Heart of Gold

Never has a place given me such a strong feeling...

As soon as you arrive in Potosi, the city’s hundreds of years of history and struggle hit you like a ton of bricks and the cold climate and high altitude ensures that you feel it all deep inside your bones. The cobblestone streets are narrow and the buildings are beautiful, but dilapidated and they look like they haven’t been touched since the colonial era. A couple blocks outside of the city center, everything disintegrates even more. The rundown historic look changes to torn up gravel roads and buildings/homes that look as though they are under construction and that they have been forever, but this is how people live.

Our first day we went to visit communal bank just 10 minutes from the main plaza. When the meeting was over, as I watched the president walk home, I couldn’t believe that I was standing in what used to be the biggest and wealthiest city in all of Latin America.

The second day we visited another communal bank . It was one of FONCRESOL’s largest and oldest communal banks and the members were cheery and excited to see us. They even shared their lunch with us, which was a small bowl of pasta and root vegetables cooked in aji- a deliciously spicy sauce made from hot chillies.

Speaking of Potosi cuisine, the morning we arrived I tried K'alaphurka- a traditional soup made from maize, served in a ceramic bowl with a hot volcanic rock in it to ensure that it arrives at your table bubbling and steaming. It is a savory, filling dish eaten in the morning and it is apparently best enjoyed with Paceña Negra, a dark malt beer that my boss ordered for us at 9am.

At 4070m Potosi can actually be relatively warm during the day because of the extreme UV rays, but as soon as the sun sets the cold is almost unbearable. At night the streets are lined with food vendors and restaurants offering hearty meals to ward off the nighttime chill, but it doesn’t do much to distract one from Potosi's frigid vibe. The problem is that there’s a dark shadow haunting Potosi- the Cerro Rico (rich hill). It's the mountain that made Potosi Potosi and it's a constant reminder of the city’s past and present dependency on the mining industry.

I decided to take a mine tour on my last day in Potosi. Mine tours are readily available for tourists, but they are not highly recommended. Lonely Planet says that if you are willing to inhale asbestos and large amounts of dust for a couple hours while climbing through claustrophobia inducing mine shafts, then you’re in for an unforgettable experience. Otherwise, the guidebook strongly suggests that you should refrain from entering the mines if you have any doubts whatsoever. I definitely had my doubts, but it was just one of those things I knew I had to do, even if I was going to hate every minute of it.

The mines that run tours are cooperative mines owned by the workers' unions. My guide, Ronaldo, used to be a miner, but his family made him leave the industry because of the horrible working conditions and the estimated 45-year lifespan of most miners. Instead, Ronaldo decided to study tourism and give mine tours.
Given the terrible conditions of the mines, mine tours aren’t the most popular tourist activity. My tour just consisted of myself, Ronaldo and another girl from Germany. I was extremely grateful for the small group size, not only because it gave me a chance to harass Ronaldo with all sorts of questions, but also because it meant that Ronaldo could give us both an extra helping hand as we struggled to pull ourselves through tiny crevices on our stomachs while rocks slid from underneath us.

Our morning began with a trip to the miners market where the miners stop on their way up to the Cerro. Here you can find stands selling dynamite, mining equipment, alcohol and coca leaves galore. The purchase and sale of dynamite is completely legal in Potosi because of the mining industry. It was pretty crazy to see it all just sitting there in bulk though, and it was even crazier to buy some. It’s recommended that tourists entering the mines buy some ‘treats’ for the miners that they will meet along the way. The mines are totally active and work does not pause for tours. The tour includes pressing yourself up against the mineshaft walls as mine carts pass by and explosions can be heard from within the mountain throughout the tour. For this reason it’s a good idea to bring some provisions with you as a peace offering for the miners whose work you are interrupting. My offering consisted of some sticks of dynamite, a 2L bottle of Coca-Cola and a big bag of coca leaves to top up everyone's stash.
This is Ronaldo in the miners market holding a plate of coca leaves:

After the market we went to the refinery plant where we learned about how they turn rocks into silver. It was weird because the stuff they extract from the mines really just looks like gravel, but upon closer inspection it has a bit of a glitter to it. In the refinery they melt the rocks down and then separate the liquid waste from the actual silver. The silver surfaces in the form of foam and then the foam is somehow turned into a sand-like substance that is basically pure silver. Ronaldo stuck his finger in it and gave me a ring. How sweet.

Arriving at Candelaria mine I couldn’t believe how primitive it looked. Outside the mine entrance were little mud huts that the workers use to put their belongings in during shifts. It seemed as though nothing had changed since the colonial era. When I shared this thought with Ronaldo he said that’s because nothing has changed. The equipment and technology used in the Potosi mines is pretty much the same stuff they used back in the day. Some of the refinery technology has evolved, but basically they are just struggling away down there like they did hundreds of years ago. The only difference is that now the mines are no longer employed by African/Indian slaves, and the workers no longer stay down there for 4 months at a time. Today miners work a much more reasonable shift from about 5am to 2am and they aren't thought of as slaves anymore- just really low paid laborers working in nightmarish conditions.

A couple meters into the mine we saw a shrine to Tío (Uncle). Appropriately so, the miners think of the mines as hell/the underworld and therefore Tio is the devil who watches over the mine. Miners pray to Tio so that he will keep them safe while they are working and they also make offerings to Tio of coca leaves and alcohol in order to ensure their safety.

Most mines in the Cerro have 3-5 levels. Candelaria has 3 and we worked our way down all of them. The Cerro is of volcanic origin so the further down you go the hotter (and dustier) it gets. This factor combined with the 4000m+ altitude made the tour pretty challenging. There were points where I wasn't sure if I was going to be able to catch my breath due to the exhausting effects of the high altitude and all the debris I was inhaling. To visit one group of miners we had to slide down a mineshaft on a wooden ramp that appeared to be from the beginning of time using our legs to brace ourselves along the edges. After this we crawled through a passage that didn’t look like it was made for humans, but somehow we managed to contort ourselves and make it through. Throughout the entire tour I had no idea how Ronaldo was navigating the mine. It seemed like a labyrinth to me....We ended up in an opening where we found a group of men with big lumps of coca in their cheeks, hacking away with their picks at the rock walls. They were actually relatively happy to see us and enjoyed the coca refill and the extra stick of dynamite.

This is a very strained smile. Ronaldo thought it would be a great action shot, but I was just hanging on for dear life and wondering if I was going to get splinters through my fashionable mining pants.

After this we went to visit two men who spend their days shoveling rocks into rubber buckets that go up to the first level on a pulley system. These men are called the paleros (shovelers). Below you will see a video of them working and then a photo of me shoveling with them for a bit. They thought it would be funny to see my attempt at working and they were right… it was pretty pathetic and very entertaining for them. I didn't mind the laughs at my expense though, I figured I was doing them a favor by providing them with some entertainment. They could spend the rest of the day laughing at the spoiled gringa who came to visit.

At this point I was pretty ready to go. My muscles were weak from the altitude and I was tired of breathing in chemicals and dust. I was so happy to see the light of day when we climbed back out of the mine. I felt pretty lame though considering we were only down there for 2 hours and I already wanted to die. The miners stay down there for about 18 hours on average without eating or drinking. They just chew wads of coca leaves to ward of hunger and stay energized.
Here’s a photo of Ronaldo and I. Another thing I learned on this tour is that I am way too tall to be a miner. I think ideal miner height is about 5 feet.

I am very grateful to have had the opportunity to visit Potosi, but after 3 days I was already missing Sucre. Potosi is a fascinating, hard working city, but for an outsider it's dark history and struggling present situation makes it a somewhat difficult and eery place to be.

Everyone I met in Potosi was friendly and happy and very proud of their city- which they should be. It truly is a magnificent place that deserves more attention.

We Fight for Diamonds

I can still hardly believe that Obama won the election. Not because I don’t think that he should have, it’s just that during the entire campaign all I could think about was the fact that the Americans voted for Bush, not once, but twice. This memory kept my faith in the American populous very low so even when the polls were telling me that Obama was going to win, I couldn’t believe it until it was for real. And now it is for real. 4 realzzzzzzzz.

Finally, 40 years after the civil rights movement, there is an African American president leading what is still arguably the world’s most powerful nation. I know changes won’t happen overnight, but the USA’s international reputation has already skyrocketed. Almost every world leader (other than Kim Jung Ill, who right now is in fact quite ‘ill’) has issued a very public, warm welcome statement to Obama. The day after the election, everyone’s favorite Hugo Chavez pulled a complete 180 and exclaimed the he is excited work with Obama. He said that he is interested in working with Obama on some of the major international issues he addressed in his campaign. ¿qué? Chavez excited to work with an American? This is definitely a complete turn around considering Chavez’ feelings towards Bush can only be classified as extremely hostile (I classify referring to someone as ‘Satan himself’ as hostile).

The fact that Chavez has already showed a strong willingness to work with Obama indicates great potential for change in USA-Venezuela relations, which right now are pretty desolate looking. Current USA-Venezuela relations are somewhat reminiscent of the relationship a crack dealer has with a crack addict. Crack being oil, the addict the USA, and the dealer Venezuela. 1) They don’t really talk to each other. 2) They don’t really want to work together. 3) The addict keeps coming back for more even though he pretends not to need it. 4) The dealer just wants the business. 5) The dealer makes fun of his customer behind his back to his other dealer friends (in this case, OPEC and other socialist Latin American states) and even though the addict hears these rumors he can’t do anything about it because he is truly addicted to the dealer’s goods.

**Trans: Chavez- "You are the devil, you smell like sulfur, you are a drunk, you are a demon, you are a genocide Mr. Devil, you are a dictator, you are an assassin Mr. Devil, you are..." Bush- "Yeah, yeah whatever you say, just fill up the tank!"

Luckily, we could soon see this love-hate relationship evolve into something less destructive. Hopefully Obama’s willingness to dialogue with the nation states that the Bush administration previously declared ‘off limits’ will help the old cronies in the US government understand that every alliance in the world (socialists in Latin America, China-Russia, EU states etc.) isn’t out to get them.
Morales has also expressed a similar enthusiasm for Obama’s election, saying that it is a positive sign of progress for the United States. I also think he is pretty pleased to see a visible minority as the nation’s leader. Morales is not a minority, but he definitely knows what it’s like to be treated like one.

Barack has a huge task laid out in front of him. He won’t change the country overnight. He may not even accomplish half of the stuff he wants to, but the fact that he is there is change enough. I don’t care if that sounds cheesy. Oprah's right.

Tomorrow we are traveling to the FONCRESOL office in Potosí. Next week’s post will provide more details on this trip so for now I just want to give some background information...
Potosí was the most important and prosperous city in South America during the good old days of colonialism, but now it has a lower human development index than Haiti. During its heyday they say that the amount of silver being exported to Spain was enough to build an entire bridge of silver all the way from Potosí to Madrid (Look at that distance on a map- it’s far!). Unfortunately, the Spanish colonizers completely drained an entire mountain worth of silver deposits in Potosí. This over-extraction created a surplus of silver in the Spanish monetary system, which caused ridiculously high inflation rates and the demise of the Spanish empire. When Spain fell Potosí lost its greatest investor and it has continued to struggle since. The mining industry lives on, but it is no longer silver-based. Now it’s mainly tin, but in the 1980’s the world tin market collapsed and many miners fled Potosí looking for work in Northern Argentina or elsewhere in Bolivia. There is a high rate of child labor in the Potosí mines, partially because the conditions are often too horrible for an adult to even fit in the mine shaft, but mainly because most of the older men have left to look for other work and families are desperate for a source of income.



We’re going to Potosí to evaluate their communal banking programs, which have been operating much longer than the Sucre programs due to the city’s soaring poverty levels. My research in Potosí will consist of talking to with credit officials to get their perspective on the financial behaviors, skills and attitudes of their clients and then I will also talk to clients to try and determine some of their thoughts and feelings towards money. These discussions will help indicate the strengths and weaknesses of clients' financial knowledge and assist with curriculum/workshop design down the road. I will do similar needs assessments in Sucre because that is where my project is based, but having a chance to chat with folks in Potosí will provide me with a greater level of understanding of the financial behaviors of FONCRESOL clients.

Speaking of mining… BBC news just issued an interesting article about the lithium deposits that exist in the salt flats in the Andean plains of Bolivia.
http://news.bbc.co.uk/2/hi/business/7707847.stm
Lithium is the stuff found in batteries and laptops and the salt flats lying about 4 hours outside of Potosí apparently contain 50% of the world’s lithium supply. Auto manufacturers are really revved up about this. Lithium is a big deal for them because enough lithium could bring the electric car back from the dead. GM, Toyota, Nissan-Renault and Mitsubishi are already on the hunt. The only problem is that they estimate that within 10 years the demand for lithium will multiply by five and lithium, like petroleum, is a finite resource.
Can someone remind me again why we aren’t spending more time thinking about better public transportation? If lithium will help with that, then fine- I’m in, but we seem to be missing the point…

In Bolivia, Morales and the minister of mining are being very cautious with this hot new resource. They still have memories of what happened in Potosí and other regions of the country where foreign investors took over. They know that the money always ends up going somewhere else, so Morales isn’t too eager to start selling off portions of the salt flats. The government is looking into some plans to make a nationalized plant, but the residents of the region don’t want to start extracting the resource. They are old mining families who are scarred by previous exploitative industries and just want to keep working and living as they are.
This quote from the Bolivia’s mining minister at the end of BBC article pretty much hits the nail on the head:
"The capitalist leaders have to change," he says. "If all the world had consumers like North America, everyone with a car, it would grind to a halt. It is also going to generate pollution, not just from fossil fuels but also from lithium plants, which produce sulfur dioxide. This isn't a magic solution.”

Todos Santos

This weekend Bolivia celebrated Todos Santos, a tradition paying homage to the dead that begins at noon on November 1 and continues until noon on November 2. The tradition has Catholic and indigenous roots and is a fascinating mix between supernatural, religious and esoteric beliefs. Families remembering a loved one flock to the cemetery to hold vigils and set up altars for the soul and sometimes they will sit there for hours and enjoy some of the food they have brought with them. It is said that the angelitos (child souls) visit the cemetery on November 1 and that the adults come on November 2. I went to the cemetery both mornings to check out what was happening and I’m glad I went because it was so interesting to see a cemetery transformed into such a lively, happy place. Of course there were tears here and there, but overall I have to say the crowds of people flowing in and out seemed happy to be sharing the day with one and other.


Outside the cemetery were rows of flower vendors and food stands catering to the masses. It was refreshing to see a cemetery and the theme of death being approached in a much more uplifting way than the way it is viewed in North American society. At home cemeteries are usually off limits, not places to hang out and spend the afternoon, and they certainly aren’t this colorful. The Sucre cemetery is actually one of the most beautiful places I’ve seen here. The graves are stacked in walls one on top of another and each has a glass window with it’s own unique decorations. Little boys work in the cemetery year round and help families put flowers and candles in the graves using ladders to reach up to the higher rows. In some areas the walls of graves are so tall that there are staircases reaching up to the various levels. I managed to capture some photos of all this, but I felt guilty for being an obnoxious tourist wandering around preying on people’s personal moments with my camera…

On the afternoon of November 2 the celebration continues. From noon onwards families who have lost someone within the past 2 years hold a small (or somewhat out of control) celebration in their homes called a kanchaku. For the most part kanchakus are public events where anyone can enter so you can literally wander the streets and just walk in, but some are more formal and require an invitation. A kanchaku will have a large altar inside to honor the soul that consists of traditional foods, flowers, drinks and photos. Everything on the table has a specific meaning and reason for being there. There are various symbols made of bread like a sun and moon, and a ladder, which is said to help the soul reach heaven.

The souls visit the living world for 24 hours and during this time it is recommended to light a candle to ensure that they have a comfortable stay. If the flame starts to spark it’s a bad sign and usually means that the soul is sad, but if it burns normally the soul is happy and will pass on it’s happiness to whoever is paying it respect. The candles are blown out at noon on November 2 so that the soul's trip back to heaven isn’t delayed because it is said the doors to heaven close at this time. As the souls leave the altars, the festivities begin and visitors start arriving anytime after noon. Upon entry to a kanchaku you are expected to pray at the altar and then the family offers you a plethora of alcoholic beverages and food. Children don’t partake in the alcoholic portion of the celebration, but they are given lots of cookies and sweets. The adults on the other hand are served drinks with no ifs, ands or buts, and for this reason a kanchaku can last well into the late evening.
I had the opportunity to visit two of these celebrations with my coworkers. The first one we went to was relatively formal and required an invitation. We were served drinks by the family and were given lots of goodies to take home with us- kinda like a loot-bag, but with more meaning. The second one we went to was much larger and less formal. Although the home appeared to be in a lower-income area, the altar here was a lot bigger and piled with food and drink. We ended up staying at this second one for a really long time… Everyone was sitting outside under a tarp because it was raining and drinking from communal bowls filled with colorful alcoholic beverages. One was chicha, a fermented corn drink and the other was just some fruity sugary concoction. I stuck with the fruity stuff. The bowls of liquor were scattered about and people grouped around them passing around only one or two shared cups while toasting one another. In Bolivia it is rude not to invite someone to drink along with you so we basically sat there passing around a cup cheers-ing one another for hours on end. In case you’re wondering, this is a very efficient way to consume alcohol. Perhaps too efficient… Thank heavens (gotta do a pun every now and then) that Monday was a day off so I had some time to recuperate after my cultural immersion.

Despite the foggy memories, my Todos Santos experience really made me think about the way death is portrayed in North American and Western European societies. There is a strong disconnect between the living and the dead and many people almost seem to experience a sense of shame when remembering lost loved ones. The mourning process is so rushed and it’s more common to try and think of ways that you can get over the pain than ways that you can celebrate it by inviting over everyone you know for a few drinks. Here it is actually obligatory for a family to hold a kanchaku for 2 years after someone has passed away and after that everyone flocks to the cemetery without question. In the Western world, families certainly take time to remember those who have passed away in their own way, but having an official national holiday makes is so different. It is a sense of shared grief and remembrance that it totally accepted and celebrated- not hidden. Catholicism believes that what waits after this life is another life, and according to the Aymara and Quechua beliefs (two of the largest Bolivian indigenous communities) death is cause for happiness because to pass from this world onto the next is a natural and wonderful step.

Today is back to work, but even down here all eyes are on the United States as today’s election results begin to pour in. Amidst the election frenzy however, the continued worsening of USA-Bolivian relations goes unnoticed. Late last week Morales announced the suspension of all of the USDEA’s (United States Drug Eradication Agency) activities in the country claiming that they have been conspiring against the government. The president of the constituent assembly, who is of indigenous and cocalero (coca farmer) background, said that (paraphrasing)… ‘if the DEA can’t have a positive role in Bolivia in the fight against drug trafficking then they might as well go’. Morales feels that the DEA worries more about punishing the campesino cocaleros than trying to control the actual chemicals used to make the drug cocaine. The Bolivian government holds that the cocaleros have their own methods for controlling coca production and do not need the DEA to set rules for them. In Bolivia coca production is something traditional and not destined for drug trafficking.
This story will not get any play right now, but there is no doubt that with an economic crisis, and wars in Iraq and Afghanistan on their hands, the USA probably doesn’t want to start fighting with Latin American leaders- not even Morales.

What Really Goes On

Due to last week’s adventure and my usual cynical ranting, I selfishly failed to mention a significant political milestone that occurred here in Bolivia. On Tuesday, congress finally approved the call for a referendum on the new constitution that Evo Morales has been trying to push forward since his election. With congress’ seal of approval the constitution can now be pushed forward and voted upon on a national level (by everyone) on January 25, 2009. This document has been the cause of upheaval here since Morales came into power, but after some rewrites the opposition lawmakers finally came to an agreement. The reason this is such a political landmark for Bolivia is that it gives the government the legal framework it needs to make the changes they’ve promised and that, generally speaking, the country needs. Another reason it was such a momentous occasion is that congress’ deciding day was met by a march of more than 3000 campesinos who had walked a full week from Caracollo (200km away from La Paz) to the government headquarters just to show their support for the new constitution. Morales himself even met up with the march for the last day of the trek. Overall it was a peaceful demonstration of solidarity, but as the decision making process grew longer and longer (18hrs) people got rowdy and there were reports of dynamite explosions in Plaza Murillo where the legislative office sits. Morales actually had to come outside a couple times and plead with people to remain calm, but it was well-worth the wait because later that day Morales was able to make a tearful celebratory speech in front of thousands of faithful followers.

The revamped constitution was printed in the newspaper the following day, so I have a copy and could tell you some of the nitty-gritty details, but the most significant changes are those pertaining to indigenous rights and freedoms. Some examples include the right: to posses their own land, to have access to an intercultural and multilingual education system, to have access to a universal and free healthcare system that respects their cosmovision and traditional practices, to exercise their own political, judicial and economic systems according to their cosmovision, to participate in the benefits of the exploitation of natural resources in their territories, to the management of autonomous indigenous territory, to the use and exclusive enjoyment of renewable natural resources existing in their territory and to participation in the institutions of the state. Reading the constitution makes me wonder how Canada gets away with being known as such a ‘developed’ nation given the way that the rights of Canadian First Nations communities are continually ignored.
The edit that seemed to put the icing on the cake for congress though, related to the clause outlining how many consecutive terms a president can be elected for. On the first draft it was up to three terms, but now it’s been brought back down to a maximum of 2 terms (5 years each)- a number that lets the opposition sleep at night.

Despite Bolivia’s breakthrough last week, on Friday the lovely Condoleezza announced that the United States has officially decided to remove Bolivia from the ATPDEA trade agreement because apparently the Morales government hasn't made a concerted effort to behave in whatever way it is that the United States wants it to behave. Meanwhile the United Nations, the Organization of American States and the European Union are all giving Bolivia major props for it's recent political accomplishment... It reminds me of that Sesame Street song/game ‘One of these things just doesn’t belong, one of these things is not like the other, lets-find-out…’ Remember? Then you had to choose which image on screen didn’t belong? For example: if you were left with three puppies and one rifle, you would pick the rifle as the oddball of the group and then Elmo would come on screen and confirm your genius status. Except I don’t think the producers of Sesame Street would ever sign off on the use of a rifle (they don’t even let Bert and Ernie live together anymore)… I just wanted to go overboard with some anti-American symbolism.

Usually bureaucratic, constitutional, legal mumbo jumbo stuff tends to bore me, but I’m intrigued by Bolivia’s recent triumph because I see it as an important foundation for change. The constitution, unlike most lengthy complicated legal documents, is straightforward and includes a bit of information on how some of the proposed changes will actually take place. This could make a huge difference. It’s one thing to state your objectives, but outlining how you’re actually going to get there is the harder part. This is an issue that I am confronted with a lot in the world of international development where people like talking about their good intentions, but have a harder time executing them. The United Nations Millennium Development Goals (MDGs- to be reached by 2015) are an example of this disconnect that I frequently wrestle with. As human beings I think we can all agree that the MDGs are all wonderfully, reasonable suggestions:

The thing I struggle with is that these are pretty enormous goals that don’t come attached to a very coherent or cooperative action plan. #8 is my favorite though because while every NGO on the planet is working towards these goals in their own way, I still don’t feel like we are really joining forces to ensure that this stuff happens. We need better teamwork. There is so much good stuff going on out there, but with better networking and knowledge sharing I think things could happen a lot faster.
When I find myself doubting the power and significance of the goals however, I have to remind myself that at least they exist as an indication of where we want to be, and at least we’ve finally agreed to make these issues a priority on an international level. As we all know, people, society and governments tend to be somewhat resistant to change, so even if all the MDG’s do is put the rusty gears in motion I guess I should recognize this is a very crucial first step.

Another somewhat bothersome example of the disconnect that I see in the field of international development, and more specifically the field of microfinance, relates to the word empowerment, which has become popularized in development literature by academics, NGO’s and policy makers. It is the idea of providing the necessary tools and knowledge one needs in order to liberate or….empower… themselves. The idea of helping people help themselves- a hand up not a hand out. This concept has taken development circles by storm, which is a definitely a good thing because it’s better than the concept that used to take development circles by storm- imperialism, but I worry that it’s just a new catch phrase like sustainability was a few years ago. I’m obviously all for the idea of teaching a man to fish, not just giving him one, but there needs to be more talk on how this is actually going happen. Talking about empowerment is fine and dandy, but actually make it happen is slightly more challenging because it basically it requires a total restructuring of societal and political norms.

Microfinance is said to empower women because it recognizes women as a priority group and institutions target women with their services. The only problem is that just ‘targeting’ women isn’t enough. Providing a new group of people with access to financial services that they were previously excluded from, doesn’t mean that now they’re now automatically empowered. In the case of women, sometimes accessing a microloan just adds to their responsibilities because now they're managing a small business and the loan to support it and their usual household duties. There is a whole pile of other factors that need to go along with the provision of financial services in order to make for a viable tool of empowerment. It’s a difficult concept to work towards too because there are no hardcore evaluation methods out there yet to indicate whether or not empowerment has been achieved- economic figures don’t work as empowerment stats as well. While financial independence may be a very important piece of the puzzle, if social and cultural norms don’t change, and especially if national and international policies don’t evolve along with the microfinance movement, then 'empowerment' efforts will only get so far.
I will conclude again by saying that I am happy that the conceptual framework on empowerment exists. It's great that these types of ideas and perspectives are circling around and maybe soon all the theoretical intentions will become a reality.
I’m by no means condemning the mission of microfinance. I think it’s a good way to start working towards a ‘bottom up’ approach to development; it just needs some tweaking here and there and some cooperation from all levels of society, not just the grassroots sectors.

That’s my beef for today. It was a lot and I don’t want be so jaded, but what would the point of me entering this field be if I had no opinions or criticisms to share?

I don’t have any personal photos this week because I went on a hike yesterday and threw my backpack (containing my camera) into a river. It was a pretty extreme hike and I was attempting to toss my backpack to the other side of some rocks because I thought my chances of making the jump would be higher without my pack. Unfortunately I forgot that I have no upper body strength and so I was unable to hurl my backpack to safety. I am letting my camera ‘dry out’ in hopes that this will magically solve the problem, but it’s not looking good. These photos are blatantly stolen from the net.

Keep the Car Running

I love my supervisor Dustin, but like many Bolivians he doesn’t like to give direct or detailed answers. Usually I’m OK with the ambiguity, but on Tuesday it ended up being somewhat problematic. We were going to go visit a community outside of Sucre that FONCRESOL works with because Dustin needed to talk to them about the fact that their 3-year loan has now become a 10-year loan. I asked how far away it was, how long we would be gone and if I should bring my wallet or phone etc., but since I didn’t get any sort of helpful indication from him I assumed it wasn’t that far and decided to bring nothing at all.

An hour and a half later, after crossing a river in FONCRESOL’s tiny red Suzuki (there was no bridge involved) we arrived at Teja Huasi. I walked into the school room where the meeting was held to find about 30 people sitting on the floor- men on one side of the room smoking cigarettes and chewing coca leaves, and women on the other side selling food stuffs to one another and dealing with their children as they ran about. The meeting was entirely in Quechua (the native language of the region) and so I didn’t understand a thing, but I got the point- FONCRESOL wants to help, but they can't let this loan go any longer. The cycle has been drawn out for so long that some people in the group have even died and now other members are having to absorb their debts in addition to their own unmanageable debt. Reasons for being unable to pay back loans range from bad weather and ruined crops to lack of jobs and family emergencies. FONCRESOL is sympathetic to this, but they can no longer operate at such a loss. Furthermore, because this is a group loan the fact that some people haven't canceled their debts keeps everyone in La Central de Información de Riesgo Crediticio (CIRC), which means that they are sort of blacklisted by financial institutions. The CIRC is an instrument used to check up on people when they apply for credit. It keeps track of people's previous loans and whether or not they hold any outstanding debts. It is equivalent to the credit bureaus at home that keep track of our credit approval ratings. Anyway, Dustin doesn’t like being the bad guy, but this is part of the job. FONCRESOL has to put the pressure on, but there is no other way of doing it other than going out and lecturing people.

After the meeting we drove for another hour or so into the valley to visit some other clients who were also behind with their loans. Dustin was again forced to collect money from people who are barley making ends meet. Just as we were climbing out of the valley and headed back to Sucre in our little FONCRESOL automobile it decided to breakdown- on a narrow windy, uphill road on the edge of cliff. We were stranded there on the side of the highway in a desert like environment for over an hour before anyone came by. This is why it would have been handy to have known how far away we were going in advance because then I would have at least brought some water with me, or maybe even some money. Soon it was four o’clock and we had not eaten all day. Delirium was starting to hit. Finally, a pick up truck filled with men traveling from Santa Cruz pulled up and agreed to drive us back to Sucre. I had the pleasure of sitting on the lap of a large, sweaty man who insisted on putting his arm around me the whole time, which meant that his wet armpit was pressed up against my back for the entire journey. It was lovely. Moral of the story- we got back to Sucre safe and sound, but by that time it was close to 6pm and I just went straight home and cooked up everything in my fridge. The result was some revolting concoction that I hovered down in 10 minutes and that left me feeling toxic in addition to completely drained- and not ‘toxic’ in a sexy Britney Spears sense of the word...

Aside from that unfortunate ending, the day was really interesting and I’m glad to have had the experience. Not only to see the beautiful landscapes that lie just outside the city, but also because it was good for me to see a somewhat unsuccessful example of microfinance. The system has not been able to take off with certain groups and this realization has helped me get closer to figuring out what exactly I want to tackle while I’m here.

What keeps shining through as a common theme/obstacle with every group I’ve visited whether rural or urban, and even with the individual loan clients I’ve met, is the issue of financial literacy, or the lack thereof. Due to Bolivia’s competitive microfinance industry, credit is so readily available that individuals have begun to immediately take out loans in financial hard times without considering other options. This has created a ‘bicycle effect’- the settling of one debt by contracting another. Over the years, microfinance organizations have just assumed that poor people know how to handle debt and clients themselves have just accepted being in debt as a fact of life. Speaking with FONCRESOL clients it is rare to find someone who doesn’t have at least one other loan with another microfinance organization. This is partially because the loans offered aren’t always big enough to cover one’s perceived costs, but also because loans are so readily available that many people use them without fully understanding how they work. There is a limited awareness of the risk of over indebtedness and juggling multiple microfinance loans requires a certain level of financial education, especially for clients who are illiterate.
The situation isn’t actually much different from what goes on in the developed world with credit misuse. It’s like people who have 3 credit cards and are using one to pay off the other. In developed economies financial education is actually starting to get some play as it becomes evident that the majority of the population, regardless of class, doesn’t know the basics of money management. From making a budget to the difference between compound and simple interest- just because someone has money doesn't mean they know how to manage it. As the banking system gets more and more complicated and more financial products and services become available, one's ability to make sense of it all is diminished. Knowing how the financial world works, how to manage your money effectively, and how to make the most of the services and products offered are the first steps towards empowerment in today's volatile economic climate. Financial illiteracy is a worldwide epidemic, but it's effects are more drastic in developing economies where people can't afford to have sloppy accounting and overspend here and there. The importance of financial literacy hasn't been made clear in these societies however, because people tend to view personal financial planning and saving as something that only rich people with extra money can do.
What I’d like to do with FONCRESOL is try and increase the amount of financial education that the institution provides their clients. Increased financial capability will increase the transparency of the institution by allowing clients to understand and exercise their rights, it will also allow clients to maximize the impact of their loans, and it will help the institution retain and attract clients while keeping loan defaults to a minimum. Clients could have more discretionary cash if they were able to manage their household and business cash flows better. For the most part financial behavior among microfinance clients is reactive and people lack the skills and confidence to properly plan their cash flow. Unfortunately changing this behavior will not be easy and it will require a greater understanding of people's attitudes and habits towards money It will also mean figuring out a way to encourage people to plan ahead instead of living day-to-day, hand-to-mouth. Learning how to save is only part of the equation though, learning how to use available financial instruments and determining which are most appropriate for different situations is the other half.

Katherine Hane does CBBA

CBBA is the abbreviation used to refer to the city of Cochabamba.
Katherine Hane is the name that appeared on the nametag I was given upon arrival at FONCRESOL’s national conference.
My name is bizarre here no matter how you cut it, but this was the first time I had seen it interpreted in such a manner. I usually introduce myself as Kate, but if that doesn’t go well I switch to Katia or something along those lines that can roll off the Spanish tongue with more ease than my actual gringa title. The Katherine part on the nametag didn’t come as much of a surprise seeing as how that is in fact my real name. ‘Hane’, on the other hand, was more perplexing, but during one of the earlier sessions on financial accounting I managed to zone out for long enough to figure out that Hane was the result of a couple factors: 1) My employers have a copy of my passport so they have access to my full, official name in all it’s waspy glory. 2) Most Bolivians have two last names and because they were all using their first last names on the nametags I guess they thought they would use my middle name as my first last name. 3) In Spanish J is pronounced as H is in English and so I think someone from my office read my name over the phone to whoever was in charge of making the nametags and they interpreted Jane as Hane.

The conference was held at a hotel about half an hour outside of CBBA and there were about 40 people in attendance from all of FONCRESOL’s regional offices (La Paz, Potosi, Tarija, Sucre, CBBA). FONCRESOL’s last national meeting was 5 years ago, so this was a pretty big deal for everyone. I was just happy to be there and to be a fly on the wall. The meeting was a great way to learn more about the organization and to get to know the people I work with. I learned that FONCRESOL, although it is one of Bolivia’s smaller microfinance institutions, is an extremely dedicated and innovative organization made up of hardworking, committed people. It’s rare to find an NGO where everyone really wants to be there and where everyone is truly passionate about the cause and mission. Logic would suggest that people working for NGO’s would generally be of this nature, but based on my encounters so far in the NGO world I have learned that this is not always the case and that often people working in this sector end up losing faith rather quickly, especially in the developing world. FONCRESOL however, is well stocked with people who truly believe in the work they are doing and who are determined to promote the development of their communities through the solidarity-banking model.
Below is a photo of me and my male coworkers from the Sucre office who didn’t make it into the last blog. Until I saw this photo I didn’t think that I stuck out that much here...

Another thing I learned on this trip about FONCRESOL employees is that not only do they work, but they play hard too. The first night I couldn’t even make it to dinner after the meeting because I didn’t sleep the night before on the bus. The next morning I found out that almost everyone was up until 5 am living it up. The second night I was dead again and wanted to go to bed, but there was an evening of festivities planned. We had teams from group exercises earlier in the day and these were used again for the evening games, which included a karaoke and dance competition. As the only female on my team I was forced to be a representative in the dance competition... Obviously as a result of my participation my team lost, but I still think I deserve some sort of bonus for attempting to compete with a bunch of limber Latin ladies to reggaeton in front of my new coworkers. Thankfully, I have no photographic evidence of the incident, but below you can find a picture of my poor teammates.

In addition to the dancing, a lot of the conference material was out of my league. There was a bunch of technical stuff about the structural changes that FONCRESOL is going make in the coming years and stuff about the financial risk analysis work they have to do. The only session I was really able to engage in was the presentation on Fair Trade.
FONCRESOL is looking to promote Fair Trade among the producers they work with and they’ve hired a consultant and another Canadian intern on board to pilot the project. Going into the presentation what I knew of Fair Trade from my UBC economics courses was that it's a great, simple trade model that everyone should just start using. This presentation broke that utopian perception... It outlined the lengthy certification process that FONCRESOL would have to help their producers with, which involves going through internationally recognized Fair Trade organizations in order to obtain the official ‘Fair Trade’ seal. I understand that some sort of regulation and standardization is necessary, but I was really frustrated to learn how centralized the Fair Trade Labeling organizations are and how their Western/Eurocentric frameworks make it hard for producers of the Global South to insert themselves into these growing markets. It costs €250 to fill out the preliminary application, then €2000-3400 to get inspected and certified, and then €1500-2700 to get recertified annually. For large commercial farmers these costs would be nothing, but the point of Fair Trade is to work with small, subsistence farmers throughout the Global South and to provide them with access to markets where their goods can be sold at a fair prices. It makes no sense to be charging these already struggling producers with such high fees just so that they can sell their goods. Similar fees apply to the people who are purchasing and reselling official Fair trade goods, but considering that importers are usually from developed nations, comparatively those prices are pretty inconsequential. I actually think the regulations should be stricter on the importer side. As the market for Fairly Traded and Organic goods is becoming trendier, more and more companies are trying to jump on the bandwagon in order to improve their socially responsible corporate image and a lot of companies just fake it. This behaviour has become so widespread that there’s actually a term to describe the technique: greenwashing- a company’s efforts to rebrand themselves with an environmentally friendly/socially aware image regardless of whether or not they have actually changed their corporate practices (ie: Starbucks).
I don't want to rain of the Fair Trade parade, I just want to share some of the intricacies I learned about the system that really grind my gears. I guess as it is still a relatively new concept some significant structural and policy changes will need to take place if it's ever going to take off as an effective development tool, which I hope it does. In the meantime I still believe that supporting existing Fair Trade initiatives is the best way to promote better practice.

Taking Care of Business

Yesterday afternoon I experienced a Bolivian sporting phenomenon. After helping with some English classes at a language school a couple of evenings after work this week, I was invited to partake in their Saturday afternoon tradition- a rousing game of wally. At first I thought they were just mispronouncing 'volley', as in volleyball, but no... it looks like volleyball, it sounds like volleyball, but it most certainly is not volleyball. ‘Wally’ is played on a squash court with a volleyball net, using the walls (I guess that’s where the name comes from) and all body parts. It’s madness. The ball was frantically bouncing off the walls and people’s heads and feet at my face. Eventually I managed to warm up to the whole thing, but I’m still not sold on it. I really just wanted to play volleyball and have some familiarity in my life, but I guess that’s a silly thing to ask for when you agree to play a game you’ve never heard of with a group of Bolivians you’ve just met. I guess it was a positive experience overall, but I still want to know if anyone else on the planet has ever heard of or played this game.
Regardless, the language school was a random and interesting little connection that I made this week. Perhaps I will even find some friends for myself there. I’m still working on that- you know, making friends and stuff…

Aside from being super lame on the ‘wallyball’ court, highlights of this week include the fact that it was my first week of work at FONCRESOL. In honor of that fact I am going to take some time to explain what FONCRESOL does and what I will be doing here for the next few months.

FONCRESOL works with poor, marginalized communities to empower individuals within their local economies through the provision of microfinance services. FONRESOL practices a community-banking model where individuals come together to form an economic solidarity group in order to be granted individual loans. The solidarity group serves as a guarantee mechanism for its members as they have no official financial credit or collateral. Most groups are composed almost entirely of women, not because FONCRESOL has a discriminatory policy, but because they target women due to their proven higher payback rate and the crucial role that women play at home and in the community. Once a group has been approved by FONCRESOL (ie: they all have identification cards and no one is in debt to another institution) they apply for a loan as a group and it is divided among the members. Then the members choose a day each month that they will meet and pay back at least the interest (approx. 2.5%) on their loan. The loans are paid back over 6 month cycles, and after a group has successfully paid back their loan at the end of a cycle they can apply for a larger loan. Most loans begin at around $800 bolivanos ($120CAD) and FONCRESOL does not dictate what the money has to be used for.
Each communal bank has an internal account that is added to by its members who pay fines for things like arriving late to meetings or missing meetings. Some groups also organize community events and contribute any generated funds to the internal account. At the end of the cycle the members can divide the internal account amongst them or carry it on to the next cycle. The internal account can also be used for emergency situations and the group can vote on whether or not they want to lend money to a member in need. This week I had the opportunity to visit a group that had just successfully finished their first loan cycle and was getting ready to apply for their second. There were also new members at the meeting who had heard about the group's success during the first cycle and wanted to join. I spoke to two girls my age there who were taking courses at university and who had small businesses on the side selling perfumes, lotions and beauty supplies.

Although the provision of micro-credit is the basis of FONCRESOL’s work, they are also dedicated to providing social development services to their clients because the organization believes that social development is just as important as economic growth. Due to Bolivia's huge informal economy it has become a competitive place for microfinance institutions and so many are now trying to go above and beyond while others are just happy to aimlessly hand out loans. You can hand out money forever, but if overarching social structures and behaviors don’t change, the added cash won’t have any long-term effects. This is where I come in. I studied economics (my 22 yr old permanently furrowed brow is proof), but I am by no means an economist. What I’m going to do with FONCRESOL is help them build upon their capacity building programs. To date they have held workshops for their clients in areas like human rights, women’s rights and political participation, but they are looking to come up with a methodology that will make the delivery of these workshops more feasible and effective. During my time with FONCRESOL I will be evaluating the current structure of their banking programs to see where I can weasel in some more of this good stuff without burdening the already overworked staff too much. Above you will find photos of some of my co-workers- Berta and Amparo. There are two gentlemen that we work with as well, but I didn’t get a chance to snap their photo on Friday. They’ll show up later. Actually, probably next week because this week I’m going to Cochabamba (on my first business trip EVER!) where FONCRESOL is having their annual national conference. I’m a high-powered business executive.

This afternoon I visited a town about 1 ½ hr outside of Sucre called Tarabuco. They have a well-known Sunday market with lots of artesian crafts and weavings. It was a cold damp day, but it was nice to get out of the city and see some of the surrounding countryside. To top it off, just as my fellow Canadian co-worker Karen and I were about to leave the market a parade materialized and I managed to catch some footage of it. Enjoy the crazy monkey/lion man.
The pictures in this post are from Tarabuco, but similar small market vendors can be found in Sucre and they are an example of the type of clients FONCRESOL works with. Please note the woman selling coca leaves in bulk.