Going green

I turned vegetarian eight months ago – for no particular reason. It may have been a subconscious desire to eat healthier, or perhaps it was a need for change after years of a meat-heavy Mexican diet. Whatever the catalyst may have been, it was definitely not a conscious objection to the consumption of meat on environmental or ethical grounds at the time. But in the months that followed, when people asked me why I made this life decision, I felt like I should have had an answer, a cause to justify my dietary habits. If I were to choose, the environmental impact of meat production would probably top the list, followed closely by the harsh treatment of animals. As opinions on food polarize us more than ever, it seems like its not enough to make a choice, you have to be able to defend yourself to both non-vegetarians as well as vegans as to why you won’t swing either way.

So what are our reasons for imposing dietary rules upon ourselves? In quantitative terms, religion is the winner. Over 2 billion Jews, Muslims, Hindus, Buddhists, Sikhs and Jains choose to adopt a range of dietary restrictions from the banning of pork in any form to limiting the consumption of vegetables only to those that do not need to be uprooted from the ground. In second place is a less voluntary factor – health. Counting together diabetics, cardiac patients, people with food allergies and intolerance towards dairy and gluten would result in a relatively low number in comparison to religion-bound consumers, but not negligible as a percentage of the world population. And lastly, taste. Some people just don’t like the way their palettes react to certain foods. Tastes, like allergies, may change over time but certainly contribute to differences in diet from one person to the next.

So the amount of food that is not consumed as a result of ethical choices is quite low in comparison to the other drivers of dietary composition, mostly because only the very affluent can make these kinds of choices. I may not have a strong ethical foundation to my logic of not eating meat, but regardless, I can afford to because I can replace it with other sources of protein or fats that others may not have access to. A friend of mine, already a strict vegetarian, recently tried to persuade me to give up dairy given the environmental impact of its production, and I thought about how many people on the planet could actually afford to give up dairy given its central place in so many different gastronomic cultures – despite the fact that we don’t need it in its current form to survive.

Not many apparently, which is why its important that we consider facts before we make choices to change diets – and preach about the value of these changes to those that may be less-informed. Beef production is often cited as extremely water-intensive but many vegetarians may not know that almonds use up more water than cows on average, water-intensiveness differing from water-efficiency which is a different matter altogether. Fish farming generates waste and depletes stocks of wild fish which are used to feed farmed fish but soybeans have contributed to the deforestation of the amazon (even though much of it is used to feed cattle). These are basic facts that everyone should be aware of before making the kind of dietary decisions that, if adopted on a large scale, will result in possibly catastrophic imbalances in our ecosystems.

There are few numbers to support most of the content in this post. This is more of a reflection on my conversations with conscious eaters since my transition to vegetarianism. The arguments against meat-eating are pretty clear to me, and obvious to most environmentally conscious people, but that doesn’t necessarily imply that I have the right to ostracize meat-eaters. Instead, I consider it my duty as a non-religious vegetarian to inform those in my ambiente why going green isn’t a bad option, apocalyptic future of a meat-eating civilization aside.

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When tillage begins, other arts will follow

IMG_0824 I’m normally not that person at the table who photographs food, but I couldn’t help myself with this one. This is a snapshot of north India’s staple diet – rotis made from seasonal basic grains, dal, saag, the ubiquitious spinach dish made famous by Indian restaurants abroad, mixed vegetables, dahi or sour Indian yogurt, and achar or pickled vegetables. What is startling about this plate of food, aside from how ridiculously delicious it was, is that everything on it was cultivated, harvested, and prepared on a single six-acre plot of land in the arid Aravalli hills of Haryana.

The topography of this area is bleak, with dusty plains and hillocks dotting the countryside. But Haryana has the good fortune to lie along the fertile Indo-Gangetic plain. This land, one of the most densely populated areas on the planet, has been continuously cultivated for more than 3000 years, aided by the rich sediment left by the the two rivers. The farmland stretches beyond the horizon, broken only by the odd city or small town, and its owners have learned their craft over millenia, excelling in seasonal, organic production of grains, fruits, and vegetables using local resources.

IMG_1246Aman Bagh, where this picture was taken, is a project run by a close family friend who is committed towards building an agricultural system based on a platform of self-sufficiency (using local inputs only) and sustainability. I had the chance to visit Aman Bagh, where mustard, wheat, ginger, potatoes and various leafy greens are grown organically, this winter, during a rare trip home to India. My conversations with Harsh, the man behind this endeavor, fueled my curiosity about how agriculture functions in a place like India, a powerhouse in global food production but reeling from the impact of climate change and mismanagement of resources. His vision of a self-sustaining landholding is bold but not new. Farmers in his family and community have done the same for centuries, but operating such an enterprise in the modern economy is not an undertaking the average Indian farmer can succeed at easily. My work in Latin America allows me to work towards strengthening farmer livelihoods here and build resilience against external shocks in rural farming communities, but I felt inadequately prepared to see the scale of the problems affecting farmers in my own backyard, even in India’s agricultural heartland.

Along with Haryana, Punjab is one of the wealthiest states in India –  much of that prosperity resting on the innovative capacity of its farmers. The Green Revolution, India’s much-lauded use of hybrid seeds to boost production yields at a time when the country was on the brink of a potentially crippling famine in the 1960s, was piloted in Punjab and it was there that we see the best and worst of that era.

The high yields, combined with remittances from Punjabis living abroad and a surge in land values, led to an unprecedented boom for the state’s farmers in the 90s, many of whom sold their land and attempted to bring city life to their village hamlets by building large concrete houses and buying flashy SUVs. During a visit to a farming community near the holy city of Amritsar following Aman Bagh, I saw first-hand the beauty and simplicity of rural life but also the dangerous consequences of this unexpected wealth creation.

IMG_0932Preet Nagar is known for its historic association with artists and writers but is first and foremost a farming village – wheat and mustard being the primary drivers of the local economy. A brick kiln is the tallest structure in the vicinity. It is a small, tight-knit, and warm community and is a welcome respite from the artificially constructed pace and stresses of city life. However, the village, like many in rural Punjab, is not without its problems. Falling employment levels and lack of opportunity has led to a widespread opium addiction among the young men in this part of the world – partly because farming has not been promoted as a “worthy” profession by in the post-Independence era and not one parents encourage their children to pursue, given its close connotation to manual labour and the complex associations with caste that come with it in a Hindu society.

Will this change in our generation? Probably not, given the costs associated with farming and the low financial returns – symptoms of a society that has forgotten the value of the small farmer. My journey to these two contrasting communities brought me back to the core of my work and why I do it, but also raised many questions about the sustainability of our current thinking around food production and what role the Indian kisan and his vast knowledge of environment-friendly production will play in the ongoing debate.

Here’s to continuing that exploration in 2016.

Let us not forget that the cultivation of the earth is the most important labor of man. When tillage begins, other arts will follow. The farmers, therefore, are the founders of civilization

– Daniel Webster

Salaries don’t make you rich, spending habits do

quinceñera is no normal birthday party for a 15-year girl in Latin America. It is a coming of age celebration and truly a happy day for the friends and family of the debutante. Booze, salsa and raunchy games begin just after lunch and can go on all night, long after the kids have gone to bed. Anyone who has lived here will tell you that the mood in Mexico is similar on the quincena, the second and last Fridays of the month on which employees are paid their wages- in contrast to the month-end paycheques common in the rest of the world. ATM lines fill entire blocks, traffic is mind boggling, and bars and restaurants hire extra temporary help – there’s money in the bank and fiesta is in the air.

Twelve days later however, the mood is grim. Statistics on the difference in consumer spending and saving between the day after the quincena and the day preceding the next quincena are hard to come by. Qualitative evidence is plenty however – supermarkets are full of office-goers looking to cook at home and stores put up promotions and sales to entice now-hesitant customers. It seemed like no one had put away anything under the mattress to endure the full two weeks. Spending two hours in line at the bank on a Friday morning recently got me thinking about saving and whether my observations on peoples’ spending were backed by any real evidence. Who am I kidding? Of course they are.

An IMF study attempting to explain low savings rates in Latin America, in comparison to those in Asian countries, came up with a number of factors that may have contributed to this trend: faulty pension schemes, low GDP/capita growth, volatile inflation and exchange rate fluctuations, and general lack of confidence in government. The recent devaluation of the peso against the dollar has generated a debate among commentators about the effects on the economy and spending. It remains to be seen what effect this will have on saving.

The IMF paper makes a good case for explaining the variance in saving between Asian and Latin American countries. But what about Mexico specifically? Mexicanos also tend to save less than their Asian counterparts. However this is a recent trend. Until the late 1980s, private saving climbed steadily. With the signing of the NAFTA deal in 1994 and the opening up of the economy, however savings rates dropped and continue to fall. Its important to clarify here that NAFTA alone may not be to blame for lower savings rates. People simply had more access to credit which triggered a spending boom in Mexico. This, along with inflationary pressure, decrease in per capita income, and the deterioration in trade terms associated with NAFTA, has led to a steady decline in private saving rates in the last two decades.

As jolly as everyone’s mood is on quincena day, I feel like if this information on the benefits of saving was made more available to the general public, people would learn to pace their spending habits to coincide with needs as opposed to the “have cash, will spend” mentality. Maybe its the cautious Indian in me talking, but that rainy day is always around the corner.

Double trouble: PRI’s Reform Agenda Falters

A meme parodying the recent escape of Sinaloa cartel jefe and drug baron Joaquín “El Chapo” Guzmán from a maximum security prison in Central México has him chasing after a terrified Donald Trump promising retribution for his comments on Mexican immigrants in the U.S. Many within Mexico however don’t take Trump and his bombastic rhetoric seriously. The real deer in the headlights following Chapo’s escape is none other than President Peña Nieto – aptly the subject of the majority of the memes circulating social networks.

El Chapo’s escape has brought confidence in the PRI Administration to an all-time low, despite a solid showing by the party in the recent mid-term elections, and was compounded by another major blow to Peña Nieto’s reform agenda the following week. Although the disappointing turnout at the Pemex contracts auction understandably didn’t receive as much attention as “El EsChapo,” it was perhaps a bigger loss to an administration which has lobbied hard in favour of privatizing the petroleum behemoth.

In sum, out of the 14 contracts up for bidding for rights to explore in the Gulf of Mexico, where shallow oil reserves have contributed heavily to Pemex’s coffers in the past, only two were snapped up – less than the 30% laid down by the Petroleum Ministry as the minimum required to justify the privatization of the sector. The majority of the bids – presented by major oil and gas players like ONGC Videsh, Sierra Oil, StatOil and Atlantic Rim – were rejected for falling below state-dictated estimates which the Peña Nieto administration had admitted to being too high prior to the auction. Moreover, one of the two successful bids has been overshadowed by claims of nepotism with the involvement of a nephew of ex-President Carlos Salinas de Gortari in the consortium which won the bid.

There are many who support the PRI’s bid to privatize the sector, yours truly included, which has long suffered from mismanagement and the state’s dependency on petro-revenue instead of developing other sectors like manufacturing. However Peña Nieto’s team, well-intentioned as they may be, will have to improve the infrastructure of the market mechanisms governing the privatization process if they want to see positive results – not just in energy reform but also every other reform policy that government intends to pass prior to elections in 2018.

David and Goliath Coexisting in a Market Economy

I’m taking a GMAT prep class in Mexico to support an eventual application to business school. Being in a class full of young, driven professionals working in finance and consulting has exposed me to a world that I’ve been relatively distant from since I arrived in Mexico in late 2012. Business growth for me has meant increasing smallholder farmer incomes and strengthening management capacities of rural enterprises, not macro-level growth of employment, incomes and production. On my way home from class the other night I saw this billboard:

Translation: 9 out of every 10 jobs in Mexico are generated by businesses with names like Ana y María and Pepe y Toño
Translation: 9 out of every 10 jobs in Mexico are generated by businesses with names like Ana y María and Pepe y Toño

Its part of a new campaign aimed at creating awareness around the importance of small retail businesses to the Mexican economy. Local neighborhood kiosks and retail outlets are protected by a strong trade association which has paid for this publicity. Due to lower transaction costs and stronger supply chain management, prices of basic consumer goods are lower in large retail chains and supermarket franchises than in stand alone stores – thereby leading to a fear of a slow but sure trend towards abandoning the neighborhood bodegas. The publicity campaign has been designed as an appeal for support for these small urban business owners.

It is impossible to cross a city block in Mexico City without crossing what is known in the U.S. as a mom-and-pop store. They go by different names here – abarrotes, changarros, kioscos – but are mostly commonly referred to as tienditas or “little shops.” Depending on the size of the tiendita, you can find anything from household essentials like bread, water cans and milk to stationary, furniture, phone cards and alcohol. The stores are more often than not holes-in-the-wall and family-run which stay open during daytime working hours, closing shop at sundown. Tiendita owners are extremely friendly and usually form close personal relationships with customers – making them the primary sources of neighborhood news and gossip. This personal contact is non-existent at the large supermarket chains which instead offer fixed schedules, larger and better-organized inventories, and most important to any consumer – lower prices. Supermarkets purchase goods at wholesale prices which make them far more competitive than stand-alone tienditas, and therefore more profitable.

Despite the shifting trends, big retail has much to learn from the Tiendita Model, if I may call it that. Over 80% of emerging-market consumers still patronize local equivalents of the tiendita and many large multinationals, recognizing their place local economies, have developed strategies to tap the “mom-and-pop network.” Pepsico’s Power of One strategy, which puts beverages and snacks within the same portfolio and distribution chain, was piloted in Mexico – where consumption of aerated beverages per capita stands at about 0.5 liters a day. Despite shareholder criticism, the strategy has been successful enough for the company to take Power of One to other emerging markets where corner shops are the lifeblood of local economies, like India and Russia.

Additionally mobile network operators have recognized the opportunities present in the tiendita network due to its  vast geographic distribution. Phone balance recharge purchases are the biggest source of revenue for tiendita owners who usually hold allegiance to a single network, creating a market where multi-billion dollar operators like  Telcel and Movistar compete over rights to contract recharge services out to individual shops.

The campaign states that 52% of Mexico’s GDP is generated by small retail business activity. I wasn’t able to find another source for this figure but I believe, and there are others who agree, that market opportunities in this sector are plenty. By projecting tienditas as brand ambassadors, as mobile operators have done, big retail has the ability to tap this massive network of  potential selling points while at the same time preserving employment and primary sources of income for millions of Mexicans. Criticism of big retail names like Walmart is not uncommon, and in some cases not unwarranted. However given the vast changes in the Mexican economy following NAFTA, corporations are finding innovative ways to leverage the potential of small business networks and customer bases to sell their products. As a frequent patron of a tiendita, I hope to see this type of enterprise flourish rather than perish – which means working together with large retail.

Analysis: Midterm Elections

Sonia Gómez Torres is a customer service representative at BBVA Bancomer, one of of Mexico’s largest commercial banks. She is young, ambitious, and the breadwinner in a family of four. Two weeks ago, for the first time since she began work at the bank, she took the morning off. She did so to stand in line at her local polling booth in the working class neighborhood of Tlatelolco in Mexico City and cast her vote for district representative in the legislative elections. On a recent visit to the bank, I asked her who she voted for. “AMLO” she said, referring to Andrés Manuel López Obrador, ex-leader of the Partido de la Revolución Democrático (PRD), who recently splintered off to form his own party. Sonia, like many working-class residents in the capital, tends to vote left and strongly supports AMLO who is credited with improving the city’s administration and rooting out corruption during his tenure as mayor. As I learned after the results were announced, Sonia and her fellow “Chilangos” are not representative of the political affiliations of the rest of the country.

The big result of the election as reported in the foreign media has been the unexpected victory of an independent candidate in the gubernatorial race in the northern state of Nuevo Leon. As astounding as this is in a country – indeed in most democratic countries – where party affiliation is a necessity to access political office, the bigger story is the weak opposition to the ruling Partido Revolucionario Institucional (PRI) juggernaut.

Fifteen years after their loss to the PAN, the Grand Old Party of Mexico is stronger than ever before, despite low approval ratings. The incumbent administration maintained its slim majority in the House of Representatives. Despite an abysmal record on crime, lack of progress on necessary reforms in the education and energy sectors, and rampant corruption going all the way up to the First Lady, President Peña Nieto goes into the second half of his Presidency in a strong position. In a campaign where voters were encouraged to hand in blank ballot slips and an electorate jaded by corruption and government ineptitude expressed indifference to the election, voter turnout was at its highest in a midterm election since 1997 at 48%.

But all is not well for the PRI. Peña Nieto was not the only winner in this election. The MORENA party, led by AMLO came out with an unexpected win in the Federal District. The party, branded as a movement to regenerate national politics, is less than a year old but carried out an aggressive campaign against the incumbent PRD government and ran on a platform of transparency and accountability. It was also the party with the highest percentage of female candidates. Parallels have been drawn with the AAP movement which also started out by gaining a foothold among the politically-savvy electorate in Delhi. It remains to be seen whether MORENA can replicate its success outside urban electorates and maintain its momentum but the future looks bright for this new player.

The other big surprise came from familiar territory – Chiapas. The Partido Verde Ecológista de México (PVEM or Partido Verde) played a masterful move by allying with the PRI and winning seats across five different states – most of which were in Chiapas which is governed by the public face of the PVEM, Manuel Velasco. The party, which has been increasingly criticized for a lack of transparency and policies contradictory to its conservation-based platform, is said to be prepping its rural voter base for its own Presidential candidate in 2018.

So were there any losers? Yes. 2015 will come to be known as the end of the brief period of tripartite politics that defined the last 15 years following the first ever loss of the PRI in the year 2000. The other two big players in Mexican politics – the PRD and the PAN – failed to make any headway in challenging the PRI hegemony, netting less than 25% of the total vote share. The PRD in particular is looking at a bleak future with the loss of the public face of AMLO – with just 4.95% of the popular vote in these elections.

Sonia was one of the few people I talked to who actually went to the polls and voted. The low voter turnout is most apparent among the educated, urban demographic – leaving rural voters susceptible to populist incentives like hand-outs and discounts which are typical PRI campaign strategies. It wouldn’t be an exaggeration to say that the party owes much of its success to the jaded feeling among young and more educated voters who choose not to go to the polls. If Mexico wants to see change at the federal level, its urban voters will have to start playing an active role in doing so, starting with Sonia.

NAFTA 20 Years Later

Like many readers of this blog, I was lucky enough to spend Christmas vacation with my family this year. Unlike many of you however, they actually came to ME, as opposed to yours truly making the pilgrimage back home. Mexico was an eye-opening experience for my parents and brother, given their relative lack of exposure to Mexican culture and lifestyles. They loved the food, got down with the music and gaped at awe-inspiring Mayan ruins all while being floored by Mexican hospitality and warmth that is such an integral part of this culture. It wasn’t all fun and games however, as they had to reconcile themselves with blatant economic inequality, Mexico’s violent revolutionary past, the fall-out from the Spanish conquest and discrimination against the indigenous groups in the southern part of the country and Guatemala, which we also visited briefly.

20140113_151003One of the struggles they became well-acquainted with during their visit was the Zapatista Movement to restore basic autonomy to indigenous communities in Chiapas, spearheaded by the EZLN (Ejercito Zapatista de Liberacion Nacional) and it’s charismatic but elusive leader Subcomandante Marcos (see my earlier post for more on the Zapatista struggle). Coincidentally they happened to be in Mexico during the 20th Anniversary of the Zapatista takeover of San Cristobal and its surrounding towns on 1st January 1994, which took place in protest against the North American Free Trade Agreement (NAFTA), which came into effect the same day. NAFTA, and its emphasis on liberal economic policies and opening up the economies of Mexico, Canada and the United States to trade between the three countries, came in stark contrast to the Zapatista platform of ensuring equitable growth and that small Mexican farmers, or campesinos in Spanish, were not marginalized by big agricultural conglomerates now free to flood the Mexican market with their cheaper products, among other concerns related to the U.S’s stature as a global hegemonic power, and its frequent use and abuse of that power within its various spheres of influence.

Successfully embarrassing the Salinas de Gortari government, the Zapatistas managed to secure a truce under certain conditions. I won’t get into details but what resulted was the creation of several Zapatista communities and municipal zones that were allowed to operate under provisional autonomy, mostly within the state of Chiapas, while NAFTA came into effect across the rest of the country. The hope with NAFTA was that free trade and unregulated foreign investment would produce the job growth and rising incomes needed to create a stay-at-home middle class that would fuel consumption and subsequent economic growth. The results speak otherwise. Twenty years on, the results of the agreement present a mixed bag, perhaps justifying the EZLN’s concerns back in ’94.

Since NAFTA’s inception in 1994 — indeed, for the 20 years of neoliberal “reform” — the Mexican middle class has shrunk and the number of poor has expanded. Economic growth has been below the pre-NAFTA economy’s performance and substantially less than what is needed to generate jobs for Mexico’s growing labor force [Source]. Moreover the rate of cross-border migration, which was expected to decrease as a result of rising incomes and job availability, has gone up. Between the U.S. censuses of 1990 and 2000, the number of Mexican-born residents in the United States increased by more than 80 percent.

Even though that “iron-strong” indicator of economic well-being, GDP per capita, is relatively high at $15,400 per annum, GDP growth during the NAFTA years, at a miserable rate of 1% annually, puts Mexico at number 18 within a group of 20 economies in Central and South America. The National Poverty Rate has remained roughly the same, 52.3% in 2012 versus 52.4% in 1994 – a decrease of 0.1% in 20 years. As far as job growth goes, the agriculture sector has been the worst affected. As a result of the dropping of tariffs and the opening up of markets to US products, 1.1 million small farmers and an additional 1.4 million dependent on agriculture as their primary source of income were driven out of work between 1994-2005. Today the average wage of a farm worker in Mexico is one-third of what it was pre-NAFTA.

Mexico is not the only country that has seen the ugly side of NAFTA. Rather than resulting in the creation of jobs in the U.S. as promised by the Clinton administration at the time, NAFTA has contributed to a trade deficit with Mexico and Canada, which by 2004 has equated to an estimated net loss of one million US jobs. The opening up of markets allowed enterprises to bypass higher labour and production costs in the U.S. and move manufacturing to Mexico to take advantage of its lower wages and less-stringent environmental standards. Furthermore, NAFTA has been credited as a factor in the U.S. for rising food prices, a decrease in basic wages and growing income inequality. Added to this are the costs associated with the doubling of Mexican immigration to the United States following NAFTA’s implementation.

I took the photograph above this afternoon in a back alley in San Cristobal. It says: “Every day, full of dignity” and features a woman of indigenous heritage covering her face with a red handkerchief, identifying her as a supporter of the Zaptistas. The results of NAFTA, far from bringing dignity to Mexico’s marginalized economic classes, has forced millions into poverty and decimated the middle class. Twenty years on, perhaps its time take another look at neoliberal economic policies so favored in Latin America in the 1990s and re-examine the Zapatisa call for equitable growth at all costs: Para todos, todo. Para nosotros, nada (For everyone, everything. For you and me, nothing).