Hiking in Honduras

My weekend adventure in a thousand words...

Economics & Coffee

Remember way back to my first post, What is "El Ritmo de Cambio", where I mentioned this blog's title has two meanings, one pertaining to the rhythm of change, and the other to the rate of exchange? We have now come to my first post on the exchange rate and current state of the Honduran economy.

Why have I waited this long?


Well, the exchange rate for Honduras hasn't changed since 2005. That is, until now. The value of the Honduran Lempira (HNL) back in 2001 was 15.54 Lempiras to the Dollar (HNL/USD) and fell to 18.89 in 2005, where it has remained ever since in its ‘de facto’ fixed exchange rate regime (Historic exchange rates). Note: When the value of a currency falls in comparison to another, the quantity of lempiras required to purchase one dollar rises. This is why 15.54 to 18.89 HNL/USD is a decline in the value of the lempira. This past July, the Central Bank of Honduras decided to reactivate the exchange rate bands at +/- 7% with respect to the established base. Since reactivation, moneychangers have entered the market looking to make some money. There are some unspoken rules here that make things interesting. The Central Bank is accused of having a monopoly on foreign dollars (USD), meaning none of the other banks are allowed to hold on to the dollars they receive from remittances or tourists. They are required by law to sell these dollars at a fixed rate to the Central Bank, who can then take advantage of the variance in the exchange rate and sell those same dollars back at current rates to the banks and companies that demand them.

This change comes at an interesting time. It may very well be a direct consequence of the country’s revised credit rating in June. Standard & Poor's (S&P) country outlook for Honduras was revised from ‘stable’ to ‘positive’ and their credit rating was promoted to a 'B', good news despite the remaining 5 levels before investment-grade status is achieved. This means that S&P is slightly more confident that Honduras will be able to repay its debts. This is due in part to the country’s Stand-by Agreement with the IMF and “continued progress in strengthening tax collections.”

Taxes on coffee exports have also strengthened the ability of Honduras to reduce its fiscal deficit in the coming years. When this tax was imposed, it originally led to an increase in the amount of coffee being smuggled into Guatemala. Guatemalan coffee is very well-known, due in large part to Starbucks featuring Antigua Guatemala coffee, for its quality. This means coffee in Guatemala has been able to fetch higher market prices – higher than Honduras. Since much of the country’s coffee is produced near the border already, why not drive it to a Honduran “storage facility” located in Guatemala and then sell it at above-Honduran-market prices? Well, the tax has funded an increase in the availability of technical assistance to producers to help boost production, leading to an increase in quality and market prices available to Honduras. Ultimately, the trafficking has decreased in recent years and Honduras has emerged as the largest coffee producer in Central America (where it has always been, though unofficially).

Ritmo de Cambio: 18.8693 HNL/USD

A Day in the Mountains

I had planned to put up an interesting post about Honduran economics and exchange rates; however, I had such an adventure yesterday I couldn’t resist sharing with you all.

7:15  Get up as usual, get ready, and eat breakfast – hot milk with stale cornflakes.

8:15  Arrive at the cooperative. I’m told there’s a meeting today at 9:00 with some of the organizations that support us and I’ll be the one giving the presentation.

10:00  Meeting starts: introductions, prayer, and presentation.

11:45  We jump into trucks to visit the beneficio (processing plant) where we’ll be installing the solar panels.

12:40  We arrive back at the cooperative and the visitors take off. We realize that our 12:00 meeting with the socios (cooperative’s members) in the mountains will be delayed (on time?). The president suggests we just go and grab some avocados for lunch on the way.

12:43  Truck pulls up to the cooperative. It’s some of our financiers for an unscheduled meeting and they want to visit the beneficio, too!

12:45  I sneak home to eat lunch

1:45  Jump into the back of a truck for our trip to visit the socios.

2:15  Arrive in Buena Vista (tiny town in the mountains). The president tells me there are only a few people at this meeting and I should head with the rest of the group to the next town, Bella Vista (different tiny town in the mountains). “¡Está cerquita!” “It’s close!” Never believe a campesino(farmer) when they tell you something is close. I think the definition is if they’ve been able to walk there in a day, it’s considered ‘close’. And nothing is close when you’re on a spine-wrenching uphill-downhill ride through the worst dirt roads imaginable in the back of a truck with no shocks.

3:00  Arrive in Bella Vista

3:01  Starts raining.

3:02  Full-on rainstorm, presumably washing away at least half of the road we came in on.

3:05  We start our meeting at near-yelling volume to overpower the sound of the rainstorm on the tin roof.  The meeting is to remind the socios of their responsibilities in maintaining our certifications and to obtain information about each of their fincas (farms). The rain lets up and starts again a few times during our meeting.

5:30  We finish the meeting and rush out to leave before the rain starts again.

5:35  Truck doesn’t start. I offer to give it a try. The main problem isn’t so much that the truck won’t start, but that the key won’t turn. I attempt to straighten the key slightly and give it another go, using increasingly more leverage.

5:36  Key breaks off in the ignition. Blank stares are exchanged.

5:38  Everyone climbs out of the truck and we start walking towards the entrance to the town to find a jalón (ride).

5:50  We hop into the back of another truck, which actually has some shocks, and head back to Subirana.

6:35  Arrive in Buena Vista to pick up the rest of our team. We, in good humor, recount the tale of me breaking the key in the ignition to explain why we’re in a different truck. The president then tells me the key I broke was for the gas tank, and we should have used the other key on the keyring! Whatever, I just want to go home!

7:05  We arrive in Subirana. Thank God it hadn’t rained since we left!

7:30  I get back to the house wet, sore, and tired.

8:00  Eat dinner and head to bed.

Plenty of jokes were made about me breaking the key. I just told them it was too boring otherwise and that I wanted a little more adventure, so I broke the key off in the ignition. My other workmate acknowledged this, and said that’s why he gave me the chance to break it. This all took place with 9 of us in the back of a truck, on a dirt road, in the dark. We were all kind of afraid we might have to stay the night in the mountains, so we were relieved to be returning to our beds. It’s amazing the things that don’t matter when you’re tired. As long as you know your bed is waiting, you can just relax and have fun!

And I still have the broken key to remember it all...

Charter City in Honduras = Development?

It started in 2007. The idea, that is.

Paul Romer, an economist and Stanford professor, began to reconceptualize the idea of economic development. Dr. Romer had considered our basic economic growth models which use inputs like labor, capital, wages, etc. and came to the conclusion that they lacked ‘ideas’ as an input. What if there was a way to create a city, like an embassy, that had a different set of rules by which it was governed so as to instigate development? In 2009, the idea had made its way to the TED stage in Oxford, England. TED stands for Technology, Entertainment, and Design and has become a premiere annual conference for presenting ground-breaking ideas such as this one. Here’s the idea in Dr. Romer’s own words:

When I was in Chicago, when I was a professor there before I went to Stanford, there was a woman who worked for my wife and me. My wife was in a residency program, so this woman helped cook and clean in our house. And she lived in the Cabrini-Green housing project in Chicago, which as many of you know is one of the most desperate failures in our public housing system. And the question that struck me, when I saw her and these two young children she was raising, is why she didn't have a chance to move to a city which could offer simple things like relatively low-cost housing and low crime. She simply didn't have that option in the United States. And I started to ask: why couldn't it be possible to create entirely new cities that could offer options like that for someone like her.

One of the models Romer frequently references is Hong Kong in the 1950s. The British entered into a sort of joint venture with China and took governing control of the island. They created a different set of rules, or ‘norms’ if you will, from China and allowed people to voluntarily move into this zone. The economic conditions of this area created opportunities that had not previously existed. Development of the island has been booming ever since. The charter city is similar, though it would operate more like a joint venture (a business concept) as opposed to a colony governed by a global power. Another similar sounding idea is a free trade zone, though the difference between these zones and the city is the scale. Free trade zones are designed around one idea: trade. However, a charter city would be designed around achieving complete self-sustainability in every regard: infrastructure, education, industry, healthcare, etc.
The idea continued to spread and was discovered by Xavier Arguello, Zelaya's presidential aide, and others in Honduras (WSJournal Article; full text). The idea then spread quickly to President Porfirio Lobo (pictured right), who met with Paul Romer in Washington D.C. to discuss the viability of a charter city in Honduras. This brings us to 2011, where Dr. Romer shared another TED talk in California, applying his charter city model to Honduras. In January, the Honduran Congress voted almost unanimously to change its constitution to allow for these types of developments within its borders. Allow me to reiterate a couple key points before continuing: This charter city utilizes unused land and residency is voluntary. Also, Honduras initiated contact in this interchange of ideas; it is not being thrust onto them by the US or any type of development organization. (Another WSJ article)

The charter city works like this.

First you have to determine who wants to play this game. Honduras has offered itself as the petri dish for this experiment. Discussions are underway with other governments like Canada, Denmark, Switzerland, and other well-established, more or less neutral countries that would enter into this charter city like a joint venture. The responsibility of these countries would be to act as a guarantor in the venture – someone who would ensure fairness between the residents that live there and the companies that operate there.
Second, a zone or location for the city is established. The last article I read said they were proposing a site just outside of Trujillo on the north coast. The second step would be to establish the charter itself – the rules, a point which Romer strongly emphasizes. Rules make the difference between nations; between opportunity and hopelessness; between North Korea and South Korea. Setting up the right kinds of rules with the right incentives and consequences is the key.

Third, you open it up to foreign investment. The appeal of a charter city is its potential. The initial investments for infrastructure will be made in order to reap the benefits of water and electricity payments for decades to come. Other companies will move in to establish themselves under this new, favorable set of rules and take advantage of the semi-cheap labor that exists here. Let’s remember that any residents are relocating voluntarily, and as Romer mentions, the risks associated with moving to this zone are far less than the risks already being taken by those illegally crossing the border to work in the States. Also, remember the governments that have chartered this city are acting as guardians to ensure that no abuses take place on either side – the people or the companies (this goes back to the rules). The companies are driven by profit to operate within the zone and perform well, which means its employees also do well and opportunities are made available for them to prosper.

Romer mentions that roughly 3 billion people live in cities, and this century we will see another 3 billion migrate to cities before we reach some sort of world population equilibrium. This means that the opportunity to implement new ideas for cities, like charter cities, will only exist in this century. And it’s clear that people are looking for different types of solutions after seeing previous methods fail, as is the case in Honduras. There exists some pessimism about the idea, but that’s not unlike any other great idea of the century. Ultimately, there’s only one way to know if it will work.

Peace Corps Challenge: Honduras

As part of Peace Corps' 50th Anniversary celebrations, PC has created the Live Like a PCV (Peace Corps Volunteer) Challenge. Now there's more to being a Peace Corps Volunteer than just dealing with the living conditions, but you can be sure it's no easy task. Maybe we could add to the list that you can't offend anyone! Below I've included the rules for the Honduras challenge.

I don't necessarily live with the harshest conditions listed here, but I would say I live with 90% of them daily. So if you're up for the task, I would challenge you to live like a PCV (i.e. ME!) for a week. Even if you decide you can't hack the challenge, you can read the list to get an understanding of what rural Honduran life is like. If you are doing the challenge, please let me know and comment on this post to share your experience.

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For one week you are asked to give up some of the everyday conveniences we do without. The levels are arranged from more common to less common living conditions of PCVs in Honduras while also taking into account the difficulty of completing the challenge in the US. So while none of us have a car, it ranks quite high in the challenge as it is much more difficult to do without one in the states. Honduras is known as the Banana Republic, which is why we have named our levels from the smallest type of banana to the largest.

First decide which month you want to participate. The first week of the month you choose (the 1st-7th) will be when you need to give up your items.

Next, look through the list below and decide which one of the five levels of difficulty you want to take on, and which items you will give up (although youʼre items may come from multiple difficulty levels you are only trying to complete one level, the most difficult you think you can manage).

Finally, let us know that youʼve taken up the challenge by completing the Accept the Challenge section of the general Live Like a PCV document. (This document is to accompany another if you did not receive that other document which outlines the general nature of this Challenge please visit LiveLikeaPCV.org)

When asked to roll a dice that number represents hours, and should be rolled each day (a regular 6-sided die).

DÁTIL – Difficulty Level I:

Choose 2 of the following

•  You canʼt use running hot water, you may only use water you boiled (yes, this includes baths)
• You canʼt use any microwave
• No checks, no debit cards or credit cards, cash only all week.
• No washing machine or dish washers - plus you must wash all articles of clothing you wore during the week by hand.
• No flushing your toilet paper

MANZANO – Difficulty Level II:

Choose 2 of the following plus 1 from Dátil

• You cannot watch television, but may watch soap operas and soccer at a neighborʼs house.
• Must keep all valuables (cash, phone, ID) hidden. Some options include bra, socks, hats, etc. Get creative.
• No sitting on couches for the week.
• Internet only every other day and for only 1 hour each time.
• Men and women may not wear shorts in public (only choose this item if you live in a warm climate).

CHATA – Difficulty Level III:

Choose 2 of the following plus 1 item from Manzano or 2 items from Dátil

• You can use your toilet but you must manually fill the tank or do a bucket flush (turn off the water to the toilet).
• Power outage: Have someone else throw a dice every day for how many hours you will be without power (5am - 11pm). He/she cannot tell you how long it will be out for, and he/she must turn off your power breakers.
• You can only use one burner on your stove and no oven.
• Say hi to everyone (including strangers) and make a comment about the weather to people you know.
• No supermarkets.

GUINEO – Difficulty Level IV:

Choose 2 of the following plus 1 item from Chata or 2 items from Manzano or 3 items from Dátil

• Reduced living space. You may only use your living room, bathroom and kitchen.
• No driving. You can use public transportation, bike, or walk.
• Cannot leave your house after sunset or before sunrise.
• No running water from your house, you must go fetch it from somewhere else (a neighbor’s house is fine).

PLÁTANO – Difficulty Level V:

Choose 1 from each level

• No English for the entire week
• Lack of temperature control. No heater or air conditioner in your house or car.
• You can only use your cell phone for 10 minutes per day.
• Your diet for the week must include (bad) coffee twice a day with 4 tsps of sugar with each cup or drink soda twice a day. Also must eat tortillas, beans, and eggs daily (absolutely no butter).

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Let's remember how most of the world lives and be thankful for our luxuries. Good luck!

Crowdsourcing

It's an idea that has become increasingly popular in the developed world. However, I think the developing world stands to gain the most from its benefits. You’re probably familiar with the term ‘outsourcing’, where we export our work to India or China because it's cheaper. This idea is a little bit different and (hopefully) doesn't bring to mind sweatshops or layoffs. The idea is this: Imagine a large puzzle with thousands of tiny pieces. Most of the puzzles you and I know have all of these little pieces conveniently placed in a box, the work now is to put these little pieces together to make that winter cabin or giant puppy. So let's take this puzzle, but now the pieces are, instead of in a box, scattered around the country or around the world. And the puzzle isn't made of cardboard, it’s made of information. This information gets communicated through a variety of mediums and is pieced together by man and machine to get a better picture of the puzzle trying to be solved. There is no single expert, rather it utilizes the composite knowledge of the crowd.

This is crowdsourcing.

One example we're all familiar with is Wikipedia. This is an encyclopedia put together by various resources, and is continually edited and updated by people like you and me who may not be an expert on the entire subject, but aggregating bits and pieces of information that we each have stitches together the world's most extensive encyclopedia. Another example involving business is one called Amazon Mechanical Turk. This is a service created by Amazon to outsource little pieces of work to a whole lot of people. These jobs usually take less than a few minutes to complete and pay you a wage in cents. It’s not day-trading and wouldn’t make sense to quit your job and do this full-time, but it is a great way to supplement your income, especially if you run a store out of your home, have frequent downtime and a regular internet connection like my friend here in Subirana. The last example I’ll give, though unpopular, is Google. I mean when Google compiles your and my information and sells it to ad companies. It’s using little pieces of information from each one of us, turning them into trend charts or profiles and selling them. (I could have included them on this blog to turn a small profit from all of you… let me know if you don’t mind and I’ll add them).

Ease of access to the internet has caused this type of interactive collaboration to proliferate. Though, another popular method for aggregating data is the use of mobile phones. For use in the developing world this is key; SMS in particular. There is a group, a non-profit actually, called Ushahidi that developed an open-source software to aggregate and even map information from a variety of inputs including SMS, tweets, and email. Ushahidi is Swahili for testimony. The software was originally developed in Kenya to map incidents of violence and peace efforts after a controversial election in 2008. It has since been used to map the location of earthquake survivors in Haiti, crime reports in Atlanta, and distress messages during the infamous Snowmageddon. Ushahidi has also developed a compact web-based version of the software called Crowdmap where you can find a list of current projects or ‘deployments’. It turns out there’s a current project in Honduras to track and map healthcare resources, and has expanded to include disease outbreaks, incidents of violence, and demonstrations. This information helps people coordinating medical brigades or aid and relief efforts during a potential health crisis.

I’ve known about this type of technology for some time and I have been in the process of trying to figure out a business application for it. Specifically, what kind of information about coffee crops, exports, etc. would the cooperative benefit from tracking? Is there a larger organization with more manpower that would aggregate this information that would also benefit from this information? Who would the information come from and who would be able to or want to access it? I also just discovered that a microfinance organization called Funder and one of the mobile service providers Tigo are offering text message subscriptions to coffee, grain, and vegetable prices. Think of all the potential these kinds of resources have. Ideas welcome.

P.S. I got my stitches out this past Thursday, after a week. And I have spent every day since my last post in bed… a full week. I rediscovered the joy of solitaire and I’m on my way to becoming a computer chess master.

Tale of Two Stitches

It was the best of times, it was the worst of times.

I think those words describe the Peace Corps experience. Or at least I'm told. The highest highs and the lowest lows. I think those are just Dickens' words rephrased.

All kinds of things happen during Peace Corps, just like would happen during any given two years of your typical American life. They also include a few other experiences that typically don't happen in the States. Now, while many people receive stitches back home, I never did. Never a broken bone, never a stitch. You can't really say I'm not the adventurous type, I mean you are talking to a Peace Corps Volunteer... which leads me to recounting the glorious tale of my first two stitches. I'll spare you the graphic photos I had to send to the Medical Officer. But if you really want to see, I posted one on facebook a few days ago.

Honestly, I wish there was a really crazy story that involved machetes, wild rabid animals (don't worry, I'm vaccinated), and me rescuing several small children from a burning building. But it doesn't. The story starts at the high school here in town. It was "student day" which means no classes, games, food, and general tomfoolery. The teachers keep trying to get me to play the games, because they (and I) think if I play, all the girls will want to participate, too. I'm resisting for most of the games, enjoying just watching people do the three-legged race (which I think was a first for most of them).

Then comes the gunny-sack race.

There are six sacks, and they've managed to finagle 5 volunteers so far. They don't seem to be moving on, so I volunteer to take up the sixth, and smallest, gunny-sack to the applause of the students. The gunny sack reaches about mid-thigh, meaning I definitely have to be leaning forward to grab onto it. We line up on the raceway (read: gravel-dirt road). We race down to the end of the track, and prepare to turn around. Turn executed properly. I managed to kick a hole through my sack and was left with my foot hanging out. I spun the sack to get my both of my feet back in the bag. We take off back towards the start and a guy falls in front of me. I don't think I even tripped on him, I was just focused on tactically avoiding the obstacle and down I went. I got back up and finished the race, noting the obvious scratches on my hand. Maybe it was the adrenaline, or the fact that there aren't very many nerve endings in your knee, or that there were thirty-something high school girls watching me, but I didn't really notice my knee.

At first, anyway.

I noticed I tore a hole in my jeans, which I remember hurting more than the physical pain. We're in short supply of malls that sell Levi's down here. Then through the hole in my jeans I could see the blood. And the gaping hole where my knee usually is! Some lucky rock had managed to puncture my skin and whatever else was in the way, trying to get to me knee-cap. Probably that same lucky rock that ripped a hole in my jeans. We spent some time in the back of the school trying to clean up my bloody mess with cotton balls, hydrogen peroxide, rubbing alcohol, and tiny bandaids (that part was unsuccessful). A few people scoured the town to find some gauze pads only to return empty handed. They kept telling me to wait, they were still looking, etc. I finally told them I had a med kit with gauze pads and all kinds of other magical items back at the house if they would just let me leave. I stumble the two blocks back to the house, do a good cleanup job and tape on some gauze. At this point I just needed to lay down and take it easy.

I left.

I had made this commitment to the missionary group that was here to attempt some interpretation. I remember how difficult it is when people are saying all sorts of good things about you, thanking you, maybe crying and you have no idea. So I stumble back a few blocks to the church and head up to the front, now embarrassingly in shorts and flip-flops in an attempt not to irritate the wound. Interpreting is as hard or harder than it sounds, but luckily I had a friend there to help with the English-to-Spanish parts (i.e. most of it). One of the missionaries came up towards the end and mentioned to me that I might be bleeding. I look down my leg to find the evidence. They then discover my current situation and wounded status. Fortunately one of them tells me the cut looks deep enough to require stitches. They offered to help with the needles and thread they had (and no trained professionals). As sweet as that was, I resisted and got the number for the doctor in town since it was after-hours at the clinic. I explained it was sort of an emergency and she agreed to come to the clinic and help me out.

This is ugly.

She said it several times as I was staring at the ceiling trying to breathe as she poured rubbing alcohol over the open wound and dug around checking for bone shrapnel. All clear. I don't think I'll need an X-ray. She puts in the two stitches, patches it up with gauze and tells me to take it easy for a while. Minimal to no walking for a few days, some antibiotics and anti-inflammatories, and after a week we'll take out the stitches. I headed over to my friend's house to get some movies for the long weekend in bed.

The whole ordeal wasn't even that bad, it's just not very fun not being able to walk and being stuck in bed all weekend. Seems to be healing well and I'm able to sleep again, so now we just wait. And for all those people that think "third-world" medicine is crazy and unsanitary and are surprised they didn't just amputate my leg... it's not that bad. And the best part, the trip to the clinic after-hours and the two stitches totals a whopping 50¢, which Peace Corps would even reimburse. I can only imagine how much this ordeal would cost in the States, all for a small aquarium, comfy stools, and unused needles (just kidding!).


Well, if you feel bad for me, feel free to take this opportunity and send me a package. I'm not picky, but I really like chocolate and it's impossible to find here. You can find my address at the right.


Meanwhile, I'm so glad I could finally get back to work today...


Location: In the Cooperative.
Status: Meeting with the supervisory board. Going on 6 (now 7) straight hours with a short lunch break.
Current topic of conversation: Why the associates don't come to meetings...