January 2026: the turmoil of 3 countries

The Turmoil of 2026: A New 1933?

On January 30, 1933, Hitler was appointed Chancellor of the German Reichstag, and few people—perhaps no one—realized what was coming. Since January 2026, things of perhaps equal importance have been happening, the weight of which we have yet to fully grasp.

The Turmoil in the United States

Donald Trump, for one, has exaggerated his incoherent behavior, due—in my opinion—to senile dementia that erases more of his restraints and inhibitions every day.

Just a few examples: in his Davos speech, he caused such a massive earthquake within NATO that he had to backtrack that very same day. The midnight calls to Republican senators and the leak of an audio where he claimed the senators worked under his orders and that the Senate was worthless.

Well, it turns out that this has cost him the defection of several of those who were his most loyal senators. This had been brewing for some time, along with the collapse of his popularity in the polls and bad news regarding inflation and employment.

Trump's support in elections, which was once fundamental, has become a burden, and that increases the threat of impeachment even before the midterm elections strip Republicans of their majority, as all signs indicate.

This does not mean that Trump is on the verge of being removed, as alarmist propaganda videos on YouTube claim; the truth is that a two-thirds vote is required for that, and no matter how much Republicans have turned their backs on him, that two-thirds threshold still seems far from existing.

But that is where things are headed. The problem is that Trump himself, acting like the mad emperor Caligula, is digging his own grave because every day he says or does something to earn a new enemy or lose support. It is an act of political suicide in real-time.

Only someone mentally ill would think to threaten and insult the only ones who can remove him from office; that is not normal behavior—it only shows how the spiral of dementia in which he is involved is growing.

When I tell you to keep an eye on J. D. Vance, I mean that the odds of Trump losing the presidency grow every day, because his mental state is becoming so delusional that a collapse in office could occur at any moment. His presidency is more precarious today than ever.

By the way, there are only four mechanisms by which he can lose the presidency: death, resignation, impeachment (trial by the Senate), or a declaration of inability to discharge his duties (the 25th Amendment).

It seems Trump already suspects that the 25th Amendment could be applied to him because he is already talking about "legal loopholes." To invoke this amendment, it is enough for the Vice President and a majority of the Cabinet to send a letter to Congress declaring that the president is unable to continue his duties.

After that letter, he loses all his powers automatically, which are assumed in full by the Vice President. Then the Congress calls for a vote, and if they obtain a two-thirds majority, the president is removed.

I believe this is a very likely event, because Trump's illness seems to be progressing faster and faster; the deterioration is not linear but is accelerating.

He falls asleep in meetings, has frenetic activity in the early morning hours, and his lack of restraint has led him to increase acts of personal corruption without worrying about the consequences. And many consequences are piling up.

In short, I believe we are approaching the first time since Richard Nixon that a President of the United States will be stripped of his office before completing his term. That is why I find it indispensable to keep an eye on the second line that could come to power: J. D. Vance and Marco Rubio.

Neither of the two is a true MAGA, and I believe they could be among the first to disown Trump. Vance is the "icebreaker" for the Silicon Valley tech giants; he is someone who made a fortune there himself. Rubio is more of a career politician, ambitious to the core.

What will happen? No one can know. It could even be that Trump regains his sanity and finishes his term, although of all the possibilities, that is the one that seems most improbable to me. In my view, it will worsen and has an expiration date marked; some give him until before September.

The Turmoil in China

It barely appears in the news; this media silence is the strangest thing I’ve seen in my life. No country in the world is darker regarding information than China; everything moves through rumors that no one confirms and disappearances that no one explains, until the issue breaks and some unexpected official information appears.

In the month of January just passed, what must be the largest military purge in Chinese history took place. General Zhang Youxia is missing: Vice Chairman of the Central Military Commission (CMC) and, until recently, considered Xi Jinping's closest ally and personal friend. It seems they are not such good friends anymore.

Additionally, General Liu Zhenli: Chief of the Joint Staff Department. One of the few generals in China with real combat experience.

The Central Military Commission, the pinnacle of the military forces, has been completely decapitated. Of its seven members, only two remain, including Xi Jinping. The Chinese armed forces today have no supreme command.

This is a problem that has been dragging on since 2023, and instead of being resolved, it has grown. Its origin is that the entire military elite—and supposedly the high-ranking officers below them—has been criticizing Xi Jinping for both his political and military leadership.

The political criticism refers to the gigantic economic crisis that has been dragging the country down for years, covered up with propaganda and financial concealment. But what cannot be hidden in this crisis are the bankruptcies and the massive rise in unemployment, nor the enormous problems in the financial and industrial sectors.

They have also criticized Xi for his aggressive foreign policy, fiascos like the "Belt and Road Initiative" (mega-investments in other countries with political objectives), and above all, for the announced goal of "reunification" with Taiwan by 2026.

The military apparently believes it would be madness and that the armed forces are not prepared for it. In any case, with this purge, China's military power has been greatly weakened; purges in the command always weaken armies, much more so if they are massive.

The Turmoil in Russia

If we believe YouTube, Putin is on the verge of collapse and Russia is about to crumble militarily. Much of that is simply lies and exaggerations, propaganda, and fabricated news.

Even so, in these years of war, Russia has been hit hard. Ukraine is today at its moment of greatest danger, but it has shown that militarily it is far superior and will likely be able to continue holding out and causing great damage to the enemy, even without aid from the United States.

Russia is the Stalinist obstinacy of a tyrant who rules a frightened country. Bureaucracy, centralization, corruption, lack of motivation, and lack of ingenuity have them stuck in the same piece of land they seized years ago without being able to advance.

They could even lose Crimea; many things in that war that were considered unthinkable are now being seen. Ukraine remains motivated and has strengthened its war machine. It has better technology, better tactics, and is strengthening its military material industry every day.

That is what has allowed them to maintain the stalemate and even achieve spectacular tactical advantages. For that reason, like never before, Putin is starting to show signs that he could agree to a ceasefire under certain conditions because, unlike Trump, he is not insane. He is just a thug like Hitler.

Above all, the economic situation in Russia is becoming increasingly suffocating. For now, it shows in the big numbers: inflation and deficit; but the day is approaching when they won't be able to pay pensions to widows or salaries to soldiers, factories will start to close, and unemployment will grow.

Everything seems to be moving in that direction. January 2026 has been a pivotal month; everything can change, and perhaps in the future, it will be remembered as we remember January 1933 today. Remember that bad things always come in threes... but so do good things.

This time it could be Trump, Xi, and Putin; hopefully, it will be so, that the saying comes true, and that in the future we remember 2026 as the year we saved ourselves from a major one. Keep an eye on J. D. Vance.

Caligula 2026

 I always thought how great it must have been to live between the 1930s and 50s, through the rise and fall of fascism and World War II. I grew up reading—like an addict—the Reader's Digest selections from those years. What an exciting time! I used to think: nothing like the boring 60s and 70s I was stuck with.

And it turns out that now, as I’m getting closer to kicking the bucket, I’m living in an era just as interesting, or perhaps even more so, with the war between Russia and Ukraine, a possible collapse of China, and the almost certain downfall of the ayatollahs in Iran and the communists in Latin America and their clones: Venezuela, Cuba, Nicaragua, Mexico.

They mocked Fukuyama so much, and yet perhaps we really are approaching the "end of history" after countless steps forward and backward. Not everything happens overnight, though some things do.

The idea that Donald Trump is the new Caligula didn’t come to me from Roman history, but from Albert Camus's play of the same name. I asked Gemini to prepare a summary for me; I’m too lazy to do it because I read it years ago and surely many details have slipped my mind. Anyway, the summary goes like this:

"The play begins with the death of Drusilla, Caligula’s sister and lover. Following her loss, the emperor disappears and returns transformed. He is not merely sad; he has had an existential revelation: 'Men die and they are not happy.'

Realizing that life has no intrinsic meaning and that fate is arbitrary, Caligula decides to become as arbitrary and cruel as fate itself.

The reign of the absurd: Caligula uses his absolute power to prove that nothing has value. If the world is absurd, he will be the most absurd of all:

Absolute freedom: He believes the only way to be free is to exercise total power, without moral limits.

Bloody logic: He begins murdering patricians, confiscating assets, and humiliating his subjects—not out of hatred, but out of cold logic: if nothing matters, killing is the same as giving life.

The quest for the impossible: His greatest desire is 'the moon.' It represents that which humans long for but cannot reach, symbolizing the eternal frustration of our existence.

The ending: The failure of his freedom: Unlike other tyrants, Caligula knows his path will lead to his death.

He allows the conspiracy against him to move forward. In his final moments, he reaches a bitter conclusion: his freedom was not the right kind. By trying to free himself through cruelty, he only managed to isolate himself and destroy others, discovering that 'one cannot destroy everything without destroying oneself.'

Finally, he is assassinated by the conspirators while screaming: 'I’m still alive!', suggesting that the absurd and the human struggle persist."

There is another similar one called "The Tragedy of King Christophe" by Aimé Césaire—I always get them mixed up. It’s about the final days of Henri Christophe, the tyrant and "liberator" of Haiti.

Well, Camus attributes rational and philosophical motivations to Caligula, while Trump probably acts driven by the impulses of his illness, which are stripping away the social inhibitions and restraints that normal people act with. But in either case, the motivation doesn't matter.

Every day I’m seeing an escalation of demented behaviors that are drawing Trump closer to the sacrifice; surely he must have moments of lucidity where he realizes the collapse is approaching, but there is little he can do to avoid it.

The situation unfolding in Minnesota is unprecedented. Now it turns out that the Black Panthers, who were always enemies of the people, traitors to the interests of their own race, are now appearing as vigilantes and defenders of the weak against the lack of control of the ICE people.

It’s not strange that ICE has lost all control and restraint; it’s something that had been brewing since its creation after the attack on the Twin Towers 25 years ago.

The creation of the entire Homeland Security system was just waiting for a fascist madman to appear and seize the opportunity to use it.

Many American friends told me this; with my namesake Tom Wilke, we talked more than 10 years ago about how a new Weimar Republic was being built in the United States and that things were going to end badly: lo and behold.

This has even driven the most lucid people mad. Today I receive dozens of articles from my namesake, overflowing with woke ideology, propaganda for "Socialism of the 21st Century," and garbage like that. I write to him not to send me any more because I’m not interested, but it’s no use: he’s on a roll.

People transition very easily from one extreme of stupidity to the opposite; they are completely incapable of thinking coolly when they are governed by a madman. They say "your madness and then some." And watch out, because over there even the cat has a gun and can carry it.

It is chilling to see the Black Panthers in armored trucks with long guns to face off against the ICE agents; the thing could become unmanageable at any minute and, to be frank, I’d rather be ruled by the Tontons Macoutes of ICE than the Black Panthers.

But in the end, all of this is the consequence of a madman with power; conflicts grow, explode, and then everything returns to its state of equilibrium. It has always been this way, and I believe it always will be.

Meanwhile, those of us who have the immense luck of living in a poor democracy in Latin America can grab a front-row seat and sit back with some popcorn, because the movie keeps getting better every day.

That’s why I told you and I’ll say it again: keep an eye on J.D. Vance, because he could become someone very important any day now, and that could bring a dramatic turn of events.

The bizarre meeting between Trump and Zelensky

I wanted to let a few days pass to see the reactions to the incident before writing my interpretation and my opinions on the matter.

Just like in the previous entry about Trump, I will deal with it in two parts: what I see as the facts, that is things that are not subject to interpretation, and then I will put my opinion, my assumptions and my prejudices.

The facts
In terms of diplomatic uses and customs, nothing like this has ever happened before. I don't remember any meeting between presidents where agreements or disagreements were not previously discussed - in private - and then a joint statement was made to the press.

The normal thing has always been that summits are held to sign something that has already been previously agreed. I can't remember a case in which two presidents have met to "talk" in front of the press in an improvised manner and without any prior agreement.

Another very strange thing was the presence of the vice president of the United States at the meeting, actively participating in the conversation. Never before in the United States has a vice president - whose position is mostly decorative while the president is in office - participated in such a way in a summit.

I think that this role of the vice president says something about Trump's senility, which will become more noticeable as time goes by, but anyway, that is just my opinion. Time will tell.

Finally, Vance's intervention was what caused the meeting to get out of control, as if they were arguing in a bar and in front of the entire press he said a reproach to Zelensky that triggered the dynamic, which nobody wanted. Because up to that point Trump was very gentlemanly.

Anyway Zelensji was also constantly provoking with his words, without letting himself be overwhelmed by Trump or by hostile questions from the press.

Many ordinary people among Trump's lovers will see these things as a "clever strategy" of his, they are not able to realize that the results are what measure the success or failure of a strategy or negotiation.

There was not "strategy" at all. It was is simply an improvised talking that got out of control, both on the part of Trump, Vance and also Zelensky.

Because Mr. Volodymyr is not a guy who gets lost in the fields of meekness, and while Vance was reprimanding him he clearly muttered "cyka" which means "bitch" in Ukrainian. Something that was recorded for everyone to see.

We must remember that Zelensky was not intimidated when he had a 40 km long armoured column on the way to Kiev. Remember that "I don't need a ride, I need more ammunition".

And that while a Spetenatz commando was looking for him in kyiv to kill him, he took a photo in the main square.

In short, the facts can be summed up like this:

Fact 1, the meeting was improvised and without any prior agenda.

Fact 2, Vice President J.D. Vance - who had nothing to do there - provoked Zelensky.

Fact 3, he answered him rudely, Trump came out to defend his official and everything got out of control.

Fact 4, the summit turned into a kind of drunken brawl in a bar.

In my opinion, these are objective, real facts, which can be discussed by Trump lovers who will always look for the fifth leg of the cat to defend their love, but in my opinion they are not subject to discussion.

Now I will move on to my opinions, which could be right or wrong, who knows.

My interpretation
I think the United States obtained nothing. If they wanted to harm Selensky, it would have been much more efficient to cut off all aid and - above all - lift economic sanctions on Russia. That would have been a serious blow to Ukraine!

The summit was not necessary, the United States had nothing to gain and much to lose from this show. The United States is indeed the richest country, and militarily the most powerful, but it is light years away from being "owner of the world."

The true strength of the United States from the post-war period until today has been based on its alliances.

If the United States were the owner of the world, then China, Russia, Iran, North Korea, the Houthis, Hamas, Afghanistan, etc. etc. would be democracies. We are light years away from that, countries in this century are only as strong as their alliances.

The two triggers
I think there are two causes for what happened. The first is that because of his age, Trump must rely unusually on Vice President Vance, Musk and other somewhat sinister types who are slowly taking control of things.

The second trigger of what happened is that Donald Trump has a mistaken idea about himself and overestimates his own capabilities. He is convinced that his presence and his "negotiating skills" are enough to achieve what he wants.

But his performance in international relations says otherwise. Let us remember that his meeting with Kim Jong-Un and this meeting with Selensky have not been successful. They are two failures in a row.

In both cases he achieved nothing, North Korea the day after the useless meeting was carrying out missile tests. Let us remember that this time it was also without an agenda, a kind of reality show that amused everyone but achieved nothing

I have not seen a single government in the world - apart from the three or four Russian stalwarts - that has supported Trump and accused Zelensky, not a single one. On the contrary, the sympathy of the governments is overwhelmingly on the side of Ukraine.

Trump is being blackmailed
Trump's alignment with the Russian government leaves me with no doubt that he is being blackmailed, I see no other logical explanation for him weakening the United States in this way. Time will tell and perhaps later we will see some pathetic porn movie or something like that.

I don't like to play the fortune teller and go around announcing things about the future that no one can predict, and these days almost everyone believes they have a crystal ball and assures us what will happen with great certainty.

But I can say what I think about the things that are happening and the consequences that all this could have. Still, there is a lot of opinion in this and it is useless to discuss it too much, so don't get angry if I don't answer some of those sure predictions. Here we are pure opinion makers, nothing more.

Appendix
I just watched an interview with Trump where he says he doesn't believe he called Zelensky a dictator, "did I said that? I can't believe I said that." Well, he did say it, albeit obliquely, but now he's starting to do the Michael Jackson step backwards.

In that same interview he added that he "has great appreciation" for Vladimir Putin and also for Zelensky! 

All this points to what I thought from the beginning: it's a situation that neither Trump nor Zelensky wanted, it was provoked by Vance's blunder and both Trump and Zelensky let themselves be dragged along.

Now both Trump and Zelensky are putting cold cloths on the matter. It's a lesson in how international relations should not be handled.

Especially seeing the violent reaction of Europe in favor of Ukraine. Someone more or less ignorant could think that Europe has nothing to do with this and that the United States can do what it wants without considering them.

He is wrong, the majority of US military power is in its bases in Europe, which could easily be expelled if things get ugly.

In that case, the United States would be left without arms and its ability to act in the world would be greatly weakened.

In the end, things are as they are. If Trump now cuts off all aid to Ukraine,he would be left without a single partner in Europe, we can already see this from the reaction. If the European governments had joined Trump, then this meeting would have made sense, but we already saw what happened.

Anyway, Trump came out of a reality show and from what he is doing it seems that he has turned the White House into a reality show, we will see how all this ends.

Donald Trump's gamble

My opinion on Trump? To me, Donald Trump is a clown, an idiot and a moron, having such strong prejudices I should not open my mouth about how he is handling the Ukraine affair.

However, I have to admit that I may be wrong sometimes. That is why I will try to write this entry leaving aside my personal opinions and trying to interpret the facts - those that I know at least - in an impartial way and with a cool head.

It turns out that even the most stupid person can make good decisions, there are many successful people with the IQ of a fly, that is a reality.

In my view, Trump has made some excellent decisions, such as disassociating the United States from the WHO, from the Paris Pact and blacklisting several other organizations that have done so much harm.

Neutrality in the United States
Trump's attitude towards the war between Ukraine and Russia is due his campaign promise and has as its antecedent the Monroe Doctrine of 1823.

There was a resurgence of neutralism in 1920 when the United States Senate voted against joining the League of Nations, in 1935 a Neutrality Act was passed. All this was vigorously pushed by the Republican Party.

The United States did not enter the Second World War - which began in 1939 - until December 1941, that is, it left Europe fighting alone against Hitler for almost three years. Even Nazi ideas achieved a certain popularity in that country.

Until they woke up with Pearl Harbor, from then until today the foreign policy of the United States ceased to be neutral and as the power of the country grew, it became increasingly involved in wars and external alliances.

Neutrality without alliances
The tradition of neutrality implies that the country should be closed to the problems of other countries, based especially on the sovereign principle of non-intervention in the internal affairs of other countries.

Neutrality includes an autarchic idea of ​​the country, closed in on its own problems and not getting involved in those of other countries.

As you can see, this doctrine of neutrality goes against the idea of ​​alliances and international cooperation.

Both are things that humanity has done throughout history as we know it: treaties of mutual defense and economic cooperation cannot exist in a neutral country. Another thing is neutrality "à la Switzerland" which, although it can take sides, does not intervene in wars abroad. Of course, that is much more theoretical and unreal.

When the United States was isolationist, in the times of the Monroe Doctrine, it was a second or third-rate country. We must not forget when in 1885 they tried to annex Panama and Chile sent the protected cruiser "Esmeralda" there; they had to run away.

That was the price of isolationism, and since that incident they have started to build up the huge fleet they now have and have started to seek alliances rather than shutting themselves in.

The politics of alliances
I don't think it's a coincidence that since the post-war period, when the many economic and military alliances of the United States were consolidated, it became the richest and most powerful country in the world.

The wealth of the United States has skyrocketed as a result of things like the Bretton Woods agreements, the Marshall Plan in Europe, the reconstruction of Japan and South Korea, the Alliance for Progress and the consolidation of military power thanks to the Cold War.

How strong is the United States on its own?
I think that's the million-dollar question. Today they are the richest and most powerful country, but that's mainly due to their alliances. The United States only got richer after the post-war period.

Suppose they isolate themselves now, will they retain the power they have today? I think it's doubtful. Today, against China, a much weaker but corrupt and bold country, they have already lost the war for manufacturing, at least until China collapses.

And when that happens, there will be a huge economic mega-earthquake, it is inevitable, the only way for the United States to survive that is to keep its allies and be able to articulate common policies.

What is Trump trying to do?
I heard analysts saying that the negotiation between Trump and Putin was a revival of the Munich Pact, when Germany, Italy, Great Britain and France agreed to force Czechoslovakia to give up the Sudetenland to avoid war. Czechoslovakia was not invited to that pact either, as Ukraine is not now.

I think that this time there are important differences. The main one is that Trump intends to leave Europe out as well, despite the fact that any agreement reached would need to have European cooperation and approval.

What would happen if Trump reaches any agreement with Putin and the European countries simply send him to hell? Trump has no way to force them, not even with all his armed forces could he do it.

The only thing left for him would be a nuclear attack, because a conventional attack is unfeasible. And here we have another thing: would the US electorate continue to support Trump after something like that?

Donald Trump's real power
Because the United States is not Russia or North Korea and Trump's power is far from being absolute as Putin's is in Russia for example.

If this move goes wrong, the midterm elections could send his majorities to hell. The system in the United States is too complex to be manipulated at the whim of a single person and the Americans cannot bear the punishment with the resignation of the Russians.

Anything he intends to do or achieve, he will need the agreement and cooperation of many people, institutions and countries. Trump has often overestimated himself, that seems to be his weak point, he is convinced that he has a longer tool than the rule shows when measuring himself.

And the fact is that many times conviction is not enough and language does not create reality. When he met with the North Korean guy, he thought he would deal a mortal blow to China and gain a new ally, but the reality was different, disappointing.

When he said he would end the war in Ukraine in 24 hours, I think he said it sincerely, he must have also believed himself capable of that, but he couldn't either. And it wouldn't be strange if this gamble of meeting Putin without inviting Ukraine were as successful as his meeting with Kim Jon Un.

A trap for Russia?
I also heard theory that all this could be a trap to seduce Putin into sitting at a negotiating table and once there, start to squeeze his neck. I don't know, it seems like a crazy idea to me, of course anything can happen in the unknown dimension.

What I think could happen
I see four possible scenarios. The first is that Trump's dreams come true and he manages to arrange with Putin an advantageous deal for the Russians so that they win at the table what they couldn't win in the trenches.

For this to happen, two conditions would need to be met: Ukraine accepts it, accepts the dismantling of its now powerful Armed Forces, and agrees to end its attacks on Russia. The other condition is that Europe accepts all this and stops helping Ukraine militarily.

I see this as the most unlikely of events, especially because of the security danger it implies for other European countries.

Another alternative is that Trump reaches some bases in agreement with Putin but neither Ukraine nor Europe accept them, and they continue fighting as if nothing happened, this time without the help of the United States Government.

We must not forget that Ukraine was fighting without supplies from that country due to bureaucratic problems for several months. This would also imply that European support would be redoubled, and probably from other countries. The cards of military alliances would be shuffled differently.

A third alternative would be that it is indeed a twisted and extraordinarily clever maneuver by Trump to put Russia in a trap and force them to submit. That is something that I also see as very unlikely.

The fourth possibility is that the talks come to nothing and Trump changes his mind and starts to massively support Russia, this time without any red lines or restrictions, to leave them so weakened that it makes Putin's fall more likely.

Anyway, I'm tired of trying to remain impartial and I'm going to tell you what I really believe. In my opinion, this inexplicable attitude of Trump throwing himself into Putin's arms and saving his skin when he is at his weakest moment has a very probable explanation for me.

I think the Russians are blackmailing him. That fits with Putin's style and Trump's style, let's remember that Trump has been on the verge of going to jail several times, he has been accused of sexual abuse more than once, and he is also stupid and reckless.

How could Putin not bring him down when Trump went to Moscow and make a great movie about him in the style of the old and reliable KGB? The guy is a fool and lustful, I think they made him fall like a little boy and that would explain everything-

Translated with AI 2

Translating with AI

So, you want to be an Entrepeneur?

Few days ago I met a friend who is starting his homebrew business and he offered to me some samples to try, so we organized a micro-summit with him; with Jorge del Carpio who is an Entrepeneur from Fibras Andinas; with Tom McDonnell and me, the first two was real Entrepreneurs and the last two was virtual or would-be entrepeneurs.

With Jorge we had a difference on definitions of the Spanish word “emprendedor”. To me the main difference is the origin of capital, when I started to hear about "emprendedores" some 10 years ago, was refered to Amazon, Google and this kind of business. Any model of emprendedores I know are related to venture capital, angel investors or state funded. In the first two cases the entrepreneur accept capitalists as partners, and when is funded by the government is via a grant (gift) or a soft loan.

Those who risk their own money -in my opinion- are rather “empresarios” and in the early stage they are micro-empresarios. Jorge´s definition of emprendedor is for any entrepeneur the first stage of the business, no matter where the money comes. Well, I guess that the distintion of terms it matter more in Spanish than English.

To risk money from others gives the incentive to take more risk compared with bet your own money, but –as lose money from others is less painfull than lose your own- the incentive to do things right also decreases. Usually is very difficult to find venture capitalists unless your business idea is extraordinary, and the new partners probably will limit your freedom to take crucial desicions.

The advantage of working with your own money is the startegic independence, full control and no need to share the profits, the obvious disadvantage is the limited budget with wich most entrepreneurs start their own business.

It depends on personal preference to work with their own money or look for external capital, in my case and with my personality, I could not share the control of my business nor depend on someone for funding. I prefer to take the risks and responsibilities by myself and take all the prize if I do well. That limits me to businesses that do not require capital to leave, but this is my limitation, many others may not have that problem.

But I'm giving a lot of thought and ado. So you wanna be an entrepreneur? Well, here are some of my own ideas:

1. - Do something you're passionate about, it's not for discouraging you, but roughly 8 out of 10 businesses fail in the first 3 years (been there, done that), early mortality is so high that if someone gets to build a business just to make money is likely to suffer and pass pretty lousy. For new business, the ideal is build something you would do for free, turn your hobby into a business is one of the best ways of starting a business, because in the case –very likely- to do poorly, at least you had fun in the process.

2. - Do not make plans, planning is valuable for accountants and bankers when you borrow. Investment projects are usually financial ficction, estimates are arbitrary and based on wishes more than facts (there are no facts when you start) and last thing you need in your newborn company is planning (been there, done that). In the beginning everything is uncertain, and if you seek for certainties better look for a salaried job. Once the company is well established and running smooth, planning and order are indispensable: lot of businesses –initially successful- crumble due an improvised administration as they grew. Moreover potentially good companies never take off because they are dedicated to planning and lowering the uncertainty in a stage when to persevere and take risk is prioritary. There is a time to be crazy and a time to be ordained.

3. - Do not think how good or bad the business is, that should be the last thing you should be interested. Just think if you're interested, if you like it, if is fun for you an enjoyable, listen to your gut. Any excellent business is bad when you think about cold, because the gains comes always from what is improbable. He who starts a business based in data is doomed. Nothing is more common than the guy who follows trends: see what is booming and follow. If sell hot dogs it booming he starts his own hot dog business (been there, done that), that's what they teach in schools and universities, but it is utterly stupid. To create good businesses you have to go against trend, and if your business performs well, you must be prepared for someone with more capital or better skills tying you out of the market.

4.-Beware of consultants, management consultants are -usually- unemployed professionals, mediocre professors or broken entrepeneur (been there, done that, I got 3 of 3). Nobody can give you a prescription for success, if anyone would know it, he would build their own business and not tell anyone about it. Follow your instincts and be prepared to go wrong because business is betting. The probability that you made a big business is similar to the probability that you win the lottery, maybe less. The probability that your business give you for eat in a sustainable manner over time is similar to the probability that you win a raffle, maybe less. But if you set something you like, you'll just have a good time even if you go wrong. If you are obsessed with finantial success, take care not pay a disproportionate price, before you died you could regret it.

I really love the idea of micro entrepeunership, and my dream to “make money doing nothing” can be better undestood as make money having fun. Many years ago I thought that electronics was fun; then I thought that computer programming was super; then it occurred to me that with the trade I could make money without doing anything, and so on. I have gone through many experiments (some unprintable) and many failures, but I always have fun. What I have not won in cash I have earned in life. So in the end I'm going to die, and all that will matter is whether or not I lived happy.

For example Internet is my last adventure. I have spent almost 10 years writing an entry every day in my blog, I have posted a bunch of sites about all kinds of nonsense, and finally it occurred to me that online education could be entertaining, I find a way to got the required equipment and, as one thing leads to another - I happened to think in convert some issues from my blog to video format. In the almost 10 years I have not won a single cent with that, but I had made lot of friends and I earned life in abundance. If I ever get to make money with this, for example with touristic videos or online courses, will be great, more profit yet, but I already got what I wished, I'm already more than paid. Well, that would be my advice, I do not have anything more to say about this, I think.

Arica without makeup, videos

Not perfect, but I´m working on it...

If you want to stay update with my videos, check my Youtube List Arica without Makeup.

Arica is the Chilean hub for transgenic research

During 1995, a branch of Dupont Company, arrived to Azapa Valley, in Arica, and started Their First trials on isolated crossing blocks for seed research. It was a very low profile operation followed in 2003 by Maraseed, who was the first to Establish formally in the Valley. Since 2007 the operations boomed, and today all the seed producers in Chile are in Arica, either with their own operations or with third parties.

Arica is not a producer for end users (farmers), but it is where research is done and new seeds genetically modified are tested and developed. The industry of seed research in Arica has several advantages such as the very stable and warm climate, allowing planting any day of the year and obtain more than two crops yearly. This is a sound advantage for the same reason as other studies uses flies who reproduces several generations in a short time: it may shorten the development of new products in one year or more with lot of time and cost reduction.

Arica is no unique as location for this industry, there are a few other places in the world competing such as certain areas in Hawaii and Panama, where you can also get more than one harvest per year. There are also other advantages in our valleys, but probably the weather is the essential one. The Valley of Azapa fields are used to test the behavior of crops, and to multiply crossed seeds. Research is made with soybean, corn, sunflower, sweet corn, canola, vegetables and flowers. The new varieties of flower seeds -despite they are small in volume- are the most profitable and mostly exported to Holland.

In Chile the production of genetically modified foods is forbidden, but not so the production of seeds for export. Anyway corn, soybeans and many other imported food are genetically modified since decades. Krsihna Devotees proudly sell their soy burgers as "pure organic" but they dont know that most of soy consumed in the world is genetically modified. Transgenic products are established in the base of the food chain all over the world, and prohibitions are merely symbolic or for propaganda purposes.

What is the economic impact of seed labs in Arica? The direct impact is not much: 1179 jobs average in a year, with a salary around a thousand dollars a month. Good but not much in the local economy. There is however, some social benefit because most of workforce is unskilled and they are trained in the same companies, obtaining a formal job, unlike of illegal inmigrants that small farmers use to hire.

But the strategic importance is much bigger. Our valleys, with scarce water and limited arable land are very vulnerable with the exploit of small farmers, they operate at a very small scale with low yield and high resource consumption. Small farmers employ informal workers from Peru and Bolivia, they consume water often irrationaly and/or illegaly and have deteriorated soils and underground reservoirs with the undiscriminated use of pesticides and fertilizers. The uncontrolled grown of those small operations menaces the supply of tap water to the city and press to the government for subsidy incredible expensive irrigation systems.

The economic rationality advices that scarce resources must be employed in production of goods with high value, seed research is a high-tech activity who add lot of value. The yield per hectarea and per cubic meter of water used is much bigger, more efficient and less poluting that the small scale farming. To create improved species of seeds is the best possible destination for the valley today and in the future.

In my view the short term impact in local economy is not big deal, but the strategig, long term effects, can be very important, swithching from many small farmers, often inneficient and enviromentally unconcious to a specialized hi-tech industry. The role of government here is watch the operation compilance with enviromental and legal framework, and avoid to subsidy big companies, so as massively do with small farmers: there are no better way to kill the competitivness of an industry than give them subsidies. Only self sustainable business may exist in the valley, based in comparative advantages -and not in taxpayer money- to make profit.

Note: most of the data of this article was obtained from E. Cajio´s "Estudio sobre la influencia económica y social de las semilleras en el Valle de Azapa" (Universidad de Tarapaca, 2013).

Schools in Chile: an alternative to the voucher system

In Chile during the eighties, the military rule decided decentralizing all the primary and secondary schools system, By those date most of them was managed under direct supervision of the Ministry of Education, with a minority group of paid elite schools and also some who was free with subsidy from government most of them was owned by the Catholic Church and masonry lodges.

The reform quited administrative responsibilities from Ministry of Education and passed to corporations: the schools formerly administrated by Ministry of Education was transfered to municipalities and the private free to corporations created by their former owners. Nowadays in Chile exist 3 different class of schools: one who depends on municipal corporations and is government owned, others depend on private corporations and are totally or partially free. The third group are elite: private and paid and are very few.

Municipal and private corporations received a direct subvention from government in a per-alum basis. Ministry of Education supervises the attendance of students and pay a certain amount for every student. This subvention allow to the owner of the corporation (who may be for profit) make good money as return of investment or re invest in the same or more schools (the most usual). There are lot of competing schools looking for students and offering them extra services, academies, etc.

Municipal corporations finances with money from local government for operation, who receives the subvention and usually receives big amount of money from national government for their investments. They are very politicized, riots are frequent and quality of education is not very good (with few exceptions) due the privileges of teachers, Private corporations finances as any business, with the subvention is enough to cover operation costs and the investments required. It is easy to distinguish municipal schools from private corporations owned: municipal are mostly ugly, bad maintenance and full of graffitis. Private are nice and clean.

When the system started the private owned with subvention where a tiny percentage, now they exceed the 60 percent and municipality has serious problems to keep working, actually many of them had been obliged to close or merge because the lack of students. There are a fierce opposition from many politics, intellectuals, economist and educators, so as unions of teachers from government, but the process in Chile seems irreversible, because even most of municipal teachers sent their kids to private subsided schools. There are many problems yet with this supply side subsidy, who probably may be solved with a system of vouchers who subsidy to the demand, but today it seems politically unfeasible.

What people do for a living in Arica?

This is a frequent answer from people interested to move from abroad, how can I make a living here?. I recently made a research of economic sectors and employement and, based in data of Instituto Nacional de Estadísticas (INE) obtained the following rank of working posts for economic activity:

1-Commerce and Car Repairment 13630 people
2-Agriculture 9260
3-Schools/Universities 6980
4-Minning 6880
5-Manufacturing industry 6490
6-Transport, storage, communications 6090
7-Government/Defense 5980
8-Building 4390
9-Hotels/Restaurants 3910
10-Real Estate/Others 3500

The unemployment rate for July-September was 4.4%, so in Arica there is full employment.

Commerce, hotels and restaurants account for almost 40% of the economic activity in the city. People who work in agriculture are mostly temporary Peruvian and Bolivian workers, many of them undocumented, they work for very low wages, except in the research laboratories for seed production (10 companies in Arica) who hire formally.

There are no minning in Arica and the 6880 people employed in minning have their jobs outside (Iquique, Antofagasta) but have their home and live in Arica during their spare time. There are 3 universities and some 60 elementary and high schools where 6980 people work.

Arica is also the city with more formal micro bussines relatively in Chile: 17720 people are self employed and 51470 have a regular job with a boss in a company. There are 3660 owners of business who employ people.

The minimun wage is about US$ 388 and is the regular for unskilled workers. More specialized jobs rage from 625 to 1040 for blue collar or clerks. Professional or critical jobs start about 1250 for entry level to some 1875 or up. Wages in government are higher by a fctos of 30%-40%

That is -more or less- how people make a living here in Arica.

Everything but money

I read it many years ago at Reader´s Digest. It is the story -autobiography- of a kid raised in a jew´s neighborhood of New York City in the twenties -when most of jews in America was still poor- I dont remember detais of the story but I never forgot the lead "in those years in which we had everyting but money".

While I read, it reminded my own chilhood, into a split family -it was just me and mom- and during many years we had also everything but money. Despite we was falling every year more deep in poverty she never lost the enthusiasm, unconcern about the future and good humor. "Well, God will provide us" she used to say, but she was an atheist and God rarely provided us, except for just enough to keep our mounths out of the water.

Anyway between 4 to 13 years old it was the greatest time of my life, full of odd situations and adventures of any kind. My mother never accepted that we was poor, she lived instead as a queen in the exile, enjoying the pintoresque faces of the poverty.

And that is why I grew with no fear to live without money, just doing what I wish and hesitant to make sacrifices or surrends to obtain "security". I am not sure if this is good or not but to me it works quite well, I have never made fortune but my life is reasonably happy, relaxed and i got a lot of adventures to remember. The fear of poverty is a fuel that I have not at all. I try to live with small material resources, avoid sacrifices, and dont worry about the future.

What the future will bring me? Well, death for sure. Not even the frozed Walt Disney was able to avoid it, so I try to spend the time who is left to me, same as when I was a kid, with everything but money and disregard about the future. And if some day I found a pot full of gold coins in my yard... well, I guess I will not get mad, life oblied us to make sacrifices, sometimes.

Musings on water economics: the problem

Biblic manna was probably water

Some time ago I wrote that the manna was talking about the Bible it probably was water. Water is actually the only food that falls from the sky to us. It is such an important food, that we can live more than a month without trying other meals, but not more than a week without water.

Many important cities had grown besides a river, the first communities settled in such places due the easy availability of water: as London on the Thames, Rome on Tiber, Paris along the Seine, New York by the Hudson, Santiago on Mapocho and Lima along Rimac, among many others.

Water is not scarce

The definition of economics is commonly related to scarcity, Samuelson said something like "Economics is how societies use scarce resources to produce valuable commodities and how to distribute it.". This is the main difficulty of water economics: for much of the history water has been an economy of abundance, only at special times, and specific places, water has actually been a scarce resource.

It is estimated that only 2.5% of the world's water is fresh, and just 0.4% is available for human consumption, the rest is locked up in ice caps. But this small percentage is more than enough for the needs of many times more people than currently exists. Although the percentage is relatively small, this is still a very abundant resource because water is renewable by nature. If we get to use nuclear technology to desalinate by example, we can consider water as an infinite resource for all practical purposes.

What there is not, sometimes, is free water

Although the water is abundant, in some specific regions it is scarce, the water is abundant but with unequal distribution in different parts of the earth. There are places where desertification has dried territories, and still remains people living there, as in northern Africa. There exists a cost to bring water from the places where it abounds to those where it is scarce. In places with large mining operations as northern Chile, water is also expensive because mining use lots of water and may be profitable enough to pay high prices for it.

From the 0.4% of available fresh water, approximately 65% is used for agricultural irrigation, 27% for industrial or mining and 8% for human consumption of drinking water. In the chain of water some links are weaker than others, the weakest link is agriculture because it requires huge amounts of water and often it is not profitable enough to pay high prices, in fact, usually does not pay a single penny for water to irrigate crops occupied. So in times of drought, agriculture is the first sector in busting.

Much stronger is mining, with an economic return sufficient to pay high prices for water, even expensive desalination plants can be instaled, so as recycling, etc. thus they are in a better position than farmers. And the strongest step is drinking water domestic distribution: for reasons of survival all government ensures that this sector is the first to have guaranteed access.

Where water is abundant there is no need of any water economy, because is not worth a single penny in those places the water is still a godsend as in biblical times. But there are other places because of drought or explosive population increase, water becomes scarce and purchase price. In those places where the need is water economy and water use rights, because it becomes a scarce resource.

Scarce water is a local issue

We must understand then that the water economy is a local, not global, it exists only where water has become scarce for some anomaly. Arica is an excellent example: population grew from 20,000 in 1958 to about 160,000 in 1988, which brought an increase in irrigated acres Azapa and Lluta, with the particularity that is one of the very few places the world where never rains, so water availability is subject to rain in far away regions. It is a classic and one of the most interesting places in the world to study the economics of water. Too bad nobody seems to be interested in the subject here.

How to cut the tart

In these cases there is the basic economic problem: how to allocate a scarce resource. There are many alternatives ranging from arbitrary allocation of quotas by any state agency to considering water as an economic good like any other, appropriated by anyone and freely traded in the market. Apart from any other consideration the economical solution to this problem is to split the action so that their use is the most efficient of all possible, that is to benefit the greatest number of people. So is raising the issue and missing now reviewing alternative solutions.

Living in the border

Arica has had bad press. It often appears in the national news as an example of economic depression, or due to a corruption scandal, or offenses related to smuggling or drug trafficking. Arica is also talk from time to time by the mega tsunami that can devastate the city at any time.

Sometimes a bad reputation is a good thing, perhaps because of that Arica population has remained stable at around 180,000 inhabitants in the last 20 years, which can be seen as a tragedy for those who believe in economies of scale as key to prosperity, but is very close to what Schumacher, in his book "Small is Beautiful", considered the perfect size for a city at human scale.

Arica is undoubtedly one of the weirdest cities of Chile, in just over an hour away and paying $ 4 -the same cost as a local taxi into the city- there are buses to Tacna in Peru, because the border is just 30 kilometers away. You can go to Peru, where nearly everything is cheaper, lunch, buy liquor and cigarettes without tax and return, all in a few hours.

The city is small enough to move on foot everywhere. They work the same amount of hours as the rest of Chile but differently distributed. In summer, many clerks or salespeople go to their jobs with a bathing suit under their regular suits or dresses. At 1:00 P.M. everything is closed and people are going to lunch at his house or go to the beach until 3:30 PM, then they dress again and return to work. From 1:00 P.M. to 4:00 P.M. Arica is like a ghost town: it´s nap time. In contrast, everything is open at least up 9:00 PM.

But not all is wine and roses. Many people hate any kind of work and effort, they are not too interested in doing things right but to make it easy. It is rare to find workaholics willing to make money here. Everyone seems to be more or less satisfied with their current situation. Money is not a strong incentive here so things seldom change. Arica may be quite boring and frozen in time.

As the population has remained stable for many years, most people knows who is who. Social differences are few because there schools and neighborhoods are not clearly segregated: for the same generation, whealty and poor people has been often mate in the school or university. The most ambitious or social climbers usually migrate to Santiago or other larger cities.

Arica is very particular, as a border town is both a Chilean and a little bit Peruvian. It is not a city for all kinds of people: those who are ambitious, who like speed or make things happen, will live in despair in Arica, where everything moves at geological speed. But those seeking a relaxed lifestyle in a boring place with perfect weather, Arica may be a perfect place to live.

The discordy´s mall

(Published in the printed version of ILC NEws Weekly, April 2012)

The mall of the city of Castro, on Chiloe Island, generated an ongoing controversy in the social networks. This bring me back to the my years living in Ancud and Castro, in the seventies, where I spent four amazing years of growth, in my teens.

The photograph that circulated on the Internet is misleading; it seems to be a beautiful town full of nice traditional houses, crushed under a huge mass of concrete that has no relation with the surrounding landscape. Many have cried out in indignation, Twitter has fuelled the fire, as usually happens, with ad-hoc experts in architecture, chilote heritage advocates and arbiters of good taste.

Well, turns out to Castro, I see no local opposition to the mall, and most of those who criticize or have never set foot in the city or just keep memories of a vacation spent in one of the few sunny days that occur in that area.

Chiloe is famous for myths and legends, not just traditional mythology as el trauco, la Pincoya and other fantastic creatures, but chilotes has continued developing an urban mythology, contemporary, much wider and accepted that the traditional mythology.

This mythology has successfully sold the idea of my beloved island as a typical place, with two picturesque towns and hundreds of beautiful villages amid beautiful landscapes where friendliest people in the world live in complete happiness and harmony with nature.

Pure myth: Ancud and Castro are small cities, not beauty nor picturesque, which were destroyed during the big earthquake of the sixties and from time to time there are great fires that burn whole blocks of these tepa-wooden houses. The people reconstruct them as best they can, which result into cityscape that is poor and a bit quirky.

There is a picturesque town that is Chonchi, the people of the three floors. All others are quite poor tiny villages where everyone has done their home as good as they can, as in Ancud and Castro, with the result that there are places that could hardly be described as quaint.

They're beautiful landscapes? Yes, there are many, like a sunset on the bay located on the south of the city of Castro, there is a hostel where you can see wonderful landscape. Or the sight from Fuerte San Antonio in Ancud. Or the sunset in front of the volcanoes in the Bay Quellón: Tronador, Puntiagudo, Corcovado, Melimollo, when the sun sets at about 10 pm in summer.

But the beautiful landscape has its B side, hundreds of acres logged or burned, in one of the few places where it is native forest. and especially the rain 9 or 10 months in a mouse-colored ceiling that throws buckets of water over your head, thunder and lightning, with a howling wind which prevent to keeps your nose out into the street. The smell of wet dog from Ancud still haunts to me.

People are there as elsewhere, good, normal or bad, but they are usually hard as rocks and almost as violent as the nature in which they live. I met amazing people there who where tremendously generous, but I hardly remember one kind or polite. Above all Chilotes are storytellers, fed by legends from their great-grandparents themselves have created the modern legends about the idyllic island customs.

Well, now fell into their own story. When at last a mall is build in Castro, then appeared the defenders of the environment and heritage of humanity, forgetting that the churches are –not the cities- the famous heritage. The city has no unit or urban beauty, in the place where they are building the mall, it probably will be the greatest architectural contribution of the neighbourhood.

I lived in that neighbourhood and we always laughed with my mom for the extravagant design of the houses "do it yourself," I see in the pictures is opposite to the feria, which is a ugly set of sheds.

A mall in Castro will be a great contribution to Chilotes, at least nine of the twelve months of the year it rains and you can not poke your nose or on the street without getting soaked, I have no doubt that the mall will improve the quality of life of people, especially young people who have nothing to do for much of the year. In my day we went to the bar and get drunk every day. Whish they build one one mall in Quellón and Ancud also.

The mall concept was invented to make a kind of square indoor, where one can spend hours without leaving not only shopping but eating, drinking or watching a movie. The idea is specially suited for cities of Chiloé, where most of the year can not do anything outdoors.

The myth of the tourism potential in Chiloé is not consistent with reality, in which much of the year it rains heavy, the idea of the mall seems particularly good where people do not have damn thing to do all day. Planning gurus have said that they would have built on the outskirts of the city "not to destroy the unity of the environment", however most of the people there do not use car, a mall should be at downtown or somewhere where can be reached on foot.

I read today on the plane that crashed travelling from Melinka to Chiloe Island, resulting in death for the pilot Richard Heim and his passengers. I had friends in the seventies who were sailors and risked their life in every trip through the inner gulfs. I left the island some 40 years ago and Chilotes continue creating myths and captains are still die in the channels. People are hard in Chiloé because life is also too hard. Don´t mess with them, if they have no problem with the mall we have no right to interfere.

Minning and water

(Published in the online edition of I Love Chile)

In the seventies, President Allende used to say that "Cooper is the wage of Chile". Today mining is still the blood of the Chilean economy. From the 83 billion dollars exported by Chile in 2011, 53 billion correspond to the mining. This year Antofagasta will receive 4.5 billion investment in mining projects. Most of the mining activity is concentrated in regions of Tarapaca and Antofagasta wich are one of the driest areas of the world. As mining requires a considerable amount of water to operate, many problems have arisen.

Unlike in southern Chile, where water is abundant and has practically no economic value, in the north the agriculture, industry and drinking water are competing for access to it. The lack of a clear strategy of development to every region makes this competition turn into conflicts that may become violent.

This is what is happening in southern Peru, where the conflict between mining, agriculture and drinking water has already turned into a war over water, involving politics and the economy. In Peru the situation is worse than in Chile because the water market is regulated quite discretionally by the Government. Farmers claims for preferred water supply to have their crops. These crops are usually inefficient, both technically and economically, because require lots of water for a starving economy.

How to distribute the water when it is scarce? Economy say that if a good is scarce, its price should rise to reach the point where supply and demand meets. For water economy this is, most of times, politically infeasible. In rural areas where farmers have ancestral rights over water, they demand to the Government to grant them more and more. In a way the farmers consider theirself as "the legitimate owners" of all the water they can get.

In Chile, Copiapo had this conflict, farmers technically advanced and profitable, increased their crops at a point that now the water resources are collapsed, which also threatens to large mining investments and even drinking water. In Antofagasta tap water users have been hardest hit, the Government installed a million dollars desalination plant, and they have to pay huge bills for poor quality water.

In Arica, where I live, there are national parks and protected areas that have prevented big mining operations, but there is strong local and external pressure -even from the Government- to remove these protections, at least partially, and install large-scale mining in the region. That would hurt all efforts to develop sustainable tourism, which is one of the main regional economic activity today.

How to allocate the water in places where it is scarce resource? It is not a simple problem, specially in a country with a very dry territory and conflicting users. There are many economic, political and social stakeholders, and a myriad of simple answers, most of them false simplification of a very complex issue. The only certainty is that the answer must be based on fine tunned technical studies, and the general economic principles that have brought prosperity to the country in the last 35 years, must be respected. Otherwise a conflict similar to South Peru is expected for our country.

Tourism in South America: six charts

Charts are a convenient way to ilustrate a point. I have been researching on tourism in my hometown, Arica, during some years and I want to show you some facts on tourism in Latin America condensed in six charts who -I think- talk better than a thousand words. Here I go:

First, let´s see how many tourist receive every country in South America (Guyanas and Surinam are excluded by their small share):

As we see, for further analysis we can eliminate also Venezuela, Bolivia and Paraguay because their small market share. Now, let´s see again, but as how much million dollars they have received from tourism:
¿Can you see it is not the same? Peru and Colombia receive more money than Chile despite they receive less tourists. This is explained by the origin of their tourists: Chile receive more visitors from the neighbor countries and those spend less, let´s see the media spend of tourist as their origin:

The lower spend of neighbor visitors is -at certain extent- compensated by their higher amount, that is way the income from tourism in Chile in % per origin of visitors is as follow:
As at the end of the day our interest is how much US$ instead ahow many visitors, it is clear that a good strategy may concentrate in improve the market share of tourists from Europe, USA, and Asia, which explain why Peru with less tourists receive more incomes. This not implies to forbid or desincentivate tourism from neighbor countries but focus the investments in the most profitable segments. If we divide the US$/tourist :
¡Chile appears in the last place!. Now, as we Chileans love rankings, the World Tourist Organization from the United Nations compiles the Touristic Competitivity Ranking based in several indicators and the results are (the lower the better):
We can note that it is not a predictive index, except in the case of Brazil who is more or less obvious. Chile, the last in US$/tourist here apprears in 3rd place, the ranking shows no correlation with tourist arrived neither with incomes.

From those six Simple graphics we can arrive to some conclusions:

1.- Some countries, due political reasons (Venezuela, Bolivia) o due their small size (Paraguay, Surinam, Guyana, Guyana Francesa) are practically out of business.

2.- Brazil and Argentina are leaders in South America, both in number of visitors as in US$ received. Those countries has a mix of vacation tourists (Mar del Plata, Rio de Janeiro) with adventurer travellers (Patagonia, Pantanal). Vacational tourism is massive and requires huge investments. The leadership is explained by the size of the economies and the abundance of natural resources and infraestructure.

3.- Peru is doing fine in tourism, probably has the best relative performance due a good strategy and the important resource of Cusco and Macchu Pichhu. Their tourism is aimed to adventurer travellers, not massive, requires comparatively small investments and the small volume make it quite sutainable. Colombia and Ecuadorare are starting with a similar strategy in the last years.

4.- Chile has a low cost strategy: massive tourism oriented to neighbor countries, wich produces lower incomes despite the comparatively higher volume of visitros. This is due a mistaken strategy, based in the model of vacational tourism following the OCDE strategies, this explain why despite the poor results Chile ranks high in competitivity index: we are successfuly implementing the wrong polities.

A final figure: for those who doubt on the importance of tourism as economic activity, in the world tourism is the fourth source of external income for countries preceded by fuels, chemical products and cars exportations. ¿And what about Chile? Incomes from tourism was US$ 1.978 millions, wich places in 5th place after minning, fruits, cellulose and salmon exports.

Classist Chileans

(Published in the online edition of I Love Chile)

Some time ago, talking with a friend -Chilean like me- about a gringo we met, he told me "he appears to be a lower class”. Well, I guess that "high class" in America is a status reserved to celebrities, oil moguls and people like that. All others are working class and if you're a plumber, electrician or professor at a university doesn´t make big difference, unless you are a criminal or a poor inmigrant.

In Chile is a bit different because your job determines sharply your social status. Some jobs are less “worthy” than others: a sergeant “worth less” than an elementary teacher. An elementary teacher “is” less than a dentist or an engineer, and so on. At the top of our social pyramid are the politicians, wealthy heirs, and, in general, all those who make lots of money doing nothing: those are our non plus ultra.

Jobs related with cleaning or serve are considered unworthy in Chile. That explain why our quality of service is so bad: we hate to serve, jobs as waiters or salespeople are considered socially inferior and underpaid. It is not just funny but quite Freudian.

Formal education in Chile is mostly a matter of status: a college degree has more value as a badge of status than as a proof of competence, no matter how great engineer you are, the important is if you graduated from an expensive university, which implies that you are coming from a “good family” and therefore trustworthy.

Even the most prominent left-wing politicians in Chile are the ones that come from "good families" (note the language again, in Chile “good” families’ means “rich” people). However, most of people in Chile is not class conscious, our classism is unconscious and automatic, most of Chileans consider ourselves as “middle class”, some more “middle” than others just as in Orwell´s farm.

Classism is not so bad as it appears., it fulfils the psychological need to consider ourselves superior to others. In Chile the social mobility is high. Chile is a country of new riches and social climbers, our classism replaces our lack of true aristocracy. Rich families in Chile seldom last more than three generations, so nobody takes too seriously the classist prejudices that we claim so often.

The good new is that racism –the other way to feel superior to others- is almost inexistent between us. Money talks in Chile and a depreciated “indio” or “cholo” may turn into a king as soon as he got a good amount of money. Respect, a “decent” job and money march together in our materialistic country.

Are we inmorals?

(Published in the online edition of I Love Chile)
A good American fellow who lives in my town, told me that we Chileans are immoral people. Despite we claim to be Catholic –he said- we seldom go to church, we use to take commitments with no intention to fulfill them, we provide information having no idea what we are talking about, just because we are ashamed to say “I have no idea”.

“You immorals!” –he told me- “are the biggest liars I've ever met in my life”. The hardest thing to accept for him is the lack of seriousness with which we Chileans use language, he said that we seems to speak just because we are unable to remain silent. He is convinced will never be able to distinguish when a Chilean is talking serious, kidding or simply is trying to cheat him.

It's funny because I use to say or thought many of those things about Peruvians, Bolivians and Argentines. Maybe I see a mirror of my own faults in them, who knows?.

However I cannot accept that Americans are as correct as they think on themselves, in my experience they lie, cheat and steal more or less same as us, but they respect some forms that in Latin countries we consider naive. Maybe it has something to do with religious puritanism.

The different approach to religion is, in my view, fundamental to understand many differences between gringos and latinos. We may be seen as a country of atheists considering the inconsistency of our actions and the catholic moral standards, but catholic religion is fundamentally different from any branch of protestants.

Catholic relation with God is a sort of permanent bargain for miracles. If God can not give us miracles it has not worth for us, our religiosity is more practical and positive. Few people in Chile think that they are obliged to go to church, our relationship with the church is relaxed, the very pious Catholics are the only who take seriously the Mass and rites.

In Latin countries it is rare to find someone who actually believes that God is watching their actions and will punish him after he dies, most Catholics think that's a ridiculous superstition.

In Anglo-Saxon world, the "fear of God" is a highly prized virtue, it is almost synonymous with being a decent person, kids are raised in the fear of God in Sunday Schools, and the evangelical preachers describe in great detail the hell that awaits those who are evil. Fear is a strong motivation for gringos.

We believe in miracles instead, we see God, the Virgin and the saints as a kind of Santa Claus dispensing miracles and good luck. For miracles people are willing to make sacrifices that horrify the non-Catholics, have you ever seen people paying promises in the religious fests?

Moving in their knees for long distances, they pay cash and in advance for a miracle, no need a virtuous life, with a physical sacrifice you can obtain the same.

I think those are two fundamentally different ways of looking at religion. Which of the two forms is best? individually I think that believe in miracles it is much more practical, because we can almost immediately see the results of our faith, those who fear hell and hope the heaven have to wait all their life to see if their religion was true.

However, from the social point of view, the fear of God is much more useful because it forces people to behave according to rules of conduct dictated by the preachers, among others.

My personal faith is entirely based on the hope that miracles can happen. I do not care what he's going to happen after I die, but I pray every day for the things I hope to get. I got enough worries in my life to worry about what will happen to me after I die.

So I prefer the religion of miracles and saints offering me the impossible, and I trust in the guardian angel caring for me. Although sometimes seems he is not doing a great job, but nobody is perfect, not even the guardian angels.

September 11 and "no al lucro"

(Published in the online edition of I Love Chile)
September 11 still divides opinion in Chile. 38 years after the coup few people knows how it was Chile in 1973, I remember well those years when I was a 18 years old Allende´s supporter. Unidad Popular was a weird attempt to turn on socialism within the democratic system, and I think that the figures who follow demonstrate why it was a failed experience, and why some of those policies may not be replicated as some people is advocating now.

The first year of the Allende government was devoted to setting prices to below production costs, duplicate salaries (teachers received a bonus equivalent to four months' salary), to increase the amount of government employees and to acelerate the agrarian reform, expelling the land owners and replacing them with peasant committees. The result was that Chile, which normally imported about 140 million dollars in food, in 1973 had to import over 700 million, leaving the state without dollars reserve and the country without food.

In early 1973 the government's economic committee reported that 34,000 small and medium business were taken over by the government, with a result similar to the agrarian reform: national production came close to disappearing. Not a single title of property was given to peasants nor ownership to workers of the business, they were used as a mean for the state to appropriate the productive system. With this combination of prices under cost, wages multiplied and productive system broke, in 1973 all goods began to disappear, we had notes: no bread, food nor anything, but all we had was lot of bills, it was the first major Inflation in Latin America.

In 1973 the economy had declined by 3.5% and the deficit of state factories was five billion dollars, equivalent to sales of copper, the main and almost only export of the country, for the past 7 years. The official inflation rate that year was 740% and the fiscal deficit was 50% of the national budget. The losses of state enterprises –at those years almost the half of national productive system- amounted to a full national budget and the Central Bank's reserves fell from 450 million to $ 3.5 million, foreign debt rose one million dollars a day. The balance of payments deficit was $ 885 million in 1973

Social housing was built by government´s CORVI, almost all health was served by the National Health Service, almost all colleges and universities was owned and administrated by the Ministry of Education. The housing deficit was huge and most of poor lived in "villas miseria" (eliminated decades ago), the infant and adult mortality was very high as well as infectious diseases, only one in ten secondary school graduates can study at universities.

“No al lucro” championed now by some leaders of students means, in practical terms, to come back to 1973 with the government in charge of more than half of national economic and teaching system. They never knew that, but still there are people who remember, we do not march nor throw stones but we are determined to prevent such huge step back.

Inequality: the standard theory

(Published in the online edition of I Love Chile)
“In Chile nowadays, despite the good macroeconomic figures, prosperity is not reaching to the people, this is because the huge inequality, one of the largest in the world where the poorest people live at the same level than African countries and the richest enjoys of European standards. People rebels against the inequality and this is the real clue of the protests”.

I had heard that for years, it is the mainstream of the progressive thinking. However I have an alternate theory, but first I must refute the standard.

Prosperity is not reaching to the people?
Most of indexes of quality of life show that Chileans, in average, are living in best standards than ever: poverty, education, life expectations are better compared with the past decades and with other Latin American countries. There is an acid test of the impact of economics on people: unemployment. The unemployment rate in Chile reached 8.1% in 2010, 1.6 points less compared to 2009, when it reached 9.7%, according to a report by the National Statistics Institute (INE). Considering that the labor force in Chile grew 7.9% and the 1.6 is additional, 428,280 new jobs were created, something considered impossible by many economists not long ago.

Certainly, nothing is enough. Like Monty Burns used to said "I would give all I have just to have a little more," but 428,280 more people employed is, from any point of view, a significant improvement . All other statistics may be debatable, but an increase in employment is a definite sign that prosperity is reaching people.

The poorest people live at the same level than African countries?
Not true, this idea was stated by the Chilean economist Andres Zahler, in an article called “What country Chileans live?”. I remarked him by twitter that in Angola, the country with which he compared Chile, "more than two thirds of the 16 million inhabitants of that country live on $ 2 a day, and 4 million people survive on U.S. $ 0.75 day or less" His explanations were very poor.

People rebels against the inequality?
It is hard to believe that in a country rage against inequality, the political parties of left obtain less than 9% of the vote, and the party of extreme right is the most voted. Much harder to accept this idea as true if we consider that people elected as president to one of the wealthiest billionaries of the country. Are Chileans resented with the inequality? I guess not, Chile has been always same as unequal, under any kind of rule, we have not been an equalitarian society, ever.

An now, my alternate theory on social unrest

The double discourse
In Chile, as most of Latin America we use the double discourse in abundance. Many parents advocate for a public education, but they prefer private schools for their own Childs, even teachers of public system prefer private schools for their kids. Chileans may be very socialist and revolutionaries in discourse, but they often choose individualist and conservative choices.

The communist party
Communist Party plays a central role in protests, their political future is uncertain because, with no help from la Concertación, they are loosing their seats in congress in the elections to come. That is why they have go go out to the streets.

The vanguard

Street figthing obeys to old rules clearly recognizable, as Lenin's idea of the revolutionary vanguard, a small and well organized group to lead the process. Camila Vallejo and Jaime Gajardo, both communist militants leads the vanguard. They make alliance with useful idiots (concept attributed to Lenin) and lumpen proletariat (Marx's concept). The street figth with lumpen proletariat aims to shock to the public opinion, but they also need a good press, a role that must meet the useful idiots.

The supporters

Obviously not all protesters are communists, most of them are students and their parents, part of the 49% of Chileans who voted against Sebastian Piñera and feel happy to cause problems to a rigthist government, they are in charge of the good press and to prevent that those who want to study broke the movement.

The President

President Piñera has alientate his base trying to attract part of those 49% who voted against him with sucessive offers. He feeds the protest trying to negotiate with those who are not interested at all in the end of conflict: is the dialogue of the deaf.

And this is my theory, not a mainstream but I think it explain more reallistically the protests than the standard.