Alan Garcia, friend or foe?

I will admit that I don't know much about Peruvian politics, despite having done a project on it in 7th grade.

However, I do know that Alan Garcia, el Presidente de Peru, enacted in 2006 a new law that requires foreign NGOs to register with the government.

To the ordinary University of Chicago (undergraduate) economist, this sounds suspicious. Why would you want the government interfering with private matters? This is normally bad news.

However, in this case, the registration of NGOs is a positive. The law was enacted to keep an eye on groups that support communism and hurt freedom--such as the Shining Path (see last post). So, Garcia is really just trying to preserve freedom and stability in Peru, which is really important for the health of the Peruvian economy. Your typical humanitarian organization is not effected at all and there are no taxes levied on these groups.

How does this effect me? It doesn't. I'm coming to Peru on a grant and not with my organization (sneaky, eh?), and hopefully I will partner with MiBanco--a Peruvian MFI that the World Bank has set me up with--anyways. Plus, I'm doing capitalist work, and giving away thousands of dollars, so they really shouldn't be too upset.

El Sendero Luminoso

For those who don't know, Peru was host to a horrible clash between El Sendero Luminoso (The Shining Path) and the legal government that lasted from 1980 to 2000. The Shining Path was (and in a few remote places still is) a violent Moaist group that terrorized government workers and ordinary citizens. They didn't limit themselves to the bourgeois, either; they even attacked poor farmers. They were unpopular (only about 15% of Peru ever supported them) and tortured or assassinated many many people. About 70,000 died as a result of their guerrilla war.

The effects of their campaign carry beyond the death-toll, though. For the work of only a few people, Peru as a whole suffered quite a lot economically. Foreign direct investment was basically nil in the 1980s and didn't pick up until most of the fighting had subsided.

Peru has since stablized and growth has been robust---with a real growth rate of about 8%. Unfortuantely, "los pobres"--the ones the Shining Path was supposedly fighting for--are often left out of the expansion, and there's widespread unemployment/underemployment around the countryside since there's a dearth of financial resources.

This is where microfinance comes in! Microfinance institutions--and there are several ones doing good work in Peru, such as Agrobanco and MiBanco--bring capital (and capitalism) to the poorest of the poor and give them opportunities for development that were taken away by the Maoists. Peru has a really wonderful future ahead, and I hope that this summer I can help a few people in the country make it even better.

Microfinance Mascot?

This is Chip. (Full name: Chocolate Chip)

What does Chip have to do with microfinance, you may ask?
More than you might think!

When I go to San Pedro de Casta and Arahuay in just a few weeks, not only will I be alone (translation: lonely and scared) but I might appear foreign and strange (rightly so, eh?) coming to offer these people money with no strings attached. That is where Chip comes in. A dog companion solves 2 of these problems at once. Not only will she provide me with company, but he'll make me appear more friendly and inviting--which will help assuage people's fears and will encourage them to come up to me, if only to pet my super-adorable dog. Accordingly, I've arranged to adopt Chip (formerly "Vacky") from ALDEA, a humane society in Lima.

More on Chocolate Chip to come. Also, only 18 more days until I arrive in Lima!

The Math of University Red-Tape

Translation: International House ("Home") plus the University of Chicago equals Red Tape

Translation: Red tape plus Genevieve equals frustration

Shout Out: The World Bank

Ah, the World Bank. The glamour of Wall Street combined with the goodwill of the United Nations. Luckily, it lacks the scandals of both. Through a friend from school, I was able to get in contact with a few people over there who have offered some fantastic advice and pointed me towards some helpful resources--such as people on the ground in Peru & research on which microcredit models work best. They did this in addition to their (I'm sure, difficult) day jobs. Their assistance has really been invaluable, so I thought I'd thank them on me blog.

People from the World Bank I'd like to thank:
Kenneth Lay
Heike Reichelt
Hannah Siedek

Getting ready to leave!

Dear all (or perhaps just Dad?),

I'm heading to Peru the first week of June, so I am busy getting all the things I need: emergency first aid kit, tent/sleeping bag, water purifier, flashlight, vaccines (ouch!)...etc.

Today I got 2 shots: tetanus and yellow fever. I think the picture explains how I feel about it.

I also bought my camping gear and a few things for safety. Once I get everything, I will post a picture of my living room filled with all sorts of things for Peru (no llamas, sorry).

I'd like to thank two sponors, SteriPEN and Moosejaw. They are both helping provide goods that will keep me healthy and safe and allow me to do my job. It's also allowing more funds to go directly to the poor.

Recommended Reading: Banker to the Poor by Muhammad Yunus

Banker to the Poor: Micro-lending and the Battle Against World Poverty

This week, I read Muhammad Yunus' book about how he came to start the Grameen Bank in response to the horrendous poverty he witnessed in Bangladesh. It's a first-hand account, really easy to read, and rather entertaining. My favorite anecdote was when he--due to Islamic purdah tradition--had to speak to women borrowers through a wall instead of face-to-face. All of a sudden, the wall collapsed, resulting in him directly facing the women--a big cultural no-no since he wasn't related to them. Although the women were shocked and embarassed, they continued to ask him questions of about how village banking worked. Microcredit was that amazing of a possibility to them. It's a short read and you'll learn a lot about how other people in the world live, which is often close to slavery. For many, if they miss a day of work, they risk starvation. If you have a few hours and are inclined to learn about global issues & microfinance, I highly suggest this book.