#48 – The Expat Files: Life in Latin America – Cost, Corruption, and Infrastructure

Automatically transcribed from the original recording; names and wording may contain errors.

[00:01] South of the border, down Mexico way. That's where I fell in love when the stars above came out to play. Hi everybody, I'm Johnny Mueller. And you're listening to The Expat Files. Living in Latin America. The one of a kind show that tells you what it's like to live, work, play and or retire in Latin America. It's a fact that millions of Europeans and North Americans have already made that big move south of the border. You might know someone who already has. Maybe it's your dream to do it someday. Well, it's a big move and it's not to be taken lightly. And that's just what this show is all about. So let's get started. In the last few shows, I've been trying to give you an idea of what it costs to live down here based on some of the prices of the food and consumer items.

[01:05] And if you've been paying attention, you'll see that most of the food items down here are much cheaper than their counterparts up in the first world. And that's especially true of the produce items and things that aren't pre-packaged. Though if they are grown, packaged and processed down here, they're still cheaper, but not by the wide margin you see with raw produce. In fact, walking through one of the local markets, you get the idea that this is probably what it was like back in your grandma's day, maybe 50 years ago back in the States. And I'm not just talking about the prices. What I mean to say is in the big street markets down here, where they have rows and rows of vendors selling everything and anything that has to do with food. Especially when it comes to fresh produce. Well, the first thing you notice is that the fruits and vegetables are not clean and neat and nicely displayed, like they are in a supermarket up north.

[01:52] In fact, most of the time you'll see the fruits are kind of dirty, kind of lopsided, and sometimes so asymmetrical that they look deformed. Because down here, those genetic engineering people from Monsanto haven't got to these people in a big way yet. And people down here never did buy their fruits and vegetables simply based on the way they looked. For them, there are a lot more things to consider. And speaking of Monsanto and that horrible crowd. Sure, they've invaded the corn, the wheat, and the rice market. They're really big markets like that. But because there are so many hundreds of varieties of vegetables and fruits, there's just no way those big transnationals have made a dent. Not yet, anyway. I mean, when a tourist or expat actually walks through one of these markets, you can bet money that he or she can't even name half of these fruits and vegetables.

[02:40] I've been down here a long time, and I still can't. Which obviously means, if some of these fruits and vegetables aren't even known yet by the general public up north, you can bet that companies like Monsanto haven't yet gotten around to manipulating the genes on these things. But I'm sure they have a master plan. Why not lock these four farmers into a cycle of dependency just like they've done in so many places around the world? And you can tell, little by little, the multinationals are making inroads down here. Because just five or ten years ago, you never saw big multinationals selling seed products and fertilizers down here in such a big way. And you can prove that to yourself by talking to any one of the local farmers, usually very poor farmers, out in the hinterlands. And whether they're growing a little patch of corn, coffee, or sugar, or tobacco, if you ask them what kind of fertilizer they use,

[03:29] which, by the way, is called a bono in Spanish. Not to be confused with the singer Bono. Or not. Anyway, their favorite of bono is chicken manure, if you can believe that. And it's big business for the chicken farmers down here. Sure, it's a pretty disgusting byproduct, but the chicken farmers do a land office business in it, selling it in 50-pound sacks to the locals for a dollar or two a sack. Now, that kind of recycling is good for everybody. However, you could also go down to the local feed store and buy those 50-pound sacks of granulated nitrogen fertilizer, made, of course, from petroleum, and made by big multinational corporations like Monsanto. But that stuff fluctuates with the price of oil, so nowadays it's just too expensive for the local poor farmer,

[04:16] the majority of whom are still planting things by hand and don't even have a tractor. But here's where the government comes in and screws everything up, as usual. Now, like I've said in so many past programs, Latin American governments are the most corrupt in the world. Not to mention inefficient and totally brainless. And if they're not in first place, they're sure running neck and neck with whoever is. Now, you can be sure that whatever third world governments collect in taxes, the political party in power will normally steal it or just squander it. And that's why people doing business will do anything to stay under the radar, and why at least a third to a half of all the working people down here work for cash and that way they're off to books. Well, if governments down here squander and steal all the tax money, you have to wonder how they get anything done.

[05:03] Like, for example, build roads, bridges, schools, or hospitals. Well, they construct public buildings and do infrastructure work because besides taxes, they have a second very big source of income, which is loans and grants from the IMF and the World Bank. And grants and direct giveaways from rich first world countries like the United States, Sweden, Switzerland, New Zealand, Israel, South Korea, and so many others. And when these Latin countries go begging for money from the first world, they've found the easiest way and the best pitch to use is to say that it's for some kind of poverty program, nutrition program, education program, or helping out the so many millions of poor rural farmers. And as far as first world donors go, and by the way,

[05:49] let's not forget about all those giveaway agencies within the United Nations. They're always sending boatloads of this, that, or the other thing to the third world. Well, of all the different kinds of aid to give, the easiest kind of aid to give for the first world donor is sacks of fertilizer because they don't deteriorate in a warehouse or sitting on a dock for some days like sacks of food might and they don't get gobbled up by insects and rodents. And sending sacks of fertilizer is far better than sending money, which stupid first world governments and charitable organizations have finally figured out, at least some of them have. That the majority of it almost always ends up in the pockets of the ruling class and in many cases, like for example in Africa, can actually be used to buy weapons for mass genocide.

[06:36] So by comparison, that makes a fertilizer donation look pretty benign. But what most people don't realize is that fertilizer donations are not really benign at all. And though it does help the farmer out in the short term, eventually he gets addicted to that stuff and his crops and soil become less diversified, the ground itself becomes more depleted in nutrients and minerals, and the dependency on that fertilizer gets much worse. And it's a petroleum-based product, so there's nothing natural about that. And it cuts the farmer off from his natural connection with the chicken farmer and the recycling of natural fertilizer. And if that isn't bad enough, consider the way those sacks of fertilizer are distributed to poor farmers. And as I'll explain, there's some very twisted logic in that. Now, when a first world country like Sweden donates a boatload of 50-pound sacks of nitrogen fertilizer

[07:28] to a country like, let's say, Paraguay, the Swedish donors themselves don't send a committee of specialists to Paraguay to oversee the distribution of that fertilizer. To wander out in the countryside and hand out sacks of fertilizer to the local farmers and communities that they deem are the most needy, no way. Instead, there'll be a photo-wop at the dock when that boat lands with the Swedish ambassador smiling and shaking hands with Paraguay's equivalent of the Secretary of Agriculture. And that'll be about it for the Swiss involvement. The government of Paraguay will take it over from there. And that's when things get really screwed up. Now, the government of Paraguay will put it in some storage facility somewhere. And generally, the government in power, let's say it's called the Patriot Party.

[08:14] Partido Patriota. And let's just imagine for a minute that that political party's slogan is an orange circle with a fist in it. Well, sooner or later, every one of those thousands of bags of fertilizer will have a nice big party slogan on it with an orange circle and fist. Now, how'd that happen? Didn't those bags come from Sweden? Well, yeah, there's still a Swedish stamp on there somewhere. But the locals don't know what that Swedish stamp is. They only notice the party stamp of the government in power. Are you starting to get the picture on this? So when they hand these sacks out to all these poor farmers, these farmers, who are just barely scraping by, are getting this wonderful gift of free fertilizer from the benevolent party in power. And that's the best marketing tool there is, because these poor farmers are going to remember that

[09:01] the next time they go in the voting booth. And though free sacks of fertilizer like that are handed out once or twice a year, depending on the types of crops in the area and the growing season, when election time comes, the government always makes sure that a double dose of fertilizer comes along, like a Christmas present, right before it's time to vote. And it usually happens like this. All the farmers will be in a small town waiting for the fertilizer truck to come. And when that truck comes into town, you can bet it'll be dolled up with all the latest party slogans, bigger than life, and that all the helpers on the truck will certainly be wearing t-shirts and hats and lapel buttons with all the right party slogans on them. And many times that truck will have a big speaker mounted on the top, blaring a pre-recorded message,

[09:48] explaining all the wonderful things their government has been doing for them, like handing out free fertilizer. And while all that's going on, they'll be handing out pamphlets, printed out, of course, by the party in power, sure to include the smiling faces of the president and vice president, and probably their wives and kids too. And the real icing on the cake, provided by the party in power, of course, is that for one day only, that is election day, they'll offer free bus service for everybody, direct to the polls, and often there'll be free box lunches provided, along with free hats and t-shirts for everybody, with the party slogan on it. And in countries down here, where poor farmers have trouble making five dollars a day, nobody turns down, a free box lunch, and a brand new t-shirt and a hat,

[10:35] not a faded old used one from a first world charity. And why not? I'd take one too. But since gringos can't vote, expats don't get any freebies like that. And speaking of t-shirts, I saw a very cool one down here, but I don't think the guy wearing it got the message at all. It had a picture of Arnold Schwarzenegger as the terminator on one side, and the caption said, I'll be back. And on the back side of the t-shirt, there was a picture of Jesus, and the caption said, I'll be back. Okay, now, let's get back to farmers and fertilizer. Now, in most countries down here, election day is a national holiday, designed to get everybody out to vote, and the local farm boys get a free lift into town and a box lunch. Well, voter turnouts are generally huge,

[11:22] and it's not because any particular candidate is loved or hated more than the other. It's all about the freebies, really. The guy in the party that gives out the most hats, t-shirts, and free food gets the most votes. And that's almost always the party in power, because, like I said in a past program, they can hold off on a lot of big construction projects, like roads and bridges, and start construction on a long-awaited piece of infrastructure just a month or two before that big election. And down here, when the government starts an infrastructure project, or even starts up something, like a big road repair job, the first thing they do is erect a big sign with the governors or mayors or presidents face on it, along with that party slogan, of course, and they all say about the same thing. This project is brought to you courtesy

[12:08] of so-and-so governor, mayor, or president, as if somehow that money came out of his pocket. And on that sign somewhere, it's going to say something like, honesty, transparency, service, your government working for you. And signs like that always make ex-pats laugh, because it's not only corny and completely unbelievable, it's the biggest load of crap we've ever seen. But now here's the thing, even if the government of South Korea or New Zealand or Australia donated the money to, let's say, construct a bridge down in Bolivia, a big sign will go up in front of that project, too, insinuating once again that it's your government working for you, even though the money was a donation from a first world government. Only somewhere on that sign, usually in very small letters,

[12:54] there'll be some kind of reference to the country that actually put up the money. And thankfully, just lately, first world countries that donate to infrastructure projects like that are finally getting smart. Well, a few of them are, anyway. And let me give you a recent example. I happened to be driving in the Outback in Costa Rica, and I came upon a brand new bridge under construction. Now, the asphalt road going to and from that bridge construction site was in terrible shape. I mean, if you tried to count out loud, the number of potholes and defects in that road, you just couldn't count them fast enough. I mean, there were literally hundreds of potholes for every block you traveled with your car. But that bridge, when I saw it, it was about 80% finished, and it was a work of art. First world all the way with the best materials

[13:41] and the best of everything. And when I stopped to get out of my car and take a good look at it, I actually saw a Korean guy walking around in the workforce wearing a yellow jumpsuit and a hard hat and punching some numbers into his blackberry. And it turns out, the South Korean government had financed the project. It was actually a donation, and they'd sent down a South Korean engineer to supervise the project. Good move, South Korea. And I got out and looked around and talked to the guy, and he spoke pretty good English. And I actually shook his hand and said, you know, I've watched a lot of first world countries donate money for projects down here, but I've never seen them send anyone down to actually watch how the thing was built, and never have I seen oversight like this on a day-to-day basis. And he smiled and said, you know, in the past, we'd come down, survey the project,

[14:28] and get the groundwork started, and hand it over to the government department down here in charge of building infrastructure projects. And he said, unfortunately, things never work out when you do it that way. And the result is always second rate, or worse. So now when they donate money for a project like this, they send someone down like him to oversee the whole thing from start to finish. And you know, as luck would have it, about a year later, I was driving down that same road, fighting the potholes and the dips and the washed out gravel, and finally, I recognized this beautiful bridge. And if you didn't consider the crappy road that led to and from it, if you just consider the bridge, you'd think you'd have been transported to the first world. And I could tell by the way this thing was designed and built, it could easily last 100 years with zero maintenance.

[15:14] And because I'd seen this thing before it was even finished, I just had to get out of my car and take a walk around. And I noticed on a small concrete pillar on the entrance to the bridge, there was a small plaque that said in tiny letters that this bridge had been donated by the country of South Korea. But in much bigger letters, there was the name of the departmental governor of that time, and a fancy three-dimensional bronze profile of the governor's head. And of course, there were additional words that said something like, service, progress, and transparency. Your government proudly working for you, in cooperation with the government of South Korea. In smaller letters, of course. Which made me laugh because it was just another big pile of crap, because I know, and I've heard it from middle-ranking government officials,

[16:02] that they don't appreciate it when foreign governments donate money for projects and they send their own people down to supervise. Because it makes it really difficult for the local government official in charge to hire his own favorite contractor and to put his friends and relatives on the payroll, which is the time-honored way of doing business down here. I mean, how's a contractor going to skim some money and supplies for himself and his cronies if there's a pesky and demanding foreigner looking over his shoulder every day? That's just not the way things are done down here. In fact, some Latin governments are so resistant to having foreign oversight that they actually refuse infrastructure donations unless they come with no strings attached. And unfortunately, for so many decades,

[16:48] First World donors accepted those terms, and that's the way things were done. Even now, most First World countries would just rather send the money down, pat themselves on the back for doing a good deed. And later on, when the project doesn't turn out nearly as well as they expected, they just wash their hands of the whole thing. And after a few years, when governments on both sides have been shuffled around with all new faces, eventually it's just so much water under the bridge, and there's nobody left who remembers just how big a screw-up it really was. Now, remember I said when a big infrastructure project starts, the government always puts up a big sign bragging about the project and how they usually have a big picture of the president, or the mayor, or the governor on that sign. Well, the truth is, they only leave those big signs up a few months

[17:35] when the road is still fresh and clean and beautiful. And that makes for a very good impression for the party in power. But why should they take that sign down in two or three months? Does that really make sense? Well, if you think about it, it really does. So let me explain. Better than 95% of all the paved roads down here are asphalt. And no matter the quality of the asphalt, or the mix, or the depth, it always looks spectacularly nice and drives well, but only for a short time. And it's almost always the case, after a new asphalt road is done, in a few months' time, bad things start to happen. And that's why governments are quick to pull those signs down after a few months. They'll take the credit the first few months when that road looks good,

[18:20] but they won't take the blame when it starts falling apart. Even though they're exactly the ones to blame. And of course, the reason why asphalt roads down here fall apart so fast is that the contractors and builders take so many shortcuts, the roads just don't hold up with the traffic, not even for one whole season. And when you're with expats a lot, you hear the same refrain over and over again. How can these Latins build such bad roads? In all the cities and towns everywhere in Latin America, the roads are just a disaster. Yet every big city down here has a university with an engineering department that turns out a crop of supposedly well-trained civil engineers every single year. The fact is, when you look at the deplorable state of the roads down here,

[19:06] and that road crews are busy patching and repairing all the time, it just doesn't make sense. In fact, building a good road is not rocket science. The Romans did it 2,000 years ago. And if you ever take a trip to Italy, you'll see that some of those old Roman roads are still in use, and those 2,000-year-old cobblestones are still going strong. So why can't Latin Americans make a simple asphalt road last more than six months? Well, believe it or not, the answer is very simple. But when you get around a bunch of Latins, especially government-employed contractors and engineering types, you'll hear all the excuses. And first, they'll blame the climate. They'll say, oh, it gets so hot the sun beats down in that asphalt all day, making it soft. And then the heavy trucks roll over it and cause it to flex.

[19:54] And then you hear that excuse about the rainy season, that four hours a day for six months you get this heavy downpour, and that asphalt eventually weakens as it gets soaked. But that just goes to show you how poorly informed the so-called educated college types are down here. Because the worst enemy of asphalt is not sun and rain. It's ice and snow and repeated freeze and thaw cycles, which they have none of, I mean zero down here. And those are just the kind of bad conditions we have in most parts of the United States, Canada, and Europe. And yet, our first world asphalt roads may be in bad shape in a lot of places up north. But the fact is, they don't deteriorate in six months and they have an average life of from seven to ten years before they need rebasing.

[20:39] The fact is, even a brand new asphalt road down here in Latin America, if judged by first world standards, would never make it through an inspection. Now the other person really doesn't know much about asphalt roads, except that he knows he'd much rather drive on a concrete one any day. Now up in the United States, where about 95% of the roads are asphalt, and like I said, on average they last about seven to ten years before they need any major maintenance. Whereas a concrete road could last twice or even three times as long. But since concrete is about a third to 50% more expensive than asphalt, down in Latin America they almost never use it. Unless, of course, they get some free or cheap first world funding. So when you see some big cement turnpike down in Mexico, you can be sure that that's other people's money.

[21:26] Probably yours. Well, back to that question, why does asphalt go bad so fast in Latin America? Well, it's pretty much the same reason why there's a sign in every restroom that says, please don't put your toilet paper in the toilet. Put it in the trash can. And I use that example not because it's so disgusting, though it is. But I use that example to illustrate that everyone should be able to put their toilet paper in the toilet. I mean, why do they call it toilet paper? They don't call it trash can paper, do they? It's because the drainage pipes in businesses and houses in Latin America are terribly inadequate. Although they're supposed to be designed to first world standards. Once the contractor gets started on the job, he cuts so many corners that the pipes end up being terribly undersized

[22:11] and unable to take any quantity of toilet paper without getting clogged. And the exact same thing happens every time the Latin Americans build an asphalt road. The fact is, the road builders skimp every step of the way from start to finish. So it's not just a simple matter of skimping on a key ingredient or using an inferior grade of something or another. It's the cumulative effect of one weak link added to another. For example, if you look up any road construction technical manual, it says when you make an asphalt road, you just don't shovel asphalt on dirt and compact it down. You prepare two separate subbases before the final asphalt cap goes on. And the very top layer, the layer you drive on, is supposed to be 2 inches thick. In other words, if you see a hole in an asphalt road and there's a piece broken out,

[23:00] you can instantly measure how thick it is and see if the road meets first world textbook design specifications. And that's only for the thickness of the final cap. And who knows what they put in the mix itself? Because after a road is put down, you're never going to find that out. Anyway, if the top coat of asphalt is supposed to be 2 inches thick, and it's always that 2 inch top coat that flakes off when the road gets old. Now, down here in Latin America, I've done some checking myself. There's so many hundreds of thousands of bad roads with virtually millions of potholes. Practically, any time you get out of your car, you can walk right up to any piece of broken asphalt and measure the thickness of the top coat. And just recently, on various roads, I measured about 20 or 30 pieces of broken asphalt.

[23:46] And I measured pieces ranging anywhere from an inch and a half to a little less than a half an inch. So, not one of them met that specification of 2 inches. And what do you think was the average depth on all those pieces I checked? Slightly under an inch. So that means that just on that top coat section, down here, the governments are making and approving roads that would not only be unacceptable and rejected in the first world, but the standard thickness itself is less than half of what is considered acceptable in the engineering materials textbook. So, after I made those measurements and came to those conclusions, I took a ride to one of the bigger universities down here. And I went to the engineering building and talked to one of the professors who taught classes in structural materials and civil engineering.

[24:33] And I got right to the point and asked him how thick the asphalt road top surfaces are supposed to be down here in his country. And he said about 5 centimeters, which works out to be about 2 inches. And I said, are you sure about that? And he pulled out a materials book and looked it up for me. And sure enough it said 5 centimeters, or 2 inches. And then I looked at the index in that materials book and it came from UCLA, California and was translated into Spanish, which once again proves that down here they copy everything first world, which as far as engineering and materials go, I was glad to see at least they were studying the right books. But it seemed obvious to me that they didn't take that information out of the doors of the university once they graduated, or maybe it was something else I didn't figure on.

[25:18] And that's why I was there, to find out. And when I told the professor that the reality was, that in his city at least, the average top coat was less than an inch thick, he shook his head and he said, yes, I know, I know. Then he admitted to me that every big road contract was a sweetheart deal between the politicians and their buddies. In other words, you let out a big multi-million dollar contract like that and every contractor that bids on that project knows, that is, if they even bid on it at all, since so many of them get handed out without even a bidding process. Anyway, he said there's always a big kickback involved that goes to the politicians and their buddies. In other words, you get a 20 million dollar job, let's say, and after you get that check, you often kick back around 6 million dollars of that,

[26:04] which is like 30 percent. And that's the deal you make with the politicians to get the job. And meanwhile, the contractor still has to build that road somehow, only now he's got 30 percent less capital to work with. So what does he do? He takes shortcuts everywhere he can. And the easiest place to do that is in materials. And then I said, what about inspectors on a big project like that? Isn't somebody out there checking? And the professor said, well, they've got that angle covered too. He said, government inspection departments are pretty much just window dressing. And if they ever have to go out and really inspect something, the contractor or road builder will take those inspectors out to a section of the road that they already know will meet the spec. In other words, it's a rigged game and it's always been like that.

[26:50] And I said, you know, that must really be frustrating for a guy like you, turning out civil engineers who know the right thing to do that just aren't able to do a good job. And the professor said, you know, I never tell them that, but they all know the score. And then he said in his defense, if you think this is bad, you ought to take a walk over to our law school and interview a few professors over there. And he rolled his eyes and said, I don't even know how those guys could get out of bed in the morning and look at themselves in the mirror. At least here in the engineering department, at least we know that some of our graduates actually like their jobs. And he was talking about his graduates that didn't have to go work in government, the ones that were lucky enough to get a job in the private sector. You've been listening to The Exped Files, living in Latin America.

[27:39] And don't forget, you can email me on anything at all about Latin America. The Exped Files at gmail.com. That's theexpedfiles at gmail.com. See you next time. Nos vemos.