March 19, 2005

10:01:49 pm Final Observations on South America  

March 18, 2005

In our last week in South America, we began a post summarizing our experience there. We never finished it then, but will attempt to do so now as we are about to depart New Zealand.

South America is an unknown continent to most Americans, who never think of going there. We encountered more Europeans than Americans, the former being more adventurous in their choice of travel destinations. We do think as a generalization that South American countries do a poor job of promoting itself as a travel destination to English-speaking Americans. Europe and Asia are more front of mind to Americans desiring a foreign continent vacation. Europe is an understandable destination given the heritage of the US, but Asia is further in distance and history, although closer to us economically. We do think Asia has a slight lead over South America in prevalence of English and availability of tourist facilities that match US expectations. This lead is only slight at most, however, and may be more in our imagination than real. Anyway, this slight lead ought is counterbalanced by the closer location of South America.

Whatever the reason why Americans don't go to South America in large numbers, they should. The array of fantastic natural and archeological sites to see tops North America in our opinion. Most Americans could name the Amazon (which we have not been to) and some are familiar with Machu Picchu, but no one seems to know Iguasu Falls (the best waterfalls in the world, making a mockery of Niagara); the Calafate Glaciers (Alaska and New Zealand's glaciers do not begin to compare); or the beauty of the Lakes Region of Chile and Argentina. (As an aside, we observe that New Zealand, which we consider to be one of the most consistently beautiful and outdoorsy countries, has nothing that matches the beauty of Iguasu, Calafate, and the Lakes Region.) The landscape of Rio is as beautiful as any city in the world, but most Americans will see San Francisco and think they've seen it all. The Galapagos Islands (and to a lesser extent Easter Island) are far away places that many Americans want to go to, but never do, opting instead for more expensive, less interesting, and further away places such as Tahiti and Bora Bora that travel agents push them to (never underestimate the power of exotic sounding name, which, when combined with a personal recommendation, becomes irresistible). To top it all off, South America is cheap, cheap, cheap--one of the most affordable places you can travel to. So go.

One question that intrigued us throughout our travels in South America is why North America has prospered while South America has not, given that both were settled in the 16th Century by European powers. The early advantage was to South America over North America as it had more developed indigenous cultures and was generally settled a bit earlier by the Spanish than was North America by other Europeans, primarily the English. So what went wrong?

We have identified three contributing factors. There are likely other factors we've missed and we will not attempt fully justify the ones we've identified, but in any event, here they are:

- Simply stated, the English were better colonialists than the Spanish were. While each kept colonies for economic gain, the English did more to develop the colonies and make them a better place to live in terms of education, infrastructure, and institution building. The Spanish invested little and took much. The best comparison we can think of is actually not in the Americas or even involving the English, but we think it illustrates the point well. The Philippines were a Spanish colony for roughly 400 years and later an American colony for roughly 40 years (the only colony the US has ever had). If you consider the American colonial period in the first half of the 20th Century a surrogate for how the English would have operated, you have a fair comparison of one nation under two different colonial rulers. The Spanish were there for 400 years, but today few people in the Philippines speak Spanish and there are no significant ties between Spain and the Philippines. The one legacy the Spanish left is Catholicism. The Americans in contrast built roads, established mass education, built democratic institutions, and voluntarily handed over power. Today, English is the unifying language of this island archipelago, even though it was not commonly spoken a century ago.

- The pervasiveness of the Catholic Church in Spanish colonial society and government was so great as to be a negative. It did not have a parallel in England, which broke with Rome in 1534, and in the US, which had a clear vision of separation of church and state based upon firsthand experience of religious persecution in Europe.

- The US had figures like George Washington as a role model. He and our other founding fathers generally put the countries' interests ahead of their own and designed a brilliant system of government that properly checked the natural bad tendencies of men in power. South America had a series of those bad men, unchecked, and in power. Instead of George Washington, they had caudillos like Juan Manuel de Rojas of Argentina who lusted after power for personal gain, not for the patriotic good, and did whatever it took to achieve it, crushing all opposition. Rojas ruled Argentina as a dictator for roughly the first 30 years of its founding and set the example for future generations of leaders.

On the last point, it's worth noting that there is a South American figure, Simon Bolivar, who is called the South American George Washington. Inspired by the American Revolution, Bolivar's vision was the confederation of Gran Columbia, consisting of present day Columbia, Venezuela, Ecuador, Peru, and Bolivia. Bolivar and his right-hand man General Sucre (continuing the analogies to the American Revolution, perhaps Sucre could be called the Alexander Hamilton of South America) fought to achieve independence from the Spanish for these countries in the 1820s and then unified them. Gran Columbia collapsed in 1830, though, as leaders of the respective countries could not put aside personal differences and competing ambitions for the greater good. This failure is a stark reminder that it was never preordained that the US colonies would unite and form one great country instead of 13 minor countries that most people in the world would have trouble placing on the map. We forget that the colonies were not unified at the beginning--they were independent, competing, often squabbling, separate entities. We are so fortunate that the politicians of the 1770s and 1780s were able to reach compromise for the common good. Consider what the US and Gran Columbia each might have become had they taken the path of the other.

The Gran Columbian countries today have a population of nearly 120 million, but we suspect its size would be tens of millions higher had they remained united, as European and Central and South American immigrants would have been attracted to the most dominant Spanish-speaking country in the world. Who knows, maybe Mexican migration would have flowed south to the Gran Columbia juggernaut instead of north to the US. With a large domestic market and its language advantage over Portuguese-speaking Brazil, Gran Columbia would be the giant of South America instead of Brazil. Instead, "we are an insignificant country today," said our Ecuadorian tour guide Ruben, lamenting that the Gran Columbia Revolution did not share a common path with the American Revolution. "And you," he continued, "have become the most powerful country in the world."

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March 02, 2005

04:43:30 pm Easter Island, Chile  

Easter Island, Chile
Sunday, February 27, 2005 - Wednesday, March 2, 2005
Population: 3,000 - 4,000
Language: Spanish and Rapa Nui (Polynesian language variant, with similarities to Hawaiian)

Itinerary
LAN Chile flight from Santiago, Chile to Easter Island, Chile
Three nights at Mana Nui Inn

Easter Island Activities
Island tour
Snorkeling
Horseback riding
Rapa Nui movie
Writing for web site

Easter Island is where to go when you want to get away from it all. It's a small, 45-square mile island, whose nearest neighbor, the even smaller Pitcairn Island, is over 1000 miles away. The five-hour flight from Santiago, roughly 2500 miles east, comes four times per week in high season. After a brief stop, the flight continues on to Tahiti, another 2500 miles west. The return flight from Tahiti arrives three times per week in high season. So, altogether, there is one flight per day in high season.

We stayed three nights on Easter Island, continued on the flight west to Tahiti. While tourism is the main interaction of the island with the outside world, only 25,000 visit the island annually, although for perspective that small number seems larger when you consider it is six or seven times the population of the island. This tourist throng did not begin until 1985, when the US funded an airport expansion to allow it to be an alternate landing site for the space shuttle should it need to make an emergency landing in the South Pacific Ocean. Before then there was no regular commercial air traffic.

Everyone knows everyone. When we did not see anyone meeting us at the airport as we had prearranged, we inquired at the information desk. The women working there turned out to be the daughter of the owner of the inn where we stayed and she quickly found her mother in the crowd. We occupied one of the two rooms at our inn, which was an additional two bedroom building constructed in the owner Bicky's backyard. We had a view of the ocean, a few hundred yards away, and it was a short walk into town. The larger hotels have one or two dozen rooms. But these days you cannot be too out of touch. There were internet cafes and our Blackberry constantly streamed e-mails from home. We guess you have to go to Macomb for your Blackberry not to work!

Easter Island of course is where those giant stone heads, called moai, you have seen in National Geographic or the Discover Channel are located (see image gallery). The entire island culture was devoted to honoring their ancestors by carving these heads in stone on the volcanic mountain and then transporting them down to the seaside. The population peaked around 15,000 in the 17th Century before an internal civil war and outside disease brought by the Europeans, reduced the population to less than a thousand in the 19th Century. Civil war between the two island clans, the Long Ears (they wore long earrings) and the Short Ears apparently ended the moai building. Many of the moai were toppled either by natural causes or perhaps by the Short Ears, but most are reconstructed today.

We watched a movie, Rapa Nui, which depicted the culture of moai building and the beginning of the civil war, before the Europeans arrived in 1722 on Easter Sunday. Kevin Costner financed, but does not appear in, the 1994 film, which perhaps results from his Dances with Wolves indigenous people phase. While the film is not historically accurate (think Oliver Stone) in that among other things it combines events that occurred over multiple centuries into a story that unfolds in less than one year, it does a good job we thought of providing one version of how some of the history could have happened. You probably won't find this mediocre-acted, B-movie at your local Blockbuster, but it's worth seeking out if you want to learn more about the native culture of Easter Island.

Despite what the guidebooks say, you really can see everything in one day, which we did on our first full day. We spent the morning of day two horseback riding. Nick has had a traumatic history with horses, but emerged from this experience uninjured. Sometime around age four, he was thrown off a pony at his grandparent's farm. Then around age eight, he fall off a galloping horse and fractured his wrist. His last horse adventure was around age 16 in the Rocky Mountains. Some years later, his uncle Dave confessed that the reason Nick's horse was constantly breaking into an uncontrolled gallop was that Dave and Nick's step-dad Bill kept poking it with a stick. It has taken him over 20 years to get back on a horse and after his latest adventure, he concluded that he was glad to have been born in the age of the automobile.

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04:42:42 pm Lakes Region, Chile & Argentina; Santiago Area, Chile  

Puerto Montt, Chile
Tuesday, February 22, 2005 - Wednesday, February 23, 2005
Largest city in the Chilean Lakes Region
City population: 110,000

Bariloche, Argentina
Wednesday, February 23, 2005 - Friday, February 25, 2005
Largest city in Argentine Lakes Region
City Population: 78,000

Santiago, Chile
Friday, February 25, 2005 - Sunday, February 27, 2005
Capital and largest city in Chile
Metro area population: 6 million

Chile Country Background:
Population: 16 million
Per capita GDP: $10,000
Size: Slightly larger than Texas
Currency: Chilean peso, 585 per US dollar
Independence: 1810 from Spain
Language: Spanish

Itinerary
LAN Chile flight from Guayaquil, Ecuador to Santiago, Chile
LAN Chile flight from Santiago to Puerto Montt
One night at Presidente Hotel
Lake Crossing tour (4 buses and 3 boats) from Puerto Montt to Bariloche, Argentina
Two nights at Llao Llao Hotel
LAN Chile flight from Bariloche to Santiago, stopping in Puerto Montt (no plane change)
Two nights at Best Western Majestic Hotel

Puerto Montt Activities
Walking around town
Movie--National Treasure

Bariloche Activities
Llao Llao painting class (Deanna), spa (Deanna), gym (Nick), and pool (both)
Walking around town
Cerro Campanario (peak overlooking lakes--see image gallery)

Santiago Activities
City tour
Museo Historico Nacional
Soccer match: Colo Colo 2 Everton 1
Excursion to Valparaiso and Vina del Mar

The final leg of our South American tour began as we left Ecuador, flew south overnight to Santiago, then took a morning flight further south to Puerto Montt, the Chilean gateway city to the Lakes Region that spans Chile and Argentina. Puerto Montt itself was a disappointment. Situated on a bay of the Pacific Ocean and adjacent to several lakes, it should have been a charming town, but we found it charmless. It seemed unaware that it was a tourist destination, as there was nothing there for tourists. Add to its plainness the ever-present South American graffiti, on the magnitude that you would expect for a city of several million people, not several hundred thousand. Why a town of this manageable a size, that has large inflows of tourists, would allow all of its public areas to be so defaced is beyond us. At this point, after nearly five weeks in South America, we were mentally finished with the continent and ready to move on. Over the next few days, though, the beauty of the Lakes Region would win us back.

So, with time to kill in Puerto Montt before our next day tour, and with nothing really to do, we heading for the mall and the cinema. National Treasure was the only thing playing that we had not seen over the prior 10 days, a movie we had resisted to date for its farcical premise. If our founding fathers really had been in possession of a great treasure, we think they would have used it to finance the army! Funding problems were the other non-military battle during the Revolutionary War and nearly cost us our independence. It was a constant effort to get the colonies to pay anything for the army. We don't think Benjamin Franklin and others would maintain loyalty to the Free Masons while watching the Revolutionary Army nearly be defeated. Anyway, if you can swallow the premise, the movie was entertaining enough, a sort of Indiana Jones adventure on the eastern seaboard.

The following day, we took a series of four buses and three boats to traverse the Lakes Region from Puerto Montt, Chile to Bariloche Argentina, leaving at 8 AM and arriving just before 10 PM. The scenery was beautiful and we think we can describe it best by referring you to the image gallery rather than trying to use words here. The trip itself did not cover as much distance as you would expect, for there was a total of about four hours of downtime during the day. This is a very South American, and especially Argentine, way of organizing a tour. If dinner is typically not until 10 PM or later, why wouldn't you want to spend all day and the evening until then on the tour? Why spend 10 hours on a tour when you can spend 14?

The answer to this is that we would rather spend those four hours at the Llao Llao Hotel in Bariloche, a great hotel by anyone's standard. (We heard the hotel name pronounced many different ways. The Millers told us it's shao-shao, but we also heard jao-jao, which corresponds to how "ll" is pronounced in Argentina; and yao-yao, which corresponds to how "ll" is pronounced by most non-Argentine Spanish speakers. We're sticking to shao-shao until corrected.) As we will have well over 300 hotel nights this year, we stayed in a mixture of accommodations, ranging to date from a bed-and-breakfast room in someone's home in Buenos Aires for $35 per night to splurging at the Llao Llao, a kind of Four Seasons or Ritz-Carlton type resort. This was a nice reward for our last week in South America. Bariloche was everything Puerto Montt was not, although we confess we spent most of our time at the hotel. Alas, we arrived too late the first night for Nick to enter and win the Llao Llao ping-pong tournament. Undoubtedly, he would have crushed all of the pre-teen boys staying with their parents at the resort, with his table tennis skills, finely honed over the years on the Mason ping-pong table.

From Bariloche, we flew back to Santiago, with the plane stopping briefly in Puerto Montt. During our two days in Santiago, we attended our first South American football (soccer) match, between two local teams, Colo Colo and Everton. Apparently, Colo Colo was such a heavy favorite over hapless Everton that not many fans bothered showing up. There were maybe 5,000 - 7,000 people on hand in the heavily partisan Colo Colo crowd. Still they made as much noise as a crowed of 50,000 at a US sports event, chanting, singing, and cheering throughout the match, that Colo Colo won 2-1.

Buying a ticket was a challenge. We knew from our hotel desk clerk that there were five different ticket prices, from roughly $4 to about $17. Not knowing what to expect, and having heard the worst about boisterous South American crowds, we knew we wanted the most expensive seats to avoid the mosh pit atmosphere of the more excitable fans. The ticket booths were spread around the outside of the stadium, each selling only one type of ticket, with no prices posted, and no one speaking English. The ticket takers themselves were behind a black screen so you couldn't see anyone; you just slid your money through a hole and received a ticket in return. It had the feel of a drug deal. Finally, after we caused quite a commotion by canceling our purchase of the wrong ticket, a helpful stadium official got two teenage stadium workers who spoke some English to escort us around to the other side of the stadium, where we were able to purchase the tickets we wanted.

Santiago has about one-half the population of Buenos Aires, appropriate as Chile has about one-half the population of Argentina. Each city dominates its country as the financial, cultural, transportation, and political center, although the Chilean legislature was relocated to Valparaiso, about 90 minutes away, when it was reconvened in the 1990s after Pinochet's rule. The executive and judicial branches of government remain in Santiago.

We took an excursion to Valparaiso and Vina del Mar, twin cities that have nothing in common. Valparaiso is a faded port town that peaked in the 19th Century and then took one economic body blow after another. First in the late 1860s, the US transcontinental railroad opened. This changed the quickest trade route from the east coast to west coast in the US from shipping around Cape Horn, South America (with a stop in Valparaiso) to rail through Chicago, Omaha, Salt Lake City, and San Francisco. Then in the early 1900s, the Panama Canal opened, so remaining shipping traffic could bypass South America altogether. More recently, a major container port opened just south of Santiago, diverted most of the Chilean container ship traffic away from Valparaiso. Valparaiso is slowly rebounding now, as the relocation of the legislature has helped the city economically, but overall it remains a poor place, and a good example of how trade flows can change suddenly and create new winners and losers. The suburban fools of Chicago who resist O'Hare airport expansion would do well to take note of this lesson, for just as Chicago displaced St. Louis as mid-America's transportation hub in the mid-1800s, so too are Atlanta and Dallas vying to replace Chicago, with its NIMBY suburban mayors.

Vina del Mar is the main Chilean seaside resort. It is somewhat similar to Punta del Este in Uruguay (and probably to Mar del Plata in Argentina, which we did not visit). The differences seem to us to be that 1) Punta del Este is nicer and 2) Vina del Mar and Mar del Plata attract primarily domestic vacationers from their respective countries, while Punta del Este attracts vacationers from throughout South America. Vina del Mar was nice enough, revered in Chile as the place to be, but not outstanding to an American eye, again due in large part to graffiti. The graffiti was not as bad as in Puerto Montt, but still way too much for a supposedly upscale resort town. Societal acceptance of this continues to baffle us, especially as there is money to employ people to sweep the streets. We could tolerate a few more gum wrappers on the sidewalk if those workers were equipped with water blasters instead of brooms.

On our (least) favorite subject, we must point out places in South America where someone has taken the initiative to get rid of the graffiti menace. We previously did mention the cleanliness of the public squares in Lima, Peru, which are a virtual graffiti-free zone, but we neglected to mention that there is hardly any graffiti in Punta del Este, Uruguay, nor is there much, if any, graffiti in downtown Guayaquil, Ecuador. Guayaquil has a noticeable security presence in its central area just like in Lima. The most impressive clean public area to us though was the Santiago subway. Santiago itself is as graffiti plagued as Buenos Aires, but each city is able to keep graffiti out of their subways. Santiago though goes one step further--not only is there no graffiti in the subway, the subway is Singapore clean. We asked one of our tour guides about this, and he explained that it is understood that the subway system is a matter of national pride, not to be defaced. We accept this explanation, but we would add that the omnipresent security and litter removal workers throughout the system are also a key part of the answer. Trust but verify, so to speak.

And now a brief, summarized, and opinionated history of Chile. The history of Chile is more similar than different to the other South American countries we described. Independence from Spain came earlier than the others in 1810, but was part of the series of campaigns that saw all of South America become free in the 1810s and 1820s. Since then, like other countries, Chile has had an alternating series of elected governments and military governments. In 1970, Salvador Allende, backed by a coalition of the socialist and the communist parties, was elected with a plurality of 36% of the vote. The left was joyous that they had finally broken through at the ballot box (Allende ran unsuccessfully in 1958 and 1964), and they envisioned a Cuba-style revolution would follow, but this time the result of a peaceful election, not a military conflict. The US was not pleased with Allende, as you might imagine, and immediately began covert action to undermine him. Remember the time--the Cold War was active (and was in fact a hot war in Vietnam), many worldwide still saw Castro as an inspirational leader, and the US feared a second communist government in the Americas.

The Allende government immediately began nationalizing (a polite word for stealing) businesses, especially foreign owned businesses, with no compensation to owners. ITT and Ford for example, lost their assets. (Castro too took over foreign assets, but he did compensate the owners for what they lost). As seems to accompany socialist governments in South America, the Allende administration completely mismanaged the economy. Prices were set at below-market levels, with these government subsidies resulting in large deficits, high levels of debt, and runaway inflation. Civil unrest was high, with strikes and nationalization takeovers initially encouraged by the administration (workers would occupy foreign company offices, not leaving until the government announced their takeover), and then later with anti-Allende demonstrations rising up in opposition to the government. By 1973, internal forces opposed to Allende and external forces, primarily the US, had enough. The military overthrew Allende on September 11, 1973, with rocket attacks against the Presidential Palace, where ultimately Allende committed suicide.

Enter Augusto Pinochet, the military dictator who ruled from 1973 to 1990, but who is now under house arrest for massive human rights abuses and widespread murder of political opponents. Chile's Dirty War during this period had much in common with Argentina's Dirty War of 1976-1983.

The US association with Pinochet is but one of many examples of be careful of who you associate with. The Batista regime in Cuba and the Somoza regime in Nicaragua are two other hemispheric examples of anti-communist regimes that came back to haunt us. To take the counter point, though, we think some of the common criticism of the US goes too far. To our credit, we do tend to change our tune when the regimes we back change theirs. The US did put a lot of pressure on Pinochet to hold the elections that ultimately removed him from him from power. The US also convinced Marcos in the Philippines to give up without a fight when public sentiment turned against him. To be clear, the US was wrong in our opinion to give tacit approval to the coup that removed the fairly elected Allende from power. But we shed no tears for Allende as he was on the wrong side of history, associated with a since discredited political movement, communism, that has caused great human suffering throughout its short history. His administration provided legal sanction to morally illegal theft of billions of dollars of assets.

We think much criticism of our former alliance partners tends to forget context at the time and has a static view that how someone turns out should have been foreseeable years or decades ahead of time. By this thinking, we should not have allied with the Soviet Union in World War II, because Stalin had and would purge millions of his own people, and would initiate a Cold War against us. Or we should not have funded opposition to the Soviet invasion of Afghanistan because one of the rebels would turn out two decades later to be Osama Bin Laden, who used his skills gained fighting the Soviets against us. A present example might be General Musharraf of Pakistan. We have no doubt this guy has more than a few skeletons in his closet. Some day, by one means or another, he won't be in power, and you may well hear a lot of bad things about him. But today, he has been one of our most beneficial allies in defeating terrorism and we believe the US is a safer place than it would otherwise be if he were not cooperating with us. So whatever comes out later, we are appreciative that he is an ally right now.

Our point is not to give carte blanche to all US action, but rather to illustrate that in present-day context, actions are driven more by what's pragmatic now versus what will look good a few decades hence with present-day context is forgotten. Too frequently foreign criticism of the US and US domestic criticism, primarily from the left, can only see one side, the latter-day side, of an issue. Having said that, there are lines not to be crossed and occasionally we've crossed them, probably fewer times proportionally than other world powers, but nevertheless we've made plenty of mistakes. Working to overthrow Allende through military means rather than through the next election was one of them.

The Pinochet case took an interesting turn in 1998. Although defeated in elections in December 1989, he remained head of the army until 1998, and after that became a senator for life under the constitution. So even as the abuses of his regime were being uncovered in the 1990s, his active presence made the government was reticent to prosecute him. In October 1998, during a routine trip to London, he was arrested unexpectedly in a case that put civil libertarians in an awkward position of defending a man they hated for his human rights abuses. A Spanish magistrate requested that British officials detain him as they sought to prosecute him for murders committed against Spanish citizens. Britain complied with the arrest, but then struggled for what to do next. Clearly, Pinochet was a bad guy, deserving trial and punishment. But to extradite him to Spain would be to establish a precedent of allowing one country to violate another's national sovereignty. To take an event that happened two months before Pinochet's arrest, should the UK comply and arrest Bill Clinton on a future visit if a Sudanese court wanted him extradited for the August 1998 bombing of a Sudanese pharmaceutical factory? Clearly no, once opened, allowing one country to extradite officials from another country could be a never-ending Pandora's box of tit-for-tat politically charged retaliation, with politicians potentially unable to leave their own borders. If you think this is exaggerated, note that Donald Rumsfeld recently held off visiting Germany until the German government gave its assurance he would not be arrested upon arrival.

The ultimate decision was a wise one we think. After 16 months deliberation, Britain decided that Pinochet's declining health made him too sick to stand trail and allowed him to return to Chile in January 2000 provided that he remain under house arrest, and if ever he recovered he must be extradited to Spain.

This fear of losing national sovereignty is why the US opposes the international criminal court. One only has to look at the UN, which at times seems a parody of itself (let's put Libya in charge of the human rights committee!), to see why the US fears a global political body deciding judicial matters affecting US citizens. Again, the US gets a lot of criticism from the world for its position, with little attempt by the criticizers in our view to understand the US position or to address our legitimate concerns. Isolationism today seems to be defined as correctly pointing out flaws in a proposed system that no one else wishes to see.

Despite its terrible human rights record, Pinochet's government generally ran things well economically, and for the last 25 years most of the ink the press has written on positive South American economic policies has been written on Chile.

Most notable, at the beginning of the 1980s, Chile privatized its social security system, one of the first (the first?) of over two dozen countries worldwide with private social security systems, a fact you may not hear from US social security reform opponents. A recent press report we read on Chile's private social security system gives it a mixed review. Investment returns have exceeded projections, but somehow payouts are lagging. At first blush, that does not make sense, and the non-financial press seems content to point out the problem without trying to understand or explain it, so we are in the dark as well. The story hints at high fees, which could be a partial explanation, and one that's fixable for future generations. We would like to know more about this.

One anticipated side benefit of privatization of social security that does appear to have materialized, although we have not seen it quantified, is that the pool of funds has created greater investment capital for Chile, and the economy has advanced beyond what it would otherwise have done. As a purely anecdotal observation, Chile did seem a bit more modern and more vibrant than its closest neighbor Argentina, even if Argentina still has a slight lead in terms of per capita GDP. Chile's more stable economy has spared it from economic collapse over the past few decades and resulted in a stronger currency. Fortunately, our experience in Torres del Paine of extremely high prices was limited to that remote area. Overall, Chile is still definitely less expensive than the US (although an occasional price will approach US levels), but definitely more expensive than the rest of South America. One example, the price of a movie: $9-$10 in Chicago, $5-$6 in Chile, $3-$4 in Ecuador.

There were some limited signs of new real estate development in downtown Santiago, something we generally did not see in the central parts of other South American cities. South American cities are generally old--their 500th birthdays will be occurring in a few decades--so the central areas are crowded with narrow streets. As a result, many (not all) Spanish-founded cities have developed a new business area away from the original city center at some point after World War II, either in 1950s, 1960s, 1970s, or 1980s. The example we know best is in the Philippines (obviously not in South America, but nonetheless a Spanish colonial city), where Nick lived for one year in Makati, part of Metro Manila, but about 30 minutes away from the original city center. All of the foreign banks, the stock exchange, and many of the shopping centers are in Makati, not in downtown Manila. A difference from the US though, is that the new business districts in
Spanish colonial cities cannot quite be called suburbs as they are still dense, and the old central areas even if somewhat run down, have retained their vibrancy in terms of people traffic. Anyway, it is unusual to see much private development in the central areas and Santiago did have some of this, mainly residential.

Nick expected that Chile's pro-growth economic policies over the past few decades would have resulted in greater degree of foreign investment than what he observed. There is foreign investment to be sure, but he expected the American and English presence to be greater. For example, in all of Chile, he only found one foreign language newsstand, and the papers it sold were anywhere from two to seven days old, sold at prices many multiples of the cover prices. For example, you could buy a week-old Miami-edition of the Miami Herald for $US3 in Santiago, whereas in dollarized Quito, Ecuador, you could get the international edition of the Miami Herald on the same day of publication for $US0.75. In Buenos Aires, the daily English language Buenos Aires Herald (no relationship to the Miami Herald) covered world news thoroughly and was available for about $US0.50. Most large foreign cities have a locally edited English language paper like this once they reach a certain level of economic development. Shanghai, China for example has two. However, there appeared to be no way to get same day printed English language news in Santiago, the one exception being the Santiago airport VIP lounges (but not the airport newsstands). This was rather surprising, and indicates that while Chile has come a long way, it still has a long way to go to become integrated more fully in the world economy. Thanks to the airport lounges, though, Nick is now packing The Wall Street Journal, Financial Times, New York Times, and Los Angeles Times. One does long for news from home.

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January 29, 2005

09:02:07 am Patagonia, Argentina & Chile  

Calfate, Argentina
Monday, January 24, 2005 - Friday, January 28, 2005
City population: 15,000

Torres del Paine National Park, Chile
Wednesday, January 26, 2005 - Thursday, January 27, 2005

Itinerary
Aerolineas Argentinas flight from Ushuaia to Calafate
Two nights at Picos del Sur Hotel
Van to Torres del Paine National Park, Chile (6 hours, including stops, border crossing, and bus change)
One night at Hosteria (Hotel) Las Torres
Van back to Calfate (4 hours, faster driver, quicker bus change and border crossing)
One night at Picos del Sur Hotel

Activities, all were excellent
Upsala Explorer, tour to Upsala Glacier and Estancia (ranch) Cristina
Tour of Torres del Paine National Park
Hike from Hosteria Las Torres to Campamento Chileno (halfway to the base of Torres del Paine)
Trekking on Moreno Glacier

Patagonia is the southern region of mainland Argentina. In English, Patagonia means "very beautiful, but too damn windy!" The name is popularized in the US through the Patagonia line of outdoor clothing and we now understand fully the merits of the jacket known as a "windbreaker." While we were there, wind speeds were commonly 30-40 miles per hour, with gusts in exposed areas of 50-60 miles per hour. At times, standing still was difficult. Apparently, 100 miles per hour wind is not unusual.

Calafate, like Ushuaia, is a frontier town, growing rapidly due to tourism. The frontier this time is Parque Nacional Los Glaciares. These are serious glaciers, worth a trip. Previously we had seen glaciers in Alaska (Nick) and Colorado (Deanna) that were a letdown. Rather than describe the Argentine glaciers, we refer you to the image gallery. We will add though that their dimensions may not be clear from the pictures. The Upsala Glacier is about 200 feet tall and extends about 500 feet below the water. It is about 2.5 miles wide and 35 miles long. In summer, parts of the glacier break off, forming icebergs in the cold waters of Lake Argentina. It is visually spectacular.

The Moreno Glacier is smaller, but more accessible and no less amazing. We trekked on this glacier with a group (you strap crampons to your shoes to walk on the ice), a fantastic activity we highly recommend. The crampons allow you to walk easily up or down the steep glacier ice (see the image gallery). The guides divided our tour into English speaking and Spanish speaking groups. Naturally, we were in the English-language group, but we were the only travelers from the US and there were only three other native English speakers from Canada. The rest of the group was from France and Italy. The French group was a wild, inclusive bunch of four couples who had been friends for decades. They were celebrating the 60th birthday of one woman in the group, and they provided champagne for everyone at lunch. "They are so friendly and nice, not at all like typical French people," one of the Italians joked. Even in the age of the EU, national identity remains prominent! (US citizens are often surprised to find that the abbreviation for US in Spanish is EU for Estados Unidos, or United States in Spanish. This seems like a wry, confusing joke now that the US and the EU are the two largest economic blocks in the world--that is until the Chinese take over.)

Strong wind and a rapidly growing Argentine town is a bad combination for someone who wears contacts. Our hotel while nice, was a few blocks off the main paved road. Dirt roads are common here, as the buildings are multiplying faster than the roads. "Ouch my eyes hurt" is all Nick could say, as dust and sand whipped into his eyeballs at high speed. Deanna thought this was a poetic payback for his Ushuaia meltdown.

Like Ushuaia, Calfate is booming. The airport was similar--relatively new and already quite crowded. The flights in and out were full. On the way back to airport for our flight out, our taxi driver happened to be an air traffic controller, moonlighting on a day off. He said the airport opened November 15, 2000, and the city population has tripled since then from 5,000 to 15,000. The old airport had short runways that did not allow for regular commercial aircraft. So tourists to this area had to fly into Rio Gallegos, and then drive three to four hours to Calafate. The glaciers are another 60 to 90 minutes drive beyond Calafate. Suffice to say, that far fewer people bothered to see the glaciers then.

The new airport in Ushuaia was built around the same time as the new airport in Calafate. We don't know, but we suspect the boom in Antarctica cruises probably occurred with the opening of the new Ushuaia airport. This airport allows Ushuaia to be reached now in two flights from major US gateway cities (e.g., New York, Miami, Los Angeles, Chicago) that have direct flights to either Buenos Aires or Santiago, Chile, those being the two international cities with flights to Ushuaia.

It's a common theme around the world. Build a new airport or road and commerce and people will come. (We owe a debt to Jim Rogers for making this point so clearly and repeatedly in his travelogue books Investment Biker and Adventure Capitalist. These two excellent books partially inspired us to take our world tour, although we won't quite match Jim's adventure-seeking method of travel through deserts and war zones.) The situation in Ushuaia and Calafate is similar to that in Liberia, Costa Rica. See our Costa Rica post for a description of how tourism is booming on the northern Pacific coast of Costa Rica now that an expanded international airport means you no longer have to fly into San Jose, a four-hour drive away.

Infrastructure such as roads and airports are one of the most useful things governments can spend money on, as the spending can open up entire new areas to development previously not feasible. That's not to say that every road project is a great idea. The Highway Bill proposed in Congress in 2004 and currently held up as the Bush administration finally shows a hint of spending discipline, is over the top in our opinion, but if a government is going to waste money, better on transportation infrastructure than on most other items. At least you are left with something useable once the money is blown.

Nevertheless, We cannot begin to describe how vast and empty this region is, even with the tourist influx. The thought of the earth being overcrowded seems farcical here. Parts of the continental US were probably this empty 80 years ago, but nothing in America outside of the less settled parts of Alaska remains this remote now. Go see Patagonia before it changes.

The southern third of Chile is not even connected with the largest part of the country by road, although that is beginning to change as the main highway is extended south gradually. To reach Torres del Paine
National Park from within Chile, you must arrive in the area by boat or plane and then drive several hours. You can also drive several hours overland from Argentina, which of course is what we did since we were already nearby on the Argentine side. The border crossing itself is a remote outpost on a dirt road.

Spending two days and one night in Torres del Paine was the most difficult part of the trip to book so far. It would seem that it would be easy to travel less than 200 miles from the town closest to arguably the most beautiful national park in Argentina to the arguably the most beautiful national park in Chile. It probably would have been easy to do this locally, but we did not want to risk no availability in high season when tourists seem to be growing faster than capacity. So we booked this trip from Chicago. It was like the old Yogi Berra saying about a restaurant, "It's so crowded, nobody goes there anymore." Travel agents for Calafate and Torres del Paine are so busy at this time of year that they do not have time to book anything for you. We should explain that daily high temperatures in Patagonia may reach only 50 degrees in the summer (although the 60s and low 70s are also common), so summer is the only good time to visit--at other times it is just too cold, especially when you factor in the wind speed. So everyone goes here in the summer. Even in summer, the wind chill can drop below 30 degrees mid-day, as the winds kick up. Thus, Deanna broke down and bought a winter hat, the one piece of true winter gear we now have.

We tried about half a dozen travel agents over the Internet before achieving success, success defined as taking three weeks to book a tour from Calafate to Torres del Paine and one hotel night in Torres del Paine. We had to wire most of the money ahead of time, pay the rest in cash in person in Buenos Aires in a transaction that took one hour, and then make another in-person visit to the agent's company in Calfate, just to reconfirm everything, which took about an hour.

Argentina is largely a cash-based society--credit cards are accepted at some higher-end places, although not always willingly and occasionally with a punitive surcharge that incentivizes you to pay cash anyway. Other parts of South America such as Bolivia and Ecuador are also like this (requiring us to wire money for tours and hotels ahead of time), but we suspect that is do to those countries' relatively unsophisticated financial systems. In Argentina, the issue seems to be more a distrust of banks and a desire to avoid them wherever possible, rather than primitive financial systems. That's not altogether an illogical reaction to a situation where you couldn't get your money out of your bank for several weeks in 2002, while the value of your currency dropped 75% against major world currencies. Or to situations in the late 80s and early 90s where inflation was over 1000% per year. Given this string of financial crises, people tend to have a lot of cash lying around. Sadly, there are reports every day in the paper of home robberies where large amounts of cash are stolen.

Credit cards seem more accepted in Brazil and Chile. We are not sure about Uruguay, as during our brief stay there we encountered different results--accepted some places, not others. Uruguay has been more stable than Argentina, so this surprised us a bit. We wonder if less than universal acceptance in Uruguay reflects the preponderance of Argentine customers wanting to pay in cash or possibly the businesses being owned by Argentines.

Torres del Paine, like the glaciers around Calafate, is stunningly beautiful to the point where it's just best to refer you to the image gallery rather than to try and describe it. Though not that high, the main peaks are sharp, jagged, and rise nearly straight up. This makes them a challenge to climb, although by 1970 humans had scaled all of the peaks. The park itself is much bigger and less developed than we expected. All roads are dirt or gravel and can be quite bumpy. After a day of riding in the van, we felt like a layer of dust had settled on us.

There is one immediately noticeable difference once you cross the border from Argentina to Chile--the prices are much higher, generally at US levels, sometimes less, sometimes beyond, depending on the item. Since our knowledge is limited to the area from the border to the tourist spot of Torres del Paine, we don't know how authentic our experience is. Prices could be inflated by the confined area we are in--there is nowhere else to get a meal, so a buffet dinner at the hotel cost US$95 for the two of us, about what we paid for dinner for five our first night in Buenos Aires. Prices could also be inflated by it being peak season. We'll see what prices are in Santiago in about one month's time, although travelers we were with during our tour said that Chile is an expensive country. Some premium seems justified as the country has been probably the most stable financially in the Americas over the past 15 years outside of the US and Canada. Still, $10 for two 8-ounce Cokes at lunch with that charge again for refills might make even a New York hotelier blush.

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