Word on the Street in Nicaragua
by Dr. Steve
Sjuggerud
November 10,
2006
"Sandinistas Retake Nicaragua," I wrote
to you earlier this week. I was honest with you in my
assessment about the new president, Daniel Ortega.
I
ended the story by saying, "I wish I could tell you
'everything will be fine,' or even that it won't be fine. But
I can't tell you either... because I don't know. Nobody does.
Markets hate uncertainty, and it looks like we'll have
uncertainty for a while with Ortega in power in
Nicaragua.
"And while a kindler, gentler Ortega is the hope,
his historical track record is to be feared. I will let you
know more as I learn more and talk to friends down there. For
now, I'm holding and hoping... just where I don't want to
be..."
I've finally heard from a few friends - notably Mike
Cobb from Gran Pacifica and Tommy Gordon from Rancho Santana.
I have had consistently good experiences with both
outfits.
Tommy Gordon said:
"Things will be fine here in Nicaragua with Ortega
as its president...
"Now, there is a different Nicaragua in a different
world than the last time he was president. There is no Soviet
Union providing money and arms. Even if he wanted to, Ortega
doesn't have the power to resurrect controversial policies
like military conscription, private property confiscation, and
censorship of the press. He doesn't control the National
Assembly or the army.
"Mr. Ortega's ability to enact radical challenges is
severely hampered by the National Assembly, which remains
divided between four parties. To rule, he must reach
agreements with the two conservative parties. Since he was in
power last, the president's power has been curbed by
constitutional changes pushed through in recent years, giving
the assembly more say over cabinet positions.
"Unlike during the last presidency of Ortega, the
Sandinistas are very involved in the tourist industry and land
development. They are aware that it is to the benefit of
everyone in the country that the economic policy will remain
pro-foreign investment and non-interventionist. No one wants
to put at risk the economic gains of recent
years.
"Of course, there is no guarantee anywhere in Central
America, but the picture of Nicaragua is a lot brighter than
you have painted it."
Thanks, Tom. Well said.
Mike Cobb of Gran Pacifica told me nearly the same
thing...
"Mr. Ortega is serious about his commitment to
promote foreign investment and tourism. We anticipate public
relations issues in the immediate future, but they'll largely
be perception based... Remember too that the presidency is
weaker due to laws passed by Oretga himself, and that the
assembly has four major parties and should become a moderating
force."
Now that we have a bit more to go on from Americans "on
the streets" in Nicaragua, it appears that Ortega could turn
out to be "kindler and gentler" after all.
I
have been traveling to Nicaragua for more than a dozen years.
I built a home there in the late 1990s. And I'll likely be
building another one there soon. I have a good deal of
experience in the country. But I am no expert. All I can do is
share my honest thoughts, even if they're not what you want to
hear.
I
want to say thanks to you, as readers, for recognizing that.
Right after the election, one reader wrote in and told me,
"Thank you for having the courage to post your comments on
Nicaragua today in your DailyWealth email."
Nicaragua's coastline is beautiful. And property there
costs a tiny fraction of the price of similar property in
California or even neighboring Costa Rica. If Tommy and Mike
are right, folks bold enough to invest there now should do
extremely well. I'll keep sharing what I learn with you, as I
learn it.
Good investing,
Steve
P.S. Tommy Gordon asked me when my next surf trip will
be... The answer is, "This summer, of course - if not
earlier!" As I explained in the August 14 DailyWealth, Nicaragua is my version
of the Hamptons, and I hope it will be for years to come with
my family.
