Private Sector: New Nicaragua
find once war-ravaged country is a good place to invest
Business, Tuesday, August 24, 2004
By Richard L. White
an incredibly beautiful nation of gentle, peace-loving
people, has shaken away the ghosts of a civil war that
ended 15 years ago, and is now beckoning to the world
as a "go-to" destination of strategic importance.
The past nine months have been a "tipping point"
of global recognition of these changes.
short, Nicaragua is easily accessible, safe, attractive
and inexpensive, and investment opportunities are timely.
officials, backed by voters, have driven these changes.
The World Bank, the International Monetary Fund and
participating nations of the Central American Free Trade
Agreement have added their affirmations by making sweeping
decisions strengthening Nicaragua's comeback.
my personal perspective, no United States city has done
more to assist Nicaragua than Pittsburgh. For example,
when its capital city of Managua was devastated by the
Christmas 1972 earthquake, one of Pittsburgh's own baseball
superstars, Roberto Clemente, lost his life trying to
fly life-saving supplies to the city.
Violeta Barrios de Chamorro -- the first democratically
elected chief executive in Nicaragua's history -- became
president of the country in 1990, she reached out to
many friends here. She appointed me as an honorary consul
representing Nicaragua in the Western Pennsylvania/Midwest
1992, I was part of a delegation of distinguished Pittsburgh
educators, medical professionals and business leaders
who went to Nicaragua at her invitation.
group advised Chamorro on how to strengthen international
ties in industry, education, health care and business.
agricultural exports and free trade zones were identified
as the best opportunities for growth.
then, Pittsburghers have maintained steady support.
Duquesne University obtained grants to upgrade Nicaraguan
health-care facilities, established a nursing exchange
program and, with Carlow College and the University
of Pittsburgh, granted scholarships to many students
who have returned to Nicaragua and now hold leadership
Pittsburgh Rotary Club, along with local foundations
and corporate support combined with significant Nicaraguan
assistance, has established two Roberto Clemente Health
Clinics serving the poor in rural regions.
first opened in LaReforma in 1998, and the second in
Limon Uno was dedicated in July. Pittsburgh-based Global
Links and Brothers' Brother have sent substantial health-care
equipment, medicines and supplies for more than a decade.
many Pittsburghers are doing business in Managua and
are bullish about the future. Among them, an investor
group is developing a world-class oceanfront hotel and
golf course community. Some background:
Turnaround. What has Nicaragua done to produce
such profound change?
one, the democratic process rules the country. Since
1990, voters have turned out in record numbers to vote
in three consecutive democratic presidential elections
leading to peaceful transfers of power. The police force
has been professionalized and is controlled by civilians.
The army has been reduced from more than 100,000 troops
to about 7,000. Elected leaders have developed realistic
budgets, instituted tax reforms and restructured underperforming
banks and domestic debt.
markets and media have taken notice. The IMF and World
Bank forgave a staggering $4.5 billion in Nicaraguan
debt this year. Japan agreed in June to write off an
additional $118 million. As well, CAFTA-- the landmark
U.S.-Central American Free Trade Agreement reached last
year -- will lower tariffs and other trade barriers.
Major news outlets are singing the nation's praises.
Easy Access. Recently, the Chicago Tribune observed
that Nicaragua was a "beautiful and peaceful place
now courting tourism." U.S. News & World Report
has trumpeted: "Nicaragua is a hot new travel destination."
2003, tourism generated revenues of $150 million, and
foreign arrivals increased 10.9 percent from 2002. American
Airlines, Continental Airlines and TACA (based in El
Salvador) make 10 flights daily between Managua and
Miami, Houston and Los Angeles. Major cruise lines stop
at San Juan del Sur. Holiday Inn, Inter-Continental
Hotels, Best Western, the Seminole Hotel and Princess
have opened hotels.
are flocking to Nicaragua. The Wall Street Journal recently
wrote: "As legions of baby boomers prepare to retire
and relocate to warmer climates, a widening range of
Central American countries are vying to be their new
home. ... As a result, a new breed of intrepid retirees
is branching out to countries including ... Nicaragua."
Safety. A study by INCAE, the Harvard Business School
affiliate in Managua, shows that Nicaragua is the safest
country, and Granada is one of the safest cities, in
all of Central America. The New York Times observed
this spring, "Unarmed, crisp-shirted policemen
have replaced battle-weary soldiers patrolling the streets."
Stunning Beauty. Nicaragua boasts of spectacular natural
and manmade beauty. Founded in 1524, Spanish colonial
Granada is the oldest city in the Western Hemisphere.
Freshwater Lake Nicaragua is the 10th-largest lake in
the world, and large volcanoes dot the landscape. Cloud
forests, howler monkeys and exotic species of flora
and fauna exist just minutes from Managua.
Inexpensive Living. Property in Nicaragua is much less
expensive than in the United States, and labor costs
are low. The Christian Science Monitor recently noted
that Nicaragua "is emerging as a U.S. retirement
haven. ... Cheap land surrounds picturesque crater lakes
and active volcanoes. And the cost of living is a fraction
of what it is in the United States." Foreigners
can become residents and acquire fee simple title to
Timely Opportunities. Active investment is stimulating growth.
Since instituting free market reforms in 1991, Nicaragua
has privatized more than 350 state enterprises and reduced
inflation from 13,500 percent to single-digits.
corporations have established local operations, including
McDonald's, Liz Claiborne, TGI Fridays, Osh Kosh B'gosh,
Payless Shoes, Kodak, United Colors of Benetton, Burger
King, Radio Shack, Pizza Hut, Domino's, Hertz, Budget
incentives also are stimulating growth. The Tourism
Tax Incentives Law is being used by Nicaraguans to invest
in certified tourism development projects as an offset
of what they would have paid in ordinary income tax.
L. White, Ph.D., of Adams, is honorary consul representing
Nicaragua; retired president of Bayer Corp.'s fibers,
additives and rubber division in Pittsburgh; and former
Duquesne University board chairman.)