Yours truly is en route to Nicaragua as I write this. My wife and I head there at least once a year to visit her family and enjoy the beautiful country next to its better-known neighbor, Costa Rica. As a finpunk, it's hard for me to go anywhere and not think about the economics, market inefficiencies, and business opportunities surrounding me.
As much as I love Steemit, I may take some time off over the next 10 days to enjoy time with family, friends, and some adventure. However, I'll also be slipping away to my favorite local cafe, Cafe Las Flores, every now and then to publish a special series on the country.
That was me last year enjoying some down time reading a banking article and trading cryptocurrencies while enjoying a tasty treat and coffee from Cafe Las Flores. Central American coffee beans are my favorite, just in case anyone needs a gift idea for me...
The @finpunk Goes to Nicaragua series will blend my vacation experiences with some economics and market observations. From plenty of prior visits I can already say there's a ton to talk about! As one of the poorest countries in the hemisphere (second to Haiti), Nicaragua clings to a clunky Socialist system that "typifies the type of government interference that is politically popular but does nothing to improve productivity."
The Heritage Foundation ranks Nicaragua's economy as being the 109th freest out of 178 countries actually assigned a score. With a composite score of 58.6 out of 100, Nicaragua sits squarely in the "Mostly Unfree" group, which is almost certainly a contributing factor to 48% of the population living below the poverty line (79.9% of the population live with less than $2 per day).
Anti–free market policies and populism have driven what amounts to a permanent campaign to justify the large state presence in Nicaragua’s economy. The inefficient regulatory framework impedes expansion and diversification of the productive base. A state-directed average 10 percent increase in the minimum wage for most sectors in 2015 typifies the type of government interference that is politically popular but does nothing to improve productivity.
A skeptical academic economist might say that causation could run in either direction and it's possible "they're unfree because they're poor!" but I'll make the bold claim that they stay poor because so much potential opportunity is stifled. Nicaragua is a permission-based economy with a ton of barriers to value creation and a rent-extracting political elite. That's the reality of Socialism.
Bitcoin is promoting freedom in Latin America, and Nicaragua is exactly the type of country that will benefit from the cryptofinance revolution. A big part of this series include discussion about how Bitcoin, services like @BlockPay, and blockchain businesses like Factom could be game-changers.
On the bright side, the country is visibly growing every year I visit. One of my favorite barometers is to wander through the grocery stores to see the split between premium vs. every day items. My wife informs me that when she was a kid and the U.S. imposed its destructive embargo under Reagan, shelves were often empty. It's nice to see them very full these days.
But hey, life's not all about work and economics! Nicaragua may rank far behind the U.S. in economic freedom, but it's amazing how free you feel not having to worry about being harassed for having a drink on the street...
It's nice having a beer on the beach in San Juan del Sur...
The chickens are super friendly...
And so much more, but my wifi connection is killing me at the moment! More to come as the adventures continue...
What are your thoughts?
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Rob Viglione is a PhD Candidate in Finance @UofSC with research interests in cryptofinance, asset pricing, and innovation. He is a former physicist, mercenary mathematician, and military officer with experience in satellite radar, space launch vehicles, and combat support intelligence. Currently a Principal at Key Force Consulting, LLC, a start-up consulting group in North Carolina, and Head of U.S. & Canada Ambassadors @BlockPay, Rob holds an MBA in Finance & Marketing and the PMP certification. He is a passionate libertarian who advocates peace, freedom, and respect for individual life.
Image source: http://wanderingtrader.com/travel-blog/nicaragua/%E2%80%8Bthings-to-do-in-nicaragua-tourist-attractions/
Heritage Foundation info on Nicaragua: http://www.heritage.org/index/country/nicaragua
I'm interested to see the rest of the series. You picked a good time of the year to head south. Do you speak fluent Spanish?
thanks so much for the feedback, i'm looking forward to this series myself.
no, i wish i could say my spanish is fluent, but it's really just minimally conversational ...enough to stay out of trouble!
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I read with interest your nice mix of holiday pleasure, serious finance with some beer thrown in. Looking forward to reading more.
gracias, much appreciated. i'll be interviewing a variety of people from all parts of the economy, so if you can think of some questions you'd like to hear tackled, please let me know.
I would be interested in how entrepreneurs deal with corruption/government regulation. How hard is it to keep a small business running in Nicaragua?
that's a great question and would make a cool discussion topic...i have a handful of small entrepreneurs i'll reach out to for some interviews and write something up. thanks for the suggestion! please keep them coming if you can think of anything else.