First, Happy Half Birthday, Uncle David! Second, Happy Half Birthday (yesterday) to us both, Rach! I celebrated with Alvi by making our now internationally famous three sauce lasagna. It was delicious, and I'm happily enjoying the leftovers this morning even though Alvi can't (because he thinks the garlic sauce will be too potent at work).
As another part of my celebration yesterday, I decided to try out a recipe for flax and parmesan crackers. Sadly, I wouldn't recommend them- stick with my famous Chickpea Crackers- the cheese tastes funny after 12 minutes in the hornito. Still, crackers take a while to make- rolling out the "dough", cutting them into shapes, and waiting while the small hornito struggles to keep up. While I worked, I decided to catch up on some of my unheard NPR podcasts.
I listened to a Planet Money podcast that was updating a previous one, and they mentioned that the White House killed the Presidential dollar coin program- literally millions of dollars were being minted after Congress passed a law requiring their minting, only to be immediately shipped away to vaults because there was very low demand for them. It was required that 20% of the newly minted dollar coins (mostly Presidential) have Sacagawea's face on them to continue remembering her legacy. Unfortunately, there is little to no demand for the Sacagawea dollar coins, and the demand for the Presidential dollar coins come mostly from collectors. Most of the coins now sit in vaults.
...or do they??
I know where they are! They're in Ecuador! Ecuador dollarized in 2000, and while they use some of their own coins, all US tender is legal and accepted, including all dollar coins. First of all, it's important to mention the predominance of cash down here. It always shocks me when I go home that I can use my credit card for pretty much any purchase, no matter how minor. I don't have any cash? No big deal, everyone will take my card and we can even split a meal out with friends three ways on different cards. Here, the only place where I ever use my debit card is at the supermarket. I pay for everything else- meals out, taxi rides, pharmacy purchases- with cash. It's hard for me to generalize, but even adults with steady jobs who probably have a credit card pay with cash when we're out to eat.
This makes a lot of sense because most of my non-supermarket purchases come from smaller vendors who can't afford to get a card swiper. I get my fruits and veggies from the women at the open market, and I pay in cash. I buy minutes for my cell phone from my neighbor at the tiny paper shop and he won't usually accept any bills that are bigger than $10 unless I'm printing a lot. We've already discussed this- exact change is pretty important down here. So people use cash here, which is different from in the US. But people also use cash differently.
For example, while 50 cent coins may be pretty odd in the US, they're a regular part of my change purse here. 50 cent coins are mostly Ecuadorian, but every once in a while you'll come across a US 50 cent coin. And now back to the original topic- dollar coins are hugely popular here. I honestly don't remember the last time that I had a dollar bill in my change purse. The Sacagawea coins are the most popular ones, probably because the Presidential coins haven't been exported down here in huge volumes yet. Daria brought down some Grant dollar coins, which are particularly shinier than the Sacagawea ones, and some of the Ecuadorians didn't believe that it was real. The first time that we tried to pay for bus fare with one of the coins, the driver said, "what is this? this isn't a real coin!" We had to explain that it had come directly from the source- the US! He eventually took it, and thus the Presidential coins began to circulate in Ecuador. I mean, they were probably circulating earlier, but Daria and I played a role.
Panama has been dollarized since 1904, pretty much since it broke off from Colombia. Apparently the dollar coins are popular there too, although Panama, like Ecuador, uses some of its own coins as well.
If you're interested, here are links to the NPR stories about the dollar coins. The first one explains the program and its problems, and the second one announces on December 13, 2011 that the program was officially halted.
http://www.npr.org/2011/06/28/137394348/-1-billion-that-nobody-wants
http://www.npr.org/blogs/money/2011/12/13/143648506/white-house-kills-dollar-coin-program?live=1
Tuesday, January 24, 2012
Thursday, January 19, 2012
ecuatorianos dejan de ser pobres
In reviewing the news this morning, I noticed that several recent articles in the Economy section listing statistics that were particularly interesting and eye-opening. The first article stated that between December 2010 and December 2011, 651,000 people were no longer considered living in poverty in Ecuador- currently, 28.6% of the total population lives in poverty.
(For those who read Spanish or want to check out the article with a translater, here's a link: http://andes.info.ec/economia/al-menos-651-mil-ecuatorianos-dejaron-de-ser-pobres-en-2011-132183.html)
I was pleasantly surprised to read that many people had left poverty- until I read that the poverty line was established at $72/month per capita- those who earn less are considered poor.
Whoa, guys- $72 is not a lot! especially not in the city. I probably spend more than $72/month on just food. $72 is more than three times my monthly rent. My internet bill + my electricity bill + my telephone bill/monthly "recharges" of my prepaid cell phone + a nice bottle of wine + an ethically traded chocolate bar cost more than that. If you take a $2 taxi to and from work every day for a month, your transportation costs are more than $72. I know that I don't live anywhere remotely near the poverty level- Rotary generously makes sure that I don't- but that number really shocked me. Living in Quito on only $72/month would be tremendously difficult, uncomfortable, and unhealthy. Even those who earn $80, or $100, or even $150/month, while not considered living in poverty, probably live in pretty abject conditions. That probably explains the next statistic that the article mentions.
The study explains that in urban areas, where 9.61 million people live (from Ecuador's total population of about 14.49 million according to the World Bank), 17.4% are affected by poverty. Meanwhile, in rural areas which are inhabited by about 4.88 million people, the poverty rate is much higher at 50.9%.
This makes a lot of sense- it's a lot more expensive to live in cities, so those without sufficient income tend to move to (or more likely, stay in) rural areas. In the campo, rent is significantly cheaper (if you pay rent at all- most people construct their own homes), and food costs can be reduced if you produce food or if you can trade some of your agricultural products or "free" labor for food and other necessities within the community. Transportation costs are usually negligable if you stay in your community because most people work on their own land. So even if you earn less than $72/month, you can probably scrape by with slightly less (although the conditions are still sure to be less than comfortable). Still, most farmers (the most common rural occupation) are poor because of a lack of agricultural training, insufficient land, historical inequalities, and because of low world prices for unprocessed agricultural products, among other reasons.
To illustrate this last point with some data related to my thesis: 90% of cocoa beans come from developing countries, yet only 5% of the global production of chocolate takes place in these countries. The price of cocoa beans Tuesday was about $2307/metric ton (MT) according to the International Cocoa Organization. One metric ton = 1,000,000 grams. To make the math easier (for me), let's assume that a 100g chocolate bar contains exclusively cocoa liquor- no sugar, soy lecithin, vanilla, or other flavors. An Ecuadorian organic chocolate maker called Pacari (we'll talk more about them soon) calls a 100% cocoa bar like this their "raw" bar.
From 1 MT of cocoa beans, you can get 800 kg of cooca liquor. 800 kilos is 800,000 grams, or 8,000 100 gram chocolate bars. For reference, a 100g bar of chocolate is really enormous- Theo's single origin bars are 84g, and they're big; Pacari's single origin bars are 50g and they're more standard sized. You could make about 9, 524 of Theo's 84g bars, or 16,000 of Pacari's 50g bars.
Theo's 84g bar- $6.95 at The Meadow*, $5 on their website.
Pacari's 50g raw 100% bar (single origin bar pictured, also 50g)- $6.95 at The Meadow, $6 on their website
So you could make 16,000 50g Pacari 100% raw bars for $2307, assuming no processing (ie. chocolate making) costs- that's the cost of 1 MT of cocoa beans. Pacari's raw bar sells for $6 online. If you were to sell 16,000 bars for $6, that's a total of $96,000. Minus the $2307 cost for the MT of cocoa beans, and you have a $93,693 profit.
This is obviously incredibly simple economics. I didn't include the cost of labor, renting/owning a factory, import fees and costs, processing, utilities, insurance, certification, etc. But it goes to show (here comes my point for this lengthy explanation) that the cocoa farmers who produce the basic product- cocoa- are those who least earn income in this whole process. Most of the value added in a chocolate bar is in the processing to make it into chocolate- not just beans. Chocolate can be so expensive that I've met farmers who have never tasted "real", dark chocolate- the only thing they can afford (occasionally) is a cheap milk chocolate bar. Even when beans are ground slightly into nibs, they are sold at hugely exaggerated prices in developed countries- a process that a farmers cooperative could easily do with some basic training and access to credit to buy the machinery and receive the training. Also important to remember- most farmers don't produce metric tons of cocoa- they can produce maybe 400kg/year/farmer. This obviously depends on the farmer, his/her land, agricultural disease issues, cocoa variety, pruning and other habits, etc. Basically, my point is that there's no wonder that 50% of rural inhabitants live in poverty- they receive the lowest price for their product which is turned into highly expensive luxury bars. One study explains that farmers get at best 5% of the retail value of their chocolate.
That was a lengthy, unnecessarily complicated viewpoint into the cocoa industry to prove a point that probably most people already knew- farmers don't get much money for their natural resources that are turned into expensive, value-added commodities. But the next time you think about poor, rural farmers in developing countries you can consider that they're not necessarily poor because they're unmotivated, uneducated, or uninterested (although these can all reasonably factor into poverty), but also because the world system that they (and we all) operate in plays a big role in working against them. Most farmers and their cooperatives are unsuccessful in bargaining for better prices or for more technical equipment for a myriad of social, cultural, economic, political and historical reasons- but that's for another post.
*The Meadow is a Portland and NY based gourmet/ethical shop that sells chooclate salt, among other pricey items. We visited while I was home in Portland.
(For those who read Spanish or want to check out the article with a translater, here's a link: http://andes.info.ec/economia/al-menos-651-mil-ecuatorianos-dejaron-de-ser-pobres-en-2011-132183.html)
I was pleasantly surprised to read that many people had left poverty- until I read that the poverty line was established at $72/month per capita- those who earn less are considered poor.
Whoa, guys- $72 is not a lot! especially not in the city. I probably spend more than $72/month on just food. $72 is more than three times my monthly rent. My internet bill + my electricity bill + my telephone bill/monthly "recharges" of my prepaid cell phone + a nice bottle of wine + an ethically traded chocolate bar cost more than that. If you take a $2 taxi to and from work every day for a month, your transportation costs are more than $72. I know that I don't live anywhere remotely near the poverty level- Rotary generously makes sure that I don't- but that number really shocked me. Living in Quito on only $72/month would be tremendously difficult, uncomfortable, and unhealthy. Even those who earn $80, or $100, or even $150/month, while not considered living in poverty, probably live in pretty abject conditions. That probably explains the next statistic that the article mentions.
The study explains that in urban areas, where 9.61 million people live (from Ecuador's total population of about 14.49 million according to the World Bank), 17.4% are affected by poverty. Meanwhile, in rural areas which are inhabited by about 4.88 million people, the poverty rate is much higher at 50.9%.
This makes a lot of sense- it's a lot more expensive to live in cities, so those without sufficient income tend to move to (or more likely, stay in) rural areas. In the campo, rent is significantly cheaper (if you pay rent at all- most people construct their own homes), and food costs can be reduced if you produce food or if you can trade some of your agricultural products or "free" labor for food and other necessities within the community. Transportation costs are usually negligable if you stay in your community because most people work on their own land. So even if you earn less than $72/month, you can probably scrape by with slightly less (although the conditions are still sure to be less than comfortable). Still, most farmers (the most common rural occupation) are poor because of a lack of agricultural training, insufficient land, historical inequalities, and because of low world prices for unprocessed agricultural products, among other reasons.
To illustrate this last point with some data related to my thesis: 90% of cocoa beans come from developing countries, yet only 5% of the global production of chocolate takes place in these countries. The price of cocoa beans Tuesday was about $2307/metric ton (MT) according to the International Cocoa Organization. One metric ton = 1,000,000 grams. To make the math easier (for me), let's assume that a 100g chocolate bar contains exclusively cocoa liquor- no sugar, soy lecithin, vanilla, or other flavors. An Ecuadorian organic chocolate maker called Pacari (we'll talk more about them soon) calls a 100% cocoa bar like this their "raw" bar.
From 1 MT of cocoa beans, you can get 800 kg of cooca liquor. 800 kilos is 800,000 grams, or 8,000 100 gram chocolate bars. For reference, a 100g bar of chocolate is really enormous- Theo's single origin bars are 84g, and they're big; Pacari's single origin bars are 50g and they're more standard sized. You could make about 9, 524 of Theo's 84g bars, or 16,000 of Pacari's 50g bars.
Theo's 84g bar- $6.95 at The Meadow*, $5 on their website.
Pacari's 50g raw 100% bar (single origin bar pictured, also 50g)- $6.95 at The Meadow, $6 on their website
So you could make 16,000 50g Pacari 100% raw bars for $2307, assuming no processing (ie. chocolate making) costs- that's the cost of 1 MT of cocoa beans. Pacari's raw bar sells for $6 online. If you were to sell 16,000 bars for $6, that's a total of $96,000. Minus the $2307 cost for the MT of cocoa beans, and you have a $93,693 profit.
This is obviously incredibly simple economics. I didn't include the cost of labor, renting/owning a factory, import fees and costs, processing, utilities, insurance, certification, etc. But it goes to show (here comes my point for this lengthy explanation) that the cocoa farmers who produce the basic product- cocoa- are those who least earn income in this whole process. Most of the value added in a chocolate bar is in the processing to make it into chocolate- not just beans. Chocolate can be so expensive that I've met farmers who have never tasted "real", dark chocolate- the only thing they can afford (occasionally) is a cheap milk chocolate bar. Even when beans are ground slightly into nibs, they are sold at hugely exaggerated prices in developed countries- a process that a farmers cooperative could easily do with some basic training and access to credit to buy the machinery and receive the training. Also important to remember- most farmers don't produce metric tons of cocoa- they can produce maybe 400kg/year/farmer. This obviously depends on the farmer, his/her land, agricultural disease issues, cocoa variety, pruning and other habits, etc. Basically, my point is that there's no wonder that 50% of rural inhabitants live in poverty- they receive the lowest price for their product which is turned into highly expensive luxury bars. One study explains that farmers get at best 5% of the retail value of their chocolate.
That was a lengthy, unnecessarily complicated viewpoint into the cocoa industry to prove a point that probably most people already knew- farmers don't get much money for their natural resources that are turned into expensive, value-added commodities. But the next time you think about poor, rural farmers in developing countries you can consider that they're not necessarily poor because they're unmotivated, uneducated, or uninterested (although these can all reasonably factor into poverty), but also because the world system that they (and we all) operate in plays a big role in working against them. Most farmers and their cooperatives are unsuccessful in bargaining for better prices or for more technical equipment for a myriad of social, cultural, economic, political and historical reasons- but that's for another post.
*The Meadow is a Portland and NY based gourmet/ethical shop that sells chooclate salt, among other pricey items. We visited while I was home in Portland.
Monday, January 16, 2012
Quito: Home of extreme weather
People, there is a huge thunderstorm here! Since you hate thunderstorms, a campaign for Quito 2015 probably wouldn't be very successful, Rach. Things are pretty intense- for the past five minutes I've been watching lightning and then before the lightning even finishes I hear the thunder. They say that you should count the seconds between when you see the lightning and when you hear the thunder, and that ever second between the two represents more or a less a mile of distance for the lightning. If that was the case, my dear vecino's stationary store would be struck! This thunderstorm has been accompanied by super super super strong rain and hail too. And to think that earlier this morning I walked out without a coat (but with an umbrella- I know how things can work around here)!
Other than extreme weather observing, it's been a slow transition back into the flow of things. Alvaro's French friend whom he met in Chile is currently living in Colombia and needed to leave the country to renew his tourist visa, so he came here to Ecuador! (I know, complicated right?) We hosted him starting on Thursday, and we took him out to the Centro Histórico, the Parque Carolina, and the Capilla del Hombre- Guayasamin's famous museum. We also played the card game Liverpool rummy, showed off the independent cinema/café near our place, prepared a big brunch, and took him out for a night of reggaeton/salsa/latino-gringo Top 40 dancing. It was nice to tour around Quito, even if I've been to these places a lot, although admittedly it's nice to be back in my "normal" schedule of not having a schedule but working on my thesis.
Other than extreme weather observing, it's been a slow transition back into the flow of things. Alvaro's French friend whom he met in Chile is currently living in Colombia and needed to leave the country to renew his tourist visa, so he came here to Ecuador! (I know, complicated right?) We hosted him starting on Thursday, and we took him out to the Centro Histórico, the Parque Carolina, and the Capilla del Hombre- Guayasamin's famous museum. We also played the card game Liverpool rummy, showed off the independent cinema/café near our place, prepared a big brunch, and took him out for a night of reggaeton/salsa/latino-gringo Top 40 dancing. It was nice to tour around Quito, even if I've been to these places a lot, although admittedly it's nice to be back in my "normal" schedule of not having a schedule but working on my thesis.
Wednesday, January 11, 2012
Life sin luz- without light
In Spanish they refer to power or electricity in a home or building as "la luz"- the light. Here in my apartment in Quito, we've been sin luz- without light- for a little more than four days, and it's been quite an adventure. Although I don't have as many electrical aparati in my apartment here as my parents do at home (no DVD player, no microwave, no digital clocks, no central heating), pretty much everything essential in my apartment operates with electricity- an electric stove, an electric water heater, my refrigerator, the internet connection, and obviously the lights. Although I'd left a friend some money to pay my bills, she wasn't able to make it to a bank where they would accept the bill, so the luz was cut off on Friday and I was told I couldn't pay the bill until Monday.
Friday night we arrived, used my mini flashlight, and collapsed in bed. During the day, my apartment gets lots of natural light, but during the evening it gets dark around 6pm. Saturday evening we had a romantic candlelit evening (we put the candles in wine bottles- very bohemian from everything I've seen in movies and in small cafes- and we also utilized my menorah and beeswax candles that the family sent) and we played cards, read books and just chatted. By Sunday I was ready for real electricity and a warm, home-cooked meal. Instead, Alvaro and I visited a cafe in the afternoon to use their internet while drinking cups of tea and hot chocolate that lasted over two hours and during the evening I strained my eyes reading my Kindle by candlelight.
Sunday we also reached a new low, trying to boil water in the fondue pot using tea candles. We were successful in creating small bubbles, but no heavy boil and our "meal" of pasta turned out gummy. Still, we felt a small sense of accomplishment and genius at the the idea to use the fondue pot and candles.
Monday morning we paid the bill in full and were told that the power would be reinstalled around 3pm. We went to the Supermaxi and optimistically bought a lot of perishable foods, anticipating the return of the luz. I went over to a local friend's place to make some quinoa and sauté some onions, which was one of the best meals we'd eaten in days if only because it was home cooked and warm. In the evening I collapsed into a pit of dispair when they didn't install the power and wouldn't answer my (persistent) phone calls. I reached yet another new low and succumbed to my desire (need?) for a hot shower and I eventually paid the hostel across the street (where Mom and Dad stayed over a year ago- by the way guys, I returned the key that you accidentally took with you) $5 to take a shower there. We bought more candles for the third night in a row and bemoaned our dependency upon electrical aparati and the inefficiency of the state-owned electricity company.
Yesterday morning, good news arrived- at 9am the holiday lights that we had plugged in to be our indication of the return of the luz finally turned on! Alvaro and I both did victory dances- for reals- and cooked meals, boiled water for tea and coffee, showered, and generally used a lot of electricity. I caught up on some emails and Skyped with family in the evening. I also probably talked about how great it was that the electricity was back on for about an hour during the day. Miracle of light!
Friday night we arrived, used my mini flashlight, and collapsed in bed. During the day, my apartment gets lots of natural light, but during the evening it gets dark around 6pm. Saturday evening we had a romantic candlelit evening (we put the candles in wine bottles- very bohemian from everything I've seen in movies and in small cafes- and we also utilized my menorah and beeswax candles that the family sent) and we played cards, read books and just chatted. By Sunday I was ready for real electricity and a warm, home-cooked meal. Instead, Alvaro and I visited a cafe in the afternoon to use their internet while drinking cups of tea and hot chocolate that lasted over two hours and during the evening I strained my eyes reading my Kindle by candlelight.
Sunday we also reached a new low, trying to boil water in the fondue pot using tea candles. We were successful in creating small bubbles, but no heavy boil and our "meal" of pasta turned out gummy. Still, we felt a small sense of accomplishment and genius at the the idea to use the fondue pot and candles.
Monday morning we paid the bill in full and were told that the power would be reinstalled around 3pm. We went to the Supermaxi and optimistically bought a lot of perishable foods, anticipating the return of the luz. I went over to a local friend's place to make some quinoa and sauté some onions, which was one of the best meals we'd eaten in days if only because it was home cooked and warm. In the evening I collapsed into a pit of dispair when they didn't install the power and wouldn't answer my (persistent) phone calls. I reached yet another new low and succumbed to my desire (need?) for a hot shower and I eventually paid the hostel across the street (where Mom and Dad stayed over a year ago- by the way guys, I returned the key that you accidentally took with you) $5 to take a shower there. We bought more candles for the third night in a row and bemoaned our dependency upon electrical aparati and the inefficiency of the state-owned electricity company.
Yesterday morning, good news arrived- at 9am the holiday lights that we had plugged in to be our indication of the return of the luz finally turned on! Alvaro and I both did victory dances- for reals- and cooked meals, boiled water for tea and coffee, showered, and generally used a lot of electricity. I caught up on some emails and Skyped with family in the evening. I also probably talked about how great it was that the electricity was back on for about an hour during the day. Miracle of light!
Tuesday, January 10, 2012
In Ecuador- update!
Things are finally rolling into place!
First, an explanation: Alvi is in Quito with me to live and work for another 4-5 months. I thought I had told everyone this, but when I was home, it was made clear that I had only told people in my head. Now everyone knows!
At home, Alvi and I had a great time hanging with Rachel and Dan in San Francisco, visiting friends and family in Vancouver and in Mukilteo, and touring around Portland and celebrating the new year with Sara, Nell and Craig who all flew out for an amazing reunion and visit.
So Alvi and I had a delightful time at home, and a terrible flight back. Although we left Portland together, we had different flights from LA to Miami, and Alvi had to overnight in the Miami airport while I got to overnight at the luxurious Chez Sara with my friend from college in LA. In Miami, our flight left an hour late, and as we were about to land in Quito, our airplane suddenly started to ascend and we were informed a few minutes later that we were being rerouted to Guayaquil- about a 50 minute flight from Quito- because the temperature was too cold in Quito to land. In Guayaquil we weren't allowed to deplane, and our plane was refueled. We departed from Guayaquil again and made a second attempt to land in Quito and for a second time we couldn't land. Back in Guayaquil for the second time, we waited in long lines for hotel and meal vouchers from American Airlines. We arrived in our hotel around 3am, and were told that our flight wasn't scheduled to leave until 8:30pm the next day.
Thankfully, we were able to walk around in Guayaquil and we saw the Malecón (pier) and a park with tons of iguanas! The iguanas were really cool. We finally returned to Quito ridiculously bad smelling (neither of us remembered to pay attention to our parents' constant advice to pack extra clothes in our carry-ons and we weren't allowed to take our suitcases off the plane until we arrived in Quito) but content to be home.
At home Friday evening we were greeted by another surprise...the electricity had been cut off! It was finally restored this morning. But that's another post!
First, an explanation: Alvi is in Quito with me to live and work for another 4-5 months. I thought I had told everyone this, but when I was home, it was made clear that I had only told people in my head. Now everyone knows!
At home, Alvi and I had a great time hanging with Rachel and Dan in San Francisco, visiting friends and family in Vancouver and in Mukilteo, and touring around Portland and celebrating the new year with Sara, Nell and Craig who all flew out for an amazing reunion and visit.
So Alvi and I had a delightful time at home, and a terrible flight back. Although we left Portland together, we had different flights from LA to Miami, and Alvi had to overnight in the Miami airport while I got to overnight at the luxurious Chez Sara with my friend from college in LA. In Miami, our flight left an hour late, and as we were about to land in Quito, our airplane suddenly started to ascend and we were informed a few minutes later that we were being rerouted to Guayaquil- about a 50 minute flight from Quito- because the temperature was too cold in Quito to land. In Guayaquil we weren't allowed to deplane, and our plane was refueled. We departed from Guayaquil again and made a second attempt to land in Quito and for a second time we couldn't land. Back in Guayaquil for the second time, we waited in long lines for hotel and meal vouchers from American Airlines. We arrived in our hotel around 3am, and were told that our flight wasn't scheduled to leave until 8:30pm the next day.
Thankfully, we were able to walk around in Guayaquil and we saw the Malecón (pier) and a park with tons of iguanas! The iguanas were really cool. We finally returned to Quito ridiculously bad smelling (neither of us remembered to pay attention to our parents' constant advice to pack extra clothes in our carry-ons and we weren't allowed to take our suitcases off the plane until we arrived in Quito) but content to be home.
At home Friday evening we were greeted by another surprise...the electricity had been cut off! It was finally restored this morning. But that's another post!
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