woodfuel plantation will help alleviate the demands on natural forest stands
and can create possible income on Nicaragua’s large woodfuel market. Profits
made from thecommercialisationofthese sustainableactivitieswill be dispersed
as follows: 50% to community members involved in these projects; 20% to
finance new projects; 15% to maintainthe localinfrastructure; and 15%for ‘social
character’ (employee uniforms, etc). The focus of Domitila’s community devel-
opment initiativeis to improve the living conditionsof theinhabitants in the area
with better education, water supply, health clinics, employment, and develop-
ment of infrastructure. The total number of people that the owners hope to
permanently employ is 21, 13 of whom will be women. While most of these
workers will be at the lodge, the other employees will be working in the projects
mentioned above.
Profitability, natural resource conservation, and community development
are important criteria for the successful establishment of private wildlife
reserves. Domitila appears to be currently addressing these critieria suffi-
ciently, and the methods by which the owners are doing so should serve as a
model for successful establishment of other private reserves in Nicaragua. For
Nicaragua to become a sought-after ecotourist destination it is necessary that
future private reserves show a commitment to implementing these criteria.
This commitment will also increase credibility from the perspectives of neces-
sary partners, such as the Nicaraguan government and the national and
international NGO community.

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Discussion
Cooperation between the Nicaraguan government and the private sector
The primary obstacles that the owners of Domitila encountered have been
overcome since the case study began, largely due to the cooperation of the Nica-
raguan government. This section provides a synopsis of ways that public and
private sectors can cooperate to facilitate establishment and development of
private reserve systems. For Domitila, the impartiality of the Nicaraguan
government towards private nature reserves was initially the limiting factor.
However, the following discussionillustrateshow new Nicaraguan government
policy is acting as a catalyst.
The first task in the establishment of Domitila was to obtain funds for feasi-
bility and environmental studies, as well as for its development. However, the
owners had no working capital, and to start, were not able to find any financial
help in Nicaragua (M. Mejia, pers. comm., 5 October 1999). As a result of the
expensive start-up costs and the absence of a mechanism for private reserve
loans, the owners had to seek internationalhelp. However, internationalgovern-
mental and non-governmental financing was impossible because there was no
legislation in Nicaragua that recognised private reserves. Before Nicaragua’s
private wildlife reserve law, the owners of Domitila reported that it was, ‘impos-
sible in Nicaragua to obtain recognition as a private wildlife reserve because of
the absence of a necessary legal framework in order to establish that category’
(M. Mejia, pers. comm., 5 October 1999). The lack of a legal framework to recog-
nise private nature reserves was therefore responsible for the inability of
Domitila to solicit funds from the financing community, compounding other
obstacles to the development of this reserve.
Domitila now has access to domestic and international financing sources due
to theratificationofthenew law, whichprovides legal recognitionofNicaraguan
private reserves. This national law has allowed Domitila to move forward with
its plans, as Danida, a Danish NGO, recently awarded a grant to Domitila to
begin construction of the facilities. The Nicaraguan government has even gone a
step further in enhancing investments in private nature reserves. The new law
provides the following incentives (M. Mejia, pers. comm., 20 July 2000). The
owners of private wildlife reserves will be:
·
·
·
exempt from income taxes for 10 years and property taxes for as long as the
property is managed as a private wildlife reserve;
exempt from Nicaraguan retail sales taxes on goods that contribute to the
reserve; and
given access to support for environmental services.
Further considerations for development of a private reserve system
The preceding discussion illustrates the importance of government involve-
ment in the establishment of a private reserve system. Further steps can be made
to integrate private reserves in national planning. These include (Lucas, 1992):
·
·
·
public consultation on establishment and management;
partnership mechanisms to marry national and local interest;
linkages with general planning legislation and other land use areas; and

Private Wildlife Reserves and Ecotourism in Nicaragua
107
·
mechanisms that provide for cooperative management and public use of
private land through management and access agreements.
Facilitation of establishment should not be the sole function of the Nicaraguan
government’s involvement with private reserves. As Nicaragua’s ecotourism
industry evolves, the government needs to ensure that established private
reserves do not become general tourist destinations co-opting the concept of
ecotourism as a marketing ploy. Regulations and contractsto ensure that private
reserves cannot introduce practices that threaten the environment should be
created and enforced. Economically,thegovernment canplay a criticalrolein the
sustainability of the private nature reserve and ecotourism industry. For
example, while enterprises becoming major monopolies can squeeze out local
enterprises (Swarbrooke, 1999), too many entrants into the private reserve
system can drive down profits (Wells, 1997). Regulated entry allows a fixed
number of operators who can act as partial monopolists to charge prices above
marginal cost for profit.
While government support for the private reserve system is necessary, it is
important to remember that public resources are limited. A nongovernmental
organisation specifically designed to support the developing national private
reserve network would greatly increase the chance of striking the proper balance
between private sector and public sector cooperation. Perhaps an appropriate
example for Nicaragua is an NGO that coordinatesColombia’s network of private
reserves. This NGO promotes the association of new reserves, conducts environ-
mental extension, facilitates transfer of environmentally sound technologies, and
proposes legal and institutional changes to the government (Uribe, 1996).
The future of ecotourism in Nicaragua depends on the current development of
Nicaragua’s private reserve network. So far, proper steps are being made to
ensure that entrance into the ecotourism land market is possible and profitable.
To ensure thatsucha development strategyremains sustainable, monitoringand
evaluation of the progression of both the ecotourism industry and the private
reserve network is crucial. Proceeding cautiously, Nicaraguan ecotourism and
the private reserve network may prove to be an adoptable strategy for sustain-
able development.
Conclusions
It is estimated that one-sixth of Central America’s landscape is officially desig-
nated as ‘protected area’ (Utting, 1993). Most protected areas actually fail to
provide management, thus giving birth to the ‘paper park’ syndrome that
plagues this region. Approximately three-quarters of the protected areasin Latin
America are not effectively safeguarded and an even larger percentage lack
long-term management plans and financial resources needed to guarantee their
perpetuity (Umana & Brandon, 1992). The average budget needed to operate
protected areas in Central America is $336per square kilometre, while the actual
budget available is $101 per square kilometre (Green & Paine, 1997).
Private reserves, when properly developed, can complement public protected
area systems. These in turn provide a supply of experience and infrastructure
needed to meet the expanding ecotourism demand. Ecotourism can provide a
sizeable contribution to a developing nation’s economy, while creating market

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Journal of Sustainable Tourism
incentives for sustainable land use and conservation. This is a significant contri-
bution in regions where poverty and marginalization are creating high risks of
environmental and social disasters, such as occurred with Hurricane Mitch.
The development of private reserve systemsdepends directly on public policy
and partnerships. Governments thatwish to adopt ecotourism as a development
strategy, but lack resources to establish and manage protected area systems,
should act now to reduce barriers to private reserve establishment and create
market incentives for investments in the national ecotourism industry. To build
public sector confidence, private organisations must ensure that their own work
is of consistently high quality and that they are prepared to engage in govern-
ment efforts at juggling national development with environmental protection.
This paper has examined the benefits of such a partnership, and how these bene-
fits can be achieved. Indeed, as the role of private nature reserves in ecotourism
industry development becomes increasingly significant, so will the need for
further research regarding this matter.
Acknowledgements
We wish to express our gratitude to Dr Jeffrey McCrary, Director of Basic
Sciences, University of Central America-Managua, for his continuous support of
Virginia Tech’s Natural Resource Program in Nicaragua.
Correspondence
Any correspondence should be directed to Dr A.L. Hammett, Dept. of Wood
Science and Forest Products, College of Natural Resources, Virginia Tech, 210
Cheatham Hall (mail code 0323), Blacksburg, Virginia 24061, USA
(himal@vt.edu).
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