Doing business in Nicaragua? Think like a Nica

Doing business in Nicaragua? Think like a Nica

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Doing business in Nicaragua? Think like a Nica

(HECTOR RETAMAL/AFP/Getty Images)

(HECTOR RETAMAL/AFP/Getty Images)

This is the third of five posts about the benefits and challenges of building a baseball academy in Nicaragua.  While it focuses on a specific project, the series also provides insight for Americans looking to pursue sports ventures in Latin America.

Winston Churchill once described Russia as “a riddle wrapped in a puzzle inside an enigma.”

While Nicaragua is nowhere near the size or complexity of the former Soviet Union, the Central American country presents a singular set of issues that, combined with international events, make the International Baseball Association (IBA) plans to build a baseball academy a daunting challenge.

When we made our first trip to Nicaragua in 2010, the United States had endured a recession and housing collapse, and the world economy was similarly affected.  It was not the ideal time to solicit the projected $500,000 through investments and financial support to build a baseball complex in a foreign country, especially one perceived to be unstable and violent.

The difficulty was compounded by the vagaries of conducting business in Nicaragua, which included:

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The country’s geography and infrastructure

Nicaragua is separated into two distinct regions. Most people live in the Pacific area and are of Hispanic origin. The Atlantic Coast is, in many ways, its own country. Its residents are of African descent (ancestors were slaves who escaped from the West Indies) and English is the primary language. There are no roads connecting the two parts of the country and travel to the Atlantic Coast is possible only by air or boat.

Despite its small population, the Atlantic Coast is a fertile area for baseball talent and projectable athletes. Former Major League outfielders Marvin Benard and David Green are from the area, as is Kansas City Royals prospect Cheslor Cuthbert. It was imperative that IBA establish a presence and set up a scouting network on the Atlantic Coast.

The Pacific area has various topographic regions, ranging from beaches to volcanoes to mountains with rain forests. Baseball is played throughout, and cities such as Matagalpa, Leon, Estelli, Rivas and Chinandega are renowned for their quality of play. In conducting baseball clinics in different areas, it became apparent that the physical characteristics of young players varied by region. Players in the coffee-growing areas, such as Matagalpa, were physically bigger and stronger than their counterparts in Managua.

It is possible to drive from Managua to locations throughout the Pacific region, but road conditions vary and travel times are much longer than in the U.S. The distance from Managua to Matagalpa is about 78 miles, but the driving time can be well over two hours. Road conditions have improved in the past five years but remain unpredictable. It is possible to drive on paved and dirt roads or be stuck behind a cart drawn by a horse or donkey. Even Managua presents challenges: It is a city with virtually no street names or addresses.

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The Nicaraguan Business Climate and Character

On our first trip to Managua, we strategically scheduled our initial meeting with a prominent Nicaraguan businessman. When we explained the project and goals, he told us that he would provide all necessary funding. We had the baseball expertise and he had the local business contacts.   It proved to be the first of many well-meaning but, ultimately, empty promises. Fortunately, we were able to assemble a small group of advisers, whose counsel proved to be invaluable. This was only accomplished after many trips and personal interactions. The basis for a business relationship follows the establishment of a personal one; there are no shortcuts.

The group’s advice included:

  • Nicaraguans are a very engaging people but their initial excitement for a project/idea is often tempered by an inability to deliver on promises.  And nearly every Nicaraguan has a relative who they say will be an asset to the project.
  • The tiny group that controls the vast majority of wealth in the country is very difficult to penetrate and rarely willing to invest their money.
  • Nicaraguans will not invest in a for-profit venture run by foreigners.  We were urged to set up an NGO in Nicaragua in order to solicit support for the academy. However, there is no tradition of philanthropy in the country and no concept of ensuring a legacy by helping the less fortunate.
  • Foreigners are allowed to purchase land and property, but, as a result of its turbulent history over the past 40 years, there can be problems with clear title.  During the Somoza dictatorship and subsequent Sandinista revolution, to the victors went the spoils and land was often seized. Therefore, it is critical to research the history of ownership in the case of claims on property. Title insurance is essential.
  • When negotiating deals and prices, use Nicaraguan IBA reserved the field at Jackie Robinson Stadium to host baseball clinics and stage games.The price quoted to us was $500 per day.  Our associates in Managua were able to secure the field for $100 per day.
  • There is no set of standardized business laws and practices and the system of graft and corruption exists.  IBA shipped several tons of donated baseball equipment to Nicaragua in 2012 and was assessed a $1,500 import fee.  With the appropriate future “contacts,” we were assured that thiswould not be repeated in the future.
  • In nearly every area, we relied on the resources and staff of the U.S. Embassy. Former Ambassador Robert Callahan (a huge Cubs fan) was especially helpful in supporting our efforts and expediting travel visas to the U.S.

Conducting business in Nicaragua can test one’s patience and mettle. The advantages previously outlined (cheap land, labor, passion for baseball, etc.) can be offset by the lack of basic amenities and resources.  When I land in Managua, I alter my expectations and assume the personality of a Nica, albeit one with a U.S. passport.

Part One: Businessmen, ballplayers target Nicaragua for investment in baseball academy

Part Two: Plans for baseball academy in Nicaragua tied to real estate development

Part Three: Doing business in Nicaragua? Think like a Nica

Part Four: Altering scope of Nicaraguan Baseball Academy a necessity

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Bob Oettinger has worked in the area of corporate and non-profit management, fund raising, planning, public relations and promotions for more than 25 years. He has served as public relations director for the American Diabetes Association, Southern California Affialite and co-director of Motion Picture and Television Fund’s $50 million capital campaign, before founding Celebrity Outreach in 1989. Bio

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