I grew up in the 1980s, and in some ways I never left it. I still wear Ray-Ban Wayfarer sunglasses. I still enjoy those big hair bands like Guns N’ Roses and the bluesy rock of Stevie Ray Vaughan. And I still get a kick out of watching re-reruns of 1980s TV shows (Miami Vice holds up well) and movies. Say Conan to me and I think of a buff Arnold Schwarzenegger, not a late night host.
The 1980s also left its indelible mark on certain places. Say “Nicaragua” and it likely conjures up images of guerilla fighting between Sandinistas and Contras. Or say “Colombia” and you likely think of the drug trade. Cigarette boats. Violence. Drug mafias. Rich cocaine kingpins. Back in the day, as the saying went, Colombians didn’t rob banks. They bought them.
Both countries have changed dramatically, though. What follows is a little peek at my recent field trips to Nicaragua and Colombia.
I recently visited an old college friend of mine who lives in Leon, Nicaragua. His family is from there, and they left in 1983 as Nicaragua’s civil war raged on. He can still remember playing in the streets, hearing machine gun fire and then sprinting home. He can remember how his family slept in the center of the house where there were more walls between them and what might happen outside. He remembers people knocking on the door begging for food or a place to hide. Only 11 at the time, he had nightmares for years afterward.
Walking around in Leon, you can still see the effects of the war. Lots where buildings once stood are empty. Some buildings are still unoccupied and unclaimed, essentially in ruins. My friend’s father told me, “This was a really nice town once. We had everything.” He told me how there were once nine movie theaters in Leon. Now there is only one. There was once a nice park with tennis courts right around the corner. Now it’s weedy and unkempt. And on and on it goes…
I always enjoy visiting, and I learn all kinds of things I’d never learn otherwise. Some of them are little things, like the way banks in Nicaragua hold checks for three weeks. (That’s a three-week float!) Or how the water pressure is so weak in the mornings that the water dribbles out of the showerheads.
On my trip, I read a book titled My Car in Managua by Forrest Colburn, who made many trips to Nicaragua in 1980s and lived there for a year in 1985. (His take on Leon was not charitable: “Unless you have family in Leon, there is nothing in the city of interest.”) His book talks about life in post-revolutionary Nicaragua in the 1980s. It’s a lighthearted look and an easy read of only 130 pages, but the stories will stick with you. I highly recommend it if you want to know something of that period in Nicaraguan history.
Nicaragua has changed a lot since the 1980s, of course. After all, my friend and his family moved back. And I was down in Nicaragua with a group of readers exploring property in Rancho Santana. I also poked around other developments nearby. The country is enjoying a revival of investor interest.
As for Colombia… Well, I recently read a very entertaining book entitled, The Fruit Palace: An Odyssey Through Colombia’s Cocaine Underworld, by Charles Nicholl. Published in 1985, the author sets off, Hunter S. Thompson-style, in search of the Great Cocaine Story, “a one- eyed glimpse up the skirts of South America.” The book takes its name from a little whitewashed café in the seaport of Santa Marta, where the author had his first encounter with drug trafficking.
Colombia is ideal for growing coca, which thrives in the lush, hot, semitropical slopes of its mountains, which run north-south up the country like primeval spines. Nicholls writes, “Fiercely hot, plentifully watered, full of hidden cul-de-sac valleys and mostly impassable to any vehicle larger than a mule… They call this the continent of fugitives, where a man can lose his own shadow.”
This is the South America of imagination, shrouded in greenery, fringed with mist and full of steamy valleys and half-hidden villages and lost shrines. Slow-moving rivers, rice paddies, cane fields, coffee plantations…
Today, though, Colombia may be the best economic story in Latin America. The drug violence has been mostly rooted out. Bogotá, the capital, is now safer than Miami, Washington or Atlanta. The economy is growing 5% per year and has a large middle class. In just the last six years, foreign investment in Colombia has gone up fourfold, and exports tripled.
The famous IMD survey recently ranked Colombia second best in Latin America in protecting private property, behind only Chile. And the World Bank rated Colombia third in Latin America in the “business friendly” category, behind only Mexico and Peru.
The Colombian stock market has been on a tear since the ’08 financial crisis. But valuations remain reasonable given the high growth rate.
As a resource story, Colombia has huge potential for oil production. There have been a number of success stories already. The stock price in the largest independent oil producer in Colombia, Pacific Rubiales, for instance, is up 10-fold in the last two years! But there are several other ways to “play Colombia.”
I recently returned from a visit to this bustling South American nation to see what values I might uncover. I will file a couple of reports about my discoveries in next week’s editions of The Daily Reckoning.
For Daily Reckoning Australia