NEWS/BLOG

Happy New Year!

There’s something invigorating about starting a new year, wiping the slate clean and resolving to make important changes. Will this be the year that you take steps toward creating a new life for yourself in a new country?

If so, here are a few steps to help you on your way.

1. Learn more about the country you’re thinking about. Read books and websites. Hunt down people who’ve been there even if their reasons for going don’t match yours. Find out from the nearest consulate what the local government requires of expats, and while you’re at it, learn what you can about health care and health insurance.

2. Plan an exploratory trip. Even if you’re undecided, focus on one country at a time. Avoid tourist destinations unless you want to live in one and save the sightseeing for another time. Stay at a bed and breakfast rather than a hotel, if possible. Visit food markets to check on what’s available and what it costs. Let a realtor show you homes for sale or rentals. Search out libraries, churches, sports facilities, anywhere you might want to spend time. Track down expats already living there and hound them with questions. Don’t decide on anything just yet.

3. Come home and think it over. Also think about the life you’d be leaving behind and your own ability to adapt. Ultimately, it’s not the choice of destination that makes for a successful living abroad experience, rather it’s the sense of adventure and the degree of flexibility you bring to the experience.

Happy 2007, and happy hunting and exploring!

More Change in Cuba

Acting Cuban President Raúl Castro recently complained to lawmakers about inefficiencies in the island’s economy, saying that there is no excuse for the country’s severe transportation and food production problems. Inefficient public transportation is among the many local complaints, along with dilapidated housing, insufficient food and government paychecks that fail to cover basic expenses.

Raúl Castro has also taken the Communist system to task. “The revolution cannot lie,” he was quoted as saying in the Communist Party newspaper Granma. “This isn’t saying that there have been comrades who have lied, but the imprecision, inexact data, consciously or unconsciously masked, can no longer continue.” This leaves experts wondering if a Cuban glasnos lies ahead.

Meanwhile, Spanish surgeon Dr. José Luis García Sabrido was flown by Cuban chartered jet to examine Cuban leader Fidel Castro. The Spanish surgeon, an expert on diseases of the digestive tract, issued a statement that Castro does not have cancer.

Cuban officials have maintained secrecy about Castro’s condition, and Venezuelan President Hugo Chavez has denied that Castro suffers from cancer or any chronic illness.

Investing in Emerging Markets

While investing in the developed world may be more comfortable for some, emerging markets are where the dramatic growth has been in recent months and years. The average emerging market mutual fund has climbed 31.3% annually during the past three years, according to Lipper Inc., and emerging market exchange-traded funds, ETFs, show similar performances.

Along with such growth comes greater risk, however, which includes currency fluctuations and lack of liquidity. In volatile markets, bid/offer spreads for emerging market ETFs can be very wide. Then, too, there can be political instability. In addition, emerging markets can be sensitive to U.S. interest rates.

Among ETFs, one of the top performers has been BLDRS Emerging Markets 50 ADR Index Fund, ADRE. The fund is up over 30% since the beginning of 2006. It tracks the Bank of New York Emerging Markets 50 ADR Index, which is comprised of 50 of the most traded, large cap companies in emerging markets, including Taiwan Semiconductor, America Movil and China Mobile. (ADRs or American depositary receipts are receipts for the shares of a foreign-based corporation held by a U.S. bank. ADRs are traded on major U.S. exchanges).

Funds not restricted to ADRs offer access to companies not traded on U.S. exchanges. The MSCI Emerging Markets fund with the symbol EEM has gained more than 30% this year. It has more than doubled since its debut in May 2003; during this same period, the S&P 500 Index of large cap U.S. stocks has risen by about 49%. EEM is diversified among various industry groups with assets invested in such companies as Gasprom and Samsung Electronics.

Funds not restricted to ADRs offer access to companies not traded on U.S. exchanges. The MSCI Emerging Markets fund with the symbol EEM has gained more than 30% this year. It has more than doubled since its debut in May 2003; during this same period, the S&P 500 Index of large cap U.S. stocks has risen by about 49%. EEM is diversified among various industry groups with assets invested in such companies as Gasprom and Samsung Electronics.

Another top performer boasting gains of over 30% in 2006 is Vanguard Emerging Markets Stock ETF, VWO, which tracks the MSCI Emerging Markets Select Index. With stocks in 18 countries in Europe, Asia, Africa and Latin America, its top holdings include Gasprom, Samsung Electronics and America Movil.

For more detailed information about these and other ETFs, see www.etfconnect.com. Since ETFs are traded like stocks, quotes and charts for ETFs can be found at any website offering stock information. 

Mexico’s Parallel Reality

Federal riot police in Oaxaca, Mexico, have ended their weeks-long occupation of the Oaxaca city center. The city of Oaxaca is favored by off-the-beaten path tourists and expats, and is surrounded by areas of extreme poverty. Needless to say, tourism has suffered recently.

The protest began as a teacher’s wage strike and grew into an anti-capitalist uprising that attempted to unseat state Gov. Ulises Ruiz, whom protestors accuse of thuggery, corruption and stealing an election. Protestors took over the center of Oaxaca for five months, and it took thousands of federal police to drive them out in November.

At the height of the protests, violent clashes erupted between activists and police, and nine protestors were shot. Hundred were arrested, and human right groups say that some have been tortured.  Activists blame local police for many, if not all, of the fatal shootings. Most recently, federal police raided the offices of the Oaxaca state police and seized their guns to determine if any were used in the shootings.

Oaxaca is just one of the problems for President Felipe Calderon. Since taking office December 1, Calderon has taken a tough stand on Mexico’s security issues, sending thousands of troops to his home state of Michoacan, where a turf war between drug cartels has led to violence. Now federal police leaving Oaxaca will beef-up the offensive in Michoacan.

Calderon won the election by small margin, or, some say, by a fraudulent counting of votes. His opponent, Andrés Manuel López Obrador refuses to recognize Calderon. Not only that, he has established his own parallel legitimate government with offices, a cabinet, and representatives in each region. His office is in his former campaign headquarters where his staff members answer the phone, “office of the legitimate President.”

Udderly Original Gifts

Did you know that a single cow can provide up to four gallons of milk a day? Or that a hen can lay 200 eggs a year?

These are a few of the things that you - and perhaps your children or grand-kids - will learn browsing the catalog of Heifer International, an organization which works to combat hunger and poverty by providing sources of food, i.e., livestock, rather than simply giving food. In 1944, the first shipment of 17 heifers left York, Pennsylvania, for Puerto Rico, going to families whose malnourished children had never even tasted milk. Since then, the organization has helped 7 million impoverished families.

What’s unique is that instead of just asking for donations, this organization suggests that you give a heifer or a goat in the name of someone on your holiday gift list. A heifer would require a gift of $500, but if your budget is more modest, you could give three rabbits for $60 or a share of a heifer for $50 or a flock of chicks for $20. The possibilities range from bees to water buffaloes. Make your selection then choose an electronic or a printable gift card.

Heifer also has a gift registry. If you’d rather not get another sweater or gadget this year, you can request that friends and family give a donation in your name and register for, say, a sheep or a llama.

To learn more, check out the website, www.catalog.heifer.org or call 800/422-0755.

International Benchmarks

One way to measure the success of an international stock, mutual fund or (ETF) exchange-traded fund is to compare it to an index. Or, to keep expense ratios low, you might choose investments that simply track an index. Morgan Stanley Capital International Inc. (MSCI) is the leading provider of international indices.

The MSCI EAFE Index, which has outperformed the S&P by about 1% per year over the last 10 years, tracks the stocks in 21 countries in Europe, Asian and Australian countries, but not in the U.S. or Canada. As of June 2005, almost 25% of its assets were invested in stocks in the U.K., 21% in Japan, 9% in France stocks, nearly 7% in Germany, 7% in Switzerland, and just under 6% in Australia.

For those investors who like the low expense ratios of index investing, Vanguard Developed Markets Index fund, VDMIX, tracks this index. The iShares MSCI EAFE Index Fund with the symbol EFA tracks it as well.

The MSCI World Index is made up of stocks from 23 developed countries, including the U.S. and Canada. The MSCI Emerging Markets Global Index is comprised of stocks from various developing countries around the globe. 

Global Re-Balancing

You’ve heard of corrections and consolidations. What the global economy now faces is re-balancing, according to Jean-Philippe Cotis, chief economist at the Organization for Economic Cooperation and Development, and the U.S. seems to be getting the short end.

The OECD offers a twice a year economic outlook for its 30 industrialized member nations. Now, in late 2006, it predicts that growth among its members will decelerate to 2.5% next year, down from 3.2% this year.

The OECD expects a slowdown for the U.S. (A major reason is the housing slump.) But the outlook is bright elsewhere. China, India and other fast-growing emerging economies such as Russia are expected to do well. This, plus Europe’s comeback this year, accounts for the “re-balancing” of global demand and output. The years ahead are not expected to resemble the slowdown of 2000, Cotis said. After a lull that may last only the first few months of 2007, the OECD expects the U.S. economy to pick up.

Housing prices have more than doubled in OECD member countries in the past decade. The greatest increases in the first half of 2006 were in Denmark, Sweden, Ireland and France, with Danish prices up 22% compared to the same period of 2005, France up 10.9% while U.S. prices rose 7.3%.

With the U.S. making up only about 46% of the world economy, keeping an eye on investment possibilities abroad makes good sense. 

Nicaragua Goes Left

It’s official. One more country has leftist leadership and the sky hasn’t fallen. Daniel Ortega, the former Sandinista leader, has been elected president of Nicaragua, the second poorest country in Latin America after Haiti, sometimes touted as “the next Costa Rica” in attempts to lure expats. Among those unhappy with the election are Nicaraguans living in the U.S., and some Nicaraguan industrialists aren’t too pleased either. Also, landowners are offering properties at a discount, calling it an “Ortega discount,” according to a Miami Herald article.

For most, though, the reaction is “wait and see.” Ortega, 61, claims that the country’s economic stability is a priority. He has already met with officials from the IMF, the World Bank and the Inter-American Development Bank.

Nicaragua’s economy has been improving for the last few years, and in the future may offer opportunities other than cheap real estate. A Reuters story details some little known high risk, potentially high-yield bonds known as BPI bonds or bonds of payment of compensation, also called land bonds.

The bonds were issued in 1993 by the former Ministry of Finance to compensate those who had lost property during Sandinista rule in the 1980s. They are traded daily on the Bolsa or Nicaraguan Stock Exchange and are held by domestic financial institutions and foreign investors.

The bonds are denominated in córdobas but indexed to the U.S. dollar. Depending on the maturity, amount outstanding and liquidity, yields currently range from 11% to 19%. Please note that this is not a recommendation to buy BPI bonds, however, any information on them or on expat life in Nicaragua now would be appreciated. 

The Birth of a Blog

This blog is not about me. It’s about an idea that became a networking group that spawned a newsletter that necessitated a website and now a blog.  Maybe it all began when I started feeling that I’d been born on the wrong continent, which was long before I spent a year as an Antioch student in Besandon, France.

It began in earnest in the early 90s after I placed an ad in LA Weekly “Greener Pastures Abroad - Let’s start a network.” Soon a fascinating group of people convened in my Southern California living room. The group grew, eventually meeting in restaurants with speakers and slide shows. A newsletter for the Network for Living Abroad seemed like a logical next step, and well, I’d been writing for decades. Focusing on one country at a time, the newsletter dealt with culture and culture shock as well as practical matters like residency requirements. After a short Washington Post story, which was picked up by newspapers all over the country, the newsletter gained national circulation.

I moved with my family, not abroad, but to Santa Fe, NM, in 1998, and the next year we launched Liveabroad.com. The website was initially designed to promote the newsletter, but by the 2000s, the information I’d been collecting from consulates, expats themselves and my own travels was becoming readily available on the Internet. The last issues was in 2002 and after that a free e-mail letter “Updates from Liveabroad.com” took its place. Internet advertising soon made the website sustainable.

From now on, “Updates from Liveabroad.com.” will alert subscribers to what’s new at the blog. There will be various threads and plenty of opportunities for visitors to the site to start discussions and post comments. Feel free to post links to other sites, including your own, but please - no outright advertising.

Many of you want to create an exciting new life in a new country and a new culture. Whether you’re just starting out in your career or have reached retirement age, you have options. The right information can expand your horizons and empower you to have the life you really want.

This news/blog will feature news and comments of interest to expats, prospective expats and anyone with an international perspective. For example, what does it mean to have Daniel Ortega, the former Sandinista guerrilla leader, elected president in Nicaragua, a country that has been billed as “the next Costa Rica”? What new tax laws is the US government or other governments cooking up for expats?

And then – money matters. I’ve never believed that financial concerns alone were a good reason to pick up and move to another country; that’s why the newsletter and website have always been keyed in to the local culture and what life is really like for expats. Now, however, everyone’s financial life is intricately connected to the global economy, so international investing will be an important part of the blog. What it won’t be is hard sell “buy now before it’s too late” or how to hide your money overseas. The purpose here is to share research and sources of information to help the small, independent investors do their own research and make their own decisions. (Unless otherwise noted, I have no financial interest in investments discussed. Although I have worked in the financial industry in the past, I now have no connections with any financial firms.)

Some of the most exciting news from abroad comes from the non-profit sector, NGOs and volunteering abroad. We’ll have information on agencies that provide micro-credit, cooperatives selling handcrafted items and stories of people making a difference in far-flung parts of the world. And as always, our links page keeps expanding to include more opportunities to volunteer abroad.

Whoever you are, whatever you’re looking for, the purpose here is to stimulate your thinking and get you talking, sharing ideas and linking with others who have similar interests.