My Balassa-Samuelson haircut

On our macroeconomics class of the first semester, we learned about the Balassa-Samuelson effect. In a nutshell - services tend to be cheaper in poorer countries ad countries with weaker foreign currency.

So, I badly needed a haircut. I have been meaning to have a haircut since March. When I went to Barcelona, for spring break, I considered having a hair cut but the Euro fee I had to pay for the service was more than I wanted.

I have just one disclaimer: I do spend money on haircuts. Unfortunately, I had pretty terrible experiences going to neighborhoods’ salons, so I do pay more for having a nice haircut in a nice salon. If you feel the need to express your judgment, go ahead – I have 4 brothers that are a constant reminder of nonchalance as a virtue.

Anyway, in need of a haircut, I decided to make a rational choice. I decided that I would have a haircut in a less expensive country than the US Over the summer I was heading to Mexico and Brazil and both countries are less expensive than the US. I looked on the Internet and through aardvark (Jenny, you owe me a beer for that) to fabulous salons in Mexico City. After a few calls, I learned that I would spend around U$40 on a haircut. I had one data point.

If you take GDP per capita, Mexico has U$ 7180 and Brazil has U$ 4289. Therefore, you would expect that a haircut in Brazil – because it’s poorer would be cheaper than in Mexico.

Well, it’s not. If I wanted a haircut in a nice salon in São Paulo, I would have spent at least U$ 130.

Why?

1 – By The Economist Big Mac index, Brazil Real is over-valuated and Mexican Peso is under-valuated and therefore services are more expensive in Brazil than they should be by the Balassa-Samuelson effect

2 – Maybe I should consider the GDP per capita of the cities and not of the country.

And here is my new Mexican haircut.

So you want to learn Portuñol?

Believe it or not, we do not speak Spanish in Brazil, we speak Portuguese. This language difference has kept Brazil distanced from the rest of the continent. One of my very good friends has a one-woman campaign that we all should speak Portuñol in Latin America to have a regional integration. I definitely support her!

My campaign started in the corporate world – at McK, I had portuñol listed on my language skills in my internal profile. I actually managed to convince one of my co-workers to also list portuñol in his profile (I also convinced him to grow a really cool handlebar moustache, some people really don’t miss me at the office…)

What is Portuñol? Brazilians are normally too lazy to actually learn proper Spanish, so we basically make some words up mixing Portuguese with Spanish accent, and that’s basically all the Spanish we think we need. Spanish speakers normally add the suffix “inho” to every little word and that’s it – a language that connects you with your fellow Latin-Americans. Portuñol is the fusion of Portu(guês)+(Espa)ñol.

So, if you wish to learn portuñol, nothing better that a whole playlist of portuñol songs for you to practice your vocabulary and nail the right accent.

The ultimate Portuñol Playlist – Brazilians singing in bad Spanish, Spanish-speakers singing in bad Portguese.

1. Caetano Veloso – Un vestido y un amor – Caetano has a whole album in Spanish called Fina Estampa. The album is great and this Fito Paez song is one of my favorite songs.
2. Gilberto Gil – Soy Loco por ti, América – portuñol in its best, with the whole political message
   
3. Os Mutantes – El Justiciero – this is my song addiction of the week. This is classic portuñol: “Tengo chocolate quiente y tequila”, “Socuerro, el Justiciero”. Priceless.
4. Maria Rita and Jorge Drexler – Soledad – so do not listen to this song if you are feeling suicidal. I have to admit that I cried a little bit at Drexler’s concert here in Mexico when he played this song.
5. João Gilberto and Caetano– Besame Mucho – classic bolero by Bossa Nova’s gran maestro.
6. Bebo y Cigala – Eu sei que vou te amar – Cuban pianist, flamenco singer, Brazilian song.
7. Caetano Veloso – Cucurrucucu paloma– if you watched the Almodóvar movie “Talk to her”, you probably remember the beautiful scene with Caetano and Jacques Morelembaum.
8. Jorge Drexler – Dom de iludir – OK, I’m a little obsessed with Caetano lately(if you consider 15 years lately). But this song has a classic Caetano verse “every person knows the beauty and sorrows of being who you are”. Rivals THE classic Caê quote: “from up-close, nobody is normal”.
   

Bonus List – the Karaoke playlist

From my experience, some karaoke nights can change your life. You never know what or whom you will encounter in shady karaoke joints in Latin America, therefore, you should always be prepared to humiliate yourself on public with well-known songs, preferably in a very kitsch bar (or in multi-cultural complex with pool tables, sushi bar, barbecue and Xmas lights in a Japanese-run karaoke, oh, well, I miss São Paulo after all)

1. Menudos – Não se reprima – claaaaassic 80’s song, Puerto Rico boys group singing in Portuñol. Ricky Martin started his career in this group.
2. Roberto Carlos – Detalles – the Brazilian King of Romantic Music. You can’t go wrong with Details – “small details of us, are just too big to forget”. This is probably one of the few songs in the world that I can actually remember the lyrics. Corny? Yes. Totally kitsch? Also. Still, I love it.
   

Street art video (Thiago's tip)

MUTO a wall-painted animation by BLU from blu on Vimeo.

Oaxaca street art

Street art – def.: art developed in public spaces. The term includes graffiti, sticker art, wheatpasting, poster art and other art interventions in the public space.


I like street art because they transform the often so-gray public space into a little space for poetry and humor. Although the root of street art is graffiti and vandalism of public spaces, nowadays this form of art has become mainstream and widely accepted. Shepard Fairey held a major exhibition at the ICA museum in Boston; osgemeos paintings are worth thousand of dollars. And Banksy has an exhibition at the Bristol Museum.


Public spaces have become so boring, lifeless and without identity that I welcome these interventions to remind me of the creativity and aesthetic sense that surrounds me. And I love the public aspect, the transformation of lifeless, grey space into a canvas for color, humor and culture, reclaiming the public space.


I went to Oaxaca, a lovely town on the south of Mexico. I was impressed by the amount of cultural option present there – not only museums of colonial and indigenous art but a lot of local contemporary artists’ scene. Oaxaca is a beautiful small-scale town, so the street art present in the city was a sign of the creativity and vitality of the local artists more than trying to give life to an anonymous building.



Note 1 - a nice website for street art: wooster collective
Note 2 - Support Human Rights in Burma by Shepard Fairey (a little wink to one of my extraordinary classmates, Jacob)

Trash II - the revenge

This post is a follow-up to Helena’s post on trash in India. I have been studying the financial aspect of the waste management in Mexico for the past weeks and I have to agree with Helena: it’s a fascinating topic.

Mexico – as most of developing countries - has a huge problem with waste. Only 50% of all the waste produced here has a safe destination. I’m not saying it’s properly recycled and used for biofuel, no, I’m just saying that only 50% of the waste is taken out of the open air. Waste has a long list of negative externalities: health, pollution, and here in Mexico even air traffic disruption. “What did you just say?” you might ask. Let me explain.

Municipalities spend a great percentage of their budget on waste collection – from 20 to over 60%. And they just can’t handle efficiently the piles of waste that is produced daily. One Mexican municipality did what most municipalities do: pile it up on an open-air landfill. After years and years of waste disposal, the piles were so high that they were endangering the air traffic to the airport nearby. Picture that!

I think waste management has many aspects:

• Broken window effect

In urban centers, if the streets are clean and you can find trash cans everywhere, people would respect more the social optimum and wouldn’t throw trash on the street, as they would do in absence of these signs of cleanliness. How to change the social norm of what is accepted in term of dumping waste?

• Social aspect

In developing countries, there are people that make a living from collecting recyclables from the trashcans. Yes, it’s degrading human condition. This lumpenproletariat works in inhuman conditions, exposed to all kind of health threats. However, any attempt to make waste management more efficient has to integrate these people, that found a way of making a frail living from the waste, so they do have jobs after.

• The limits of Government efficiency

Governments that cannot deal with the waste management have to find partners to do so. The obvious answer is PPP – Private Public Partnership. However, private sectors companies involved in waste management vary from absurdly corrupt (as any paulista* will tell you) to innovative companies that use waste to recycle, produce biofuels and are able to minimize the negative externalities from the waste. The difficulty is how to design a proper contract, an efficient monitoring agency and a fair price to pay.

• Ecology

How to minimize the effect of the waste we produce everyday? Recycle and reuse seems to be a good policy as long you already have an ecological social norm in place. I think we could expect some entrepreneurial activities focusing on using waste in more efficient ways than dumping.
For some reason as I write this, I have the car from "Back to The Future" in mind, it used trash as combustible. Does anyone remember that?


*paulista=born in São Paulo.

Decentralized urban planning

I work at the corporate center of Mexico City – Santa Fé. The curious story behind the area is that it was a sanitary landfill less than 20 years ago. One real estate entrepreneur decided to develop corporate skyscrapers on the valueless land. He was very successful – today Santa Fé is a thriving neighborhood with corporate centers, universities, and residential and commercial centers.

Well, so far so good. Viva the private enterprise. Right?
The problem with real estate development is that they are heavily dependent on public infrastructure – roads, water, energy, security, and transport. The lack of coordination between public goods and private enterprise creates a chaotic situation. Private sector continues to expand into new areas, where land is not expensive and the public sector continues to expand beyond their capabilities.

Santa Fé has one access to the city center, that cannot handle the current flow. You can imagine the chaotic traffic of an unplanned road access to a new neighborhood. There is no metro or reliable alternative transport (unless you consider helicopter an alternative). As a result, I’m stuck in traffic every single day - chatting with Porfirio, the former toreador converted into my taxi driver.

What are the alternatives?

Mexico has managed to attract private investment into the city colonial center (the Zocalo). Should the government intervene to make central areas more attractive to private investments? What would be the way of doing this? Any thoughts?

El Chavo

I have been struggling with the idea of a common Latin American identity.

Brazil considers itself the BIG exception – a huge Portuguese-speaking country in a Spanish-speaking sub-continent (mostly). We had different colonizations all through Latin-America, different economical structures, different people. Are we any similar?

The more I travel through Latin-America, the more I see similarities. We are a mestizo region, deeply influenced by the Spanish-Portuguese culture, colonialist history and institutions.

I would also add that we ALL watched El Chavo when we were kids! El Chavo is the common denominator of our Latin-American heritage. Just try this: put together a Mexica, an Ecuatorian, a Brazilian and a Peruvian and ask them about El Chavo. I guarantee that they will start an endless talk about favorite episodes and the characters.

A little curious note - in Brazil, they translated "El Chavo" (the boy) to Chaves and Chapulin Colorado (the red grasshopper) to Chapolim Colorado (chapolim doesn't mean anything). I just figured out that Chapulin Colorado was inspired by an insect here. Yup, I'm that slow!

Who would have guessed that a 70’s slap-comedy would make it clear for Latin American that we do have a lot in common?