Panama Investor Blog

Why are foreigners still buying in Nicaragua

The article attached is about a fellow from England who has bought property in Nicaragua and built his paradise. When I read these stories I ask myself, why in the world would someone invest money in Nicaragua?  Yes it is beautiful, and the people in the countryside are very friendly. The land is relatively cheap and the barriers to owning property have been lowered. So why not?

The major reason I know of not to invest in Nicaragua is politics which lead can lead to the security of your investment and maybe your personal safety. I know many foreigners living in Nicaragua will take issue with me saying that I don't know what I am talking about, and that things have changed but, I have been there a number of times and I know Nicaraguan developers who have left their own country to seek safer ground. I was in Leon Nicaragua the day the revolution began in July 1979 and barely got out with my grandfather and our lives. The revolution was led by the current president Daniel Ortega.

The fact is that the current leadership is a committed socialist and has aligned himself with the likes of Venezuela, Cuba, Iran, China and Russia to name a few. All are either socialist, communists or openly antagonistic to western governments. It is one thing to have diplomatic relationships with these countries and another to have similar ideals and close personal ties to their leadership. Remember that the main ideological differences come down to individual freedom and it is that very thing that drives foreigners to invest outside their home country. Is the beauty of an area coupled with a low price justification for taking such risks?

It is an absolute fallacy to believe that these governments will protect you or your assets should trouble break out. They have only one interest and that is their political agendas and individual power. Foreigners play into their hands by investing their money and lives into developing the land. There may come a day when they take it back and throw you out or worse, just because of the country you are from and what you represent. It will not matter your ideology, your kind heart or good intentions.

I am not saying these things to drive people away from Nicaragua and to Panama because if Panama were to take this road I will be screaming it from the rooftops.

Excerpt: “When we got to Nicaragua we just loved the people and the country – and then fell in love with this piece of land,” said Mr Renshaw, an Englishman who directs musicals in London’s West End. Three and a half years, some $450,000 and a reservoir of patience and dedication later, he had turned a two-acre plot into an exquisitely designed multi-level property spilling sympathetically over a steep, jungly hillside that drops abruptly down to a small, deserted white-sand beach.

“We’re not worried about the rhetoric per se, but we are worried about the effect this could have on prospective investors who don’t know better,” says Mr Calvet, who argues that macro- economic policy remains faithful to the IMF rulebook. “We are at the lowest part of the cycle.”

Other concerns include a patchy infrastructure, particularly in water and electricity, while many roads remain poor.

But legal issues pose perhaps the most serious barriers to investment. One problem is that much land in the war-torn years of the 1980s was expropriated, leading to some uncertainty over ownership.

Read the whole article at FT.com

Nicaragua: The Inherent Dangers of Being a Militant Mecca

I sometimes post news on other countries in Central America that I find might be of interest to expat's considering buying property in those lands. Since last years election of Daniel Ortega to the Presidency of Nicaragua, I have been following the events there more closely. Nicaragua is a beautiful country and a visit there two years ago amazed me at the number of foreigners investing in the country either as developers or as home buyers. Since the election we have seen little sign of the old Marxist Ortega turned Christian, but a sign of the old leftist has come to light when he recently grated asylum to several FARC rebels.

I subscribe to a  regular intelligence report from an organization called Strafor who cover geo-political events from around the world. They sent me this report on Nicaragua this morning that I think is important for those considering residing there. I am posting it here with their permission.

Terrorism Intelligence report from Stratfor

By Fred Burton and Scott Stewart

Diplomatic relations between Colombia and Nicaragua are once again in the news, with the two countries trading broadsides over the Nicaraguan government’s recent decision to grant asylum to three female members of the Revolutionary Armed Forces of Colombia (FARC).

Nicaraguan President Daniel Ortega in June said that the FARC members in question reportedly survived the March 1 attack on a FARC camp just over the Colombian border in Ecuador that resulted in the death of Raul Reyes (Luis Edgar Devia Silva), FARC’s No. 2 and one of its most long-standing and experienced operational commanders. After the March 1 raid, Nicaragua briefly severed diplomatic relations with Colombia in protest of the country’s violation of Ecuador’s sovereignty.

Ortega accused the Colombian government of conducting “state-sponsored terrorism” against the FARC members in his explanation of why he granted them asylum. To emphasize this point, Ortega further accused the Colombian government of plotting to assassinate the three FARC members in Nicaragua. He then stressed that the three need Nicaraguan protection so they can serve as witnesses in a future trial of Colombian President Alvaro Uribe Velez for “crimes against humanity.”