Episode Summary
In this episode of The Expat Files, Johnny Mueller explores the multifaceted challenges of property investment in Latin America, particularly in the context of undeveloped land and farmland. He highlights the importance of due diligence, noting red flags such as properties not being in a computerized land registry, indigenous families with unclear property rights, and owners who appear to be armed and in control of large tracts of land. Johnny also discusses the broader implications of Brazil's biodiesel and biofuel program, noting its economic and social consequences, including high costs and a shift in agricultural priorities.
The episode then shifts to consumer behavior in Latin America, where Johnny notes how the influx of Western-style retail chains like Walmart and Costco has raised the standard of produce quality, though traditional outdoor markets still offer cheaper, imperfect produce. He emphasizes the need for extensive research and preparation when investing in farmland for biodiesel projects, warning about the risks of buying land without proper surveys and the prevalence of squatters in rural areas.
Johnny also delves into land disputes among indigenous communities, highlighting how these disputes often involve multiple families claiming the same property, with evidence based on oral tradition and family history. He notes the challenges of legal systems in resolving these conflicts due to language barriers and the complexity of indigenous languages. The segment also touches on how industries like oil handle land disputes through land options rather than direct purchases, and how recent legal reforms have attempted to compensate indigenous communities for historical land theft.
The episode concludes with a discussion on the political dynamics in Latin America, particularly focusing on land reform and indigenous rights. Johnny notes that politicians often use promises of land reform to secure votes, leading to laws that protect squatters' rights. He highlights the historical context of indigenous peoples' struggles, noting that while their rights have improved, they still face discrimination. Johnny also touches on the complexities of indigenous groups' internal conflicts and the broader implications for expats considering property investments in Latin America. He concludes with a warning about the risks of rural land and promotes his seminar on expat wisdom in Latin America.
Later, Johnny shifts to discussing recent developments, such as Bolivia's plan to explore nuclear energy, which he views as unrealistic and indicative of Latin American governments' lack of alignment with global realities. He critiques the lack of international media attention to major events in Latin America and emphasizes the importance of expats being aware of these dynamics. The episode also touches on the state of medical and nuclear waste disposal in Latin America, particularly in Bolivia, highlighting the underregulated and often dangerous practices in the region.
Topics
Property investment in Latin America, Legal and practical challenges of buying land, Indigenous property rights, Biodiesel and biofuel production in Brazil, Economic and social consequences of energy independence, Consumer behavior in Latin America, Biodiesel projects and land investment, Land ownership and squatters in Latin America, Land disputes in Latin America, Indigenous land rights, Legal challenges in land ownership, Impact of globalization on indigenous communities
Chapters
00:00:00 Opening 00:00:33 Continuing the Discussion on Property Investment in Latin America 00:01:03 Caution When Buying Property in Latin America 00:05:40 Consumer Behavior in Latin America 00:06:24 Biodiesel Projects and Land Investment 00:09:45 Land Ownership and Squatters in Latin America 00:11:26 The Story of a Man Who Benefited from Squatting on Beachfront Property 00:12:02 The Importance of Squatting on Beachfront Property in a Poor Indigenous Community 00:12:14 Land Value Increases and the Resulting Jealousy and Infighting in Indigenous Communities 00:13:08 How Land Disputes Play Out in Court: The Same Story from Both Sides 00:14:14 The Complexity of Land Disputes Between Indigenous Families That Don't Speak the Same Language 00:15:57 How Oil Companies Avoid Land Disputes by Using Land Options 00:16:32 Recent Legal Reforms to Address Historical Land Theft from Indigenous Communities 00:17:25 Interconnected World and Political Strategies 00:17:42 Land Reform and Legal Developments 00:17:49 Historical Context of Indigenous Rights 00:18:39 Property Investment and Rural Risks 00:19:06 Breaking News and Political Developments 00:19:10 Bolivia's Nuclear Energy Plans 00:20:40 Critique of Latin American Nuclear Ambitions 00:21:11 Media Coverage and Expatriate Perspectives 00:23:47 The Problem with Public Hospitals in Bolivia 00:25:05 The Dangers of Combining Government Corruption with Waste Disposal 00:26:38 The Scavenger Population Around Public Landfills
Transcript
Automatically transcribed from the original recording; names and wording may contain errors.
[00:00] South of the border down Mexico way That's where I fell in love when the stars above came up to play and now as I wonder Hello there all you expat wannabes I'm Johnny Mueller and you're listening to the expat files living in Latin America the show that tells you just what it's like to live Work play and or retire down here in Latin America It's a mix of the good the bad the ugly and the great and it's all right here. So let's get started Now I like to finish what I started last week about buying undeveloped land and farm properties down here So here are some of the tips I and a lot of other expats learned the hard way So hopefully you'll listen and not fall into the same holes that we did
[00:47] Yep, I fell in them too, but you pick yourself up dust yourself off and live to get ripped off another day Just kidding or maybe not. So listen up Hold on to your wallet and pay attention Because I know you're not gonna hear any of this stuff from the international living guys Like I said on last week's show be very very cautious when you buy property in Latin America That one is not in a computerized land registry Two has been held for generations in the hands of an indigenous family or a mixed Latin indigenous family who talk about their property rights going so far back that nobody quite remembers how they did end up living there and Look out if when you meet the members of their family each has a slightly different version of the story And here's another thing to be aware of if you're looking for big tracks of farmland in the boonies
[01:37] Beware when the owner meets you at the gate of the property on horseback And he's prominently toting a handgun or a rifle or both What that means is two things one He's in the habit of shagging away squatters and trespassers Which you're gonna have to deal with if you buy that land from the guy and to Usually a guy on horseback as opposed to a car trucker Jeep well generally not even know the exact boundaries of his land himself and What do I mean by that? Well not so long ago I was checking out some farmland with a gringo expat myself a guy interested in putting up a biodiesel plant and by the way There's a lot of that going on down here. Everybody thinks they can put up a biodiesel plant Well, not everybody just a lot of gringos think they can't but no one seems to have been able to do it yet
[02:24] Nothing scaled up so they can sell any more than they can use themselves Anyway, except of course in Brazil where some years ago an iron-fisted government Mandated a certain percentage of biofuels and that's why Brazil is not a net importer of petroleum products And of course every green-minded gringo who hears that thinks it's just great But here's what you didn't know now if Brazil's biofuels program has been such a great success and Its proponents always say it makes them totally energy independent Well, then how come all the other Latin countries in the region even richer ones like Chile Argentina and Uruguay have no such large-scale biofuel or biodiesel programs at all And since they are much wealthier countries, they could switch over in a second
[03:09] So why don't they Brazil's right next door and they've already proven out the technology, right? So what's up with that? well, the thing is energy experts in those adjacent countries know that Brazil has had severe and extensive problems bringing it online as that old song says they've been accentuating the positive and Eliminating the negative for international PR purposes, of course They never talk about the massive government subsidies that were in place to get it online The fact is that even today experts don't know what the true cost of Biodiesel and gas a hole in Brazil should really be though It's less than a gallon of gasoline today at the pump That's all artificial and manipulated and it should be much more maybe even double since the whole refining Infrastructure was built with subsidies government subsidies meaning taxpayer dough, of course, and if you're thinking so what that's what governments really should do
[04:03] Subsidized programs like that to get a country on its feet Well, the truth is the average Brazilian working man still doesn't make enough money to even buy a car to be able to put Gasahol or biodiesel in the tank. So even after 15 or 20 years of total imported fuel independence The average Brazilian working man still can't afford a car Does that seem like a success story to you and by the way that big biodiesel and gas a hall business has actually screwed up The economy in other ways Brazil is now a very expensive country In fact, most of the products in the grocery stores are at first world prices These days experts are saying farmers in Brazil would rather produce crops for biodiesel or gas a hall than grow food Why because grain for a biofuel crop could be ugly and bug infested and quite uncosmetic
[04:52] But who cares what it looks like? It's gonna turn into fuel in the end. Anyway, whereas a farmer growing corn or wheat or apples Carrots or cabbages has to attend to his crops much more cautiously and carefully because if they're ugly dirty discolored or bug infested They'll get a much lower price than the nice looking stuff in the grocery stores because consumers care what their food looks like before They eat it at least the middle and upper middle classes are starting to which in some ways doesn't make much sense But that's progress or is it and by the way Don't tell me you don't squeeze the oranges the apples the tomatoes and the charm and yourself I do and you know the funny thing when I first came down here 20 something years ago Latins bought fruits and vegetables, whatever they look like depending what was in season It never mattered how banged up or imperfect. They looked they always tasted well
[05:40] Terrific, but little by little except for the very poor classes. Latins are more cosmetically discerning They're starting to poke and prod this stuff. Just like we do surprise surprise these days are acting just like gringos and why shouldn't they? They've got Walmart and Costco down here now with their beautiful displays of nice perfect aesthetically symmetrical fruits and vegetables, too So we've caused them to raise the bar a bit in that department But thankfully when you go to one of those giant outdoor markets You can buy the asymmetrical twisted and distorted stuff for half price or much less So now you can have it both ways Imperfect natural and cheap or beautiful symmetrical tasteless and more expensive But I digress as usual. Now, where was I? Oh, yeah I was back checking that farmland out for that possible biodiesel project
[06:28] I was telling you about with an expat friend who is really game to get into a project like that And with me checking out farmland for a possible biodiesel project I know that makes me sound like a hypocrite after what I just said about biodiesel projects in Brazil But you see I still get a lot of emails about it Biodiesel is still on the minds of so many gringos expats is gonna be zen wannabes And I have done quite a bit of legwork and research on it myself. It's not a weekend hobby It's something you have to do 24-7 for at least five years before it starts paying off And you better be kind of a jack-of-all-trades and know something about farming machines and mechanics and chemistry Anyway, when we met the owner of the land who was on horseback and he invited us to check out the perimeter only about half
[07:15] Of which was fenced by the way Occasionally, he'd stop by a big rock or a tree and say something like the following but in Spanish, of course Now notice that this is where the property ends on the east right by that avocado tree over there And then it runs down the ravine Till it butts up against that big mango tree and then it runs on down to the river and yonder up to that big tan Boulder and it heads do West from there And yep, if you're wondering there is a Spanish word for yonder They say a yeah And so many of these big farm properties even the small ones have not had a modern survey with transit Instruments and such and if you want that generally you'll have to pay for it yourself, which is always recommended But could take a week or a month
[08:03] That's not how you want to buy property and worse yet beware of property That's not fenced in unless of course you plan on fencing it in yourself however that could be a huge expense if you're talking about acres and acres and if it is fenced it better be a good secure one because You see no fence or a badly done fence is the quickest way to invite squatters and yes There are squatters in fact the farther you are out from a big city The more likely you are to have them and the Latin word for squatters is in Vasores and when you look at the letters of in Vasores, it looks a lot like the word invaders Which is exactly what they are and you know people with big tracts of land are always worried about squatters And that's why nearly all large farms have a guard or two
[08:50] Constantly patrolling often on horseback and with a shotgun and they almost never have to use it squatters know better They only show up when the lands completely devoid of other humans for months or years at a time So as long as there's some activity going on They keep out because they know you can call the local cops and eventually have them thrown off now. Don't get me wrong I'm not trying to scare you here But think of a desolate piece of land way out in the boonies like in one of those old John Wayne movies And back then all the settlers really had to worry about was drought pestilence and Indian invasion and down here You've got none of that stuff. You've only got the threat of the occasional squatter So you've got that going for you But remember plan on having a full-time guard and of course he and his family will be living on the premises
[09:37] Not with you, of course in the main house if that's where you're gonna be But he'll have his own little tin shack or you'll end up building one for him So what about those squatters now every country in Latin America is a little bit different But squatters do have rights under certain conditions like when the owner hasn't showed up or paid his taxes for usually seven or so years and Thus when a squatter shows up in court usually with a lawyer They'll make the case that the land was abandoned and by the way, that's how hundreds if not thousands of poor Uneducated indigenous Costa Rican people living in shacks became rich practically overnight Little did these guys or their families know that They're little plots of land that no one cared about back in the 50s and 60s would be prime real estate for
[10:25] Gringos and expats someday land that most of the time wasn't even theirs to begin with basically abandoned And back then no one in a million years would have thought that little Costa Rica would grow into an expensive Gringified latin Disneyland and by the way back in Costa Rica I knew a few of those formerly poor uneducated Compassinos who made their riches simply because they are one of their ancestors Squatted on the right piece of beachfront property way back when before a single gringo even showed his face around there And I once asked one of those wealthy Compassino guys why in the world the former owner would abandon the land anyway and the guy told me in his case His little piece of property was formerly a piece of the United Fruit Company's property
[11:10] Which they abandoned in the 50s when a tropical storm took out a bunch of bridges on the main road Which was basically the only road so he told me the United Fruit Company Just simply abandoned it because rebuilding the infrastructure would have cost way too much They just picked up and left and his parents He said were former wage hands at the plantation and when the company left They just stayed on because they had nowhere else to go then 30 years later the gringos came and the rest is history and now he proudly shows off his three Toyota Hilux pickup trucks in front of the Little house where his dad once lived a half century ago with his mother a couple chickens and two mules But now the house still in the family vastly remodeled in a half-assed sort of way
[11:56] But still demonstrating to all his Compassino friends and neighbors that he's king of the sandbox now All because his parents were smart enough or lucky enough to have squatted on beachfront property Instead of inland like the rest of his jealous neighbors now as you might imagine in a poor indigenous community When land values suddenly jump like in Costa Rica or anywhere else in Latin America that's suddenly being developed especially in the boonies There's a lot of jealousy and infighting between the locals to get in on a piece of the action And that's when the land squabbles and title wars begin and that's when out-of-town lawyers show up and start heading their Compassino clients to the nearest land registry office and oftentimes there will be two or more local indigenous families
[12:41] Claiming title on the same piece of property So anyway when these land disputes get to court like for example in the Nicaraguan boonies where indigenous people are always fighting it out Especially now that Nicaragua's getting a bit on the radar as gringos and expats flee Costa Rica for cheaper more fertile and more laid-back territory like Nicaragua a quick and easy place to go because it's right across the Costa Rican border the fact is the judge almost always hears the same story from both sides and it goes something like this an Old Compassino the patriarch of the family will get up and say I was born here I have witnesses my grandfather and his father work this land I have witnesses to that too My father divided it among his children and hears the will and then the old guy or his lawyer will pull out a
[13:32] dog-geared copy of a last will and testament and most lawyers will tell you that indigenous communities That's generally how it goes down in court And then they'll inevitably produce some kind of paperwork which wasn't properly registered either That doesn't mean it's not legal, but just one more confusing piece to the puzzle anyway Judges in those land disputes hear that stuff day in and day out like a broken record not to mention They've seen every kind of land deal and contract Scribbled on all kinds of beat-up old ragged pieces of parchment and paper Oh, yeah, and to complicate things further all the land registries have their paperwork in Spanish But each indigenous tribe has its own language For example, Guatemala has about 25 indigenous tribes meaning 25 different languages even crazier
[14:20] The land disputes can sometimes be between two indigenous families that don't even speak the same language And by the way, there are many indigenous tribes in Latin America that don't speak Spanish only their own native language For example, there's one called Kachikal a popular Mayan language That's a real brutal sounding thing and a hell of a tongue twister In fact when I pick up on someone speaking it, I'm always amazed that humans can even make those kind of sounds I tell you it always stops me dead in my tracks And you know, you always kind of wonder what they're saying about you since unlike Spanish I don't know any gringo or expat that can translate a single word and then there's those original kitchen table contracts Which might be in the case of Guatemala, for example in any one of 25 different languages
[15:07] Try to put yourself in the judges shoes when he sees one of those you see the problem So bottom line if you're gonna buy a big piece of undeveloped land, of course Let your lawyer handle it but be doubly aware that if you're buying something way out in the boonies You'll need him a local lawyer to who knows the area and maybe a lot of luck now as one gringle buddy of mine In the oil business tells me nearly all of their oil wells are way out in the boonies and they never buy land They just write 1 2 3 5 or 10 year options with the locals that own the land at least the ones that have the strongest Claim to it. That way they almost never run into such problems And sure like he says oftentimes there will be disputes because you're talking about a lot of money But in that case because it's oil and the government gets a percentage of oil revenue
[15:55] It's never the oil company's problem The government guarantees title and handles any disputes like that And if the locals still want to fight things out in court any awards or damages don't come out of the oil company They're held harmless unless they've caused some kind of property or environmental damages themselves however damages in a title dispute case are assessed to one of the two parties that are fighting it out in court and You should know that these days as opposed to any other time in Latin history in recent years Some of the courts and the countries that have many indigenous people have written and adjusted their laws in order to give some Compensation and some land rights to these poor folks because they had been cheated out of their land so many times in the past By so-called land reform presidents and such who basically made it possible for big rich landowners to simply take by force
[16:47] Or pay for with peanuts a powerless indigenous guys little plot of land and in fact back in the 70s and 80s That's what so many of these civil wars were about in Latin America Those wars were land wars the taking of farm mining and oil land away from the ignorant indigenous populations who'd been living on it for hundreds of years just barely scratching by and when they wouldn't get out peacefully the government would just Occasionally burn them out or just massacre them and nowadays the wars are over Technology has moved in cell phones microwave ovens cable TV and stuff and the indigenous populations are still exploited But in different ways now these days because of the interconnected world the web and stuff Politicians can't steal their land, but they steal their votes
[17:34] so it's all about promising land reform for votes and That has worked out quite well for politicians believe me And that's also why after a certain amount of time laws have been passed to protect squatters rights Which is in fact a fairly new development in Latin America considering that prior to the 1980s the indigenous folks had practically no rights At all. Oh, I take that back. They had the right to be abused ostracized and occasionally massacred But lucky for them these days the upper-class latins only abuse ostracize and discriminate against them But believe me for the indigenous folks slowly, but surely things are getting better But the problem is they don't much like each other either in fact before the Spanish Conquistadors got here to Latin America the local indigenous tribes were raping pillaging and killing each other off like crazy, too
[18:26] Which made it all that much easier for Cortez and his buddies to divide and conquer if you know your history and even now the? Indigenous groups they've got their own little power struggles going too, but in time they'll get it together So again the bottom line is don't be afraid to buy land or property in the cities But beware of the problems. I just mentioned out in the countryside Okay, enough said about that. Oh and before I forget if you're interested in coming down to my expat wisdom January 2014 boots on the ground Latin American seminar Just go to expat wisdom comm click on the Latin American seminar link and get the full details Okay Now for some of the latest breaking news and revolting developments in Latin America Looks like our socialist buddy evil Morales is in the news again. Now. He doesn't like to call himself a socialist
[19:18] He says he's a populist Populism is the new socialism, right? Anyway, he and his energy minister have just announced that Bolivia is running out of oil at least They're projecting it's gonna happen fairly soon Now, you know Bolivia is an oil producer and they get almost all their foreign revenue by selling oil and gas products Kind of like a small version of venezuela, but bolivia's infinitely better run less corrupt and more laid-back And though evil Morales could use a fashion makeover that indigenous touch to his tailoring does solidify his man-of-the-people image Since bolivia's population mostly consists of poor indigenous folks Anyway in wednesday's press release He and his energy ministry have opened up talks with argentina and get this
[20:07] France to study the feasibility of putting up a few nuclear power plants in the country. In fact, he says in the press release quote Bolivia has all the conditions necessary to exploit nuclear energy Our studies indicate that it won't be long before we will have a peaceful nuclear energy program And he's asking france and argentina both countries Of course that have nuclear power plants to provide them with the necessary technology and expertise Now my take on this is that it will never happen But it does show you how uninformed and just out of step with reality these latin american governments are Now like i've mentioned before there are only three latin countries that have nuclear power plants mexico brazil and argentina
[20:54] And in all of those countries their nuclear programs have had severe startup problems But the first world never really hears about that stuff because the nuclear energy commissions in those countries Keep a very tight lid on the p.r. That's coming out of those plants And anyway people up in the first world really don't give a damn about what's happening in latin america Anyway, unless some us embassy down there gets torched or a us citizen gets kidnapped or something Now in the case of chile which has had the biggest earthquakes in recorded history There have been many times in the past 50 years when thousands and thousands have been killed at a crack Many more people than got wiped out in 9 11 at the twin towers And when that tragic stuff happens down here It gets about a paragraph on the third page of the new york times then in a couple of days. It's gone forever
[21:42] Unless a couple of americans have croaked in the process. Now. Don't get me wrong I'm not complaining about the lack of publicity long-term expats like me Kind of prefer that the international media doesn't pick up on that stuff because to us that just means we're living in a place That's way off the radar Which is exactly how we like it For example, even after the fukushima disaster Which has been in the first world media off and on for the past year and because japan is a first world country It is highly newsworthy Anyway, if something like that happened in argentina or brazil For example, it would be a momentary blip on the radar and most americans probably wouldn't never hear about it Anyway, even after all that publicity I'd say probably one out of a thousand gringos up north could even name those three latin countries that have nuclear power plants
[22:30] The point is even if nuclear energy was completely safe, which we know it can never be based on fukushima Chernobyl and thousands of other unreported incidents Anyway, remember this even if they have the perfect nuclear power scenario and the best technology coming out of france or germany or whatever Just remember that when the plants built and all the latin people are trained by french and german and english Technicians and operators when the first world folks go home and they will from then on in the case of bolivia For example, there'll be bolivians running the show even worse latin bolivians working for the government So if you trust them and give them the responsibility of running a big operation like that and keeping it 100 safe Well dream on just take the examples of public hospitals in bolivia run by the government
[23:18] They're just complete disasters like taking a step back 50 years in time Just what you want when you've got a medical problem, right? And sure there are a lot of first world style hospitals and surgical centers in latin america bolivia included And when you walk in those places, it's a totally different world because they're privately run If you didn't see that the signs were all in spanish, you'd think you were in a real high-end hospital in the first world But i'm only referring to the private pay-as-you-go hospitals here Not the public ones run by lazy incompetent corrupt government officials, which are unmitigated disasters Never recommended for expats that is unless you get into a bad car accident right outside the public hospital emergency room But even then if there's any way to get out of it grab a taxi and go to the nearest private hospital
[24:06] You won't regret it And of course these hospitals have nuclear medicine departments too Just like up in the first world and of course that includes both private and public hospitals And so they have machines that use nuclear particles and radioactive dyes and isotopes, etc, etc All dangerous stuff that's got to be handled carefully and it is when it's handled within the confines of the hospital But the question that nobody asks except me because well, i like to put people on the spot Anyway, where does all that medical and nuclear waste go when they're finished using it? Because obviously every hospital puts out a certain amount of nuclear and medical waste that's got to be disposed of And in the first world disposal of nuclear and medical waste is very well regulated But in latin america as you might imagine things are vastly
[24:54] Underregulated which in most cases is much better than over regulation However down here when you combine government laziness and corruption with things like medical and nuclear waste disposal You're really asking for trouble Well, you know what some hospitals mostly private hospitals dispose of their own medical waste in first world style incinerators Right on their own premises Which is a very good thing because they have complete control of the input and the output of the stuff from start to finish But guess what happens to the nuclear waste it goes into a local landfill somewhere At least as far as I can tell Now there are companies that will haul it away for you But once it's handed over to them they could dump it or bury it just about anywhere they want and how do I know that?
[25:40] Well, I know a latin guy who runs a private garbage disposal business in salvador In fact, it says right on the side of his truck. We'll pick up anything in spanish, of course Now does that mean he'll pick up nuclear waste? I don't know But I bet he will next time I see him I think i'll ask him and I know this guy because he actually has a contract with expat eddie For picking up garbage at his restaurants and this guy told me anybody and I mean anybody can start a garbage pickup service You just start a company register your business get a couple of trucks and you're on your way And where you eventually dump this stuff is up to you And of course, it's assumed you're going to take it to a private or public dump And even if there's a law that says you have to there are no garbage police enforcing that and that's why you often see Midnight dumpers alongside rivers and ravines letting loose with their garbage both liquid and solid
[26:31] Yes, it is pretty horrifying that no one's keeping tabs on that But you know, this is the third world and down here in latin america Did you know that nearly all public landfills have a scavenger population of people? Living right in and on top of the dump 24-7 picking through that garbage and looking for anything that they can sell or recycle for them It's a living in fact you drive by any big dump down here And you'll see tin checks that have been there for years if not generations In fact a whole society eventually pops up around them and yes, the people are affected They're sick and they're sad with very shortened lifespans But let's not get into that right now because it's too depressing and disgusting So tying this in with what I said about hospital waste Nuclear and otherwise just consider the fact that the waste from those decrepit public hospitals ends up
[27:22] Right in these waste dumps even the nuclear waste though. No one will admit it Anyway, i'll pick up this strange story again beginning with the next show. So stay tuned You've been listening to the expat files living in latin america coming to you twice a week from somewhere south of the border Email me the expat files at gmail.com And don't forget to check out expatwisdom.com to sign up for your free reports on latin america See you next time. Nos vemos