#739 – The Expat Files: Car Insurance, Legal Risks, and Chinese Influence in Latin America

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 out to play and now as I wonder Hello there all you ex-pad 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 You know, I always recommend if you have a car here in Latin America to get minimum third-party liability insurance coverage You'd be nuts not to and for a lot of reasons first of all if you do it right and bypass the gringo brokers that I'll try to sell you a policy because they know you don't

[00:46] Speak Spanish you can be sure they'll pat it and oversell it because they get a bigger commission that way I'm mentioning that for all you gringas and expats who end up on the gringo tourist trailer close to it Again, if you bypass the broker and go directly to the insurance office, then you'll need someone who speaks Spanish You can usually get third-party liability coverage including an all-inclusive sort of triple-a coverage You know if you get a flat tire battery dies lost your key even run out of gas They'll be there in 10 or 15 minutes and that's part of the coverage all that for around 150 to 200 bucks a year Now a lot of gringles and expats think that the main reason to have liability coverage Is this in case you hit somebody or they hit you the damage to their car is covered. Well, that's true All right, but considering probably half or more of the cars here in Latin America aren't even roadworthy

[01:36] They're just poorly maintained or never maintained pieces of junk if you have a fender bender It'll probably be with one of those guys. Then comes the question. How do you fix a car? That's already got 4600 dents in it. So that's not the primary reason you want to have liability coverage The main reason is if you hit someone and you heard him and they go to the hospital even if it's not your fault depending how bad the injuries are to the other guy the cops just might take you down to the Local station and throw you in jail And if it happens on a weekend or a holiday You might just be sitting out a couple days in a very scummy jail cell, of course being a gringo You'll have the gringo advantage in jail, too Contrary to those Hollywood movies that show gringos getting extorted tortured and bung-holed in jail Well, you'll find that pretty much only happens in you ready for this

[02:22] Mexican jails and possibly in El Salvador Because as you've heard me mentioned before once you get south of south of the border that is south of the Mexican border Man, your gringo advantage is alive and well because it's just not that many gringos around oddly enough You're kind of an admired welcome to guest. Yep, even in jail. Most people will want to be your friend I know what you're thinking not that kind of friend Anyway, as opposed to Mexico where there's at least a million and a half gringos who are retired and or have property there Many who are what you might call ugly Americans who've worn out their welcome. So to Mexicans gringos are so common There are no great shakes We're just taller whiter English speaking people with a lot more money than they have which is why I saw many gringos and expats

[03:09] In Mexico get ensnared in cons scams gringo pricing and gouging Anyway as mentioned if you don't have insurance and you put someone in the hospital even if it's their fault If it's serious, you'll go to jail until one your lawyer comes down and bells you out or two Which is why you want to have insurance because the insurance van will show up at the scene Probably within 10 minutes to a half an hour and they'll write a check for the dough to bail you out That's part of your insurance coverage Meaning unless you've actually killed someone in a car accident, you're not going to jail So you really have to know about the legal system if you get in a car accident and you heard somebody It's not you're innocent until proven guilty They take you down to the police station and hold you whether you're a gringo latino, Chinese, whatever and you have to wonder Why do they do that? Why is that so common?

[03:56] Well, it's like this because there are so many drivers without two-cent avo So rub together if they didn't hold these guys till a court hearing they just disappear Meaning they'd probably never show up for the hearing or court date. Why because they've got nothing to lose if they don't show up I mean really look at the average Latinos assets if the cars are pieces junk and like I said more than half the cars are That means they live in a crap neighborhood no money in the bank So there's no account to garnish or lock up which is why in all Latin countries if you get an accident and hurt someone They'll bring you down to the station if you can't put up the bail They'll put you in a cell till you're hearing which could be the next day or a couple of days if it's the weekend And even though it might only be slightly less comfortable than a backpacker hotel You wouldn't want that which is why you want to have a good trusted lawyer around one that'll answer your phone or your text

[04:47] Messages in a reasonable amount of time or someone from his office gets back to you soon Anyway, and you want to have that minimum liability car insurance because then they'll come and bail you out That's part of the policy. So then you might ask what would the bail amount be if you put someone in a coma? Well, I've asked around in most situations. It's no more than a thousand bucks often much less like a hundred bucks or so By the way insurance policies like policies up in the states will have a maximum limit that they will pay for bail In fact, I'm looking at a policy right now. It's a Spanish, of course, and it says they'll pay up to 3,500 bucks for bail money, by the way, the Spanish word for bail is fiance F-I-A-N-Z-A fiance now while I was reviewing my own policy Which by the way pay around 150 bucks a year for I noticed one of those other crazy things that could only happen here

[05:38] In Latin America under the column called Beneficios additionales, which means added benefits they include in the insurance policy and you're not gonna believe this Third-party accident coverage, of course and medical coverage, etc for the driver Even if his driver's license has expired in my particular policy It says we'll cover a driver whose license is expired, but not if it's expired more than six months So if you're gonna crash in your license is expired six months in one day They won't cover the accident and you know when I first read this the other day I had to look at it two or three times because I'm thinking this must be fantasy land because up in the states if you're driving and get in an accident and your license is Expired one minute beyond the given date. Not only will your insurance company deny the claim

[06:24] The cops will be taking your car and I'll take you to jail, too So again living down here in Latin America Surprising even crazy things happen every day when speaking of Mexico Which I really like for a quick vacation package deal to one of the resort areas But that's about it speaking of driving a car in Mexico Sure Every Latin country has cops who are on the take most of them are corrupt occasionally when they pull you over There'll be an expectant a bribe of sorts, especially if you're a gringo For example, if you're in Honduras Salvador even Bolivia You might get nicked for 20 bucks at a road stop or even asked for gas money problem is you see in Mexico They're not gonna ask you for 20 bucks. It'll be 50 100 even 200 So it's true throughout Latin America the cops are on the take But I found pretty much in only two countries in Latin America have the cops up the ante to Franklin's

[07:14] Oh and do note if you're driving around through Latin America with us plates on your car man You're a target and you're gonna get nicked a lot by the cops And of course, there are lots of cars with us plates in Mexico Cuz people are coming back and forth all the time to have a car with us plates in Mexico I was like having a dollar sign tattooed on your forehead, which is why if you're driving around especially in Mexico You want to have Mexican plates then they'll leave you alone same thing goes for a police, Costa Rica Guatemala Salvador Honduras Nicaragua when you're driving around in their country and you've got their plates on your car You might never get nicked for a bribe. Oh and speaking of Mexico. Here's reason 2476 why don't recommend that place for Gringo's and expats except like I said for a nice package to her vacation

[08:00] Did you know and I'm sure you didn't that this July Mexico's having its presidential election and as it turns out the front Runner by far is former Mexican city mayor Andres Manuel Lopez Obrador, so he's the guy with the money behind him. He's pegged to win Nobody's doubting that but here's what you didn't know the guy who's backing him putting up all the money is a Monterey tycoon named Alfonso Romo so big deal You say anyone running for president in any country is gonna need some big money behind him, right? And of course the big money boys are gonna want favors once you get in there, correct? So anyway, this big money guy Alfonso Romero has already been pegged after the election to be the new chief of staff For the new president. So here's what you didn't know

[08:47] this guy who's gonna be chief of staff was chairman and CEO of a company called some meanest an agricultural seed producer that get this was bought up for 1.5 billion dollars in cash plus a performance bonus of 125 billion bucks by Everybody's favorite poisonous snake from hell Monsanto so that means the new president is gonna have for his chief of staff a guy that's Massively beholden to Monsanto. Of course, they don't want anything from the new administration, right? Which brings me to a conversation I had just recently had one of the local coffee shops was sitting around with a bunch of Latin American Entrepreneurs 40 and 50 something guys with businesses most of them who inherited them from their rich daddies

[09:37] and one of the topics on the table was Competition as one guy said I don't know what my business is gonna look like in five or ten years But I can tell you this the Chinese are coming in and they're taking over not only Latin American businesses But the world the guy who said that was in the textile business He said the Chinese are starting to crowd him out. He says I don't get it. They come over They don't speak a word of Spanish and soon enough. They end up owning a bunch of businesses First he said they go after the Makila and textile industries Then like in Belize where they don't have textile industries They go after something else like mini marts grocery stores hotel chains the orchid and flower business Then this guy started talking about protectionism

[10:25] Sound familiar and his buddies all agreed with him. Remember all this is going down in Spanish Then one of the guys said, you know, the only way we can compete with the Chinese is to freeze them out Do like the big cement and beer companies to you know, hold up their containers at the Adwana Knit pick them to death tell them they have to redo their paperwork, etc Stall them with injunctions tie them up in court make them do environmental impact studies Then he winked at me and said that we know you foreigners are the only ones who have to comply with Then one of the guys who was in the plastic container business says yeah, we can play that game We've all got friends and relatives in high places Then he spoke about how a dozen containers of machinery for a Chinese extrusion plant We're stuck in the Adwana on the Pacific Coast for over a year and a half

[11:14] Because see that's how things have been done for so many years here in Latin America The big rich Latin families with a lot to lose like sugar tobacco hotels restaurant chains cement factories movie theaters All have political buddies even family members in government to help them protect their monopolies That's how they remain the top families in the top monopolies But like the guy said it's not business as usual anymore The old way of stifling competition is coming to an end The Chinese got the big muscle in the dough and they're starting to spread that money around to the politically connected to then he said I don't know what we're gonna do. Those guys are wickedly smart Then he went into a little story about his brother-in-law who owned part of a construction company in Panama that Partnered up with the Chinese firm. He said the Chinese developers come in with state-backed dough

[12:02] They offer creative finance packages to politicians for road work projects port and Harbor improvement stuff that costs millions For example, he says if Panama needs a new port and some dredging and the whole thing costs 50 million And I'm out that the country doesn't have but the project definitely needs to get done It would be a dream for a politician to fulfill a promise with someone else's money He'd be a hero get rich in the process. The project would get done and future generations would have to pay Hmm. What have I heard that before? So say the estimates 50 million and the government just can't swing it Politicians have been promising it for years, but nothing's happening. Well, guess who's done their homework The Chinese will come in and offer to build it for let's say 30 million

[12:48] It's a bit that no local Latin developers or construction companies can meet. It's just too low Well, here's how it's done The Chinese developer will build it take a loss on the project and his Chinese Partners and the Chinese government will make up the rest But part of the deal is that your new Chinese friends get a significant portion of the income of the port for 50 even 75 years So the Chinese are doing deals like that nearly every third world country what they lose in profits upfront They make up in long-term revenue by having a piece of the action that lasts for decades and even in the beginning They rarely lose because their own government will kick in a bonus Which is how Chinese businesses and the Chinese government end up owning property is in third world countries

[13:33] They become long-term share and leaseholders. That's how they worm their way into the economies of sovereign nations Which is kind of ironic because the word sovereign means independent autonomous and free from outside pressures Yeah, right. In fact, as all these guys agreed the common Latino on the street just doesn't care In fact, they don't even like what they call chinos at all, but they'll work for them Of course talk about stereotyping. It doesn't matter if you're Japanese Korean Indonesian Filipino They're all chinos to Latin Americans. In fact, I've seen it myself with my own Latin friends One will see a Latin woman with a Chinese guy, especially if she's attractive Then come the cheese maze Latin's both men and women will start in with the inside joke saying she's in it for the money and he's in it

[14:20] For more western looking kids the word cheese maze kind of like an inside joke Anyway, like these guys are saying you'll never see a Chinese girl with a Latin guy It's always the other way around a Chinese guy with a Latin girl And so far as far as I can see they're correct and the guy's family generally has money At least that's what my Latino friends always tell me and she'll be above average looking Middle or lower middle class meaning he saved her from a life of riding a chicken bus Oh, and by the way, these young Chinese guys will always have Latina wives and girlfriends never Indigenous wives and girlfriends as one of my Latin buddies pointed out. They've got their own latino racial prejudice is going too Just as latin guys prefer blonde light-skinned blue eyed gringas Which is pretty much the impossible dream for them. Chinese guys prefer light-skinned latinas

[15:09] Not short dark indigenous females turns out just like latino men They're overly concerned about the next generation what their kids are gonna look like talk about Classists racist and being color conscious you can bitch and moan about prejudices up in the first world But until you've been down in latin america and had your boots on the ground for a while You ain't seen nothing yet. Now don't get the impression. There are lots of chinese around there certainly aren't but they own a Disproportionate share of businesses you've heard me mentioned in past shows that there are only a few latin countries where you see chinese people On a regular basis, you know brazil's biggest trading partner is china Yet the brazilian latinos on the street just don't care Almost none of them speak chinese or mandarin nor do they care to and young students at brazil's universities who should see the future

[15:56] Always prefer to take spanish and english as their preferred second or third languages And almost none of them show any interest in the chinese culture or chinese languages at all Nor do they show any interest at all in wanting to travel and see china Brazilians if given the chance would much rather see spain my by york or my jammy than the great wall They just don't have any interest in that but where were we? Oh, yeah Then the wealthy latin guy with the brother who has the construction company in panama said, you know Unless you're in the textile or clothing business in most of latin america You almost never run into chinese people on a daily basis unless you're in panama brazil argentina or colombia Then he said if you go to the airport lounges in those countries You'll find they're starting to open a variety of provincial chinese restaurant kiosks

[16:47] And he said they're nothing like your standard neighborhood chinese restaurant You know china has so many different regional cuisines and till recently anyway The chinese businessmen coming in couldn't find any decent chinese food Not to their liking anyway and almost nothing in the way a cuisine from their own regions or provinces And you heard me talk about that on previous shows that chinese restaurants here in latin america just basically suck They're just so generic and bland. Don't get me wrong There's thousands of them probably tens of thousands of them 99 percent of them are just bastardized latin slash chinese junk food greasy spoon joints But what this guy was saying is that if you go to the international airports in panama brazil argentina and colombia You're starting to see a variety of provincial chinese restaurant kiosks

[17:36] With a lot of exotic dishes most latinos have never seen or tried before He says they're also popping up in the big cities in those countries around business centers and luxury hotels Obviously, there's enough chinese people arriving to support the demand then he said being in the clothing and textile business He's gone to a lot of trade shows in big latin cities He says you see a lot of chinese people these days manning the sales booths He said he's seen a lot of funky chinese plastic carryout containers Which can only mean some of the display booth guys have brought food in doggy bags from their own provinces back in china I guess that'd be a sweet and sour wonton journey of five thousand miles or so, huh? Talk about long distance cravings, but you know latins do the same thing You see them at airports flying back to the states with doggy bags filled with local treats

[18:24] They can't get back in the states. Oh and earlier I mentioned that brazil's number one trading partner is china I mentioned that first because brazil's so huge, but guess what china is also chile and peruse biggest trading partner That means china's got a huge amount of leverage in south america. So is that good or bad? Well, not if you're chinese, but if you're living in south america or considering setting up your plan b there I don't think i'd be too happy about that But that's just me So as a gringo expat living in latin america or an expat putting together your plan b from up there in seattle or cleveland Should you be worried? Well in most of these chinese latin american state to state development projects as in the previous examples where the chinese Step in with an extremely low bid on a government project

[19:10] Just remember the chinese are in it for the long run. They don't just build stuff and leave Those contracts have strings if not tentacles besides the fact that the deal includes the chinese taking future concessions Most often those contracts have other binding guarantees Like built-in deals for chinese contractors and machinery suppliers Often hundreds of chinese manual laborers are included in the deal Now you might think that's kind of a dirty weaselly way to get their long-term hooks into a third world government But you know what that's exactly what the u.s government's been doing with foreign aid for a hundred years now Did you ever read confessions of an economic hitman by john perkins? It's the same blueprint only slightly different where the u.s government makes huge

[19:55] Unrepayable loans to third world countries to build bridges dams infrastructure projects using all us machinery and technology Then after a while the country defaults on those loans The u.s kindly steps in and loans them more with certain contingencies, but you knew that already, right? Now, of course the chinese governments aren't setting latin or third world countries up for default. They don't want to be in that business They're very patient and happy to sign a deal that involves future concessions Now my latin buddies who all went to school here in latin america have tunnel vision and don't read much They say johnny, why are the chinese so successful? They can't speak the language. They look different. We don't even like them Now my latin buddies know nothing of the confusion work ethic Which is kind of like the protestant work ethic that the u.s founding fathers had

[20:45] But alas my college educated latin buddies don't know what the protestant work ethic is either Kind of wonder what they study, huh Then I tell my latin business buddies that chinese all have to learn english at school It's a requirement. They're forced to do it from grade school on whereas latin americans practically all of which would rather live in the u.s Rarely learn english though. The average first world guy from cleveland or seattle should talk We don't learn chinese at school or spanish either unless of course, we picked it up from the gardener So bottom line the chinese have the numbers the education force of will etc So they probably will take over the world. Oh, and I just read the other day that some 300 000 chinese people are going to school at u.s universities right now So what's that tell you?

[21:30] Oh and the chinese that have emigrated don't much like their government at all and they Have little or no use for safety net welfare states either And you know, it sounds like a cliche But they stick together like one big family. They help each other out. They give each other loans You know the story you've heard it a million times might be a cliche, but cliches are all based in fact So for the chinese family's number one nothing wrong with that too bad We can't say that for the majority of people living up in the states. Oh, but they've got their virtual families, right? You know iphones fakebook twitter instagram judging by the way You see first world families acting at the dinner table if they even eat dinner together these days Their devices are their family. All right. Here's a question that pops up regularly Are latin-based airlines safe to fly? Hmm. All right before we dive

[22:20] Wrong choice of words into that sticky subject like to mention for all you planned beers out there thinking of coming down to my july 2018 expat insider seminar i've picked the dates write this down It'll start saturday july 7th and go through the evening of thursday july 12th Though I always recommend you add a few days to the front and or back end of the trip So you can fit in one or both of the famous john gulp pre and post seminar tours All right, then to get on the early bird list and receive the info details and mailings before everyone else Just send me an email the expat files at gmail.com and put seminar in the subject box So back to that all important question Are latin american airlines safe to fly on and what about maintenance?

[23:06] Especially knowing that the word maintenance is often not in the latin vocabulary. Oh, and what about the food? Well as good luck would have it almost all of the major latin american airlines For example mexicana copa and avianca have all partnered up with big first world airlines like delta lufstanza Iberia and klm and that's why many times if you don't take a direct flight You'll have a layover in panama or mexico city and you'll switch from a u.s Based airline to a latin american carrier like copa or avianca now You have to know when in a latin based airline partners up with a first world airline The standards are first world all the way besides there's the fact that any national airline That goes beyond its country's borders and lands at an international airport

[23:51] Has to comply with the regular maintenance and inspection procedures as outlined by the faa and the european International airline authorities by the way, all international airports have the same regs So the airports their equipment and their air traffic controllers come under heavy scrutiny, too Now the same thing is not true though If you're talking about a national airline that does not go beyond a country's borders That is unless they make stops at the local country's international airports Then they have to follow those regs too That means if you're flying from some small podunk airport to another small airport That's not certified for international flights Well, you're kind of on your own and the truth is there are small plane crashes throughout latin america Pretty much on a regular basis, but we're talking about small prop planes

[24:38] It's extremely rare to hear about a passenger jet plane crashing The fact is statistically you have no more chance of crashing in a latin american passenger jet Than you do in a passenger jet in any other country However, you hear about small prop planes crashing all the time often because they're overloaded with fat latino government types and cocaine Which is no big loss. I keep away from prop planes myself So modern international air travel here in latin america is as safe as it is anywhere else Though it is true in the past before the year 2000 the millennium, man That seems like such a short time ago, but it was what 18 years now Anyway before the year 2000 there was a history of established carriers like delta and lufstanza Often sending their oldest aircraft to their latin affiliates

[25:24] In fact a latin american political scientist named moises nyam once famously called that phenomena american airline syndrome I'm not kidding back then 20 years ago or more that symbolized how little united states and international carriers Cared about little latin american airways. Hey, where do you think all the old broken down us school buses go? To latin america, of course Then they get a facelift lata chrome lata neon and voila you have a chicken bus So yes before the millennia. I flew in a lot of those ancient aircraft myself. It's just not like that anymore So don't worry though back then before 9 11 I remember flying in an airline in brazil and it was kind of like a chicken bus with wings Lots of turbulence kids crying samba music the plane bobbing up and down like a cork and the stewardesses

[26:14] That's what they called them back then before the age of pc kind of sweaty and even a bit terrified Oh, and speaking of stewardesses slash flight attendants I know a few latina flight attendants and a few ladies that tried out for the job And here's what they had to say as you might expect they have to be nice friendly calm Unflappable and smiley and how about this? Something they can only get away with in latin america, I guess They must be thin or what they call columbia curvy But not too curvy because those airplane aisles are narrow And all of them said that the better looking girls were selected with a few gay guys thrown in for good measure What that says is there's definitely a lot of lag time in the equal opportunity hiring department And there are no women's rights or gender organizations protesting

[27:01] It's that lag time effect. You know, it pervades everything down here, which reminds me about three weeks ago I was at a big latin international airport and I saw a latin girl wearing a t-shirt and I took a picture of it I'm sure as usual. She didn't speak english and had no idea what it meant. Here's what it said It asked this question. Where does virgin olive oil come from? Ugly olives Then under that in smaller parentheses, it said how about extra virgin olive oil answer? ugly old olives You've been listening to the expat files living in latin america If you need some help with your own plan b you can schedule a one-on-one phone call with me But first download my free plan b questionnaire at The new expat dot com better yet if you want to get your plan b going from right up there in the states

[27:48] Just sign up for my nine hour expat essentials course Get the perfect plan b blueprint by going to the expat files dot com slash academy most famous