There are Two Economies in Nicaragua and Why it Matters

¡¡ Warning: Dry development-oriented subject matter with no cute pictures ahead !!

The title of this blog entry refers to something I've encountered often in my three years working in Nicaragua.

In the subculture of development work in Nicaragua, there are actually two economies at play.

Logically, one is the indigenous, national economy. When Nicaraguans (or Nicaraguan institutions) transact, it goes without saying that they do so in the Nicaraguan economy.

Something else happens when an international-based entity -- be it a person or an organization -- is involved is involved in the transaction.

The economy miraculously transforms. Prices go up and supply goes down. Sometimes dramatically.

This shouldn't come as any real surprise. The Nicaraguan party to the transaction operates under the impression that the foreign-based body has access to more funds. It is logical, and, it is often true.

There can be repercussions however to small grassroots organizations like BECA.

BECA's work is about facilitating educational opportunities for ambitious, serious-minded Nicaraguans.

If BECA has to pay more, that means fewer opportunities for these people.

The reality is that consultants, merchants, and even educational institutions often prefer to negotiate with us in the "Gringo Economy."

Some might call these actors "greedy bastards." (Disclaimer: I've done that. Huge waste of emotional energy.)

Others might call them "good capitalists."

Irregardless, the "Gringo Economy" isn't leaving Nicaragua anytime soon.

Clearly, it is BECA's strong preference to transact in the Nicaraguan economy.

What is one to do? What is our response?

I'm not entirely sure I have the solution.

But I believe that one step is for me to move to the background and let the local people assume the public face of BECA here in Nicaragua. (And, with time, assume operations.)

It is an interesting situation and one of the reasons I continue to find great personal satisfaction in the work here.

The challenges are very different from running a business in, say, my native Canada, but they are challenges that fascinate, instruct and empower nonetheless.