The Opera of Growth in Peru

As an opera fan traveling through Peru, I was constantly reminded of the premise of John Adams’ “Nixon in China,” which portrays the perils of a closed society attempting to take its place on the world stage. Peru is an economy that is opening to the world after years of being governed by policies of isolation and mismanagement. It is an environment of contrast and volatile change at a record pace, where innovation and ignorance walk hand in hand. It is a world of cultural, economic and political one-upmanship, where promises of greater power push aside the philosophy that stimulated its growth.
Our business visits began with a trip down the coast. It was at this point that I got my first look at the Peruvian coastline. The Pacific Ocean butts up against a practically barren desert. In contrast to the picturesque Andean villages, the settlements along the coast looked forlorn, like the land they inhabit. However, this bareness hides a wealth of natural resources. Our first stop was Peru LNG, a natural gas liquefaction plant. While we were not allowed to go into the plant itself, it was interesting to hear about how the company put into place its complicated supply chain, and is continuing to grow.
From there we continued to the TACA fishmeal plant. The Peruvian fisheries are some of the richest in the world. I enjoyed hearing about the overfishing in the 1970’s that almost destroyed this resource, and how current sustainability policy has successfully prevented further destruction. This was also the only firm I visited where the company’s sustainability program was not counterproductive to the goals of the firm.
One of the advantages of the Peruvian coastal desert is that, while rainless, the climate is humid and rather mild. Using runoff water from the Andes, parts of it have been turned into very fertile farmland. In order to see this in action, we visited “La Hoja Redonda” orchards. While this company exports citrus and avocadoes to the US, the amount of regulation imposed at the urging of American agricultural interests makes the export efforts hardly worth it. In fact, at certain times of the year, the company chooses not to export to the US, due to pointless regulations which make it almost impossible for their produce to be deemed acceptable by the U.S. government when it is in fact perfectly fine. These barriers not only inhibit free trade, but also essentially amount to price-fixing of the local produce market, and should be removed.
As one of several Spanish-speakers on the tour, I had been doing some informal translation during the trip. When we visited the Talma airport ground services headquarters, the native speakers who were supposed to be translating were otherwise occupied. The warehouse manager came over and began speaking Spanish to my small group. Noticing the blank stares from my colleagues, I immediately stepped in and started translating. He explained company’s drug screening procedures, including a demonstration with a drug-sniffing dog. The entire presentation lasted only about ten minutes, but I enjoyed translating so much that it was one of my favorite moments on the entire trip.
Most of the companies we visited at least paid lip service to protecting the environment, even if they did not have much of a program. Environmental issues seemed to be included in their presentations to meet the expectations of the visitors. Owing to my upbringing and experience in the journalistic disciplines, I had been asking probing questions the entire trip. However, at the Backus brewing company, the presentation essentially consisted of nothing but the sustainability director extolling the company’s attempts to become carbon neutral, and its responsible drinking campaign. While most of my peers were asking about their methodology, I raised my hand and directly inquired as to the impact of these efforts on the company’s bottom line. After a good 10 seconds of stunned silence, the sustainability director grudgingly admitted that her efforts had negatively affected the company’s profits.

As in the opera “Nixon in China,” the subject of what all of this means to Peru is a complicated one. Even the Peruvian executives we met seemed to shy away from the philosophical implications of Peru’s growth. Instead they seemed much more interested in portraying a semblance of confidence, security, and belief in their own rhetoric. From the politicians to the executives, to even some of those in our own group, the appearance of conviction seemed more important than reality. And, like the character of Lady Mao, the press release image they project often conceals the ominous truth lurking just below the surface. This is an election year in Peru. The outcome will determine whether Peru will return to a philosophy of protectionism, or continue to grow precariously. Beneath its veil of confidence, Peru is a country perched on a precipice of uncertainty. I leave you with the final lines of ‘Nixon in China:’ “Of all of what we’ve done, how much of it was good?” Peru is a country in search of an answer.

On the Peruvian Andes

Over my university’s winter break I traveled to Peru in order to study the economy there. While I was only there for 2 weeks, I feel as if I have been to much more than one country. The group leader, Professor Carl Voigt, asked us to sum up the experience in just a few words. The first thing that came to my mind is that Peru is a land of jarring contrasts. Geographically, the country is divided into three completely different regions: the Coast, the Andes, and rainforest, which borders on the Brazilian Amazon. While the country has only 28 million inhabitants, each of these regions not only has its own climate, but is populated by a complete different culture. Economically, the country displays a sharp divide between wealth and poverty. In Peruvian cities the division between the two is striking. In Cusco, or even the capital city of Lima, you can pass from a wealthy to an impoverished district simply by crossing the street.
My first 24 hours on the ground were a crash course in the myriad of differences. After a whirlwind tour of Lima’s historical center and Pizarro’s tomb, we flew to the two-mile-high Andean City of Cusco. From there, a bus and train ride took us to the “ceja de la selva”, or eyebrow of the jungle, where the mountains give way to the wilderness beyond.
Peru is an 80% catholic country. We arrived in the span between Christmas and Epiphany, and before New Year’s there were not many business open for us to visit. So, our group began immersing itself in the cultural heritage of the country. After one night, in the hill town of Aguas Calientes, we set out for a day in Machu Picchu. I remain impressed by the striking location and character of the ruins. This was also New Year’s Eve, so that afternoon our group returned to Cusco, one of the best places in the world to ring in the New Year. The atmosphere was very different than anything you could find in the US. The Main Square was crowded with parades, bands and revelers shooting off fireworks, in any and all directions. It was a refreshing change.
We spent another day in Cusco, seeing the major sights of the city, including the two main churches, would have been impressive even in Europe. I spent some time walking around and getting to know the city. The next morning we returned to Lima, to begin business visits the next day.