Thank you Brian for the celebrity guest blog.
This last semester we’ve learned about Porter’s Five Forces, Baron’s Four I’s, and the importance of clusters to local economies. On Wednesday and Thursday in Lima, we saw every imaginable framework come together in a neighborhood called Gamarra.
Gamarra is the textiles hub for all of Peru and one of the largest in the world. In the radius of a few blocks, there are over 17,000 shops, ranging from fabrics to high end formal wear. We had two separate tours. The first was to a workshop where several workers were diligently producing knock-off soccer jerseys (don’t tell Nike and FC Barcelona). The second was a tad more…legitimate. A young designer had built an amazing manufacturing infrastructure for designer clothing that he sells to one of the largest shopping malls in South America, Replay, and he has just recently opened his own retail store in Lima’s central shopping district.
In the afternoon, we went to the Central Reserve Bank of Peru, where we received two amazing lectures from top economists in the bank. Peru has an excellent story to tell. In the last ten years, they’ve reduced the national poverty rate from about 60% to approximately 30%. They’ve managed to check their hyper inflation and improve key quality of life indicators like child mortality, child malnutrition, and life expectancy.
On Thursday, we heard a number of presentations from Peruvian institutions and firms that focus on private sector development. The first presentation was by PromPeru, a government body that works to increase Peruvian exports and key industry exposure. Since 2010, Peru has experienced a 27% per capita increase in exports, which has been driven by a diversification of regional trade partners. Peru has a pending trade agreement with the European Union and PromPeru is central to assisting domestic firms prepare for trade in the new region.
After PromPeru, we met with Alan Dabbs, the Founder and CEO of the Social Capital Group. SCG works with multinational enterprises exploring development projects and they provide a suite of services that includes social assessment of foreign investment target, management planning and alignment, and implementation and outsourcing. Mr. Dabbs stressed the importance of providing social context for each project, which needs to include anthropological, political, and economic indicators prior to investment. A primary key to successful project management is information sharing with external stakeholders that are not directly involved in the immediate consideration of the project.
Our final presentation of the day was made by Choice, which is a subsidiary of AMECO, a global leader in integrated mobile equipment and tool solutions for the construction and industrial markets. The presentation was made by former GW MBA student, Gian Piero Bassi. The talk not only highlighted the work that Choice does in the mining industry, but it importantly, he discussed the complications that can occur between enterprise and social interest groups, which can be a common occurrence in the developing world.
The last couple of days have been fascinating as our presenters have continued to help bridge the divide between academic and actuality, and our experiences have importantly showed an amazing contrast between street economies and national economics. The only lesson that we still need to learn is how to cross the street in a Latin American country. Seriously, it’s terrifying.