icaragua is known in the surfing world as a great place to catch some waves with "mack" point breaks. The sport is among the drivers of the country's growing tourism sector. But recently this Central American nation, long associated with turmoil and civil war, is catching the attention of U.S. BPO firms looking for the next juicy site.
   One such firm is Sitel, the Nashville, Tenn.-based global BPO provider that operates 150 contact centers in 27 countries, serving about 500 clients. The company, which employs 67,000 globally and offers services in 32 languages, established a Central American beachhead several years ago in Panama and now operates three centers there with more than 3,000 employees.
   Sitel's new center in Managua, Nicaragua, opened with 295 seats in mid-April and will eventually employ about 400 to provide in-bound customer service. The center's clients will include a major telecom company.
   "Contrary to the perceptions of Nicaragua being a war-torn and volatile country, it is proving itself to be a very safe and friendly nation," says Ann Harts, corporate real estate officer for Sitel. "It has a stable government and scores and scores of English-speaking countrymen returning to the country."
   Nicaragua came to Sitel's attention through the efforts of ProNicaragua, the country's investment agency. Sitel's search began in February of 2007 and included four other countries in Latin America which Harts declined to identify.
   "It used to be that everyone was looking for the next India or the next Philippines," Harts says. "Then Latin America became the driving force and everyone was looking for the next Panama or the next great opportunity."
   Sitel worked through ProNicaragua to arrange site tours, meet with developers and learn about the country's Free Trade Zone program. That program offers benefits that include total tax exemption on income and property taxes, total exemption on municipal taxes and total exemption on taxes for machinery, equipment and raw materials. Sitel's new center is about 17,000 sq. ft. (1,580 sq. m.) of space in an office building designated as a stand-alone free trade zone.
   Sitel's center requires employees with English-Spanish skills. Nicaragua and other countries have launched programs to develop this capability in order to lure foreign investment.
   "What has impressed us most in many of the Latin American countries is their English programs that are similar to the English as a Second Language programs in the U.S.," Harts says. "Nicaragua has developed a program with numerous private investors."    Harts, a former vice president of economic development for the Manhattan (Kan.) Area Chamber of Commerce, says the Nicaraguan English-speaking labor market is being buoyed by the offspring of Nicaraguans who fled the war-torn country in the late 1970s. Now equipped with U.S. educations and strong English skills, many want to return to Nicaragua as jobs become available.
   "These positions are considered to be professional jobs in Latin America, and we're seeing a lot more educated applicants," Harts says. "The U.S. cultural affinity going on in Nicaragua makes good business sense. Once you start talking with your clients and show your research, it makes for an easy business case."
   Harts says other benefits of locating in Nicaragua and other Latin American countries include proximity to the U.S., a labor pool that demonstrates dynamic, multilingual customer service ability and high under-employment and unemployment.
   "As we did our drill down and started digging deeper and looking at the business case for Nicaragua, it proved to be a very business-friendly nation," Harts says. "The U.S. Spanish-speaking market is the fastest growing demographic and it poises Latin America to be successful for U.S. business."
   Harts participated in a job fair to recruit for the new Managua facility. She was impressed that more than 50 percent of applicants qualified as English bilingual. Another speaking aspect of potential employees, accent neutralization, also caught her attention, as did the affinity for U.S. culture.
   "What I really like about Nicaragua is the neutralization of accents," she says. "You will hear very good English."
   Harts assembles a focus group of potential job applicants in her site searches. In her Nicaragua group, she found that 60 percent had visited or lived in the U.S. or Canada and 100 percent watched U.S. television via cable or satellite. She says about 90 percent prefer to watch TV in English.
   "They can recite their favorite shows and characters. I looked at their cell phones and the text is in English. Their favorite places to eat are U.S. restaurants such as Pizza Hut, McDonald's and Burger King. I asked them to name the top news issues in the U.S. and the answers were better than a survey I did in the U.S."    Kristin Crispin, an industry manager for enterprise communications and ICT in Latin America for Frost & Sullivan, says Central American countries are attractive for investment due to local and national governments being proactive in offering tax abatements and other incentives.
   "Panama and Costa Rica have been the strong countries," Crispin says. "Now, Nicaragua is developing a strong influence in bringing in foreign investment. Of course, having cultural similarities and proximity to the U.S. is a benefit. With little difference in time zones, Central America is attractive to U.S. firms."
   Crispin says Central America's current political stability is another factor boosting confidence in the region. Telecom infrastructure is also in place, with several major undersea telecom cables nearby.
   "Companies that used to do a lot of offshoring in Asia now have Central America at the top of their lists," Crispin says.
   But Panama and Costa Rica are maturing markets for contact centers and soon may become saturated in terms of labor, Crispin believes. She says both countries must push bilingual education in order to continue their growth.
   Costa Rica announced a major push in this area in March with a new program, Multilingual Costa Rica, aimed at training 35,000 Costa Ricans to attain various English skill levels. The program requires that 100 percent of the nation's high school students graduate with these skills by 2017.
   Peter Ryan, an analyst with Datamonitor, agrees that Central America is one of the world's most aggressive locations in attracting contact centers, though he says most of the incentives are long-term tax abatements rather than direct handouts.
   "One of the challenges in Costa Rica the last few years has been the influx of online gambling houses due to preferential tax treatment," Ryan says. "Labor has been going to online gambling because they pay higher salaries."
   Ryan says the election of former Sandinista leader Daniel Ortega as president in 2006 has caused some potential investors in Nicaragua to take a closer look. He says even though that seemed to reinforce some negative perceptions of the country, it has turned a corner.
   "Companies need to do their due diligence and look at the positive aspects Nicaragua can offer," Ryan says.