Dateline: San Salvador, El Salvador
I’ve spent an interesting couple of days in El Salvador, a country that is, by most accounts, the poorest in all of the Americas. The country is nonetheless taking progressive measures, adopting Bitcoin in El Salvador as its legal tender in world-first adoption on the 7th of September 2021.
Yesterday, I asked a bewildered taxi driver to take me to San Salvador’s historic district, El Centro. My lawyer, the hotel staff, and even the taxi driver himself couldn’t understand why I would want to go there.
Six dollars, or 0.00013 in El Salvador currency Bitcoin, and fifteen minutes later, I discovered why.
Salvadorans are truly welcoming people, but San Salvador’s historic center leaves much to be desired. As someone who spends a lot of time in emerging countries, I can’t say I was appalled… but I was a bit turned off.
Part of the lack of appeal is due to an earthquake that destroyed sections of the city years ago, leaving parts of the city center either sparsely inhabited or extremely poor.
The rest of the city center is either a dirty mess or a virtual wasteland. It’s truly a bold radical financial experiment that El Salvador currency Bitcoin is now launched.
In all my years of travel, the only place I’ve ever been the victim of crime was in Managua, Nicaragua, where — despite the country statistically being amongst the safest in the region — I was robbed at gunpoint. While I was surprised at just how brazen I was with my attackers, the desire to not have that happen again was in my mind while walking in downtown San Salvador.
Even in the middle of the day.
People of means in El Salvador don’t go to El Centro, not even for the dirt cheap fresh fruits sold by street hawkers or the $1 shoeshines that turned my tired pair of Magnanni loafers into good-as-new. Some vendors are hesitant to accept Bitcoin in El Salvador as the national currency, but others are seeing it as a progressive opportunity.
All over Central America, the message is the same: don’t go into the “big city”; it’s not safe and there’s nothing for you there.
When most people read stories like this, they often feel a range of emotions from pity to happiness that they are living in some “first world country” safely ensconced away from the dire poverty that plagues El Salvador’s worst neighborhoods.
The interesting thing is that such thinking is actually rather destructive because with or without the new El Salvador currency Bitcoin, the country isn’t different from where you live in many ways.
First-World vs. Third-World with Newest El Salvador Currency Bitcoin Adoption
I hate using the antiquated terms “first world” and “third world”, but we’ll go with it for the purpose of discussion.
Most people who live in countries like the United States grew up being taught to pity people living in “the third world”. We were taught that giving $20 a month to a charity would save people in El Salvador, Tanzania, or Cambodia from debilitating poverty.
No doubt, there is plenty of poverty here. But El Salvador — and practically every other emerging country I’ve ever been to — has a growing middle class as well as great wealth. After adopting Bitcoin in El Salvador, The “third world” country’s government is rolling out Bitcoin ATMs and kiosks.
The bold decision of the country to adopt Bitcoin in El Salvador was coupled with the country running an e-wallet named Chivo, local slang for “cool”, for purchases in Bitcoin or US dollars.
Property here, for example, costs more than many places in the United States. The local malls are filled with people shopping at American stores and eating at Taco Bell and Pizza Hut.
Where most people really fall off their chair is when you tell them that many of the people in these almost unheard-of, “third world countries” have more freedom than they do.
El Salvador actually has greater personal freedom than many European countries, including France. And it has HIGHER freedom of the press than the United States, which fell to 46th place in the world this year. Even at times of taking a historic decision as big and controversial as adopting Bitcoin as their currency, El Salvador has great personal freedom of expression.
My lawyer was telling me about all of the problems here in El Salvador, but one thing he did credit his country with — and much of the region, namely Nicaragua, as well — was increasing stability. The Sandinistas are not so great now, he explained, but at least they won’t steal your property the way they would have decades ago.
(Funny how I said the same thing a year and a half ago.)
Westerners look at what’s happening in Turkey, where the government is taking over the editorial department of anti-administration newspapers, and say “look at how bad things are over there”.
The reality, however, is that the same problems befalling countries like Turkey, and in another respect El Salvador, are also happening in the western world.
In fact, the political stability of the western world enables governments in the US, UK, and Europe to harass their own citizens for fun and profit.
Just look at the recent ruling from the US Justice Department, where Lois Lerner and the IRS were spared from prosecution despite findings that the IRS made life difficult for Tea Party groups that the Obama Administration didn’t like.
Look at how the dynastic Hillary Clinton smugly defends her actions at the State Department… all while leading practically every national poll.
People in El Salvador aren’t having their property stolen by their government, but Americans are.
In fact, one of the issues surrounding Donald Trump’s presidential candidacy is his support for eminent domain laws. Many Americans believe that eminent domain laws have gone too far as local governments have snatched up private property from middle-class citizens, only to give it to greedy developers.
Eminent domain is an issue in some emerging nations, but it’s an issue in the western world, too.
So is freedom of the press. The reality is that countries like Jamaica have better freedom of the press than the United States and much of Western Europe.
Privacy is an issue as well because, of course, the governments of the US and Europe believe it is their right to access your internet search history or listen to your phone calls.
Meanwhile, westerners poke fun at “nepotistic” countries where a husband serves as president and then hands the job over to his wife… without realizing that several Senators in the US, namely Hillary Clinton, George W. Bush, and Jeb Bush have held or are running for high offices as a result of their family dynasty, and not political competence.
It’s hard to make fun of the Marcos family in the Philippines when the candidates for election in the 2016 United States are a Bush and a Clinton.
Go Where You’re Treated Best
As we frequently discuss, most westerners aren’t treated as well in their home countries as they would be overseas. Part of the reason this is possible is that people allow their politicians to convince them that the rest of the world is a third-world hole where their money — or their person — will go to die.
I’ve personally helped a number of people invest in Central American countries like Nicaragua and Belize. I’m here in El Salvador checking out a very limited number of opportunities, putting El Salvador adopting Bitcoin as a currency and its anticipated impact on the market into perspective, and will decide whether it’s a good fit soon.
Friends of mine are happy with their businesses and investments in Latin America, precisely because they allowed themselves to realize that a poor country does not make for a bad investment the same way a “rich” country doesn’t make for a good one. They allowed themselves to adopt the “go where you’re treated best” motto.
The exuberance in places like New York, Los Angeles, and London right now makes me seriously question how much hotter these markets can get.
On the other hand, there are several markets in Central and South America that have been so trashed by investor sentiment in “rich” countries that I believe there is a tremendous buying opportunity.
And while I wouldn’t recommend living in El Salvador, there are plenty of livable places in this part of the world. And I can almost promise that you won’t get killed there.
The question for you is, will you accept that your country is not the beneficiary of some magic soil that makes it “the greatest?” If you can, the world will be your oyster and provide you great returns.