Susan Bursey-Wyss
TOURISM POTENTIAL
Tourism, one of the bright lights in other economies of the region, is seen as having great potential in Nicaragua. Tourism investment has recently been included ;n the tax benefit package for non-traditional development. Clean, unspoiled beaches run the entire length of the Pacific coast of Nicaragua and are within an easy drive from Managua.
Lake Granada, the second-largest body of water in Latin America, is dotted with thousands of islands that are home to orchids, tropical birds and Nicaragua's rich archaeological heritage. One of the largest islands, Solenta nime, is also the cradle of the Nicaraguan-school primitive painters. The Spanish resort chain, Barcelo, recently purchased Montilimar, the former beach estate of the Somozas, and offers sun and sand as well as "soft adventure" tours in conjunction with Careli Tours, the first local company to actively promote nature tourism in Nicaragua. Managua has three large, modern hotels - the InterContinental, Camino Real and Las Mercedes - and many smaller inns throug h out the city.
MAJOR TELECOMMUNICATIONS POTENTIAL
Multinational companies are again recognizing the opportunities Nicaragua offers. Motorola, in a joint venture with Nicaraguan partners, is extending cellular telephone service to the entire Pacific coast of the country. The growth potential for this and other telecommunication businesses is enormous, according to Enrique Dreyfus, former secretary of state for Nicaragua and president of Nicacel, the joint-venture partner.
Telecommunications offers outstanding investment opportunities, he explains. In most developing countries there are some 10 phones per 100 inhabitants, while there are 70 per 100 in the United States. But in Nicaragua there are only 1.8 per 100, and demand is strong. "High-tech companies should not be afraid of this developing cou ntry, but should seize upon its interest in modernization," Dreyfus says.
TELCOR, the national telephone company, has spent more than U.S.$120 million ;1 the last three years to upgrade and revamp the telephone system by installing new switches and fiber-optic cables. TELCOR was privatized in 1994, with 40 percent of the value and control of the company being offered to an international telecommunication operating company. Companies that have pre qualified for the bidding include AT&T, SPRINT and GTE from the United States, ANTEL from Chile, TELE FONICA of Spain, Singapore Tel ecom, Korea Telecom, France Telecom and TELMEX of Mexico. Twenty percent of the shares of the company will be offered to private investors through the newly established stock market in Nicaragua, and the remainder will be retained by the government.
TELCOR will be operated by the international telecommunication company but regulated by the newly formed regulatory agency that will operate much like the Federal Communications Commission in the United States.
CAPITALIZING ON NAFTA
The passage of the North American Free Trade Agreement has caused concern about this region's access to market; there is greater urgency to create a viable and dynamic regional trading group.
Four Central American countries are cooperating to harmonize regulations and create integrated economies: Nicaragua, Guatemala, El Salvador and Honduras, also known as the CA4. Because the economic policies of the last 12 y ears have weakened the economy and put Nicaragua in disadvantageous position, it has been given preferential trade status until 1996 by other members of the group. The group of four countries is establishing uniform tariffs, banking regulations, utility rate, and customs regulations. Those factors will facilitate the movement of goods in the region and position the area for free trade status in the near future with the United States, Mexico and Canada.
Investors in Nicaragua will find credit available for manufacturing for the local market as well as export through the local private and state banks and international sources. MIGA, the insurance arm of the World Bank. offers political risk and currency i nconvertibility insurance, and OPIC, the Overseas Private Investment Corp. of the U.S. government, offers financing and insurance for qualifying US. companies.
With a new cabinet installed January 10, the Chamorro government is determined to continue strengthening its market economy to stimulate growth. Nicaragua offers opportunities that the wise investor will readily recognize. The door is open and the welcome mat is out. -