Guatemala: Going Forward

“I do not believe in corporate social responsibility” – Steve Miller, Founder of Helps International

“Governments should just get out of the way” – Álvaro Arzú, Mayor of Guatemala City

“If you want to do good, create jobs in Guatemala” – José Raúl, CEO Cementos Progreso

Guatemala is no ordinary place. Being one of the poorest countries in Latin America, it faces many complex challenges. Leaders from the government, businesses and third sector all agree that the path to development will be strenuous. As highlighted on the quotes above, they know there are no shortcuts. Still, we saw amazing initiatives and innovation that are certain to lead the country in the right direction.

DSC08786
Group reflection – Lake Atitlán

Silicon Valley con Frijoles (with beans) is an innovation hub with a taste of Guatemala. We met the founder of Kingo, a company that provides prepaid solar energy service in communities without access to the electricity grid. It is a high-tech company solving an important social problem, and it is already expanding into other countries. After the meeting, some students were discussing about implementing the solution in other countries. Seriously! In a market which is usually heavily subsidized, they developed a sustainable model to grow. We also visited Pomona Impact, an impact investing fund with a full portfolio of such companies.

After all that inspiration, at Lake Atitlán it was time for us to go hands-on (yes, MBAs can do it)! Pintando Santa Catarina is a social project that brings arts to empower people and attract tourism. The initial goal is to paint all the houses on one of the villages that surrounds Lake Atitlán. The results have already started: with more money flowing into the region, people started to become entrepreneurs and create a positive cycle for the community. After meeting the founder, Harris Whitbeck, we set of to the village to paint houses and be part of the impact.

The final visit was a great way to close the tour! Helps International is a non-profit founded by Steve Miller. He does not believe in corporate social responsibility, yet partnered with local companies and governments to promote his social programs. One of the projects brings stoves that allows families to cook more cheaply and efficiently. Sometimes, this can make the difference between having enough food or not on their dishes. The stove was engineered with the support of Cementos Progreso. Steve highlighted the importance of providing high-quality products that will last for long, which is usually not the case in emerging markets. We went on the field to try it and worked in the houses as volunteers for the installation. Visiting the houses allowed us to really feel how important the program is. More importantly, we were able to talk to different families and learn from them.

IMG_3859.JPG
First tortillas on the new stove – with Helps International

The final message of the trip would come from one of the community members. He had recently left his job at a multinational company in order to have more time for his family. Getting the income reduction is not an obvious decision when you have already small wages. He showed that we should be empathetic and learn other people’s realities before proposing our own solutions. This is the only way to bring growth and development in a globalized, complex world.

Guatemala was hectic, inspiring, insightful, and it was also a lot of fun! To close this amazing trip, nothing better than having a farewell dinner and party in Antigua Guatemala!

IMG_3873.JPG

Gracias!

– Pedro Barata ’18

Guatemala: Foundations

Guatemala’s GDP per capita is comparable to that of the US in the late 1800’s. There is a long way to go for the country to achieve a good level of development. With such large challenge, who is leading this much-needed growth and making the necessary investments? At the moment, a few family-run conglomerates are taking the lead and setting the foundations for Guatemala. As we try to relate to the business environment in America, the scenario has similarities from how the US was in the late 19th century, but brings new challenges. We visited two of those business groups, in the construction and in the food and beverage industries.

Cementos Progreso manufactures cement and aggregates. The facilities are world-class, as could not be different as they operate in a global environment. However, they face two challenges that are unique to developing countries. In order to keep expanding, they first need to look externally for investments. Secondly, they need to look internally to develop their community. As an example of the external investment side, the company is currently building a new plant which required over 700M dollars. The financing came from retained earnings, loans from local banks, and an international bond. Only mature companies are able to build this complex financial structure in the country.

f7b643bc-b5b9-43bf-8ec1-917567d4a652

6abd8435-a086-4ffd-b9f4-dd971cb504ee
Field tour at Cementos Progreso

Cerveceria Centroamericana is in the food and beverage industry, with beer as its main product. They are currently doubling the capacity as they face competition from AB Inbev, the largest beer company in the world. The group also has investments in energy, packaging, infrastructure and real estate. Their CEO, Guillermo Castillo, sees himself as an asset manager who seeks opportunities for growth in different lines of business.

DSC08730

DSC08736
With Guillermo Castillo, CEO of Cerveceria Centroamericana

Both businesses are aware of the need to develop their communities. In Guatemala, it is not enough to work on the supply side. Smart business also need to help aggregate demand expand. Among other initiatives, they run amazing projects focusing on education and food. A lot of kids in Guatemala do not get adequate nutrition, preventing them from reaching their full intellectual capacity. In order to tackle it, Cementos Progreso runs a program to cultivate a local tree that is rich in nutrients. Cerveceria Centroamericana runs a program through their foundation, providing daily meals to hundreds of students at school. In addition, both groups run schools and even employed some of their students after graduation. The ultimate goal is to create a virtuous development cycle.

DSC08764
Social projects at Cementos Progreso

The final part of the Chazen tour will focus on more initiatives with social impact. Before that, a final message from José Raúl, CEO of Cementos Progreso: “If you want to help people, create jobs that generate wealth”.

 

– Pedro Barata ’18

Guatemala: Origins

We started our Chazen tour at Tikal, an ancient Mayan city that dates back to 400 BC. What an amazing place! Led by Liwy Grazioso, we learned about the origins of this great society. The Mayans were a resilient people that managed to adapt to the landscape in order to survive for over a thousand years. Starting with small groups led by a chief, the society gradually got more organized. Science and religion flourished, while different tribes developed their own languages throughout the years. Over 20 dialects evolved throughout time, most of them being still active. Until today, they are a major topic of interest. But did we study archeology? The sites were amazing and we had a great time, but the main answer would come later.

IMG_3681
CBS Chazen at Tikal

 

Back at Guatemala City, the following day we met with Álvaro Arzú, former president of the country and current mayor of Guatemala City. He is without doubt one of the most influential individual in the region. When asked about his regrets in life, he mentioned: “I wish I had studied more about history”. For me, it relates directly to learning about the Mayans in order to understand the current Guatemalan society. But he probably already knew about this part – it is his society after all. He mentioned specifically that he wishes he knew in detail the history of Mexico when he got into politics. During his terms, Guatemala repeated some of the same mistakes previously done by Mexico.

As MBA students, it is pivotal to learn about the societies we are working on. This is how we can put all the thoughts and case studies into perspective.

DSC08699
Ricardo Quiñónez (vice-mayor), Álvaro Arzú (former president and current mayor of Guatemala City) and Paulina Dougherty (CBS’18)

As a final message, he recommended being more “high touch” and connecting to people. His main story was no ordinary one. As a leader in the negotiations for the peace with the guerrillas in the 90s, Mr. Arzú achieved an agreement after meeting the guerrilla leader. In a bold (and illegal) move, he agreed to join a secret meeting at El Salvador. After more than 7 hours of conversation, both leaders saw they had more shared goals than divergences. The peace agreement of 1996 ended 36 years of civil war. The message: more face-to-face conversations and less cold texting.

Check the official video: Columbia University visita MuniGuate

Now we are ready for more company and cultural visits. Stay tuned!

– Pedro Barata ’18

First-ever Chazen Guatemala

In a few days we will start the first-ever Chazen Study Tour to Guatemala. To be selected as a destination for over 30 CBS students means that the country has something unique to offer. So, what exactly should we expect?

At this point, I got the best insights from our tour leaders. Here is an extract of what they wrote:

“Although economic opportunities are sparse and government programming provides few opportunities for growth and advancement, a group of socially conscious entrepreneurs have been successful in empowering Guatemalans. Social entrepreneurial organizations offer innovative ways to create social and economic changes when programs offered by the government do not necessarily meet the needs of the people. These groups often work independently, but sometimes work in collaboration with governments, big corporations and more traditional charity organizations. […]

We believe in the role of Social Enterprise in today’s (not only) developing economies. We are passionate about social change and making a difference in the world. We have grown up with principles that have instilled in us a deep sense of community and made us understand the importance of believing in others and of providing opportunities. We want to demonstrate firsthand to our peers how Social Enterprise is a sustainable way of bringing developing economies forward. We would like to share this unique perspective with our CBS peers interested in learning end expanding their horizons.

Also, Guatemala is an excellent country in which to showcase Social Enterprise in all its forms. With more than half of the country’s population being poor and a little over 40% of it being indigenous, the large majority of businesses in the country have some form of Social Enterprise that make a direct impact in Guatemalan society. Companies are used to creating economic value while considering the less fortunate and preserving the culture of the communities that surround them. From the largest multinational corporations to the smallest entrepreneurs, most of the businesses in Guatemala have incorporated in their daily operations multiple programs to help their employees and their neighboring communities thrive.”

Adapted from Paulina Dougherty, Luis Héctor Rubio, Alberto Garrido, Kyle Van Decker (CBS´18).

 

Personally, I strongly believe the nature of the tour is important as it relates to the business environment in several other countries. Now the agenda is ready and I can’t wait to get to Guatemala. Some of our amazing hosts include:

  • Mayor of Guatemala City – Alvaro Arzu
  • Pomona Impact Investing – Rich Ambrose, Co-Founder and Managing Partner
  • Cerveceria Centroamericana – Guillermo Castillo, CEO
  • Cementos Progreso – Jose Raul Gonzalez, CEO
  • Kingo Energy – Juan Rodriguez, CEO
  • Pintando Santa Catarina – Harris Whitbeck
  • Helps International – Steve Miller, Founder and President
  • Liwy Grazioso, Archaeologist

Obviously, we will also see the incredible natural landscapes and touristic attractions. Wait for the next posts to check it out!

– Pedro Barata ‘18