Do Current Political Events In Nicaragua Affect The Expat Community?

It’s Time To Forget This Guy And Just Enjoy The Country

Nicaragua has long been a popular destination for expats… especially expats on a budget. It’s a country that offers one of the lowest costs of living in the Americas, along with low property costs.

And properties in Nicaragua are a good value, with a diverse array of lifestyles and property types. You can buy a classic Spanish colonial home in Granada, a beach house in San Juan del Sur, or a home or condo in a luxury beachfront planned community… all at great prices.

Residency is easy in Nicaragua, with very low financial thresholds for qualification. You can even bring your car… and drive it here.

Best of all, Nicaraguans will make you feel right at home. It’s one of the most welcoming places I’ve found in the 15 years I’ve been working this beat.

But this past week we’ve gotten a number of emails from people who are concerned about the actions of President Daniel Ortega and today’s political situation in Nicaragua. Current events have resurrected old worries about foreigners’ property rights and political instability.

Daniel Ortega was one of America’s Cold War villains… something that most boomers will remember.

President Ortega was (and still is) the head of the FSLN(Frente Sandinista de Liberación Nacional), more commonly known as the Sandinistas. (The Sandinistas are named for Augusto César Sandino, a well-known revolutionary figure who fought against the repeated invasions and occupations of Nicaragua by the United States. He was assassinated in 1934.)

Daniel Ortega came to international prominence in 1979 when the FSLN overthrew Anastasio Somoza, a dictator and the last leader of the Somoza family dynasty that had ruled Nicaragua since 1936.

Somoza hightailed it when his downfall was imminent, robbed the national treasury and fled, initially to Miami, leaving Nicaragua deeply in debt. He was assassinated by a Nicaraguan hit squad of four men and three women in Paraguay in 1980.

Considered a dictator, Somoza was not what you’d call a “man of the people.” His family owned about 20% of the arable land in Nicaragua and controlled about 60% of the country’s economic activity, which left most of the country’s wealth in the hands of the Somoza family and their associates.

Soon after Ortega took power in 1979, around five million acres of land were “redistributed” to about 100,000 families. This confiscation was intended to target Somoza land but was actually extended to include Somoza associates and supporters, as well.

This act of land redistribution affects Ortega’s reputation to this day.

With Nicaragua’s next presidential election scheduled for November 2016, readers have recently expressed a few areas of concern.

One is the lack of term limits in Nicaragua. Term limits were abolished by the legislature in 2014, allowing President Ortega to run again in 2016. So far, he’s been elected president in 1984, 2006, and 2011.

There’s also the apparent lack of opposition. On June 8, 2016, the Nicaraguan Supreme Court decided a six-year-old lawsuit, ruling that Daniel Ortega’s main opposition in the election—Eduardo Montealegre—was no longer the head of his party and was ineligible to run for election. Instead they appointed an Ortega supporter, Pedro Reyes—leaving Ortega with no serious opposition. The Supreme Court in Nicaragua is dominated by appointees loyal to Ortega, so most assume the ruling and timing were politically motivated.

Finally there’s his running mate. President Ortega named his wife, Rosario Murillo, as his running mate for the November election. To many onlookers this seems like the beginning of another family dynasty.

Nicaragua has what could be turning into a one-party system with a perpetual ruler… and it’s setting the stage for a liberal version of the Somoza dynasty.

What do I think of these developments?

Generally, I’m neither here nor there on foreign term limits. We didn’t have them in the United States until 1951 and found that presidential terms were usually self-regulating.

And I understand why some Latin American countries are getting rid of term limits. Places like Nicaragua and Ecuador went through years of oppressive regimes. So when they get a president they like, they want the right to keep him in office.

With respect to the lack of opposition, I don’t think the court ruling really made any difference. According to a poll conducted in May, Ortega would get 64% of the vote while the closest opposition would receive only 10%. Ortega was going to win anyway.

So while many will object to the situation—and the way it was brought about—the court ruling makes no practical difference in the outcome of November’s election.

As to Ortega’s running mate, I don’t see the selection of Rosario Murillo as having anything to do with expats in Nicaragua or the rights of foreign property owners. An intelligent, well-educated woman who speaks four languages, she’s descended from Sandino himself, joined the FSLN in 1969, and fought in the revolution. I have no reason to think she’s not qualified for the job.

Ortega has also come down on the side of foreign owners in the past—most notably when the coastal law came out in favor of the foreign property owner.

The amount of setback from the ocean that constitutes public land was in dispute for many years, and when the final ruling was made by the Ortega administration, they could have drawn the line in a way that allowed them to confiscate tens of millions of dollars in mostly expat-owned properties.

But he didn’t do it. He stood by his pre-election commitment to the foreign property owner.

Mike Cobb, chief executive of ECI Development, has been in Nicaragua for more than 16 years. As developer of the Gran Pacifica Beach and Golf Resort, he’s a high-profile foreign developer and investor who’s brought many other investors to the country. During this time, as an American businessman, he’s enjoyed the support of center, left, and right administrations… including the support of Daniel Ortega and the Sandinista government. In Mike’s own words, “the understanding and support of the Ortega administration has been exceptional.”

With respect to property confiscation, remember that the confiscation and redistribution of land in the early 1980s was focused on Somoza’s huge land holdings.

There is no such motivation for land redistribution today. And even if there were, most expat-owned property (mostly colonial homes, townhouses, and beach property) would be of little value to the country’s agricultural output.

Finally, one-party domination is not the end of the world… just look at Mexico. The PRI party held the presidency for 72 years, until 2000. During this time Mexico maintained strong growth and became the world’s #1 expat destination for Americans and Canadians. (The PRI was voted out of office in 2000 and voted back in in 2012.)

Someday, Nicaraguans will probably vote the Sandinistas out. But until that time, Nicaraguans have the government they want, and one that works for them.

In my 15 years of living abroad—including the past 10 years as a Nicaragua property-owner—my experience has taught me to separate expat living from politics.

So I judge a country on what its lifestyle is like in a practical way, not on the ideology of its current leaders… unless those leaders threaten our personal safety or property rights.

I’ve also learned that countries are far more pleasant places to live when the leadership has the support and approval of the people. In Nicaragua, Ortega’s approval rating is around 65% and has been as high as 80%. This is good by any standard.

Earlier this week I was discussing the Nicaragua situation with editor Lynn Mulvihill, a longtime friend and colleague. She reminded me that 10 years ago, she and I were going through this very same exercise. That is, analyzing what Ortega might do when he took office and contacting people on the ground in Nicaragua for their input.

It made me realize that Daniel Ortega has a 10-year track record of maintaining expat property rights. He’s also improved Nicaraguan living conditions, making it a better place for us to live.

So my advice to those interested in Nicaragua is to forget the politics. It’s usually a bad idea to select a country based on the current leader’s ideology, as long as it doesn’t affect the rights of property owners or expats.

Finally, it’s time to quit worrying about Daniel Ortega and to get on with enjoying one of the best and least-expensive expat venues in the Americas.

Lee Harrison
Editor, Overseas Property Alert

Make a Profit And Have The Adventure Of A Lifetime