How to Avoid Diversification Disappointment

The number of people exiting First World Countries for Second- and Third-World countries is on the rise. This should not come as a surprise to readers of this publication, as they will be aware that more and more people today are becoming conscious of the value of internationalisation.

Generally, these individuals are fairly sophisticated, educated, and often entrepreneurial. They are, by and large, seeking greater freedom and diminished regulation. Many are also seeking a more peaceful existence and/or a less expensive economic system.

Back in the 1970s my own country, the Cayman Islands, became attractive to international thinkers and over the last forty years, our population became fifty percent expatriate. Over the years, I have observed the trends amongst those who come and go, and those who come and remain. All of them came as a result of a perception of something better, something that they did not have at home.

It is rare that any person who does so finds exactly what he anticipated. Some make the transition easily; many do not. It seems to depend upon two factors:

  1. The amount of research he has done prior to his move (the most useful factor being a trial visit), and
  2. His personal level of imagination.

The former factor is rather obvious, but the latter one seems not to be.

Many people, even if they research a jurisdiction thoroughly, will generally not be prepared for what they find if they are lacking in imagination. Six months after making their move, they may complain that the locals don't seem to always understand their point of view, or that differences in cultural habits have proven difficult to adjust to.

To be sure, the more provincial the expat is, the less travelling he has done, the less flexible he is by nature, and the less likely he is to adapt well to his new home.

The above condition is perennial, but in recent years, there seems to be a new twist on it. There appears to be an increase in the number of expats who, while having realised their objectives by internationalising, were surprised to find their new countries lacking in some things that they had in their previous countries and had simply assumed they would find in the new location.

Expectations and Disappointments

For example, someone who moved to Ecuador, in part to be able to stroll on a beach where there are no crowds, later complains that he had still expected to be able to drive a short distance to find a Starbucks where he could get his daily mocha latte.

Someone who moved to Uruguay, in part because much of the produce and meat are produced organically, is disappointed to learn that he could not buy Lean Cuisine in the grocery stores.

Someone who moved to the Cayman Islands, in part because of the sophisticated banking and lack of direct taxation, is disappointed to learn that gasoline is pricier than he had been accustomed to, due to a 20% import duty. Each of the above examples are real ones that have actually occurred.

Each person who had these expectations had hoped that he could somehow "have it all," that he could retain all of the advantages of his homeland - the sophistication of London, the variety of consumables in New York, or the social diversity of Vancouver - and simply add on the further advantages of the new jurisdiction.

Those who return home in frustration and disgust offer reasons that might have seemed obvious to others.

"I liked moving to a quiet Costa Rican village where the villagers worked cheaply, but I couldn't sit around in the evening with those same villagers and discuss our respective overseas investments."

"Yes, I could renovate my house cheaply in Chile, but the workmanship was crude, and forget about finding a Home Depot to buy decent fixtures."

"There are nice cafes in Chiang Mai and the waiters are attentive enough, but if you want to chat with someone about something as simple as the FA Cup finals, no one knows what you're talking about."

Essential Research

Why should this trend be growing? Why are so many people surprised by the fact that the destination they chose because it was different, turned out to be... well, different? I believe the main reason may be that many who are now internationalising are doing so more hastily than their forebears. Coupled with this may be the fact that many who plan to expatriate are finding their expatriation advice from blogs, websites, etc. and coming away with either inadequate or inaccurate information. ("Come to sunny Panama and have it all!") It appears, also, that more people in recent years have failed to understand that any move is a trade-off - that there will invariably be some gains and some losses.

Certainly, if a trial visit is not undertaken prior to moving, the likelihood of unpleasant surprises is far greater. However, it would seem obvious that if an expat seeks, say, the quiet life of a Central American village or the ability to hire rural people cheaply, an obvious disadvantage will be that he will be moving to a location that is lacking in sophistication (no Starbucks, no neighbours who subscribe to International Speculator.)

In my own country, forty years ago the locals were extremely friendly, shared everything, worked very cheaply and were enamoured of new arrivals. On the other hand, there was little to do here. Homes were simple and there was little money to be made. There were no sophisticated shops to spend what little money people earned.

Today, that has all changed. The country is highly cosmopolitan, with cineplexes, shops and a wide variety of extracurricular activities available, but locals no longer work as maids, waiters or yard-men. They now go to university and make very good livings as bankers and lawyers. The lower-paying jobs are filled by imported labour. While the locals are still very friendly, they are more cautious with new arrivals.

It was a wonderful country forty years ago, and it's a wonderful country now, but for very different reasons.

One set of advantages has been traded for another set.

Perhaps we are hoping to find a destination where we can buy a large beautiful home with all the amenities, with excellent restaurants, sophisticated shopping and plenty of up-to-date activities for our children and ourselves. However, a modicum of objective thought must tell us that then the locals would not be humble, uneducated people who were somehow able to deliver a world-class sophistication, but chose to live on low wages and live simple, spartan lives. Even if such a place were to magically appear, within a very short time, it would be overrun with newcomers, who, by their very presence, would forever change the delicate balance.

Planning Ahead

Do the above observations suggest that you should not seek a better situation in another location? Not at all. They simply suggest that, should you decide to get out of Dodge, you should not do so hastily.

The following three steps may help to assure that the destination you choose will be a successful one.

  1. Make a list of the advantages you presently have at your current location, and decide which ones are important to you. (Maybe you really need to be around people of a similar mindset, but you can manage without the Starbucks.)
  2. Make another list of the advantages that you do not presently have but are important to you. Then research destinations that may have that combination of advantages.
  3. When you feel you have it down to one or two destinations, skip your annual vacation, and, instead, spend the time visiting the country that you are considering moving to. Then imagine actually living in the new destination, not just visiting as a tourist.

There is no "ideal" location. There are only good trade-offs. Plan well, and you'll do well.

Tags: panama, expat, costa rica, cayman islands,