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Archive for August, 2008

Nicaragua’s Window of Opportunity (2)

A staff member was recently asked a question on an international forum about Nicaragua's investment climate. This was the excellent answer:


According to a 2007 regression analysis of 150 countries using the
Index of Economic Freedom (Heritage Foundation) and per-capita income
(as a proxy for overall prices including real estate prices), Nicaragua
is 68% undervalued.
Basically, prices here are 32% of Nicaragua's
peer-group average and would have to triple to reach “fair value.”

Nicaragua was globally heralded as the “next Costa Rica” and the “next
Panama” before Daniel Ortega's presidential victory. It still gets
praise in tourism articles across the U.S., Canada and Europe.

Ortega is a minority president (who won only 38% of the vote with current
approval ratings below 22%) who
has not made radical
economic policy moves. The World Bank and International Monetary Fund continue to maintain condition-based
financial support based on their rigid reform-minded policy criteria.
This is a virtual seal of approval. Nicaragua is more dependent than
ever on the U.S. and European Union — most Nicaraguans know this.

proximity and success of Costa Rica, Panama, Chile and Uruguay are,
long-term, powerful examples to Nicaragua about the right way to bolster growth and
job creation and reduce poverty. As real estate prices escalate in
Costa Rica and Panama (the “California” and “Florida” of Central
America); as baby boomers and entrepreneurs continue to seek more
cheaper, virgin markets outside North America and Western Europe; and
as Ortega approaches the end of his five-year presidential term (in
2011), Nicaragua will continue to attract investor attention.

has created apprehension, but investment interest remains intense,
especially from Europeans and Canadians enjoying strong currencies, for
whom the region is a bargain. Ortega opened a window of opportunity for
smart, forward-looking investors with a five- to ten-year time horizon
to get in “before the herd”, before the end of his term unleashes
pent-up demand and a resumption of the boom that preceded him.

Nicaragua may now represent the kind of business opportunity Ireland
did when it was an economic basket case in the 1980's; that Argentina
did during its peso crisis in 2001; that Eastern Europe, reeling from
the end of Communism, represented in the early 1990's and that
Nicaragua itself represented in the early 1990's after the end of the
Sandinista's communist rule. Each of these periods eventually gave way
to fantastic booms.

Regarding the Atlantic coast: there are plans for a
new Atlantic-Pacific Highway, a deepwater port in Monkey Point,
expansion of the Bluefields airport to accommodate international
flights and for expanded oil exploration, all of which will encourage
infrastructure development. A note about a previous answer: Highway
quality between the capital, major cities and ports is excellent, in
many cases superior to Costa Rica and Panama. Major road-improvements
are underway to better connect smaller towns. The airport is new,
congestion-free and first-class (beats the heck out of Dulles, JFK or

Nicaragua is one of the
most peaceful countries in Central America: moreso than the U.S.
according to The Economist (UK)-sponsored Peace Index. Another big
asset (amid global, current or pending resource shortages): its
massive, varied, untapped supply of alternative energy and freshwater.
The posted link provides more detail, original sources and independent
commentary from across the professional spectrum, from people who've
assessed the country thoroughly.


'Nuff said. Discover Serenity.


Solar power: major breakthroughs up ahead

Major breakthroughs are underway and up ahead in the world of solar power…breakthroughs that could substantially reduce if not eliminate our dependence on fossil fuels within as early as a decade…breakthroughs that could make living in Nicaragua even more appealing than it already is now. Nicaragua enjoys an unusual abundance and variety of untapped alternative energy, including solar.

The Massachusetts Instituste of Technology reports on MIT Professor Marc Baldo’s and MIT Professor Daniel Nocera’s surprising work on new technologies to absorb and store solar power in a new way that could make solar power much more useful, much cheaper and a lot more practical.

Congratulations professors…is that a Nobel Prize we see up ahead?