Author Archives: Peter Hess

“Strings of Chinese Pearls” of the Past

What do these three pictures have in common?

Bergen Bryggen, outpost of the Hanseatic League

Ilha de Moçambique: Fortaleza de São Sebastião

Port of Colombo, Sri Lanka (Source: The Economist, June 8, 2013)

All three images show attempts by a major power to expand its hegemonic sphere by expanding its own trade network.

Around 1360, the Hanseatic League established a Kontor (trade office) in the wharf of Bergen, a major Norwegian port city on the Atlantic coast. The Hanseatic League, based in Lübeck, was a trade and defense pact which dominated trade in the Baltic and North Sea from the 13th to the 17th century; at the peak of its power in the 14th century, it included 170 cities in Northern Europe. Over the next years, members of the Hanseatic Kontor bought all properties at the Bergen wharf which then was the city center, thus displacing the local traders and even forcing the city hall to move. The members of the Kontor, 2,000 strong at the peak, formed their own segregated society and system of governance that de facto ruled Bergen over centuries. It also controlled trade along the Atlantic coast of Norway. The Bergen Kontor only closed in 1754.

Access to the Asian spice and silk markets fueled a competition between Spain and Portugal to open a trade route to India and China during the first age of globalization. While the Spanish headed west but were slowed by this hitherto unknown continent that blocked access, the Portuguese traveled around Africa to reach Asia. Vasco de Gama landed on Mozambique Island probably in 1498. Subsequently, the Portuguese established a string of fortified outposts along the coasts of Africa, India, and China to secure their trade routes. By 1507, the Portuguese built a small fort on Mozambique Island. As the area was part of the Arabic and Ottoman trade systems, a more substantial fort was required. Between 1546 and 1583, the Portuguese built the Fortaleza de São Sebastião, the grandest of all European forts in Sub-Saharan Africa. Gradually, the Portuguese started to control territories and their populations on the adjacent mainland, predominantly to control the food supply for their trade posts. But the Portuguese did not assume full control over the territory referred to as Mozambique today until the 19th century when the major European powers started to carve up Africa into their own fiefdoms. Mozambique achieved independence from Portugal only in 1975.

These days, China is creating a shipping hub in Colombo, just 200 miles from India’s southern tip. A Chinese company is building a new container terminal which will be run by an entity controlled by another Chinese firm. The terminal opens this month and will be completed by April 2014. According to The Economist, this will make Colombo one of the world’s 20 biggest container ports. As the Economist article points out, the new Chinese hub in Colombo is part of a network of ports around the world that are at least in part controlled by Chinese interests, as the map below shows–which looks similar to the maps of the Hanseatic and Portuguese trade systems.

The Economist, June 8, 2013

Recently, Chinese investments in the ports of Piraeus and Karachi made the news–both times because they expand Chinese influence in parts of the world not traditionally considered in China’s orbit. The subtitle of the Economist article spells it out that “China’s growing empire of ports abroad is mainly about trade, not aggression.” But as the examples of the Hanseatic League and of Portugal show, this strategy of establishing trade outposts can serve to secure access and political power over long periods of time.

While the three images show three different historic periods and different parts of the world, they all illustrate the same pattern. They all represent the hegemonial aspirations of major powers which in all three cases are successfully implemented by securing trade posts far away from home and by creating expansive trade networks. Both the Hanseatic League and the Portuguese crown used their trade posts and their respective trade systems to gain political control over the areas in which they were active. It remains to be seen to what extent the Chinese strategy of creating a “String of Pearls” will translate into establishing hegemonic rule.

Marc Rich and Switzerland: An Uneasy Relationship

By sheer coincidence, I arrived in Zug, Switzerland, a couple of days after the passing of Marc Rich (1934-2013) who was one of the world’s foremost commodities traders. It just so happens that this is the city where in 1974 Marc Rich and friends founded Marc Rich + Co AG which specialized in commodities trading. It is no accident that Rich set up his company in Zug which is a business-friendly tax haven cloaked in secrecy, located in a small country that specializes in tax shelters and bank secrecy. Rich sold his company in 1994 which then was renamed Glencore and today is one of the biggest traders in commodities–still based in Zug.

Zug, Switzerland. Humans: 25,000. Corporations: 30,000.

Marc Rich traded with anyone, and he pursued commodities even in countries with very difficult political situations where other traders stayed away. His company also traded with countries under US or international sanctions, such as Cuba, Iran, and South Africa during Apartheid, and with ruthless dictators like Pinochet, Ceausescu, Qaddafi, and others. A congressional investigation revealed that Rich for instance delivered Soviet and Iranian oil to South Africa and traded uranium from Namibia, which then was a South African protectorate, back to the Soviet Union in return. The Shipping Research Bureau in Amsterdam documented 149 oil deliveries to South Africa set up by Marc Rich between 1979 and 1993 in violation of the embargo. These oil deliveries were vital as oil was the only major raw material South Africa did not possess on its own.

Ken Silverstein in his well-researched 2012 profile of Marc Rich in Foreign Policy states that “the real secret to Glencore’s success is operating in markets that scare off more risk-averse companies that fear running afoul of corporate governance laws in the United States and the European Union.” Daniel Ammann, who wrote a Marc Rich biography entitled The King of Oil, in a 2010 interview with Reuters stated that Rich “went where others feared to tread – geographically and morally.” According to CNN Money, Rich was “one of the world’s most famous white-collar criminals,” and the Financial Times more bluntly called Rich a “buccaneering oil trader.”

Marc Rich was indicted in the US in 1983 on more than 50 counts of fraud, racketeering, evading income taxes, and breaking US and UN trade embargoes. At the time, he was considered the biggest tax evader in US history, and dealing with outlaw regimes had turned into his specialty. The FBI put Marc Rich on its most wanted list. In response, Rich renounced his US citizenship in 1984 and hunkered down in Switzerland which proved to be a reliable place of exile. Rich maintained his primary residence in Switzerland, first in Zug and then in nearby Meggen, until his death earlier this week. His exile only ended when President Bill Clinton pardoned Marc Rich on his last day in office on January 20, 2001–an act that left a stain on Clinton’s legacy. The record shows that influential politicians of another small state, Israel, had lobbied on Rich’s behalf, including Ehud Barak and Schimon Peres. In spite of Clinton’s pardon, Rich never dared to return to the United States out of fear that US officials would file charges not covered by the pardon.

But the question of interest here is why Switzerland offered Marc Rich a safe haven during his years as a refugee from the law. I see four major factors. Perhaps most importantly, Switzerland makes a distinction between tax evasion and tax fraud. Only tax fraud is considered a felony, while tax evasion, no matter the amount and degree of criminal intent, remains a minor civil offense not unlike a parking ticket. While most of the civilized world sees this as an artificial and self-serving distinction, it prevented Marc Rich from being extradited to the United States. This issue, by the way, is at the core of current taxation conflicts between Switzerland and the outside world, most notably the United States and the European Union. This quirk in Swiss tax law, in conjunction with bank secrecy laws, provides legal cover for tax evaders who hold accounts in Switzerland but whose tax home is elsewhere.

A second factor is the Swiss policy of absolute neutrality which the country implemented after WW II and was only softened when Switzerland joined the UN in 2002. In this strict interpretation of the 1907 Hague Convention on the “Rights and Duties of Neutral Powers,” Switzerland abstained from international actions against other countries, even trade embargoes. Therefore, Switzerland continued to trade with the Apartheid regime in South Africa , including the sale of war materials. Swiss corporations thus were free to engage in trade with countries like South Africa or Iran. Switzerland offered a safe home base to Marc Rich who had free hand to trade commodities with renegade countries like South Africa and thus to circumvent UN trade sanctions and embargoes and profit from them.

The third factor is that Marc Rich was good for business in Zug. Marc Rich and his corporation brought wealth into the community, and he enjoyed the protection of local politicians in return, particularly during the 1980s when he was a fugitive. Ties to then Zug mayor Walther A. Hegglin and to Georg Stucky, the cantonal minister of finance from 1975 to 1990, appear to have been particularly close. Hegglin allegedly coined the saying, “Was gut ist für Marc Rich, ist auch gut für Zug.” (What is good for Marc Rich is good for Zug as well.) In an interview with the Neue Luzerner Zeitung this week, Hegglin stated, “We owed a lot to Marc Rich,” explaining that tax revenue from Rich’s company created a windfall for the city. Stucky served on the board of the Marc Rich Group and of some of his charitable foundations from the early 1990s onward and has remained a close business associate until now–even though he simultaneously was a member of the National Council (lower chamber of the Swiss national parliament) from 1979 to 1999. In an Associated Press article by Clare Nallis from 2001 he is quoted as saying about Rich: “The whole picture of him has been completely distorted. He is an extremely generous man and he’s done an incredible amount of good.”

The fourth factor is that Marc Rich after his 1983 indictment in the US stepped up his philanthropic efforts which benefited Switzerland, other European countries, and Israel. According to his own official biography, his foundations have donated over $150’000’000 to various charitable causes. The Swiss Foundation for the Doron Prize, founded in 1986, recognizes Swiss “individuals and institutions that devote time, energy and/or financial resources to the fields of social welfare, education, arts and culture, and science.” The Marc Rich Foundation for Education, Culture and Welfare, chartered in 1991, seeks to promote education, art, culture and scientific research in Europe and Israel. And in 1989, Rich donated his extensive photography collection to the Kunsthaus Zürich, the premier art museum in Switzerland. Furthermore, he was an important sponsor of the EVZ, the local hockey club and one of the top teams in Switzerland. Through his philanthropy and a public relations campaign, “he achieved a level of social respectability in Swiss society not usually afforded to those facing 325 years in an American prison if the feds had had their way,” as the obituary in The Economist cheekily points out.

The story of Marc Rich shows how easily a wealthy renegade can sway the public opinion and achieve respectability by cleverly catering to small state sensibilities. But even in Zug, Marc Rich was not without detractors. Josef “Jo” Lang of the Green-Alternative movement created a political career out of his opposition to Marc Rich and his business practices, as he told the Zurich daily Tages-Anzeiger this week, and his party tends to garner around 20 per cent of the popular vote. In a small state, colorful and controversial figures like Marc Rich quickly can rise to a level of notoriety not seen in large states, but this also true for their equally colorful detractors.

News from Appalachia: UBS Is not the Kind of Bank the Swiss Think It Is

Few outside of Switzerland know what UBS stands for (or used to stand for): Union Bank of Switzerland. Few inside of Switzerland know that it is not really a Swiss bank.

Before English ruled the world, the bank was called Schweizerische Bankgesellschaft (SBG), or Union Bank of Switzerland (UBS) in its international business operations–its logo worked for both English and German.

When the Schweizerische Bankgesellschaft merged with the Schweizerischer Bankverein (Swiss Bank Corporation, or SBV for short) in1998, it became the second-largest bank in the world and simply called itself UBS, keeping the three interlocked keys of the SBV as its logo, but dropping the pretense that UBS stands for anything.

Two things are noteworthy: first, the acronym was based on the name of the bank in English, not German. And second, the fact that UBS does not really stand or anything anymore detaches the name from Switzerland–the origin of the “S” in the corporate name. Both indicate that UBS is downplaying its Swissness: with the merger and name change in 1998, they were positioning themselves as a global financial conglomerate that happens to be headquartered in Zurich. In positioning themselves as a global player, UBS clearly was interested in shedding any references that point to any national origin.

Most people outside of Switzerland do not see UBS as a Swiss bank–they see UBS as a global financial conglomerate, and in some places there have been protests against UBS because it was at the heart of a local conflict. One example is this demonstrations against UBS during a labor dispute involving cleaning staff in London in 2010:

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Protests against UBS in London in 2010. (Source: demotix.com, accessed 6/1/13)

In December 2012, global protest against UBS even hit home base: as the banking giant was negotiating a settlement with US and British authorities regarding its manipulation of interest rates, protesters gathered in the Paradeplatz in Zurich, where both UBS (center) and CS (right) are headquartered, and formed a giant red fish.

Protests against UBS in Zurich, December 2012 (nyt.com, accessed 6/1/13)

More recently, on May 24, 2013, activists entered the Knoxville, TN, branch of UBS wealth management services and refused to leave. (By the way, the web site of the Knoxville branch in no way communicates that UBS is a Swiss bank.) They protested against UBS because it is financing coal mining operations in Appalachia which is leading to mountaintop removals and extensive environmental destruction.

Protests against Knoxville UBS branch in May 2013 (mountainjustice.org, accessed 6/1/13)

Protesters also staged a sit-in in front of the UBS Knoxville branch, locking themselves to the effigy of an investment banker. The UBS Hands Off Appalachia campaign even has its own Facebook page. Protests against UBS also occurred in other parts of the Appalachia region, such as in Lexington, KY.

This UBS appears to have little in common with the UBS most Swiss still see as one of their national brands. Citizens of small states see major corporations that grew in their countries as national treasures. Nokia in Finland is the textbook example. No American seriously would identify with Bank of America, and if it were to go out of business (which it won’t because it is too big to fail) few would be upset about it (except for those who lost money). If UBS, on the other hand, were to go out of business (which it won’t because it is way too big to fail–and already was bailed out once in 2008) it would be regarded as the demise of a national symbol and a national humiliation. The demise of Swissair in 2001 is a textbook example: thousands demonstrated against “United Bandits of Switzerland” because UBS failed to make cash available to Swissair before its grounding–one national symbol betraying another. More on that in a different post.

Big corporations in small states fill citizens with pride. The message is that even small states and their economic institutions can be global players, and the well-being of these corporations has great symbolic (as well as economic) value for small states. Global corporations fill citizens of small countries with pride and give them a sense of importance in a globalized world that otherwise has little regard for them. The Swiss still see the two large Swiss banks UBS and CS (Credit Suisse) as national institutions even though this is not how the two banks see themselves.

UBS has been the eye of the storm in the ongoing taxation conflict between Switzerland and other countries, most notably the United States–more on that in another blog. Many Swiss resent the fact that Swiss banks are cooperating with the US government to prosecute large-scale tax evaders and thus, in their view, are selling out the Swiss bank secret–this also will merit another blog entry. UBS increasingly sees the Swiss bank secret as a PR debacle that is bad for prestige and business. For the Swiss, and particularly for conservatives, the bank secret still is a matter of national identity.

UBS profits greatly from its Swiss home base: Switzerland offers unparalleled political stability, a highly developed infrastructure, and a good quality of life, and he Swiss government pursues market-friendly policies from which the financial sector profits greatly–never in its modern history has the Swiss government restricted the flow of capital. But in the age of globalization no financial institution with a global reach wants to be defined in terms of national origin. In short, in times of globalization large corporate conglomerates do their best to de-nationalize themselves. So the story of UBS in Switzerland tells of a growing conflict between a post-national financial conglomerate and a public that still largely regards UBS as a national treasure.

When Second Place Is as Good as Winning

During the hockey World Championships in Stockholm and Helsinki in May 2013, the Swiss team won all seven group games, beat the Czech Republic and the United States in elimination games, but finally succumbed to Sweden in the final game in Stockholm on May 19. While the rest of the world barely took note, the Swiss public went absolutely nuts. The Swiss tabloid Blick even printed a free special issue—to celebrate second place.

Who won? Hint: not the Swiss team. (Blick.ch, accessed May 20, 2013)

“Weltmeister der Herzen” (world champion of the hearts) was the big headline in gold letters on the cover of the 16-page edition. It also promises a “Poster unserer Helden” (poster of our heroes) as a centerfold. Even the more reserved Neue Zürcher Zeitung, the Swiss newspaper of record, wrote enthusiastically: “Die Schweizer schrieben in Stockholm Eishockey-Geschichte, ein Märchen vom unbeirrbaren Kampfgeist, von Einsatzbereitschaft und Selbstbewusstsein.” (The Swiss wrote hockey history in Stockholm, a fairy tale of unwavering fighting spirit, dedication and self-confidence.) Even international news outlets took note of the exuberant Swiss celebration of defeat, like the German cable news channel n-tv whose headline read “Schweiz feiert Silber wie Gold!” (Switzerland celebrates silver like gold!) The advertisement on the back cover of the Blick special free edition, sponsored by major Swiss newsstand operators, says it all: “Being vice world champion is totally okay, too.”

(Blick.ch, accessed May 20, 2013)

While in large countries, like the US, only victories count, expectations in small states are considerably lower, and Switzerland is a textbook example for this. The Swiss are happy if their team can keep up with the international competition. Losing is fine as long as the loss is not humiliating. Winning against teams from large countries is not expected, and when it does happen the Swiss fans are ecstatic. A good example is the victory against Spain in group play at the 2010 soccer World Cup. While losing the other two group games was disappointing, the Swiss team could return home with their pride intact. Just qualifying for and participating in a major tournament fills fans with pride. Being there was more important than winning, and having beaten the eventual world champion was just a bonus.

A notable example is the 2006 Soccer World Cup where the Swiss were eliminated by the Ukraine in a penalty shootout in the second round. The Swiss tabloid Blick wrote: “Our heroes have to go home. Without conceding a single goal. Yes, Switzerland even wrote a piece of World Cup history. They are the first team ever to have been eliminated from a World Cup tournament without conceding a single goal!” Being eliminated from the tournament in a penalty shoot-out without losing a game and without conceding a single goal during regular play was a moment worth celebrating: in defeat, the Swiss team just had set a new FIFA World Cup record. This is a fine example for how small states can tease out small victories out of what everybody else would see as a defeat. As winning the tournament was elusive, this small moral victory was worth celebrating.

In the recent hockey World Championship tournament, there were plenty of signs of victory in defeat as well. Victories against hockey powers like Canada, Sweden (in group play), the US, and the Czech Republic (twice) were celebrated in the media in enthusiastic headlines. Furthermore, two of the six players in the all-star team were Swiss, and the Swiss defender Roman Josi was chosen as the MVP of the entire tournament–both reasons for celebration. The message is clear: even though the Swiss team lost the big game, there is ample reason for happiness. As the tabloid Blick put it in its report on the game: “Ihr seid trotzdem Silberhelden” (You are are silver heroes nonetheless).

In the Swiss sportive world, defeat is acceptable as long as it is honorable. The sportive vocabulary is spiked with phrases that embody this spirit: terms like Achtungserfolg (respectable success [in defeat]) and ehrenvolle Niederlage (honorable defeat) are often used in the media to describe losses by Swiss teams or individuals. Wolfgang Bortlik evokes this attitude in his short 2008 monograph entitled Hopp Schwiiz! (Go Switzerland!) with the telling subtitle Fußball in der Schweiz oder die Kunst der ehrenvollen Niederlage (soccer in Switzerland or the art the honorable defeat). As sportive successes are not abundant in a small state like Switzerland, developing rhetorical categories to make failure look like success has become a national pastime.

(Blick.ch, accessed May 20, 2013)

This is how the Blick special edition could frame the performance of the Swiss national team as “Ein Märchen in 10 Akten” (a fairy tale in 10 acts), again using the fairy tale metaphor while completely glossing over the fact that the tenth act did not have a happy ending. Likewise, the ad by PostFinance on the opposite page congratulates the team and states that “all of Switzerland is happy about the World Championship success.” Even for the postal bank, second place is as good as winning.

Just playing in the final game in Stockholm thus ranks as one of the biggest successes in the history of Swiss team sports–the tabloid Blick ranked it second only to the victories of Alinghi in the America’s Cup in 2003 and 2007. The Alinghi victory in 2003 created an amazing surge of interest in sailing in land-locked Switzerland. If a Swiss individual or a Swiss team does well internationally–totally against all expectations, of course–interest in that sport rises dramatically. Before Martina Hingis and Roger Federer mesmerized the Swiss public with their Grand Slam victories, tennis was seen as an elitist, marginal sport with modest media attention. Now, the entire country watches when Federer plays in any tournament.

Before the final game in Stockholm, one question was discussed in the Swiss media over and over again: are we going to win? Can we win the big game? This question was also put to the players in the Swiss team. While they all answered in the affirmative, there always was a hint of doubt: if felt like the players did not really believe in the possibility of victory in spite of statements to the contrary. If you are from a small country, you know that you are not supposed to win big games. It felt like it was not the place for the Swiss to be on top of the hockey world. Being world champion in a major team sport is just unimaginable in Switzerland–it would have felt like a violation of the established order. The Swiss team had done enough to ensure a place in history and to make the Swiss proud. As winning could not really be imagined, it was okay to drop the big game. And they did.

A commentary in the Neue Luzerner Zeitung picks up this point and argues that the Swiss will never be world champions with this attitude. In their view, the Swiss now have two options. The first one is to indulge in total happiness over the best national team ever which celebrated the biggest success in Swiss hockey history.The commentary concludes, “If we do that, we will never be world champion.” The second option is to be proud of the Swiss performance, but not satisfied. When the new season begins in September, so the argument, the disappointment has to outweigh self-satisfaction–this is the only way to ever become world champion.

The Swedes did not have better players, they were not a technically better, and they were not better coached, according to this commentary in the Lucerne paper. The difference was one of attitude: the Swedes showed self-confidence to the point of arrogance: just as for the Swiss team winning was not in the realm of the imaginable, losing was not in the realm of the imaginable for the Swedes: losing in front of their own fans was not an option. They showed assertive body language, resolve in their actions, and a grim determination that signaled to the Swiss that they had no intention of losing this game.

This is a new kind kind of commentary and a new kind of language to talk about sports in Switzerland. We will see in the Olympic tournament in 2014 if and how fast the Swiss small-state-attitude towards winning can be adjusted.

One point of consolation: the Swiss success in Stockholm no doubt will have coattails. One result will be that a larger number of Swiss players will get the opportunity to play in the NHL–the undisputed top hockey league in the world. The Swiss media regularly report on the successes (and failures) of Swiss soccer, hockey, and basketball players who play in top leagues abroad. More Swiss players in the NHL means that there will be more feel-good-moments for the Swiss. So the Swiss will have more opportunity to be proud without making a real commitment to winning.

Pizarro in Exile

The monument of Francisco Pizarro (1470/71 – 1541) in Lima is the work of the American sculptor Charles Cary Rumsey (1879 – 1922). In 1913 Rumsey received an invitation to contribute a large equestrian statue of Pizarro to the Panama-Pacific International Exposition held in San Francisco in 1915. His work appears to have been well-received. Other copies were cast later, and three of them are extant today: in Buffaly, NY, in Trujillo, Spain (Pizarro’s place of birth), and of course in Lima, Peru. This particular bronze statue was donated to the city of Lima by his widow Mary Harriman Rumsey (1881 – 1934) and unveiled on January 18, 1935, on the occasion of the fourth centenary of Lima’s founding by Pizarro.

The Pizarro monument in the Parque de la Muralla (2010)

Francisco Pizarro led a brutal and bloody campaign to conquer and subjugate the Inca empire. His expedition reached northern Peru in 1532, and he founded the city of Lima in 1535 which was going to become the capital of the Viceroyalty of Peru in 1541. Later in 1535 he entered the Inca capital of Cusco, thus completing his conquest of the Inca empire. Pizarro was murdered in Lima in 1541 by a fellow Spaniard as a result of political conflict among colonizers–which was a common feature of the Conquest.

While the landscape of South America is dotted with monuments to the two main South American liberators Simón Bolívar (1783–1830) and José de San Martín (c. 1778–1850), why would the city of Lima set up a monument to Francisco Pizarro? The reasons lie in the way the Peruvian Republic, which declared its independence in 1821, dealt with the colonial past.

Even though the revolutionaries and liberators of the early 19th century, like Simón Bolívar and José de San Martín, were of Spanish descent, they pursued a distinct nationalist Peruvian (and South American) identity that was detached from the Spanish colonial masters, following the path the United States had taken from 1776 onward. In the 1860s, the Republican governments started to transform Lima into a modern capital which was modeled after Paris; it featured wide avenues and large stately buildings in the then-dominant neo-classical style. The imitation of the European colonial masters had become acceptable again.

After World War I, a neo-colonial style became more fashionable, the palace of the archbishop (1924) next to the cathedral perhaps being the best example. This conscious reflection on the civilizing legacy of the Spanish colonizers on the Peruvian Republic was in part in response to growing indigenist viewpoints that framed the Spaniards as brutal colonizers who had committed genocide. It also was a tribute to a rising European fascism which had a significant impact in Latin America and to which many in the elites had an affinity. It is in that context that the veneration of Pizarro became a point of identification among the Peruvian elites. In 1928, a chapel celebrating Pizarro’s achievements was dedicated in the historic Lima Cathedral, including a memorable mosaic showing Pizarro entering a primitive and depraved Peruvian landscape.

Mosaic showing Pizarro’s conquest of Peru (chapel in Lima Cathedral, dedicated in 1928)

This was followed by the erection of said monument to Pizarro just a few steps away in 1935. In his opening speech at the unveiling of the Pizarro monument in 1935, Lima mayor Luis Gallo Porras (1894 – 1972) called the statue a “figura preclara del héroe y del civilizador” (illustrious statue of the hero and civilizer).

The Pizarro monument in front of Lima cathedral after 1935

Initially, the monument was located in front of the Cathedral on the Plaza de Armas (Plaza Mayor), the most prominent and symbolic space in the entire city of Lima. From the very beginning, the placement of the monument caused conflict. Due to complaints from the Archdiocese of Lima, the statue was moved to a small square off the Northwest corner of the Plaza de Armas, between the Presidential Palace and Lima’s Palacio Municipal, in 1952. The small square then was called Plaza Pizarro.

Pizarro monument in a corner of the Plaza de Armas (1950-2003)

Pizarro monument in the Plaza Pizarro, off the Plaza de Armas (1952-2003)

Conservatives saw it appropriate to commemorate the founder of the city and to celebrate the colonial roots of contemporary Peru. They likened the Spanish conquest of Peru to the Roman conquest of Spain and argued that Peru in its essence was Spanish. Progressives viewed the monument as a symbol of colonialism and oppression and argued that Lima should not honor the destroyer of the Inca culture and oppressor and murderer of Peru’s indigenous people. They viewed Peru as a nation rooted in indigenous culture which survived centuries of efforts to eradicate it.

As a clear majority of the Peruvian population identifies with indigenous cultures, the political mood was changing in this direction in the last quarter of the 20^th century. In 2003, Lima Mayor Luis Castañeda Lossio ordered the removal of the statue. The plaza was remodeled and renamed “Plaza Perú”. The statue was eventually placed into a remote corner of the Parque de la Muralla (park of the wall), a park that was developed at the time as part of a project to protect remnants of the historic city wall which were discovered during a construction project a few years earlier. The statue also has been deprived of the large and commanding base which it enjoyed in its previous two locations–the equestrian monument has been demoted to a pedestrian level. While the statue still is publicly displayed, it is clear that Pizarro has been exiled to an insignificant spot outside the boundaries of colonial Lima.

Pizarro is founding father to some and war criminal to others. His monument is a lightening rod for ongoing political conflicts between the conservative elites mostly of Spanish descent and progressive forces who identify with and support the cause of Peru’s indigenous majority. It is symbolic for the negotiations to create a unified national identity and for the ongoing effort to define a hybrid culture that in some form existed ever since Pizarro arrived. As the conflict surrounding the Pizarro monument illustrates, even two centuries after Peruvian liberation, the legacy of colonial rule is omnipresent in Peruvian culture and political discourse.

Pizarro in exile today–apparently not commanding a lot of respect (2010).

The Second Life of Used Toys

Nampula is a market town and trade center of half a million people in northern Mozambique; it recently surpassed Beira as the second-largest city in Mozambique. It is the economic hub of Northern Mozambique with an airport and other transportation infrastructure.

View of Nampula, Mozambique, from the air

While walking down a major street close to the center of the city, I noticed a group of perhaps fifteen male workers unload a large container that was sitting on a truck. They were unloading large transparent plastic bags filled with used toys and children’s clothes. There was not much else going on (other than a wrecked ambulance standing in a ditch across the street which was witnessed by the locals with great consternation), so I started to take pictures.

Workers unloading used toys and clothes in Nampula, Mozambique

Moments later, a man of about 40 approached me; he made it clear that he was the person in charge of this operation, and he wanted to know why I was taking pictures. He was relieved that my interest was strictly academic–he had been concerned that I was a competitor checking out his operation. So he freely told me the story of the merchandise that was unloaded in front of my eyes. The toys and clothes were donated to churches in Europe by individuals; they in turn sold the collected items wholesale to a dealer who shipped them to Africa in a container. The container was put on a truck at a nearby seaport and brought to Nampula where workers were unloading the bags in front of my eye and bringing them into the warehouse where the items were sorted out.

Large container truck parked in front of the warehouse in Nampula, Mozambique

As he was light-skinned and spoke very good English (which is not common in Lusophone Mozambique), I asked him where he was from. His response surprised me: Sierra Leone. Of course I wanted the know where he was really from. (I understand that people with a hyphenated origin hate this question–but I felt that this was a relevant part of the story.) It turns out that his family of merchants was from the Middle East but had settled in Sierra Leone a couple of generations ago.

So what happens with these toys? After the toys and clothes have been sorted out, they go to markets all over the region to be sold. But in recent years, some buyers in the villages and small towns have become more market-savvy. They are quickly learning what the fashionable items and brands are in Europe and the U.S. because they have seen them on TV. So the distributor now has to sort all items into three categories for resale–trendy, average, and less desirable–and the pricing structure will have to reflect that.

Roadside market in Mamudo, Nampula province, Mozambique

In the village of Mamudo, seventy miles east of Nampula, used clothes and other items are sold to the local population at a typical small roadside market. Villagers are unloading the same kind of plastic bags from a small truck, containing used clothes and other items. The toys and clothes appear to have reached the last part of the journey, where their second lives can begin.

There are three interesting angles to this story. The first is that donors in Europe unlikely understand what is really happening to their donated children’s toys and clothes. Rather, donors in Europe happily are left with the thought that their charitable donations are distributed to poor children in Africa for free. While churches presumably use the proceeds from the sale of donated goods for charitable purposes, the goods themselves cross over into the for-profit sector of the economy again. The trade in used merchandise is big business in Africa.

The second point is this: as the market in many African countries is flooded by cheap imports of donated used clothing, it is very difficult for the domestic textile industry to compete. Ironically, these donated goods hinder the development of domestic production and thus make many more locals dependent on development aid. While these donations by Europeans are well-intended, they actually become an obstacle to sustained economic development.

Youths in the small town of Mamudo, Mozambique

Youths in the small town of Mamudo, Nampula province, Mozambique

The third point is less tangible but equally important. How do T-shirts with imprints of Western brands and cultural icons impact these young people? What does this young boy think of this Marylin-Monroe-like seductive blonde on this chest? What does it teach him about consumerism that is unattainable to him, about racial hierarchies, and about the felt cultural, economic and political dominance of the West?

Cultures Contexts

Essays on global issues, present and past