Camels, Commodities, and Bankers Instead of the Incas

Peru is going through its most serious drought in decades.

The piece below on Camels etcetera was published half a dozen years ago in Caretas. The author adds this today (December 15, 2016):

I discussed the longer-term global warming issue the other day with President Kuczynski, asking what he has in mind, and referring specifically to the continued drop in fisheries stocks in the Peruvian Pacific, the disappearance of the glaciers in the Central and Southern Andes, and continued logging in the jungle. He replied it was essential to rebuild fisheries stocks, meaning cutting back in commercial and factory fishing. On logging, he said the first thing has to be a halt in gold placer illegal mining in the jungle. In the mountains, he said the government is planning high altitude forestry plantations a la Inca.

Let’s hope.

Camels, Commodities, and Bankers Instead of the Incas

By Nicholas Asheshov

Ferocious blizzards in the United States, a warm North Pole, biblical floods in Queensland and drought in northern China are being blamed on La Niña but here in Urubamba close, one supposes, to the Niño+Niña epicentre, the climate could not be more charming.

The shock pre-Niña rains here a year ago, which cut away big slices of the railway to Machu Picchu, have been followed this year by the traditional monsoon mixture of daily sunshine and rainfall. It’s sparkling, green and friendly, our favourite time of the year. Here we are in the mysterious, carefully-sculpted Cloud Kingdom of the Incas. They got it right.

The first El Niño that gave Peru a headline role in the world’s climate drama occurred four decades ago with the 1972 Niño. Newspapers worldwide published little maps showing Peru with arrows going in all directions. My sister Anna, an international skier, complained that Peru’s desert rainstorms were ruining the snow in the Swiss Alps for her championship schedule -globalization avant le mot.

That Niño had been preceded in Peru by a famously remorseless anchoveta hunt by the brash new Peru fishing fleet led by the engaging, brilliant Lucho Banchero. Every single anchoveta, from the beach breaks to the whale belt 100 miles offshore was netted. Boats would capsize and sink with too much fish. The catch was 12 million tons, one in every five fish caught worldwide that year.

The Apus struck back instantly and, as we will see, they are still furious. The horizon-to-horizon clouds of seabirds, the world’s greatest, have never returned. We watched starving pelicans fight for their last scraps in the Surquillo market. The price of fishmeal, corn, wheat, sugar, cotton and soya skyrocketed on the New York and Chicago markets.

Serendipitously possibly, OPEC doubled and tripled the price of oil to $15 the barrel.

I myself moved the market. I reported to McGraw-Hill’s commodities wire on the basis of a good-humoured tip from the U.S. Embassy, then literally a stone’s throw away on Av Washington, that Arabs had come to Lima to buy copper. I practically had them mounting their camels in flowing robes at the door of the Hotel Bolivar before riding down La Colmena. The Chicago Board of Trade copper price jumped from 60 to 70 cents the pound but I was too young and poor to take advantage. In any case I had just come from Fleet St where you learn on Day One never to believe your own story.

Thus the first post-WWII price crisis. Nixon had de-pegged the dollar from gold. The oil people had no idea what to do with their billions –before that a million or two was real money– and gave it to Citibank who lent it to obscure states that even Brazilians hadn’t heard of, to Peronists in Argentina and to the Banco Popular in Peru. Six hyper-crises later, here we are yet again. Hundred-degree heat scorched the wheat crop last year in Russia and the Ukraine, The same economists who six months ago were gasping deflation are now fighting inflation by, of all things, reducing taxes.

So here in Urubamba we all know that bumbling bankers, confused bureaucrats and a cascade of Niños and Niñas have packaged themselves into a global rollercoaster. Stop the World, I want to get off, though I bet that here in Peru we’re safer than anywhere else.

Here in any case is where we stand, broad-brush, in the southern Sierra as far as global warming is concerned.

Four decades of figures from Senamhi, the weather bureau, show an average increase of between two and three degrees centigrade –the figures themselves are precise but it depends on the location. This is a lot. The glaciers from the Vilcabamba south to the Cordillera Real above La Paz and Lake Titicaca have all but disappeared. The remains of old airplanes that crashed into them 30 years ago are being uncovered.

Average rainfall has lessened, too, though the overall figures aren’t startling. But the rain now comes in sharp bursts, meaning there’s a lot less for farmers.

“We’re having to undo the work of decades where European NGOs brought in expensive cows and crops like alfalfa to feed them. Now there’s not enough water,” a government official in Cuzco tells me.

“We’re bringing back llamas and alpacas, smaller fields. We’re going back to how it used to be.”

As you might imagine, the Incas had it all clear. Their big polylepis-queuña forests conserved water and their thousands of terrace complexes made best use of it.

If I, like many of my friends, were running for President, my plan de gobierno would be just four words and here they are:

Back to the Incas.

This February, 2011 article was first published in Spanish in Caretas.

Nelson Mandela and my Austin Healey

Low riding Healey

Low riding Healey

Urubamba Dec 2013

Caretas – Country Notes

By Nicholas Asheshov

I arrived in Johannesburg a few weeks after Nelson Mandela had been sent off for life to Robbin Island.FOr most of the two million Whites in South Africa, and for many even of the 11mn Blacks, this was a relief, a solution. Mandela was an Extremist, a Communist, a troublemaker…

I had a one-room flat in Hillbrow, a lively bohemian quarter a dozen blocks from the -centre where the offices of the Jo’burg Sunday Times had its offices and where I had found a job as a reporter. Later I transferred to the Jo’burg office of the Associated Press, nearby.

On Saturdays and Sundays I lived it up in the cafes and pubs of Hillbrow and played tennis and swam in the rich swimming pools of the White northern suburbs.

My contact with Blacks was almost nil. When I had arrived, on a flight from Lagos, I was house-sitting for a friend, a lawyer who had the painters in. The painters were, of course, Black. They called me “B’ass” boss. They were nice chaps. Me, just arrived from England and indeed three years in Peru and Brazil, told them, “I’m Nick.”

“Yes, B’ass.”

Later, in my flat in jolly Hillbrow, today black and white and thoroughly dangerous they tell me, I had a plump Black lady, Sophie, who cleaned for me and other people in the building. By then I had acquired a noisy sports car, an Austin Healey two-seater, which had lost its cockpit hood. If it rained, I got wet. I had offered to take Sophie back home to Soweto, the massive Black township. This was not just Brit kindness: I needed an excuse to go there. It was just as prohibited for Whites to go to a Black area as it was for Blacks to be in a White area, like Hillbrow, without a pass. The Pass Law was a cornerstone of apartheid and once I got arrested, by a black plainclothesman, for taking photographs of a roundup of illegals. The black cop did not call me B’ass.

Finally I got Sophie to agree, to the Soweto trip; though she had never seen my car. In the street the dented but gleaming Healey was parked and ready. I opened the little passenger door for her.

She was appalled. “Where am I to sit, Boss?”

The Healey had a tiny thin back sort-of seat for a cat and a thin briefcase. Sophie, was matronly. It had not occured to me, and why would it, that she would never want to sit next to me. The passenger seat, like the driver’s, placed the passenger’s bum nine inches off the road. Sophie could not conceive of sitting anywhere but in the back. She got in but hated every minute of it, especially when we got to the dreary, dry Soweto (South West Township). She refused absolutely to allow me to drive her to her home, children, husband, and neighbours.

In the parks, of Jo’burg, Pretoria, Cape Town, everywhere, the benches, side by side were stencilled ‘Nur Blanke’ or ‘Nur Schwarz’: Afrikaans was the language of apartheid. Buses, trains, restaurants, everything was segregated. Taxi drivers where white for whites, black for blacks.

The Sunday Times, like its sister the Rand Daily Mail, was anti-apartheid. But this did not mean that they were in favour of, of Blacks running the country. Whatever it was that they wanted, it, as we know, never happened.

My lawyer friend was once defending a Portugese carpenter who had been caught having sex with a black girl, a criminal offence. Barry, my friend, asked me to appear as an expert witness to tell the judge that the carpenter in his native Portugal could never imagine that inter-racial sex was illegal. I think he got off, though no thanks to me.

Visiting Japanese were honorary whites. Chinese were also-rans as Coloureds, as were Malays and Indians.

Once I wrote a story, ‘The Case of the Sun-Tanned Settler,’ published worldwide, about a Greek immigrant who was denied entry by the authorities at the port of Durban because he had been suntanning himself on the three-week boat voyage. through the Red Sea and was now too dark.

The potential for violence was not just from the Blacks. Not long after Mandela was sent to Robbin Island, a white teacher called Harris was hanged for a protest bomb, which killed several people in Johannessburg main railway station. The Sunday Times was firmly in favour of the sentence.

At around the same time, a rich English South African farmer shot President Hendrik Verwoerd at point-blank range at an agricultural show, but the shot did not kill him. My friend Don Royle of the AP got the only photograph of the apparently dead Verwoerd, lying on the ground. Verwoerd, a bleak, pompous figure, was widely despised outside the Afrikaner community. His wife was rather dark, and a daughter was clearly mixed race and newspapers were not permitted to run photographs of her.

Nelson Mandela was promoting armed revolution and so was a commie agitator. He was Black, for sure, but it was worse; he was trying to upset the established order where we were on a knife-edge with the Russians and the Chinese Commies.

Not to mention Fidel Castro. The Bomb and missiles were the currency of international conversation. Vietnam was just around the corner. These were the years, 1964-5, when Birmingham Alabama and Martin Luther King Jnr were a centre of the great revolution of the ‘Sixties when not only Blacks but Women and Gays were beginning to emerge as normal people. Indeed, the Young were suddenly, for the first time, flowering all over Europe and the States.

Later I drove my Healey across the wonderful rolling farming country of the Transvaal and Swaziland, British and Black, to Lourenzo Marques, the lively port capital of Mozambique, then still, like Angola, part of the Portugese Empire, under the dictator Salazar — like Franco, a good, upstanding non-Commie.

In Lorenzo Marques I talked to middle-class White anti-imperialists. These all, in South Africa too, called themselves Progressives. In the evenings I joined white South African Boers in the exciting port bars where black girls –and boys for that matter– were, unlike in South Africa, very much part of the scene. What a party! A bit like Brazil. For the first time in a year I got a whiff of wonderful Africa.

Speeding back at night across the lonely, wide-open Transvaal, I flipped the Healey and, unconscious, was rescued by the police who took me to a local hospital. I woke up after a day or two. There were a couple of uniformed cops on my door. They had found pro-Independence — i.e. communist — literature in my car.

Back in Jo’burg, I was ordered to report to the SB, the feared Special Branch, HQ. I was luckier than most. I was released. Evidently I did not belong to what Graham Greene* called famously “the torturable class.” But a week later, I forget how, I was warned and I ran bumpety-bump at 3:00 a.m. in the poor Healey for the airport and caught a cheapo charter seat in an old Constellation four-prop, via Luanda and Majorca, for London.

The Associated Press was not amused. It had not been my job to create problems with the authorities in Pretoria. Luckily,, I got a job on the Daily Sketch, on Fleet St,, a Conservative tabloid owned by Viscount Rothermere and his wife “Bubbles. They evidently considered my flirt with revolution in Africa as just a youthful fling.

It was to be three shameful decades before the collapse of the Berlin Wall allowed Nelson Mandela, who President Obama rightly calls the Liberator, to be released to allow him to give South Africa the beginnings of a chance.

Ends.

**Greene’s ‘torture’ remark came in Our Man in Havanna. In The Human Factor, a spy thriller, Greene features apartheid Johannesburg including a black girl who escapes with and marries an MI5 Brit who is also a KGB agent.

Javier Silva Ruete — Finance, Politics and Charm 1935-2012

By Nicholas Asheshov

(First appeared in the Peruvian Times, Sept. 22, 2012)

Javier Silva Ruete, who died Sept 21 aged 77, was one of the most colorful of the stars that crisscrossed the Lima financial and political stage over the last three decades of the 20th century.

His most brilliant moment came in 1978 when for two years he was Finance Minister for the outgoing military government.  At the time the country’s public finances were in what was, in those days, the usual shambles, but more so.  The military government, under General Velasco, had been in power for a decade and what with the disastrous agrarian reform, gringo-bashing and expropriations, a billion dollars worth of Russian fighter planes and tanks, exchange controls and so on, by 1978 the whole public administration was on its last legs.  General Morales Bermudez, a sensible, distinguished officer —still alive, I believe— had taken over in 1976 and was moving decidedly but cautiously back to democracy.  This was when he called in Javier Silva Ruete.

Javier, then in his early 40s, moved in a middle-of-the-road leftwing ambient, respectable then and now everywhere, and was one of those people whose energy and personal charm meant that he knew everyone.  I remember Claudio Herska, a top Central Bank economist, saying, “Javier is the only person who can pull this together.”  Claudio was right: Javier did.

His first talent, certainly on this occasion, was to bring together a tight team of public-spirited financial and administrative hot-shots.  These ensured, for a start, that before he accepted Morales Bermudez’s request to become Finance minister, he laid down a set of pre-requisites, conditions.  I can’t remember what they were, though he gave me later his version of them, and it had cost Morales Bermudez dozens of cups of coffee during a final overnight negotiating session.   Morales Bermudez himself had been Finance minister for three years around 1970-73 and knew what Silva Ruete was talking about.

Top members of the Silva Ruete team were Manuel Moreyra, who had earlier been the head of the Central Bank’s legal department and who now became executive chairman of the Bank.  General manager of the Bank was Alonso Polar, a quiet, brilliant bridge player.  The head of the Banco de la Nacion, in effect the Treasury in those days, was Alvaro Meneses, another colourful figure who introduced to Peru the Banco Ambrosiano, the Pope’s bank which went spectacularly bust a year or so later when Alvaro’s friend Roberto Calvi was found dead, hanging over the Thames with a rope round his neck and the other end attached to Blackfriars Bridge.

Silva Ruete’s practical, flexible ordering of public finances, carried out by this team while he dealt with the military and civilian politicos, was greatly aided by a rise in copper prices, and of other minerals and metals, during one of the upsurges following the quintupling of oil prices in the years immediately following 1973.  Peru had been, like most countries, in permanent trouble with the IMF but Washington in general was overjoyed to have some non-military, knowledgeable people to talk to and Peru’s fractured relations with the international community, i.e. the banks and aid officials, was quickly patched up by Silva Ruete.

A new constitution was being put together and everyone was agreed that this was to all intents and purposes a civilian government.  Indeed it was, especially compared to the dreadful Chileans, Argentines, Bolivians and only relatively better Brazilians, Uruguayans, Paraguayans, Panamanians and so on.

In this world, Silva Ruete, with an ivory cigarette holder and a friendly, quick touch for everyone, was a real star.  This was only partly because of his ability to look as though he was drinking in every word and was totally agreed with whoever it was.  He and his team, for instance, wedged out exchange controls, still politically sacrosanct, by introducing no-questions-asked Certificates of Deposit in dollars at the  local banks.  Suddenly it was no longer illegal to have dollars.  Some of the sillier import controls were relaxed and, in general, a breath of financial common sense joined, through Javier, with political moves towards elections, which indeed took place successfully in 1980 when Fernando Belaunde lanslided into power.

The loans and commodities boom featured, in 1979, the extraordinary boom in silver and gold prices, a massive scam engineered by a group of international banks and traders led by the Hunt Brothers, from Dallas.  Peru, and Javier Silva Ruete’s financial administration, unwittingly played a key role in this fraud that saw silver —of which, then as now, Peru is a top producer— gazump from $3 the ounce to $50.  Neither Silva Ruete himself nor Manuel Moreyra at the Central Bank realized that there was anything fishy about the sudden rises —but then, nor did anyone else, much less the New York and Chicago regulators.  The Banco de la Nacion was caught, literally, short and had to be bailed out for over $100mn, real money in those days.  (The Belaunde government later, in an operation led by Pedro Pablo Kuczynski [PPK], the Mining minister, successfully went on to sue the perpetrators of the scam under the anti-Mafia RICO legislation of the time).

Silva Ruete, as is often the case with independent, clever minds, was no success as a businessman.  An early venture, for instance, was into the local manufacture of slide rulers just as handheld calculators were coming in and which, for the price of a box of corn flakes, could do the job much better.  He also went into the printing business but that was not a success either.  He always seemed, however, to be able to land a job in the public sector and was Peru’s representative for some years in Washington, or representative of the Andean Finance Corp, well-paid, tax-free jobs of that ilk.  He even had a new fling at the Finance Ministry for a time under President Paniagua and President Toledo a few years ago.

His personal life was, naturally, colorful, starting with a close friendship from student days with Mario Vargas Llosa, and Javier made a cameo appearance as ‘Javier’ in Mario’s super early comedy ‘Aunt Julia and the Scriptwriter’.

CADE Innovations: Stay tuned for ‘El Nuevo Peru de Antes!’

By Nicholas Asheshov

As business leaders meet in Cusco this weekend to focus on “Innovation” at the Annual Executive Conference, CADE, from the countryside of the Urubamba valley the author proposes looking back for truly radical and practical, high-tech innovation.

Ancient Peru was one of the half-dozen centers of the technological and political innovation that ushered in today’s complex world of great, interdependent cultures.

Unlike the other centers — China, the Fertile Crescent and Egypt, India, and finally the Mediterranean and Western Europe — most of Peru’s innovations, above all in social organization, were lost in the disaster of the Conquest.

Proud, sad bits and pieces of the ancient Andean and coastal cultures remain.  The potato and a half-dozen varieties of maize have been essential parts of the food chain that is feeding 7,000 million people.  China is today the world’s biggest producer of the potato, first domesticated around Lake Titicaca, and of the sweet potato, camote.

Peruvians can reflect, perhaps with mixed feelings, that it was the US$200,000,000,000, at today’s values —the figure comes from Prof. Niall Ferguson’s Civilization: The West and The Rest, published in London earlier this year— that the conquistadors sent back to Europe between 1532 and 1780, which provided the liquidity for the creation of the global economy of the 21st century.

But the precious metals, like the guano, tomato, quinoa, cherimoya and cocaine, are secondary and are in any case not really what we mean by innovation.  The khipu, the cutting-edge strings-and-knots combination of iPad and Registros Publicos — production cost 35 cents— was lost, destroyed maliciously by the priests, the Taliban of the day.  Only 620 remain. According to Prof. Gary Urton, of Harvard, it was much more sophisticated than anything in Europe at the time but they still haven’t cracked its complex code.

Like Machu Picchu, the thousands of miles of all-weather roads, irrigation systems on the coast, tens of thousands of stone terraces and water systems in the valleys and highlands, and the networks of warehouses, these were by-products of the real value of life in Ancient Peru.  This was the lively, aggressive social and political stability that allowed the Incas and a dozen great cultures that preceded them — Chavin, Moche, Tiahuanacu, Huari — to produce societies that were in the front rank of their contemporaries worldwide.

On Lake Titicaca, in the Sacred Valley, and in 50 other valleys like the Colca and the Rimac, the stability and genius for working together of the ancient Peruvians literally remodeled one of the world’s toughest environments.  They consistently created an idealized, civilized world of good order and stability.

No one can look at the massive millimeter-fine, delicately imaginative granite blocks at Sacsayhuaman, Pisac, Rac’chi, Huanuco Viejo, Rosaspata, Sillustani and, naturally, Machu Picchu itself without understanding instantly that for two or three thousand years ancient Peruvians created a purposeful permanence.

The same applies, with obvious local variations, to the great adobe pyramids on the coast.  Perhaps in the same way that today’s costeños are more outgoing than the peoples of the highlands, the costeños produced the flamboyant artistry of the gold- and silver-working of Sipan.

These were productive, often competitive societies whose vision was not just day-to-day or year-to-year, but in some clear way, eternal.  You and your children do not spend a lifetime producing a granite masterpiece just to fill in the time between meals.

Peruvian schoolchildren are not taught about the power and range of their ancestors.

The Incas — schoolchildren in Urubamba, Huancane, Bambamarca and Ayabaca are taught today — were ‘indigenas’.   There is a puzzling political agenda here.  The teachers do not know, do not seem to want to know, about Peru’s long distinguished past.

So my proposal for a first innovation that Peru today might want to consider is to produce DVD and computer programs that will be in every school in the land, every classroom in the country, which will tell the real story of the pre-Conquista past.  They will learn, for instance, of the complex, innovative technology that went into the layered construction of the terraces and hydrological systems they see around them.  They will learn about the networks of warehouses and storage facilities.  When the Spaniards arrived, they found that there was two or three years of food and clothing stored everywhere.

The project includes the creation of computer games called “Build An Andean Empire” and “Run Your Own Coastal Civilization” and, of course, war games like “Incas vs Spaniards.”

Secondary-level kids will move on to “How to Run a Municipality/Region/Country.”

And so on.

The interactive computer programs and movies, modeled perhaps on the science and history programs produced for the NGS, the Discovery Channel, the History Channel and the BBC, will be financed and distributed by the banks and commercial and industrial companies, all of them members of CADE, which will also be in charge of distributing them.  Teachers, including members of SUTEP, will be instructed on teaching the children how to switch them on and off.

Within a few years young Peruvian voters will have a new vision of their country and its possibilities.  Unlike most other countries, including some of the neighbors, they have a history, not to mention a geography, which they can see and touch, second to none. Population: from 1mn to 3mn to 30mn — and now on to 40mn

It is hard to blame today’s governments for not telling the young about the first-class public administrations of Peru half a millennium ago.

The most crushing blow of the Conquest was in the loss of people.  Between smallpox and piratical savagery, nine out of every 10 Peruvians died between 1530 and 1601 when a census registered only one million people, most of them in the highlands.  The coastal peoples had been exterminated.

These population losses were calculated by Noble David Cook in Demographic Collapse: Indian Peru 1520-1620 and Born to Die; Disease and New World Conquest published by the Cambridge University Press.

Peru’s population was to rise painfully slowly to three million by 1911.  All the Peruvians of a century ago would all fit easily into Lima’s Cono Norte today.   As everyone knows, today Peru’s population is 30mn, 10 times greater, in less than four generations.

Inca Peru had 10 million inhabitants, according to Prof. Cook’s best guess.   All of them lived out in what is today the countryside.  Cuzco had perhaps 40,000 inhabitants, less than Huacho today.

The next innovation will be to prepare for a Peru that within another generation will have 40 million people.  Peruvians will be much younger in a decade or two than the Chinese and other Asian tigers and, of course, the already-geriatric Europeans.

The local politicians in Cajamarca, Puno and elsewhere today who are protesting against gold and copper mines are being unusually far-sighted.   They are trying to keep the gold, silver and copper out of the hands both of international bankers and of Lima bureaucrats.  “Water for us, not gold for them,” they shout, and of course we all agree.   The government should instead borrow from the bankers and, noblesse oblige, repay them in worthless paper in 2041 et seq.

A decade or two from now the minerals will be worth ten times their present value and a generation of history-savvy, computer-literate Peruvians will be able to take full advantage of their elders’ foresight.

______________________

This article was published in Caretas magazine the week of November 28, 2011 in Spanish.