Nectar de Sabila

Posted on by under Life in Peru

This weekend I spent 4 Neuvo Soles on a bottle of “Nectar de Sabila” at the local market here in Wanchaq. This concoction is some type of cactus juice that, according to its producers, has both nutritional and healing properties. The label states:

“Nectar de Sabila presenta caracteristicas nutricionales ademas se puede recomendar con propositos curativos: ejerce una funcion analgesica antiinflamatoria cicatrizante y antibiotica.”

The part I find most interesting is the claimed anti-biotic properties. The nectar is produced here in Cusco “por la asociacion de productores y transformadores agro industriales Kay Pachapi Llank’ay“. Anyone who speaks Quechua please tell us in the comments if that name has any meaning.

Nectar de Sabila by Natunec, Productos Ecologicos

Nectar de Sabila by Natunec, Productos Ecologicos

The recommended use is a half a glass before or after breakfast, so I’ve been faithfully sipping my cactus juice every morning. It doesn’t taste quite like fruit juice, but not medicinal either, it actually tastes pretty good.

Natural medicine is popular in Peru. Hotels and chamans offer ayahuasca sessions and many typical Andean or Amazon plants are believed to have healing powers, the most famous of these is, of course, the coca leaf.

I’m honestly not a huge fan of the so-called natural medicine here in Cusco, because it is very commercialized for the tourists, just like anything else here in the city. Once you leave the main tourist area in Cusco behind, I do find it fascinating to learn about the healing powers believed to exist in the culture and nature of the Andes.

Nectar de Sabila

Nectar de Sabila

Sad day

Posted on by under History and culture, Life in Peru

Read the news yesterday that Billy Powell, keyboardist for the band Lynyrd Skynyrd, passed away at age 56. He was one of the survivors of the tragic plane crash in 1977 that killed several other members of the band.

Some decisions you make in life turn out much different than you might expect. If hadn’t bought an extra ticket to a Lynyrd Skynyrd show 5 years ago our lives might have been a lot different… I might have never met Patricia, moved to Peru, visited great places like Accha, Ancon or Lago Titicaca.

Here’s a tribute to Billy Powell, the famous piano intro of Freebird:

I made a fool out of myself!

Posted on by under Life in Peru

Well that in itself is not really newsworthy – it happens. But this time, I’m kind of proud of it, because at least I tried.

Let me set the stage: here in Cusco stray dogs are everywhere. A handful have made their home in the little park in our complex. Most of the stray dogs are male, but a few are female Рhembra as they say here in Peru. Most of the hembritas are not fixed, and when one of them is in heat, a whole pack of stray dogs gathers around the little park and they all bark and argue about who gets to be the next one to make chucul̼n with the horny bitch. This is kind of a nuisance, and a bit dangerous since there are so many kids around.

Stray dogs hanging around the park.

Stray dogs hanging around the park.

When I take Roxi and Manchita for a walk I can usually chase the whole pack of because Roxi is mean, and dogs on a leash with their owner seem to have a level of intimidation over stray dogs. So I typically wait for one of the stray dogs to give Roxi a look she doesn’t like and then she flies of in a mad rage and sends the whole pack running, at least temporarily.

The other night a group of stray dogs got in a big fight over one of the hembritas in the park. Since I didn’t have Roxi with me I figured to break up the fight by yelling at the stray Peruvian dogs in my meanest English, spiced up with an occasional Dutch “maakt u weg gij dommen hond”. I didn’t really accomplish anything since there were about a dozen of them, and only one of me. I would succeed in running one dog of, only to have another one sneak around back to the horny bitch.

Stray Peruvian dog, hurt his eye in a fight.

Stray Peruvian dog, hurt his eye in a fight.

Stray pup in Cusco, Peru. This one is hembrita.

Stray pup in Cusco, Peru. This one is hembrita.

Point being that Peru is not very good at organizational behavior, and needs better institutions. There is no real animal control here in Cusco – although there are public campaigns to fight rabies. I can make a fool out of myself, but I can’t feed and watch a dozen stray dogs. At least 2 of the dogs in our little park have bitten people that I know of (people sometimes do treat them badly), and occasionally they get in fights with one another.

So while all the locals were staring out their windows thinking “look at that crazy gringo”, I at least felt some satisfaction of knowing that I tried…

GE releases 4Q earnings

Posted on by under Business & Economy

GE, my former employer, released earnings this morning. As expected, it wasn’t pretty.

GE needs a radical new corporate culture

GE needs a radical new corporate culture

Many of my former collegues who have been at GE since the stock’s heyday of the late 1990s have a hard time understanding how GE stock has consistently lost value for nearly 10 years now while the company continues to post profits. Some of them still believe the stock will go back up like it did in the 1990s.

Now working at GE was very good to me. The company has great benefits, health care, tuition reimbursement, a fixed pension, etc. In the aircraft engines division we had a fantastic team of engineers and technicians, as well as a world-class work environment. It’s easy to understand how many of my former collegues, from inside the company, always believed in GE’s stock.

The trouble with GE is that the finance arm Jack Welch created to buy and sell companies at will, and thereby achieve his illusion of “managed earnings”, has now become a big headache. I’m no finance guy or economist, but check out a great analysis of GE’s creaky balance sheet here.

What to do if I were Jeff Immelt:

GE’s corporate culture needs a radical overhaul. GE’s culture is still focused on things like competitive advantage, doing more with less, earnings growth, and all those tired old 20th century concepts that simply won’t work in the 21st century. Only by having a culture that relentlessly drove an illusion of value did GE end up with north of half a trillion $ in debt.

Change in a large organization is not easy, but here are some ideas:

  • Do away with all the “fast track” management programs (HRLP, OMLP, etc.) These programs are indeed good mentoring tools, but the trouble is they have created an exclusive fraternity. In a company with over 300,000 employees, it doesn’t make sense to largely limit your innovation and opportunities to a select club of “golden boys/girls”.
  • Get rid of most internal metrics and focus on managing people and relationships. Many metrics are unreliable and drive no behavior, or drive unwanted 20th century type thinking.
  • Ditch “Six Sigma”. I’m sure when “Six Sigma” was introduced as a quality tool it had its benefits, but it’s no longer relevant today. I could come up with many reasons why, for one, it stifles innovation, but most importantly “Six Sigma” is a throwback to the old way of doing things, pervasive like a cancer in GE’s culture, and it needs to go. Have a big “Green Book” bonfire. Bring hot dogs and hamburgers and have a “Six Sigma cookout” for employee morale. I’ll take onions and BBQ sauce on my burger please 😉

There are plenty of other things I could think of, but the main idea is that GE was a standard-bearer of business in the 20th century, yet corporate culture of the late 20th century set the stage for today’s crises, and a radical overhaul is needed. You can read Umair Haque’s great thoughts on 21st century economics and why 20th century thinking won’t work any more.

Reality check:

As much as I believe in overhauling corporate culture, GE may also have to make structural changes to survive. If GE were forced to take the kind of write-downs on its financial portfolio that major banks have (and there’s no reason why that’s not a possibility) the company would be in big trouble. It may be inevitable to split the finance arm from the rest of the company.

Some more positive ideas going forward:

  • Spin of the traditional (non-finance) businesses in a successful IPO. Why should all the good people and great technology in the traditional businesses be burdened with the worry about a half a trillion $ debt load?
  • Buy Yahoo! and combine it with GE’s traditional businesses. That’s right, GE’s technology and media businesses would be great partners for Yahoo! – a technology/media company. And coupled with a new and better corporate culture, it would be a cool new place to work!

In the final analysis, you may think I’m naive, just plain wrong or have been drinking too much coca tea. But GE and the rest of corporate America already know how to do business in the 20th century, so if I’m wrong we can always return to the old way of doing things. But if we wait any longer to look forward, it may be too late in case the new reality is here to stay, as I believe it is.

NB: 5 year chart used above courtesy of marketwatch.

Micro enterprise in Cusco, Peru

Posted on by under Life in Peru

Micro enterprises are everywhere here in Cusco. On every busy street corner you find vendors selling snacks, ice cream, magazines, etc. The vendors typically use some type of converted bicycle as a vending stand, such as the one in this picture.

Typical micro enterprise in Cusco, Peru

Typical micro enterprise in Cusco, Peru

The girl in the picture is 13, she helps her mother about half a day, 6 days a week, taking care of her vending stand. I usually stop by to say hello and buy a piece of candy during my morning walk with Roxi and Manchita.

Ward Welvaert

Leader of the Year: Alan Garcia ???

Posted on by under Business & Economy, Life in Peru

I just stumbled across this article in Latin Business Chronicle:

“What a year it has been for Peru. It managed to post its best economic performance in 14 years (and Latin America’s second-highest growth rate), post another jump in foreign direct investments, achieve investment grade and host key regional summits with Asia and Europe…Much of the credit goes to Alan Garcia…”

My first thoughts were something like “Madre de Dios… Ayude me pues!!!”. Now I have often said life in Peru has been great to me and there are a lot of wonderful opportunities here, but I find it disappointing that both the media and political / business establishment in Peru often view “progress” strictly in macro-economic terms, levels of foreign investment, nr of free trade agreements, etc.

The unfortunate reality is that the macro-economic gains Peru has made in the last 2 decades have not improved the quality of life of all Peruvians proportionately, hence Alan Garcia’s (and before him Toledo’s) low approval ratings. In addition, in light of the collapse in commodities prices I wrote about earlier, anyone who believes Peru won’t be affected by the global recession is dreaming.

The good news, I agree with Umair Haque that “this is no mere recession: it’s a tectonic global shift in savings, consumption, and investment”. There has never been a better time than now to tackle some of the issues that will improve the quality of life for all Peruvians, such as economy in the provinces, environmental protections, occupational safety, corporate culture, cost of home ownership, etc.

Finally, one of the accomplishments touted by Alan Garcia was the free trade agreement (TLC) between Peru and China signed at the APEC summit. Here’s a wildly speculative, yet extremely intriguing question about what will happen to La Oroya now that the Chinese are coming?

La Oroya – putting the $ in perspective.

Posted on by under Business & Economy, Life in Peru

I just read this Reuters release on mining giant BHP Biliton:

“BHP Billiton Ltd/Plc (BLT.L) (BHP.AX) will cut 6,000 jobs and close its giant Ravensthorpe nickel mine in Australia, writing off $1.6 billion, as the global resources giant battles a collapse in commodity prices. …”

Much has been written about the environmental situation in the Peruvian town of La Oroya, since it was featured in an episode of CNN’s “Planet in Peril” a few weeks ago. This news release simply illustrates that the money involved to clean up, move or close the Doe Run smelter in La Oroya is just not that big an issue. Mining is a huge industry, and if BHP Biliton is willing to kiss $1.6 billion goodbye just because the economy is slowing, Doe Run and the Peruvian government darn well ought to pony up the money to fix, move or close the smelter at La Oroya.

Read an interesting comment about Doe Run’s history in the US at americaninlima.com.

Ward Welvaert

Another demonstration in Cusco

Posted on by under Life in Peru

Since we live in front of the Ministery of Labor and around the corner from the Ministery of Agriculture we see occasional demonstrations and street protests in front of our house. I usually have a hard time understanding the slogans the protesters are shouting, but I believe this morning the issue was around zoning and land use.

Here in Peru there is only mild civil unrest, the demonstrations are usually mellow and good-natured. Typically the demonstrators are organized labor or indigenous peasants, while the current government in Peru is center-right. Not meaning to get into politics, I will say that in my observations there is a great disconnect between the middle class / establishment and the poorer / rural populations.

I usually don’t venture out too much while the crowds are in front of our house, since I obviously don’t fit in with either the crowd or the riot police who are 4ft outside of our house. The pictures were taken from our yard.

I’m happy to report that my humble presence here has not been the cause of any civil unrest ;).

21st century globalization – a perspective from Peru

Posted on by under Business & Economy, Life in Peru

With the start of the New Year there are lots of opinions and blog posts out there about how to deal with the global financial crisis and the economy today. I agree with Umair Haque that “… this year, those with the purpose, courage, and vision to get seriously radical will have the opportunity to reconceive and reinvent the global economy”.

What strikes me in all of the current discussion is how much corporate culture, and many of the solutions being proposed, continue to resemble the ideas and corporate culture of the 20th century – the same tired old ideas that caused the crisis in the first place.

One idea that needs to be revisited is globalization. The old way of globalization was to move labor-intensive work to developing economies to save costs and find less environmental restrictions, see the case of La Oroya here in Peru.

Here’s why and how globalization needs to be reinvented for the 21st century:

  • Relationships matter. Too often the old way of globalization was to “get the deal done” and then get the heck out of this backwards place. The economy is truly global today, the developing world expects to be treated as an equal partner, future growth will undoubtedly be in the developing world – it’s not too late to start building real relationships, but start now.
  • Contribute something. Just buying “cheap labor” is an unsustainable illusion, there has to be a balance, something of value added to the developing economies where you buy the labor. If not, the developing world ends up with a big pile of funny green printed paper and the developed world ends up with a ton of stuff we don’t need and a colossal credit crisis – newsflash: we’re there!
  • So what can the developed world contribute, how can you rebalance globalization? Let’s open-source globalization: share your know-how, human resources and intellectual property. The developing world still needs a lot of improvements, from occupational safety to environmental protections and employee development – things we are good at.
  • Forget about competitive advantage. My old bosses at GE would cringe… $30,000 on tuition reimbursement for business school and I dare say “forget about competitive advantage”? That’s right, globalization was all about gaining an advantage over organized labor, suppliers, etc. Problem is, for a sustainable enterprise you need a good workforce, reliable suppliers, distribution channels, etc. Trying to gain advantage over them is akin to destroying your own future.

There are a lot of opportunities in developing economies. Here in Peru, half of the population today is less than 26 years old and the country’s infrastructure is nowhere near ready for the economic growth that definitely will happen when these young people start their own lives and families.

In closing, consider the developing economies an equal partner. If you’re doing business overseas, you can contribute your ideas and expertise to the corporate culture there, as well as learn from your foreign partners. Globalization today should be about businesses in mature economies benefiting from a solid presence in the developing world while at the same time helping to improve the quality of life there.

Ward Welvaert

If you enjoy living in Latin America… Thank Ambassador Bob White.

Posted on by under History and culture, Life in Peru

Life in Peru has been good to me. I don’t regret for a minute leaving corporate America to spend time with Patricia here in Cusco. I’ve been able to travel, meet a lot of great people, learn a new culture and work on things I enjoy.

There are many sides to Peru and the country still faces a lot of difficult issues, such as poverty, corporate culture and environmental protections. That said, the country is safe, has a free and open society and a generally functional democracy. Today there are great opportunities in Peru, both in life and business.

Life in Peru hasn’t always been this good. In the decades of the Cold War most of Latin America was governed by ruthless dictators and torn by civil war. Basic human rights were violated by security forces, guerillas and paramilitaries alike.

I had the good fortune of meeting one man who dedicated his life and career to promoting human rights and a de-militarization of foreign policy in Latin America, Ambassador Bob White. I met Ambassador White at a conference on Cuba policy when I was in the air cargo business in Florida – thinking at the time at some point the US would normalize relations with Cuba and we could fly there.

It’s certainly not my place to tell Ambassador White’s story, but here are some links that are worth visiting:

The ambassador’s tale
Center for International Policy

During his work in foreign service, Ambassador White was one of the first to question US ties to Operation Condor and he worked tirelessly to bring to justice Salvadoran soldiers who murdered four American clergywomen in El Salvador in 1980. The women were killed only a day after being Ambassador White’s dinner guests at his residence.

Site where Northamerican churchwomen were dumped in El Salvador

Site where Northamerican churchwomen were dumped in El Salvador

Today half of Peru’s population is less than 26 years old and I am often surprised that many of them seem unaware or indifferent to Latin America’s recent history. I teach kids who have no bigger worry than getting a new cellphone or MP3 player. Yet were it not for people like Ambassador White who took a principled stand, life in Latin America today would not be what it is. While there is still a lot of work to be done, I am thankful Peru has great opportunities going forward.

Ambassador Robert White

Ambassador Robert White

NB: Since 1990 Ambassador White has been President of the Center for International Policy, which advocates a responsible foreign policy and supports many Latin American causes.

NB: See the original photo used above on Flickr.

Ward Welvaert