Christmas in Machu Picchu

Christmas greetings from Machu Picchu in Peru

This year’s end is in Machu Picchu in Peru and yes smack on Christmas Day. Maria, the lady who runs the lodge right next to the Inca ruins thinks that I am nuts trying to send off this posting when I am supposed to be on vacation.

I do try to spend as much year-end vacations in South America as possible and in the past few years have done Chile, Brazil, Ecuador, Argentina and now Peru.

I spend most of the year covering the financial services industry in all of Asia, and travel to Europe and the US either as a speaker, a resource or just to visit with people in the industry. I am beginning to be familiar with the Middle East, but hardly South America.

So, I reserve my year end to visit this part of the world as much as I can, and have been doing so off and on over the past four years, thanks to airline miles, hundreds of thousands of them accumulated over each year!

Coming here also gives me a chance to add dimension to my own understanding as to why South America is so diverse and alive, and yet very different from the other parts of the world that I am familiar with. Understanding South America is just as important as understanding China, India, Africa or other significant parts of the world.

In corporate banking for example, the big difference between South America and Asia is how Asia is driven so much by the equities market, whilst South America is driven by debt. Historically, money has been concentrated in the hands of a few here, despite the fact that populations are large and industrious. So, raising capital has always been very difficult here.

In commercial banking, a history of rampant inflation and bank runs have created several value propositions that customers actually pay a premium for (especially to foreign banks) service that customers in Asia would not even think about.

South America is home to some good people I have known personally. Let me see… Sebastian Paradez who is CEO of Bank Danamon in Indonesia is Ecuadorian. That guy who used to be CEO of ABN Amro Asia about eight years ago… urgg.. holiday mood, can’t recall, from Brazil. Great guy, although he fell out of favour at the board level from what I heard… Sergio Rial.

I remember the time when ATMs were in great demand in Brazil, Argentina and even here in Peru because of rampant inflation (they just kept adding zeros to the currency). So, I take photos of ATMs here (I just did in Cusco, the town near Machu Picchu) they are very user friendly and commercially run by a private enterprise (called ISOs in the ATM world) here, one of which is called ATM Global Net.

I talk to the local people very much. This year, I got a sense of how Fujimori got elected as president (the Peruvians were truly not happy with their existing lot at that time and innocently thought that a Japanese Peruvian would be a refreshing change. He was for a while, and many Peruvians thought that he made some important changes, except that he lied that he was Peruvian-born in the first place. He made Peru part of APEC (yes, my Apec card works here!), legalised casinoes long before Singapore did to attract Asian visitors (they never really came in droves but Peruvians got into the gambling habit and it is now a social problem) and generally did well for the country until corruption set in.

An interesting off-shoot of the Fujimori legacy is that you actually see a steady stream of Japanese tourists here. They have all but disappeared in the rest of the world while the Chinese have taken over. The Peruvians are waiting for the flooding in of Chinese tourists as their politicians promise them.

When I was in Ecuador last year, I listened as Ecuadorians cursed every banker in the land for having robbed them in the late 1990s and running away with the money to Miami. I told them that I owned a banking magazine and that we would expose each and every one of those bas! if they introduced me to one. The offer is still open

I spend my time asking myself what makes this part of the world tick. It is increasingly very developed, more developed since the crisis years. All my domestic Lan airline tickets are bought online. Lima airport in Peru is perhaps one of the most sophisticated tourist friendly airports in the world, and they have so much to offer. It is also a very sophisticated part of the world, even if sometimes they can’t afford the lifestyle. I enjoy watching Argentinian men and women in close conversations in any street cafe I pass.

Although countries like Peru are technically poor, I am really touched by the strong sense of community everywhere. Poverty in South America is very different from Asia or Africa. Despite poverty, I do not see hungry people here. Children are the most delightful, running all over the place and obviously well fed.

The main reason is that the land is fertile, and if not for the modern economy, South America, particularly the Inca and pre-Inca traditions, developed over the past 2000 years, is home to some of the most developed agricultural countries in the world. Can you imagine a culture that has developed over 300 varieties of potatoes and another few hundred types of corn! These are people who were practicing genetic engineering way before the word was invented.

I don{t know enough, but the advent of the Spanish in the 1500s and then the experimentation with different political and economic models much later in the 1960s and 1970s cost this region considerably in terms of their ability to generate wealth as people in the capitalist world would understand it.

Thinking aloud here, I do wonder what the so-called Latin American experts at the IMF and World Bank assumed when they promulgated some of their programmes for this region over the past 40 years. … material for another posting.

My one complain is that the best hotels in this part of the world provide a lower quality of service than those in Asia, because they cater for an American crowd, who are demanding for all the wrong things. Almost as a rule, the better the hotel, the worse the food! But is also a world where wealth is less evenly distributed than even in China.

As I end the year, and do miles of trekking (it really tests my lungs here at 11,000 feet!) and taking glorious trains through the mountains, some of the imponderables that run across my mind (just to give you a flavour) include:

– Will India ever change? There is a lot of talk about unstoppable GDP growth, but where is it all going? There is no more excuses for the filthy streets, crumbling airports and falsely marginalised human beings at all layers because of a cruel caste system. The rest of the world should not tolerate any more excuses if this country is to be taken seriously at all. Period. I think of India because some of Latin America is as desperately poor as India, but food is one thing they seem to have solved. Maybe there is something here that countries like India can learn from regions like Latin America.
– Even South Korea is changing. Anyone been past Seoul airport recently? This a people who are supposed to hate foreigners, but look at how friendly they have become. But what is driving that and how real is that?
– Japan desperately wants to be taken seriously, but will Japanese banking ever change? It seems to be going backwards with the new customer protection laws. The recent disastrous attempt to list shares of a Japanese bank internationally (Azora?) should be a wake up call, but this country is so very difficult. Having said that, The Asian Banker will be selling its first products to Japanese banks in January.
– Malaysia will become attractive to foreign direct investment again. They have to! I have properties there to worry about!
– I have to spend more time in the Middle East.
– I really need the next generation editor who will enjoy taking The Asian Banker to the next level so that I can write my books and take a more macro perspective of things in general.
– Now that Jeffrey Koo Sr of Taiwan’s clout in the region is crumbling, it is time that the mainland Chinese take over some of the regional initiatives he, a Taiwanese, sponsored previously. Hmm, some ideas there.
– Earthy things like how to pay my own bills!

Have a great end of the year and let’s all start the new year rested and refreshed. Another ten hours of trekking tomorrow.


  1. Great post ED. Hope to see you in Singapore soon!


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