Back From Ecuador


Frances Urco (French Mountain), an Incan pyramid, looms like a sharp emerald tooth biting into the powder blue sky. We move southwest, dropping from Cuenca into the Tarqui Valley, a green rolling spread covered with haciendas that glow white against thick equatorial grass. I reflect on all I have heard and seen on this trip.

My first thoughts are on the richness and beauty in this magnificent country. We rush passed a small village marked by a white washed cathedral tower bright against red tiled roofs, verdant pasture and trees. Everything always grows here, so much richness even for the poor. This is why this country has survived so many setbacks without more disorder.

But not all is well. The driver, a good friend, well connected with bankers tells me that Filanbank (one of the countries biggest banks) is in serious trouble. Another businessman explains why. "By borrowing (in dollars), no businessman can make a profit with the high interest rates (14% and above). So we just go bust."

Too many busted businesses mean busted banks.

Yet this keeps real estate prices (and the cost of living) low in this paradise. As we race down the valley, the air thickens and warms (for every 100 meter drop the temperature rises 1 degree Centigrade). Rows of Scotch broom suddenly flash by and explode in bursts of yellow.

"The poor are hurting perhaps even more," I reflect. "This is further bad news. This will add to tensions in this Andean culture. The hotspots most likely in Guayaquil and Quito where Barrios have grown as more and more poor leave the country for what one sociologist described as the fatal attraction of the city".

This is one reason Merri and I have focused our attention on Cuenca and surrounds. This is among South America's most beautiful cities and the contrasts between rich and poor are not as pronounced. We are headed for Hacienda San Francisco, a 1,000+ acre estate complete with huge waterfall about an hour and a half from Cuenca. This estate is for sale and we have looked at it once already.

We reach Portete Urco, another Incan pyramid (named after a liberation soldier Lieutenant Portete). This sharp Yunga (stepped pyramid) is one in a chain that allowed the Incans to send signals and warnings from one end of the empire to the other in a flash.

Rounding a bend the Giron valley comes into view. Breathtaking. The valley widens for the village of Giron, full of quaint casitas painted tan, white and eggshell blue. The ridges become sharper and gigantic stone walls are gray slabs of stone that slice along corrugated cliff faces. The mountain points become sharper and the lush greens forests give way to fields of potato and corn.

"This is always the sweet balance we seek." I think. Just enough trouble to get prices down so our investments can really help, yet not so serious that civil order erodes. History suggests that Ecuador will make it through and if so, those who invest now will really win. Yet this is for risk takers who are willing to take a chance on the sweetness of the Andean nationals and their rich natural resources.

The five big industries in Ecuador are #1: oil, #2: bananas, #3: shrimp, #4: flowers and #5 tourism. During the serious recession two years ago oil prices were depressed, there was a banana war, the shrimp industry was devastated by white spot and the tourism business clobbered by active volcanoes. Today things are better in every industry, yet the huge overhang of these problems still exist.

We know how we feel. This will be a long term winner so we drive on headed for land we might make our home. Mountain clouds pushed our direction by the Humboldt currents lay below us, white wisps snaking through a mountain pass. With the moisture comes tropical foliage, lantana, hibiscus, frangipani, rubber plant, oily, silver castor trees and rich bougainvillea and the village of San Isabel. We are almost there, just 20 minutes to the hacienda.

Hacienda San Francisco is a Y shaped property bordering the San Francisco river. The entrance is at 4,500 feet on the main paved road from Cuenca (Ecuador's third largest city) to Machalla (Ecuador's third largest port). This 1,000 acre plot is for sale (asking price $400,000 but the broker thinks the owner will accept half that). Merri and I loved it at first site but are practicing what we preach when we see land we love.

"Leave it and go away," we say. "See if the enthusiasm remains. Return later with a clear head. If the land is gone it was not meant to be. Never buy on impulse."

This time we plan a thorough look, on horseback and foot. We'll stay the night, talk to the hired help and get a much better feel.

While there we watched the cane grinding. The estate earns income growing tomatoes, coffee and sugar cane which is distilled into a fiery liquor at the hacienda's distillery. They have cattle, pigs and chickens as well. Their own hydro power keeps everything going.

Our stay was wonderful. We rode and I further hiked the land. The entrance is perfect and the property is tucked in its own quiet valley making it a unique, secluded paradise. There is a simple but solid, three bedroom farm house and two bedroom guest house, plus many places for the hired staff to live and cook, plus equipment sheds and the cane crusher and distillery. Every imaginable tropical fruit grows in the bottom lands and potatoes and corn above. A well maintained community road (that leads to the small seven family village of San Antonio) runs along the top of the land making access to the water fall easy. The falls are magnificent, hundreds of feet high with large bubbling pools below. Incredible views are everywhere!

We enjoyed the night, sitting on the patio, drinking café de la casa, overlooking the swimming pool, watching our mountain view fade in the twilight. Next morning we awoke to rooster serenades and enjoyed walking through wet grass while feeling the warm, wet, tropical air.

These were the words warm, wet and tropical that stopped us from buying this land. After nearly twenty years in the Naples Florida humidity we have become mountainfolk. We want cozy fires at night and sleeping under blankets even in summer. Cool mountain air is our aim year round and Hacienda San Francisco is just a little too warm and tropical for us. However this is a buy of the lifetime for the right person so I happily pass this opportunity onto you. I am no way financially or otherwise involved but happy pleased to give you broker Eduardo Quito's address at eduardo@garyascott.com.

Eduardo is in Peru until June 2nd, so be patient if he does not reply right away.

Shortly I will send you some incredible information on another discovery Merri and I made while in Ecuador! Until then, good global business and investing!

Gary


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