Busted in Managua

“You ran through a red light.”

“No, I didn’t. It was yellow.”

The police stopped us yesterday on the streets of Managua. Our driver, Carlos, argued his case.

We were surprised by his aggressive response. It doesn’t generally pay to contradict the police. In the US, we are taught to keep out mouths shut. Then again, policemen in the US are armed.

We’ll return to the scene in Managua in a moment …

 

managua copsCops in Managua (Nicaragua) – they don’t look like arguing with them would be a good idea … however, there are ways and means as you will learn below.

Photo credit: AP

 

Cheap and Easy

“I’m going to have to write up a ticket.”

“I don’t have time for that.”

“What’s your hurry?”

“I’m taking this foreign investor to the immigration office. We have an appointment at 11.”

“Well…”

The cop threw a quizzical look in our direction.

“He’s an investor?”

“Yes. He’s coming here to invest money.”

“Well, you’re going in the wrong direction. The immigration office is over there,” he said, pointing vaguely back the way we had come.

“No. I turn to the left ahead at the intersection. Then it’s up on the right.”

“No, it’s over there. You have to turn around and go in the opposite direction.”

The conversationalists continued, as we wondered where they were going. Then it became obvious. Our chauffeur had fished a 100-cordoba bill (about $4) out of his pocket.

With an artfulness that must have been practiced a hundred times, the policeman slid his hand in through the open window and our driver placed the folded bill in his palm. Thereafter, the red light incident was forgotten and we were free to go on our way.

“You just have to know how to talk to them,” Carlos explained.

“Some of them just give you a ticket and it’s a big pain in the *** to pay it. But when he started giving me directions, I knew the directions were wrong and so did he.

“It was just his way of inviting conversation. So, I ended up paying about $4 to settle the matter. It was cheap. And easy. And the money supplements the policemen’s earnings so we don’t have to pay them so much in salary.”

 

Nicaragua Police

Guilt can be erased with 100 Cordoba per alleged traffic infraction

Photo credit: watchingthesunbake.blogspot.com


Trading Favors

Life in the emerging world is simpler, and more complicated, than life in a developed economy. Corruption is usually more direct… and much cheaper. Policemen, politicians, voters, businessmen and bureaucrats – rich and poor alike – can all be bought… just as they can north of the Rio Grande.

But it can take real skill to negotiate a deal. A friend, a lifelong resident of Nicaragua, told us how it works.

“It’s about knowing the right people. And trading favors. You have to have the right connections. And you have to have something they want. Usually money.

“I know one time my nephew lost his passport just before he was supposed to leave for the US. It was Easter weekend. The passport office was closed. And it takes a couple of weeks even when it is open.

“But my wife’s cousin knew someone. I don’t know what he had for this guy… or on this guy… but he went in on a Sunday and got the passport.”

We have been here now for two weeks. The sun has shone every day. Temperatures are always in the low 80s. Here by the Pacific Ocean, the waves keep coming, one after another, like drinks at happy hour.

But Nicaragua is not just a sleepy Central American hideaway. It is also an economy that is growing as fast as China. Seven percent is the official tally for GDP growth last year. Trucks fill the roads. Tourists fill the bars and beaches. Almost anywhere you go, there are new cars, new restaurants, new shops and businesses.

Yes, it appears rough and disorderly – with trash strewn in vacant lots, half-finished houses along the road, and teams of oxen drawing two-wheel carts. But that is how real progress works: It is messy, like a teenager, not carefully organized, like a senior citizen.

 

The “Pacific Riviera”

Along the “Pacific Riviera,” our once-deserted beach is now bustling with surfers, young families and retirees. It looks like California, there are so many surfers in the water. But it shows its youth, too. Dogs run on the sand without leashes. Small children play without clothes. Older children ride horses and splash through the surf.

The houses are directly on the beach – just as they are in Malibu or Delray Beach. But there are no warning flags, no lifeguards… and apparently no rules.

“If you want to make some money you will buy land on the coast,” says our old friend.

Taking a line from Will Rogers, “They just aren’t making places like this anymore.” Beautiful beach. Beautiful hill views. Great weather. Warm water. Cheap, cheerful household help. When North Americans realize what Nicaragua has to offer, there will be a land rush.

Maybe. We have believed in the Nicaragua beach story for more than 15 years, ever since we came here in the late 1990s. We take credit – probably undeserved – for having coined the “Pacific Riviera” moniker many years ago. Since then, we’ve watched as thousands of new houses have been constructed.

Now, we see in the travel magazines that Nicaragua is one of the “10 Places to Visit in 2015.” And mainstream TV shows are talking about the country as a place for Americans and Canadians to retire. Prices have risen. But they are still way below the Malibu level. This week, we had a young man from Pacific Palisades, California, visiting:

“This is a little like that part of California. Malibu is not as nice. But it’s similar. And close to L.A. But in Malibu you’re going to spend $15 million for a house on the ocean. Here you can get one for less than $1 million.”

Perhaps he is exaggerating. Or maybe there’s still room to grow.

 

emerald coast nicaraguaEmerald coast, Nicaragua

Photo via visasignaturehotels.com

 

The above article is taken from the Diary of a Rogue Economist originally written for Bonner & Partners. Bill Bonner founded Agora, Inc in 1978. It has since grown into one of the largest independent newsletter publishing companies in the world. He has also written three New York Times bestselling books, Financial Reckoning Day, Empire of Debt and Mobs, Messiahs and Markets.

 

 

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