A recent election ended in disaster. Voters revived a party that has no business coming back into power. I only hope the electorate wakes up soon and gets the situation back on track.
No, I am not talking about the congressional elections in the United States.
I’m talking about the presidential election in Nicaragua, where Daniel Ortega, leader of the Sandinista Party, was re-elected president after a 15-year hiatus.
Real estate values plunged 10 percent instantly, and large corporations began pulling projects from the country. For a poor nation that had come an incredibly long way in the last 10 years, this is a setback that strikes me as very sad.
Since the election, Ortega, who was responsible for thousands of Nicaraguan deaths in the 1980s, has been saying all the right things. He tells us he’s changed. He vows to keep the pro-market people who have helped the country progress.
I find this hard to believe because he did nothing but bash such folks in the months leading up to the election. Ortega is trying to meet with leaders from the largest international banks that have been active in Nicaragua to prove he wants to maintain the pro-market environment that was slowly gaining ground in the country. Again, I doubt his ability to do this because he won after promising a stop to the “crazy capitalism” that was taking over the country.
Experts say Ortega was able to win not because people suddenly despise freemarket capitalism, but because the group in power became corrupt.
This was similar to how he took control in 1979, although the circumstances across the board were not as extreme. The danger, though, is that he says one thing, then reverts back to his own version of backroom-dealing corruption, and the citizens of Nicaragua are no better off.
I challenge anyone to show me a better government system than free-market capitalism. The Ortega victory might provide a buying opportunity for assets in his country, but I would be cautious for a while.
Although I have never been to Nicaragua, I have visited Costa Rica and El Salvador many times the last seven years. These countries get it, and they are being rewarded for their commitment to freemarket policies. In a very short time, I’ve seen the improvements.
(I go down there on surf trips. There’s a spot in the northern part of Costa Rica called Ollie’s Point. It’s one of my favorite waves in the world. It got that name because it is less than 10 miles from the Nicaraguan border and, in the 1980s, Oliver North flew a sea plane into this bay and did his weapons deals with the rebels who were fighting Ortega’s government. Unless you are a rebel who likes long jungle hikes, the only access to the point is by boat. It’s a long trip, but the waves are worth it!)
Despite higher prices in the market since summer, it still looks as if the trend is up for now. Large-cap growth seems the way to go, with technology leading the way.
Hauke is the CEO of Samex Capital Advisors, a locally based money manager. Views expressed here are the writer’s. Hauke can be reached at 829-5029 or at firstname.lastname@example.org.