Bananas from Jersey: How the world is losing trillions to tax havens

This post was originally published on UN Dispatch on November 30, 2011.

Since the economic collapse of 2008 and the ensuing recession, increasingly more attention is being paid to corporate accountability. Recently, the Occupy movement has brought into sharp relief some of the discontent with poor corporate citizenship. If you pay close enough attention, there have been many stories in the media exposing unfair – sometimes illegal – corporate practices and how they are affecting the overall health of the economy. We’ve learned, for example, how G.E. – America’s largest corporation – avoided paying any taxes in the United States in 2010 – thanks to the “clever use” of tax breaks and offshore accounting. While Republican presidential hopefuls will have you believe that reducing corporate tax rates is the best way to boost the economy, American corporate tax rates haven’t been this low (35%) since before the Second World War. Meanwhile, the United States is struggling to figure out how to cut a soaring budget deficit and continue financing key health care and welfare programs.

This situation, however, is not unique to the United States or the industrialized world. Indeed, a recent report by Eurodad (European Network on Debt & Development) finds that developing nations lose more than a trillion (yes, trillion) dollars of potential tax revenue every year because of corporate tax evasion.

The UK-based Tax Justice Network also recently published a report to highlight the negative effects of tax dodging by multinational corporations, and launched a new campaign “Tackle Tax Havens (By the way, their website, www.tackletaxhavens.com, offers myriad resources, information and data about tax evasion – I highly recommend checking it out.) Their reportshows that tax evasion costs 145 countries, representing over 98% of world GDP, more than US$3.1 trillion annually.

As noted in the executive summary of the Eurodad report, “the international community has repeatedly stressed the need to mobilise domestic resources in developing countries, as the most sustainable way of financing development and ending aid dependency […] The cross border nature of multinational companies’operations combined with the absence of adequate transparency regulations have very damaging implications for a country’s ability to mobilise domestic resources.” Mobilizing resources through taxation is not just critical for developing countries’ ability to finance development: it is, in fact, one of the most fundamental functions of modern, sovereign states – developing or industrialized. Drawing a parallel with the way in which the United States is weak on corporate tax enforcement allows us to see the depth of the problem of tax evasion.

While we continue to think about how developing nations can finance programs to support economic and social development, it’s clear that the issue of corporate tax evasion must be addressed. In the extractive industry, efforts such as the Extractive Industry Transparency Initiative, begin to deal with this issue, but the voluntary nature of the EITI, and the lack of enforcement mechanisms, make it an imperfect solution. Dealing with tax havens is a third rail issue. Similarly, attempting to close tax loopholes for multinational corporations is practically political suicide. The globalized nature of this problem suggests that bold, concerted action will need to take place – nothing less than the viability and sustainability of our economic and financial systems are at stake.

Is EDUN a success?

In 2008, as part of a conference goodie-bag, I received an EDUN t-shirt. The shirt’s tags indicated my shirt was made in Peru, from organic Peruvian cotton. The small pamphlet attached to it noted that the company, started by Bono and his wife Ali Hewson, was focused on sustainable, ethical and eco-friendly fashions. I remember liking the shirt and the story behind it, especially because my job at the time had me focusing on economic development for small-holder farmers in rural Peru. I liked the idea that not only was the organic cotton produced in Peru, but instead of being exported as a raw material, the value-added product was created there in Peruvian factories, thus enhancing economic returns locally.

Me and my Peruvian-made EDUN shirt

EDUN’s mission though, according to Ali Hewson is to make a profit — not because the executive board needs the money but to demonstrate to other entrepreneurs that it’s possible to do so in developing countries, paying fair wages and relying on local raw material entirely processed and manufactured by local labor, from start to finish.

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An article entitled “Out of Africa, Into Asia” in Friday’s Wall Street Journal explains how the company decided to move a majority of the production to China because of various issues with the manufacturers in the developing world, particularly in Africa. Delivery delays and quality problems were affecting the clothing line to the point where the company hosted “a party in the dark, at the chic cabaret venue The Box, to draw attention away from the clothes.”

According to the WSJ:

After putting around $20 million of their own money into the still-unprofitable brand, Bono and Ms. Hewson sold 49% of the company last year to LVMH Moët Hennessy Louis Vuitton for about $7.8 million. LVMH, the world’s largest luxury conglomerate, helped the company recruit new management and a new designer (Mr. Gregory left in 2007), and then tried to convince the founders to expand their sourcing horizons.

Currently, 15% of EDUN’s products are manufactured in Africa; this particular point led to an interesting conversation on Twitter about whether this means that EDUN is succeeding in its mission, or if in fact it has failed to accomplish what it set out to do. Some argued that EDUN was proving that it was possible to run a for-profit enterprise with a strong commitment to fair and ethical practices. Others – myself included – questioned whether EDUN could be considered successful given how much it seems to be deviating from its original intent.

***

I can relate to both sides of the argument here. Bono and his wife set out on a creative enterprise which they hope can become a model. As Hewson told the WSJ in 2009, EDUN is supposed to demonstrate that a for-profit business can be successful and ethical at the same time. This in turn can encourage other businesses to adopt new practices: sourcing products (and not just raw materials) from factories with strong labor and environmental standards in developing countries. These are obviously laudable goals that should be supported. However, my concern lies with the fact that Bono and Hewson didn’t actually prove that this was possible through EDUN, given all the issues they encountered in making their vision a reality.

In EDUN’s “mission” section of their website, it seems rather obvious that the focus is strongly on Africa. A rather tedious and unoriginal video of schoolchildren dancing in a school in the slum of Kibera and a slideshow of nameless organic cotton farmers adorn the webpage, along with a “Made in Africa”section, ominously subtitled “coming soon…”

The mission statement talks about about two partnerships: one with the aforementioned school in Kibera, and the Conservation Cotton Initiative in Northern Uganda with Invisible Children (everyone’s favorite advocacy organization) and the Wildlife Conservation Society. Leaving aside the merits of these two initiatives, they do speak to the rather small-scale scope of EDUN’s impact on African manufacturing. Which is precisely why I find it difficult to construe EDUN as a success: they have only very partially achieved their goal of having their fashion clothing line produced in African factories.

***

In the WSJ article, Ali Hewson makes it clear where EDUN’s priorities lie: “we focused too much on the mission in the beginning. It’s the clothes, it’s the product. It’s a fashion company. That needs to be first and foremost.” Now this makes perfect business sense – a good company sells quality, in-demand products at the lowest possible cost in order to maximize revenues. What this suggests, though, is that the fair trade aspect of the mission – while still present – is not a priority. This is reflected in the decision to source a majority of products from China, with only a nominal portion coming from Africa. Furthermore, as EDUN’s website suggests, their efforts in Africa seem to be informed by somewhat vague principles and guidelines.

The problem is that EDUN, under these circumstances, is hardly demonstrating that “doing good while doing well” is a viable way to run a business. In fact, I’d argue quite the opposite. Their initial focus on product marketing (through celebrity ad campaigns and thanks to Bono’s superstar status) rather than on developing a viable, sustainable business model eventually forced them to rethink their model. This is particularly frustrating because EDUN could have easily sought to do its homework properly and anticipate the predictable problems they ran into. Saundra Schimmelpfennig wrote about this exact topic last year, and there are hundreds of entrepreneurs in the same space whose counsel could have been sought.

EDUN failed to learn the lessons of their predecessors’ mistakes in order to make their model succeed has they originally intended. Instead of proving that their business model was viable, they seem to have proved exactly the opposite. If it Bono hadn’t had the ability to throw $20mm of his own money into the company when it was suffering financially, if he didn’t have the kind of prestige that would make LVMH purchase the flailing, unprofitable company, I highly doubt EDUN would still exist today.

***

I’m one to be supportive of daring entrepreneurship, both social and commercial, and I do have a lot of respect for people who have the courage to throw their energy into creating a successful enterprise. That said, when it comes to EDUN, I feel that the efforts were superficial, in more ways than one. Had EDUN done better research, they might have come up with a better model than what led them to be pretty much ashamed of the clothes that came from Africa (cf. the party in the dark to draw attention away from the clothes – for a fashion company!?) I don’t think anyone considering investing in African business would look to Bono and EDUN’s example as a model for success… In fact, I would imagine that looking at EDUN would discourage potential investors.

It seems that we don’t hold Bono to the same standards we hold non-rock star entrepreneurs. His mere trying to succeed appears to be enough to endear him to his supporters. Frankly, I feel Bono doesn’t deserve much praise here. If he was truly committed to supporting African cotton farmers, sellers and manufacturers, he could have invested in a few small or medium size clothing factories, for example. Industry in the developing world needs capital and improved operational standards, and there are several organizations which focus precisely on achieving this. The Grassroots Business Fund, for instance, makes equity, quasi-equity, and debt investments in the $250,000 – $1,000,000 range in agricultural and artisanal businesses, as well as access to finance and BoP services.

I understand: EDUN is a fashion clothes line, not an aid project. Fair enough. But then let’s see this for what it really is: one among many lines of clothing designed and marketed by a celebrity, with an ethical “twist.” To say that EDUN is a “game-changing” initiative is giving much too much credit to an enterprise which essentially failed to accomplish the mission it set out for itself.

Wonk love

‘Tis that time of the year again: long weekends and celebrations of national holidays, fireworks and hot-dogs. As I suspect many of you will be traveling this weekend (and throughout the summer), I thought I’d recommend one of my all time favorite podcasts: the Center for Global Development’s Global Prosperity Wonkcast. Usually hosted by Lawrence MacDonald, the podcasts usually last about 20 minutes and feature Center for Global Development (CGD) fellows, as well as other prominent guests. The themes discussed are always salient and topical, and the expertise is spot-on.

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Last week, the Wonkcast had an excellent episode on the Gulf of Mexico gusher and Africa’s oil boom (mostly about the latter topic, really), with Todd Moss and Vijaya Ramachandran. The New York Times reports that “as many as 546 million gallons of oil spilled into the Niger Delta over the last five decades, or nearly 11 million gallons a year.” Unlike the outrage sparked by the Deepwater Horizon catastrophy, the response to the relentless flow of oil into the Niger delta has generated little action. There are different factors affecting the situation: criminal activity by rebel groups, which illegally tap pipelines and fail to cap them, is one major issue. But one point which the experts in the Wonkcast insist on is the responsibility of corporations.

Nigeria has a weak regulatory environment, and many of the companies drilling for oil do so out of sight – literally. With offshore platforms left unmonitored by the government or other independent bodies, the safety and security precautions taken by companies are determined internally. This leads to several issues related to poor maintenance of facilities (corroding and unsecured pipelines), environmentally destructive practices (gas flares, which are the result of burning off natural gas recovered during the extraction of crude oil), and a general lack of accountability and responsibility for the social and environmental impact of natural resource extraction activities.

The Nigerian authorities – both federal and local – and natural resource companies share the responsibility for what is occurring in the Niger Delta. If they are not directly responsible, they are at the very least guilty of omission. Todd Moss speaks of the need to drastically improve the regulatory framework that governs natural resource extraction in Nigeria. I would add that companies also need to adopt much stricter standards, and embrace good corporate citizenship. As we are seeing with BP in the Gulf of Mexico, the practice of putting profits and the bottom line ahead of any other concerns has to change.

Efforts to promote the value of corporate social responsibility have been gaining in importance in recent years. The notion of “triple bottom line” (people/planet/profits), for instance, is becoming the dominant approach to full cost accounting, which takes into account the full economic, social and environmental cost of operating a business. The Dow Jones Sustainability Index “comprises the leading companies in terms of sustainability around the world. It captures the top 10% based on long-term economic, environmental and social criteria out of the biggest 2500 companies worldwide.” The Extractive Industries Transparency Initiative, as well at the Global Reporting Initiative, are other examples of new accountability systems that are changing the way in which companies report on their activities. What ties all these initiatives together is the move towards taking into account all of the dimensions – economic, social, environmental – which a business necessarily impacts.

Another initiative, this time led by executives in the natural resource sector, is the International Council on Mining and Metals (ICMM). The ICMM’s mission is to help its member companies make their social and environmental commitments in line with sustainable practices, and to increase the overall sustainability of their operations. Having worked with the ICMM in the past, I can attest to the quality of the organization’s work. As far as I know, there is no similar initiative for the oil and gas industry.

Because of the nature of the natural resource extraction business,  negative externalities caused by these activities are often not on people’s radars. It took a massive disaster in the Gulf of Mexico for the general public in the United States to question the practice of deep-water, offshore drilling. In our day to day lives, we are not exposed to the environmental and social consequences of natural resource extraction – out of sight, out of mind.

For the estimated 30 million people living in the Niger Delta, however, the effects of poorly regulated oil extraction have very tangible consequences: destroyed ecosystems, depletion of fish stocks and wildlife (impacting the livelihoods of local fishermen and farmers), hampered agricultural production, pollution (leading to many health issues), insecurity (due to the presence of armed criminal groups), etc. Amnesty International released a comprehensive report last year, where these issues are explored in depth.

One of the solutions discussed by Todd Moss to decrease poverty in the Niger Delta is the institution of direct cash transfers to the local population. Under this scheme, the Nigerian government would redistribute 10% of its annual dividends directly to individuals in the region. By by-passing state coffers, and thus the possibility of funds being misappropriate or mismanaged, direct cash transfers are seen as a way to beat the “oil curse”, which has plagued natural resource rich countries with poor governance. This method of redistributing revenue is being used in Alaska since 1982, and Moss has been advocating for this approach to be adopted by West African nations such as Ghana and Nigeria.

In the podcast, Moss notes that this direct cash transfer proposal is creating strange bedfellows: on the one hand, progressive liberals believe that this allows citizens to have a stake in the wealth of their country, and, on the other hand, libertarians love the idea of cutting out the government middle man. Moss points out that the dividends paid to citizens should still be taxed by the government, in an effort to keep accountability loops. Nevertheless, I wonder about the indirect effects of such a system.

For example, under this system, the incentives for government accountability in terms of natural resource wealth management are reduced. In other developing nations, the approach has been to strengthen both the regulatory framework and redistribution channels, and to build the capacity of government agencies to manage natural resource wealth. While direct cash transfers may be a good short term solution, in the long term, it does not help resolve the overarching challenge of poor governance.

In my mind, building the institutional capacity of resource-rich countries is the most critical element of turning the “resource curse” into a blessing. Chile and Peru are examples of countries that, not very long ago, were struggling with poverty. Both of these nations have instituted reforms and focused on attracting and managing foreign investors and natural resource companies. The government of Peru has a complex taxation and redistribution system in place, which seeks to ensure that the wealth generated by mining is shared based on principles of equality.

A study by the Fraser Institute supports this view (emphasis mine):

“The authors of the report, after considering new and existing data, come to the conclusion that whether a country benefits from natural resources depends largely on the integrity of its institutions and economic freedom — government bureaucracy, legal structure, property rights, monetary policies and international trade. Simply put, the higher the level of economic freedom a country enjoys, the greater the benefit from resources.”

For Nigeria, direct cash transfers can probably help alleviate poverty to some degree. Nevertheless, I don’t think the egregious violations of human rights, the environmental destruction and insecurity will subside unless: 1. the government of Nigeria improves governance and regulation, and 2. natural resource companies self-impose stricter standards for safety, security and work much harder on mitigating the negative social and environmental impact of their activities.

These aren’t short term projects, but they should accompany any initiative that seeks to diminish the negative impact of natural resource extraction in the region.

Dead Aid Bandwagon

If you are a development nerd, you have probably read ad nauseam about Dambisa Moyo’s new book, Dead Aid. In the last few months, there has been an interesting debate happening between different schools of thought. Essentially, Moyo argues that foreign aid to African countries is one of the preeminent root causes of Africa’s underdevelopment (for lack of a better word), and that instead of throwing billions of (wasted) dollars into the hands of dicators, African governments should instead be given access to more private finance. 


Having worked at the World Bank and Goldman Sachs, Moyo – who hails from Zambia – offers a refreshing perspective on the aid debate (which is typically dominated by white males… no surprises there, right?)


Her book unleashed an outpouring of commentary – some condemning her views, others wholeheartedly agreeing, and everything in between. I have been tempted to throw in my two cents, but the more I read about it, the more convinced I am that a) everything that could be said, has been said and, b) the debate over whether aid should be stopped or not is such a macro discussion that, ultimately, we’re getting stuck at the “50,000 foot” view – and that doesn’t really help move the debate forward constructively. Because, as we all know, foreign aid will NOT end – even if you were able to show by a+b=c that aid caused most of Africa’s problems, Official Development Aid (ODA) is still a critical foreign policy tool, and to call for its halt is unrealistic.

Anyway.  

Most recently, Francis Fukuyama voiced his opinion on the matter in Slate. He compares Moyo’s argument with another prominent African scholar’s views, Wangari Maatai. His piece, I thought, actually touches on a couple of really key issues, which most commentary on “Dead Aid” have failed to focus on. Excerpt:

Both women see sub-Saharan Africa’s fundamental problem not as one of resources, human or natural, or as a matter of geography, but, rather, as one of bad government. Far too many regimes in Africa have become patronage machines in which political power is sought by “big men” for the sole purpose of acquiring resources—resources that are funneled either back to the networks of supporters who helped a particular leader come to power or else into the proverbial Swiss bank account. There is no concept of public good; politics has devolved instead into a zero-sum struggle to appropriate the state and whatever assets it can control.

This view actually echoes what one of the most prominent French African scholars, Jean Francois Bayart, writes in his book “L’Etat en Afrique: La politique du ventre“. In this book, he writes that the “politics of the belly” – which is to say the political culture that is prevalent in Africa whereby rulers seek to accumulate power and possessions –  is not only the fundamental issue that has been plaguing the continent, but also a product of its very particular social, political and economic history. In his book (which I unfortunately don’t think has been translated into English), he describes how complex social and political networks arose in the context of colonial and post colonial sub-Saharan Africa, and how the polity that emerged is defined by an intricate interplay between foreign dependency, reliance on local (and often socially constructed) tribal or ethnic identities and leaders’ destructive desire to selfishly accumulate resources. 

Of course, given that we’re talking about a whole continent, generalizations are very hard to make – so while one can certainly find counter points to Bayart and Fukuyama’s argument, there is an element of truth to it, which to me captures the most powerful criticism of Moyo’s book: it’s not aid per se that’s the problem – it’s what’s being done with it, and how it’s being managed. And of course, Moyo knows this. But, as Owen Barder notes:

It seems to me that Dambisa Moyo has set up a false dichotomy between aid and entrepreneurship. Many of the things Moyo would like to see – better access to financial services, a better business environment, lower tariffs – can be (and are) supported by aid. 

It’s been frustrating to read Bono’s response to Moyo, as well as the reactions from a lot of people “shocked” that Moyo would call for an end to foreign aid. But, if (like me…) you subscribe to the Easterly school of thought that holds that most ODA ends up being horribly wasted and that an entirely new ODA regime needs to come about, then her argument, while virulent and, frankly, aggressive, makes sense. 

Just recently, from (of all places) USA Today:

Two United Nations agencies spent millions in U.S. money on substandard Afghanistan construction projects, including a central bank without electricity and a bridge at risk of “life threatening” collapse. 

In the current context, I think it’s great to debate the virtues (or lack thereof) of ODA – however, focusing on that macro question shouldn’t be a reason to turn our focus away from the real issue: today, there are millions of aid dollars at work – how do we actually make them work, with a view to incrementally decrease countries’ dependence on foreign assistance? 

Oh, aid effectiveness… You are hella elusive. 

Understanding the poor?

I’ve been neglecting my little corner of the internet these past couple of weeks… Blogging can be a serious “monkey on your back” situation, and the more I put it off, the less motivated I become to write. Also, the fact that I’ve been doing a lot of writing and editing at work every day probably compounds this… Anyway, poor excuses. There is a lot I want to share, like for example (and in no particular order), my impressions of Peru, the value of a trillion dollars, Obama’s greying hair and the ICC indictment of President Bashir (great article by Alex de Waal, who is The Authority on Darfur).


But I won’t… Not today, at least (although chances are I will never write about Obama’s hair). One of my colleagues forwarded an article from the Stanford Social Innovation Review a few weeks back, noting that the last couple paragraphs completely jive with our organization’s mission (hurray! I agree with the conclusions of the article, and it gave me a warm fuzzy feeling that I spend my days working for an organization that embraces those principles) 

The author, Aneel Karnani, makes a lot of good points in this article called “Romanticizing the Poor”. He lays to rest a lot of misconceptions about the business opportunities that exist at the bottom of the pyramid – his main thesis is that poor people are not necessarily aspiring entrepreneurs (as many advocates of microfinance see it), nor are they particularly discerning consumers (as corporations like to portray). Excerpt:

Beneath these beliefs in the market readiness of poor people lies a more basic assumption: people in dire straits are well-informed and rational economic actors. Yet this view denies the fact that poor people often act against their own self-interest. Of course, wealthier people sometimes do so, too. But poor people face far worse consequences for their bad choices than do more affluent people. And so romanticized views of BOP people as value-conscious consumers and resilient entrepreneurs are not only false, but also harmful. These views lead states to build too few legal, regulatory, and social mechanisms to protect the poor, as well as to rely too heavily on market solutions to poverty.

To support his views, he makes a number of compelling (and honest) arguments that deconstruct a “romanticized” vision of the poor, which rests on the assumption that they are rational economic actors. Of course, because he’s talking about billions of people in a general way, these are clearly sweeping generalizations – but like all generalizations, there is a lot of truth to what he’s saying. 

He notes, for example, that people who live in poverty tend to spend inordinate amounts of money on celebrations, festivals and what I will call, broadly speaking, escapism (he cites a recent field study in Sri Lanka which reveals that more than 10% of poor male respondents regularly spend their entire incomes on alcohol). This really resonates with me – I am still unable to understand why Liberian refugees in Ghana needed to have a costly “Miss Liberia” pageant, or make t-shirts for every last occasion of the year (you essentially cannot be a “real” organization or club until you have a t-shirt with your motto and logo on it). That always struck me as an immense waste of resources, particularly in a context of complete and utter need – you wouldn’t be pressed to find someone telling you about their t-shirt order and in the same breath asking you for money to buy food/water/go to the clinic.

I remember trying to organize a half day workshop on nutrition for the staff of the school I was volunteering at – I drew up a budget, and discussed it with my local colleague. He pointed out that my food/refreshment line item was quite small – indeed, I had only accounted for the purchase of water and some basic snacks. He explained that “no one would show up” unless I had the event catered and everyone got a “soft drink”. Yes – catered. In the end, most of the costs of the workshop were food related. I thought this was because I was white and therefore incredibly rich, of course, that people expected this. But time after time, I heard about these “catered workshops” during my time in the refugee camp.

Another trend which Karnani points to is how corporations take advantage of the lack of regulations in order to market products that are detrimental to a person’s health – such as liquor in very small (and therefore very affordable) packages. This brings up another memory: small sachets of rum that would litter the ground of the refugee camp. Except they weren’t being made by large foreign corporations but by smart local entrepreneurs – these are the guys who are really taking advantage of business opportunities at the bottom of the pyramid. This is a point I disagree on slightly – Karnani says: “It is not only tobacco and alcohol companies that exploit the weaknesses of the poor: Even Unilever, a consumer products company, preys on the anxieties of disadvantaged people” Umm… wait: it’s not only tobacco and alcohol companies marketing to the poor that exploit weaknesses – that’s what every single company that markets a non-essential product does!! Everyone on the planet is subject to shameless marketing, not just the poor. The difference is, though, is that I know I don’t “need” a blanket with arm holes (even though I know a lot of people who would fight me on this, but bear with me). At the bottom of the pyramid, as Karnani writes,

” …yet these advocates do not acknowledge that the poor lack the education, information, and other economic, cultural, and social capital that would allow them to take advantage of—and shield themselves against—the vagaries of the free market.”

I think he nails it with that sentence.

I really think that it ultimately boils down to education – what I’m talking about though, goes much beyond the Millenium Development Goal of providing primary education to all the world’s children by 2015 (that ain’t happening, by the way). In my mind, “education” comprises formal education at all levels, including the promotion of university or technical degrees, as well as skills and knowledge transfer. For micro, small and medium size enterprises, good leadership and sound management are essential for success – neither of these skills is born out of thin air, and individuals need to somehow acquire them. A direct result of this is the increased premium places on capacity building and technical assistance as crucial complements of financing for any informal organization or business in the developing world.

As Karnani accurately notes, for individuals to “take advantage of and shield themselves from the vagaries of the free market”, a strong regulatory framework is imperative. Consumers need to be protected and industries promoted, controlled and appropriately incentivized – isn’t that what we ask from our own governments? (well, perhaps Rush Limbaugh disagrees…) 

An interesting and rather intense debate took place over at Nextbillion.net regarding this piece – one of the scholars that Karnani criticizes in his piece, Al Hammond, responds to Karnani in no uncertain terms. I highly recommend checking out the vitriolic back and forth. Here‘s a softer response to Karnani’s article.

Karnani’s article is a must-read – as my good friend CPL said, “that’s one of the best most honest pieces I have read in a long time.”

Oh, and here are a couple of photos from my trip to Peru


From 2009 pics

This man owns and runs a cheese factory/shop in the mountain town of Cajamarca, Peru. He started his business about 10 years ago, and now sells cheese in different regions of the country – his marketing strategy was developed with the help of a local economic development organization. He told us his story and showed us around his facilities, describing which challenges he faced as a small business owner – very enlightening. I’ll admit the cheese wasn’t really all that great (I’m from France… I have discerning taste in cheese), but on the other hand the dulce de leche (displayed in the center of the photo), was amazingly good. 



From 2009 pics

And this is “Lima-by-Night”, viewed from the neighborhood of Barranco (I want to live there). Yes, it’s a ginormous illuminated crucifix.