Managua ) is the capital city of Nicaragua as well as the department and municipality by the same name. It is the largest city in Nicaragua in terms of population and geographic size. Located on the southwestern shore of Lake Managua, the city was declared the national capital in 1852. Prior to its inception as the capital city, the title had alternated between the cities of León and Granada. The city has a population of roughly 1,800,000, composed predominantly of mestizos and whites. Managua is the second most populous city in Central America after Guatemala City.Founded in 1819, the city was given the name: Leal Villa de Santiago de Managua. Its original purpose was to serve as a rural fishing village. Efforts to make Managua the capital of Nicaragua began in 1824, after the Central American nations formally attained their independence from Spain. Managua's location between the rival cities of León and Granada made it a logical and ideal compromise site. Modern-day Managua was built in the 1850s on the site of an indigenous community. The city occupies an area on a fault. Seismologists predict that Managua will continue to experience a severe earthquake every 50 years or less. The city's economy is based mainly on trade. Managua is Nicaragua's chief trading center for coffee, cotton, and other crops. It serves as an important industrial, commercial, political and cultural center. Its chief products include beer, coffee, matches, textiles and shoes.The city has been witness to the rise and fall of political powers throughout Nicaragua's history and has suffered devastating earthquakes in 1931 and 1972, with the latter having lasting effects on the city's development. In 2007, after a successful literacy campaign, Managua was declared by the Mayor of Managua and the Sandinista party newspaper to be the first capital city in Central America to be rid of illiteracy. Since the 1972 earthquake, residential and business areas have developed on the outskirts of Managua. Other construction projects included schools, hospitals, and shopping centers. Such structures were specially constructed to withstand severe earthquakes. Managua also houses the only eternal flame in Central America and one out of the five in Latin America.Residents of the city and of the department of Managua are called Managüenses.