Issue: 2007 - 4

I. Business News and the Economy

II. Tourism News

III. Press Articles

Dear Friends,

We just past the 100th day of our new President’s term in office and, quite frankly, its pretty much business as usual.  In fact, it’s better business than ever before.  You don’t have to believe me, you can check out the economic update from our friend Javier Morales included below to see the most recent economic growth figures.  Bottom line:  They’re up.

So what does that mean?  It means a few things, three of which I’ll touch on here: confidence, progress and opportunity.  We have some very good friends here who in the immediate days after the election were certain they were going to pack up and head to the US.  They decided to take a “wait-and-see” approach and are remaining here.  As time goes by, their confidence climbs and in the mean time, they continue to work hard and contribute to the economy.  Despite the fears people had prior to the election and subsequent inauguration, the economy here continues to progress and economic policies have been altered little.  The result?  Opportunity for savvy folks who will dig into the facts.  

Are their going to be bumps in the road?  Yes, of course.  There is talk of raising taxes, never a good sign to the economy, but President Ortega wants to be able to fund his much needed social programs and has little wiggle room inside the IMF framework.  The other, more effective mechanism they will use is better tax collection.  This may prove a larger gain to the DGI (tax department) than higher taxes.  Other issues will certainly pop up, but as long as confidence in the stability of the country, both economic and political remains, we’ll see positive growth.  

Nicaragua continues to get positive tourism press around the world.  The Caribbean coast  has been featured lately in several articles, specifically the Corn Islands, known for their very laid back lifestyle, fantastic lobster, and spectacular diving.  President Ortega campaigned on the promise and belief that tourism can be a huge economic engine for Nicaragua.  He’s right. His new Tourism Minister, Mario Salinas is reworking the Tourism Incentives Law #306 right now, enhancing the areas that will facilitate a more rapid growth in this industry.  There is a strong awareness here that tourism really can be the new “industry without chimneys.”  

Nicaragua is a very special place, one that is moving ahead economically and socially.  If you are willing to push aside left over misperceptions and judge the facts for what they are, you have the unique opportunity to be early in this rapidly growing market.  Opportunities abound.  Plan a trip, see the country for what it really is and you may find your self hook, line and sinker involved here as I have.  

On a totally unrelated note, have you ever wanted to see Alaska by ship?  If so, I’ve been invited to speak aboard a cruise this summer about demographics, scarcity and the opportunities for folks in Central America, and would love to have some friends in the audience.  The cruise goes from Vancouver to Anchorage, from July 15 to 22.  Lots of great speakers including Peter Zipper, Michael Checkan, Joel Nagel and Bennett Cooper.  For more information, send Greta a note greta@granpacifica.com and she’ll pass your name along to the organizers.

Thank you again for your interest in Nicaragua.  One person at a time we can change the old image of this wonderful nation and replace it with a vision of reality.  Enjoy a fabulous day and come visit some time.  You’ll be glad you did.

Keep in touch,

Mike Cobb
President
Gran Pacifica
www.granpacifica.com

Barry Dufresne
E-Mail:  President@Stealthfinancial.com
RICA NICA NICARAGUA REAL ESTATE
Http://www.Stealthfinancial.com

p.s.       The ocean-front Las Perlas condos at Gran Pacifica are now finished and accepting reservations for June 2007 and beyond.   For more information about rentals e-mail concierge@granpacifica.com.   

p.p.s     Keep a heads up for trips and tours later in the summer where you too can visit the exotic areas of Nicaragua while seeing the realities and possibilities with your own eyes.  



I. Business News and the Economy top


INVESTMENT COMMENTARY [1]
April, 2007
By Javier Morales

The differences in what a politician wants and what he gets has always been a topic of discussion in the political debate. Nicaragua is an example of how reality can frame the course of the political will. During the last administration, the opposition forces wanted to change the constitution to force the resignation of President Bolaños and change the government structure from a presidential led organization to a parliament led one. No change really occurred, however, and economic activity was not affected. The country grew at healthy rates during the last 3 years of the past administration, namely 5.3% in 2004, 4.3% in 2005, and 3.7% during 2006. Some analyst mentioned that Nicaragua is suffering from an Italianization syndrome, namely, drastic swings in the political sphere do not affect the economic sphere.

Some analysts continue to express concern upon the political direction of the new government; however, macro- as well as microeconomic indicators have not been altered.   The IMF President Rodrigo Rato mentioned recently that the Fund was ready to discuss a new monetary program and that their forecast for growth and inflation were in line with the objectives of the Nicaraguan authorities.  The following indicators demonstrate that economic indicators remain solid.

International reserves at the Central Bank were $ 929.3 million, dated April 13th, an increase of 4% with respect to last month. Deposits in the financial systems are at the highest levels after last election at a US$2,219 millions peak dated April 13th of 2007. Exchange rate spread is at its minimum level and inflation during the second week of April was only 0.26%, and cumulative inflation for the year 2007 reached 3.6 % which is lower than the previous three years for the same period. Exports are growing at 20% and commodity prices are still propelled by the oil shock. Only residential construction, a very sensitive sector regarding rational expectations, have slowed down by 30%, according to the National Association of Developers. In spite of the decrease in real estate sales, home prices remain at the same level.

Finally, when Eduardo Montealegre complained today in a TV program that while he was a Foreign Relations Minister, he was not able to get an appointment with the US Secretary of State, Samuel Santos, the new Sandinista Foreign Relations Minister, had a meeting with Condoleezza Rice just last Thursday. Secretary Rice announced after the meeting that the US intends to maintain good relations with the Government and the people of Nicaragua and USAID programs will be maintained.

[1]Javier Morales earned a PhD in Economics at Stanford University has served in several public posts and has held a variety of senior management positions.

Nicaraguan American California Chamber of Commerce (CACONACA) meets with Nicaraguan Ambassador and Gran Pacifica investors in California
(From Nicas En El Exterior Newsletter)

Framed with the beautiful view of the marina in Marina del Rey, California, the Board of Directors of the Nicaraguan American California Chamber of Commerce (CACONACA) had their first meeting with the newly appointed Nicaraguan ambassador to the United States, Dr. Arturo Cruz de Sequeira, at Tony P’s Dockside Grill, a restaurant owned by Danny Ringwood and Tony Palermo, who are also investors in Gran Pacifica. 

Dr. Cruz, a sharp man with extensive knowledge of international and national economies, displayed at all times a charismatic agility which he used to communicate his government’s message. 

CACONACA, which celebrates its 13th anniversary on May 18th and today is one of the most credible institutions in California as well as Nicaragua, is the organizer of the event that brings together the largest number of Nicaraguans in California: the International Augustine Fair, which this year will take place on the 4th and 5th of August.

In the meeting, the directors of CACONACA expressed the necessity to the ambassador of creating a vice ministry of external relations concerned solely with the interests of Nicaraguans living outside of Nicaragua.  This could be an initiative that takes form as more and more Nicaraguan communities get organized and take responsibility for management of themselves outside of their country.

They also said that this is not a new idea, that El Salvador has for several years had a person in charge of liaising with the government on behalf of nationals who have left the country.  They added that even Costa Rica has a similar representative, even though their numbers abroad are far smaller than those in Nicaragua.

One of the principal tasks of this vice ministry would be to represent the interests of Nicas living abroad, such as: documentation, immigration issues, health service guarantees for people wishing to return, and voting rights, among others.

Some other issues touched upon were the coordination of commercial missions and the participation of the embassy in different events that CACONACA has set up for the rest of the year. 

NOTE: Recently CACONACA successfully collaborated on a commercial mission with the Chamber of the Americas (COTA) which was supported by the Nicaraguan Embassy in the United States.

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Moving Towards Electric Interconnection
Giant mega project on the isthmus takes first steps in Nicaragua

Jorge Loáisiga Mayorga y Moisés Martínez

The Central American Electric Interconnection System (SIEPAC) has stopped being a dream.  Construction began in Nicaragua and to date more than three million dollars in indemnities have been paid for the right of service. 

The project takes the form of an electrical transmission line of approximately 1,800 kilometers (1,076 miles) which will connect the electric networks of Panama, Costa Rica, Nicaragua, Honduras, El Salvador, and Guatemala.

The line, with capacities for 230 kilovolts and 300 megawatts, will be the backbone of the Central American Electric Interconnection System, one of the principal projects for integration and regional cooperation.

Of the 1,800 kilometres of electric lines, 318 kilometres (197 miles) will be constructed in Nicaragua, from El Guasaule to the border with Costa Rica along the Pacific coast, at a cost of approximately 40 or 50 million dollars.

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Democracy and Development Intrinsically Linked, Rice Says
(Governments must “deliver for their people” to sustain democratic progress)
By Jane Morse
USINFO Staff Writer

Washington -- Well-governed democracies must be able “to deliver for their people” or they will not be able to sustain momentum for democratic development, says Secretary of State Condoleezza Rice.

At an April 16 meeting at the State Department with members of the Advisory Committee on Democracy Promotion, she emphasized the link between democracy and economic development.

“If you're really only talking about job growth, trade, investment, you're not making the connection to the next level of development,” she said. That “micro level of development,” Rice explained, “is making sure that there's an educated population, making sure that there's a healthy population, making certain that the benefits of democracy are translating downward into the population so that when the next term for accountability comes, which is the next election, those young democracies are able to point to something that they have delivered.”

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II. Tourism News top

Alternative Tourism & Sustainable Development in Nicaragua
By Karen M. Rapaccioli

IN the process of expanding the “Industry without Chimneys” it is essential to count on the support of all sectors to meet the goal that is so necessary to bring about the desired social and economic development of our nations.

Nicaragua has lately been mentioned in International Living, Yahoo Travel, the Travel Channel, and several major US newspapers.  It has even garnered a spot as “The World’s Best Retirement Secret”.

Nicaragua is situated in a very coveted location for retirement and ecotourism.  According to the Inter-American Institute of Human Rights, Nicaragua is the safest country in Central America, and one of the safest in the world.  Its crime rate is comparable to those of Germany, France, and the United States.  We are ready to create, to combine efforts, and to present our Nicaragua to the world offering equitable and sustainable tourism for all.  Until now, our country’s tourism has generated $239 million, with 770 visitors in 2006.

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House Hunters International
Episode HHINT-311

Moving to Managua
Deneen and Brian Wargo make their living working in water, specifically the warm waters of Hawaii. She helms a submarine for a tourism company, and he works for a tourist fishing company. Although they like living close to the water in their two-bedroom, two-bath condo, this active couple is running out of space. One visit to Costa Rica and neighboring Nicaragua opened their eyes to new opportunities and new surf to explore. With just as much beautiful scenery, a cheaper cost of living and a growing Nicaraguan tourism market, the city of Managua is the place where this couple wants to drop their next anchor. Real estate agent and fellow surfer, Barry Oliver, signs on to help this couple find a place that suits their needs.

GUESTS:
Barry Oliver
Real Estate Agent, Century 21 Best Value Realty

AIR TIMES:

Elkin Fonseca Update:
LETTER FROM JANET FOERSTER
April 8, 2007

Dear Friends:

I’m sending this letter to our growing project partnership circle as an update on the Elkin Fonseca Zapata medical care trip to Pittsburgh—which we now expect to begin in early May.  For those in the group who are fairly new and may not clearly understand how all the pieces fit together, I will begin with a brief description of the background on how we met Elkin and learned of his serious health condition.

My company, innerCHANGE associates international (iCHai), a limited liability company, works in partnership with businesses, educational and healthcare institutions, governmental and non-governmental organizations, and communities to develop their human resources through understanding, valuing, and leveraging cultural differences.  Within its humanitarian program division, iCHai engages skilled associates and critical partners to manage sustainable and culturally appropriate humanitarian development programs and projects.  In this capacity, iCHai is coordinating the many partnership activities involved in bringing Elkin to the U.S.

Children, Health, Education, and Supporting Services (CHESS) is one of the major new initiatives of iCHai’s humanitarian program division.  CHESS aims to assist the municipality of Villa El Carmen, Nicaragua in achieving community empowerment through improved primary school education and health.  In partnership with the USAID Alliance Program for Education and Health, Gran Pacifica Nicaragua and Rotary Clubs and Rotary International, as well as other non-profit organizations.  iCHai coordinates activities in support of 12 targeted communities of Villa El Carmen in the following key program areas: community health education workshops; continuing English language education for teachers; health and safety improvements, library programs, and cultural heritage education projects for the primary schools; and educational programs for pre-school teachers and children.   

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Ernesto Leal Memorial Scholarship
Sponsors: International Rotary Club & Gran Pacifica Resort

Announcement of Master Scholarship

The Rotary Foundation and Gran Pacifica Resort have created the academic scholarship Ernesto Leal in memorial, recognizing the ex-diplomat of Nicaragua, who constantly worked to promote in a positive way the Central American regional integration. The Ernesto Leal Scholarship, will allow to a Nicaraguan student to attend a postgraduate program to one of the postgraduate programs in a University in the area of Pennsylvania, United States, with the purpose of improve his/her education and serve the Nicaraguan community at his/her return. The scholarship consists in granting the best student US $25,000.00 to complement the student’s education in a Pennsylvania University Area. The scholarship winner must fulfill all the requirements mentioned in the present announcement.

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III. Press Articles top

Nicaragua, the new Panama
By Diane Wedner Los Angeles Times

SAN JUAN del SUR, Nicaragua — What second-home buyers yearn for in Central America is Costa Rica before the building boom. They want ocean views and unspoiled land, without the steep prices, crime and U.S. fast-food chains. They want Panama before Donald Trump, Mexico before the prices went up.

Adventurous Americans, Canadians and Europeans willing to dodge livestock and potholes for the two-hour car ride south from Managua to this sleepy fishing village on the west coast of Nicaragua are finding just that. Three-bedroom homes with unfettered views of shimmering bays and turquoise water start at $155,000; condos, from $129,000.
Undeveloped land with ocean views — sites of a quarter-acre — start at $35,000. Construction costs generally range from $55 to $75 per square foot. To investors, it simply screams "ground floor."

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Nicaragua's Corn Islands, an unspoiled Paradise
By Diane Wedner, Los Angeles Times Staff Writer
April 06, 2007

Little Corn Island, Nicaragua

If your idea of a Caribbean vacation includes facials, room service and $25 breakfasts, head to those islands whose names start with "Saint." But if strapping on a pair of hiking boots, slathering yourself in high-test mosquito repellent and trekking through the jungle to deserted beaches quickens your pulse, Little Corn or its sister, Great (also called Big) Corn, are your ticket.

High-end amenities here include hot water, 24-hour electricity and $11 lobster dinners.

During my visit in January, I overheard Canadian and European tourists say, "I wanted to go to Costa Rica, but it's too expensive and built up."

So they're here instead, at a place with no golf resorts, few tourists and zero paparazzi. At a place poised somewhere between adolescence and adulthood: striving to be St. Thomas but still in its awkward "Pirates of the Caribbean" stage — treehouses and jungle cabins, Ramón the Spaniard and Paola the Italian.

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Nicaragua Sandinistas to fight former foes' hunger
Mon Apr 2, 2007

MANAGUA (Reuters) - Nicaragua's Sandinista government will hand out seeds and farm animals to fight hunger the Caribbean coast, including among Miskito Indians who fought the leftists' first government in the 1980s.

Agriculture Minister Ariel Bucardo said the project would help 75,000 malnourished families, starting in the extremely poor Rio Coco region, close to the border with Honduras.

"It is incredible the level of poverty in this region," Bucardo told reporters. He said an average of 17 people died of hunger-related diseases in the region each month.
Rio Coco, an often waterlogged zone recently blighted by crop-destroying plagues of rats, is largely populated by the Miskito and Mayagna ethnic groups.

The Miskitos, traditionally turtle fishermen, aligned with U.S.-financed "Contra" rebels to fight the revolutionary government of Sandinista leader Daniel Ortega in the 1980s.
Thousands of Miskitos were forcibly relocated by the first Sandinista government.

Under the new program, which Bucardo said would last five years and cost about $150 million, families will be given farm animals, seeds and tools.

Ortega was voted out of office in 1990 but made a comeback after winning elections last year. He has promised reconciliation with wartime enemies and says he will reduce poverty.

PEOPLE’S DAILY ONLINE
Nicaraguan president calls on schools to review policies

Nicaraguan President Daniel Ortega opened the 2007 school year on Monday for the nation's 1.3 million children, calling on schools to abandon uniforms and "ornaments" because the children of poor families often go to school without having breakfast.
"The Constitution says that both boys and girls should receive free education," Ortega said, during a tour of the public schools in Managua.

Pupils told Ortega that some of them have the typical gallopinto (red beans and rice) breakfast while others have to make do with only a glass of sugar water.
"This drama of children coming to school without breakfast ... has to end in Nicaragua," he said.

He also announced a program designed to reduce illiteracy to 5 percent from the current 35 percent, during his five-year term.

Ortega, who was sworn in for his third term on Jan. 10, has promised free education.
Education Minister Miguel de Castilla said that the nation's children and teens will not go through another year without studying, because school registration has been extended to February.

Some 800,000 children every year had no access to schooling in the country for the past 16 years when free-market oriented governments were in power.

CATCH THE WAVE
Surprise! The best real estate buys aren’t where you might expect

Suzan Haskins has a tip for people interested in finding the world’s undiscovered beachfront property: follow the surfers. Long before any condo or resort developers arrive, surfers stake out remote beaches in their quest for good waves, says Haskins, who is the Latin America editorial director for International Living. “The surfers come first and then the mainstream follows,” she says.

During the past decade or so, the surfing crowd has been moving in to typically unexpected places like the Central American countries Nicaragua, Panama, and Honduras, as well as the Dominican Republic in the Caribbean. Even today, the beachfront idyll has yet to be disturbed in some of these spots. “The thing about Nicaraguan beaches is that they are just deserted. You can walk for miles and be the only person on the beach,” says Haskins, who recently relocated from Panama City to San Juan del Sur, an increasingly popular destination on Nicaragua’s Pacific coast.

Lately, though, word has spread well beyond surfer and backpacker circles about the appeal of these little-known beachfront escapes, prompting a wave of construction aimed at second-home buyers and retirees from North America. A number of factors have coalesced to spur this beachfront real estate boom. For one thing, American baby boomers, a generally adventurous group with significant amounts of disposable income, are far more likely than previous generations to consider a second home or even retirement outside the United States.

Perhaps equally important, particularly for those focused on a second home as an investment, is the relatively lackluster appreciation in recent years of vacation getaways in traditional U.S. markets like Florida, California, Nevada, and Arizona. “We have a phenomenon in the United States that occurred in 2006; the four principal second-home markets have gotten pretty flat,” says Mitch Creekmore, a senior vice president and director of business development f or the Houston-based real estate information and transaction management company Stewart Information International and co-author of the book Cashing In on a Second Home in Central America. “Second-home buyers still have the income and still want to invest, and they’re looking at markets outside the United States. And certainly Central America is viable.”

It has become more viable because the real estate markets across the region have matured. This makes it easier for foreign investors to get secure title insurance and, increasingly, mortgage financing. Michael Skalka, chairman and CEO of Stewart Information International, also points out how easy it is to get to and from these countries, and how welcome you are once you arrive. “And we are so spoiled in Houston. We can get anywhere in the Central American region in two and a half hours to four hours max,” he says.

Below, you’ll find a sampling of some of the least known yet most promising beachfront second-home markets in the hemisphere.

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