Happy Thanksgiving

Every time I intentionally enter a natural place, God surprises me with some amazing piece of creation that was made just for his people's enjoyment. This morning I went for a run around the Gwynn's Falls Trail, which is mostly urban but has a few tree-lined waterviews. The rising sun reflecting off of frost crystals on a wood-planked path scintillated a thousand new points of light with every step.

While I ran, I listened to a sermon by Rob Bell of Mars Hill Church about how when God parted the Red Sea (or Sea of Reeds, depending on your translation) to enable the Jews to escape the Egyptians, there were some that just looked down. They saw the muddy seabed squishing between their toes, covering their sandals, and complained about the mess.

On this Thanksgiving, I hope I will be able to ignore the mud between my toes and thank God for giving me more than all I need or could ask for.

Deflation?

Some economists now speculate that the consumption slowdown, with lower demand and subsequent price declines for fuel, could lead to deflation. This makes sense in the short term, as retailers trim prices to attract demand, housing stock continues to sit and get fatter, and consumer confidence is dead. However, low lending rates and money being pumped into corporate America will drive a recovery at some point. When that happens, the Fed will need to decrease the supply of money to avoid inflation, driving interest rates back up. Higher rates and lower liquidity will quelch a recovery. Either way, it will be tough going through 2010.

Why isn't everyone concerned about inflation?

I have no doubt that Paulson and Bernanke are brilliant and are making the right decisions to restore confidence in the financial system. However, I think that we will see significant inflation in 2009 that will dramatically impact US consumers and this should get more attention now.

First, a common misperception is that when the Fed lowers rates, it just declares such a change and markets respond. The Fed actually pumps money into the financial system to such a degree that the "price" of money (all that interest rates really are) falls to the target rate.

Second, the US government is running two huge deficits that you could think of as a balance sheet and an income statement. We are spending more than we are bringing in (or in other words, taxes are less than government expenditures) and we are growing our share of debt to cover this. The rest of the world, particularly China, have been happy to support our debt habit, but recent events have shaken confidence and it is only because other countries are in similarly dire straits that investors have held tight.

Third, to cover the requests to support ailing industries and struggling consumers, the government will need to keep flooding the markets with capital, taking on more debt to finance this. One easy way to minimize the impact of this debt is inflation, which decreases the future value of money and as such enables debt repayment with "cheaper" money. As an example, if you can borrow $100 to buy a watch today at a 5% interest rate, then see inflation (and hopefully wages) grow to make that watch cost $1,000 next year, you could sell your watch, repay the $105 you owe, and pocket $895 dollars. The money you repay the loan with has been devalued so that the debt becomes a much less significant burden.

The US consumer base is the strongest in the world by a long shot, but GDP growth hs slowed and we are likely in recession now. Increasing the supply of money despite slowing economic activity creates a supply and demand imbalance, driving inflation. I don't expect another 1920's Germany (http://en.wikipedia.org/wiki/Hyperinflation) because with Volcker at Obama's side, the Fed will likely take firm action to abate the problem before it spirals out of control. However, this will require significantly higher interest rates within the next few years, as money is sucked from the financial system to quell inflation.

Oasis or Mirage?

Strategic Insights into the Bottom of the Pyramid

Background

C.K. Prahalad’s “Fortune at the Bottom of the Pyramid” has received praise and disdain for its ingenuity and exaggerated optimism, respectively. The altruistic concept that poverty can be transformed into opportunity is attractive and Prahalad’s case study evidence demonstrates support.[i] Through an examination of support, criticism, and current business practices, this paper recommends when and how the Bottom of the Pyramid (BOP) should be targeted to minimize risk and maximize profit opportunities.

Prahalad asserts that the BOP offers opportunities for profitability while achieving social good and that profit-seeking MNCs are the best means to achieve this. Aneel Karnani, a fellow Ross School academic, argues that Prahalad has vastly overestimated the market opportunity, that the case studies presented do not prove the stated points, and that in order for the poor to afford goods currently out of reach MNCs must reduce quality. Both arguments have merit, and out of a balanced understanding of risks and opportunities a framework can be applied to evaluate strategic options (see Exhibit A).

Importance of Localization

In identifying the continued importance of physical location in business, with preferences towards an increasingly localized market, Pankaj Ghemawat supports the idea that multinational corporations (MNCs) cannot conquer the world without catering to local markets.[ii] Nowhere is this more valid than in the BOP, where tastes and preferences are traditionally less influenced by branding. Patrick Cescau, the boss of Unilever, host of a hallmark BOP success story, agrees, “The traditional multinational model of local subsidiaries operating with globally-imposed processes, capabilities, structures and branding is not up to the job in these low-income markets.”[iii] This was learned after Nirma, an indigenous Indian low-quality soap brand, increased market share from 12% to 62% between 1977 and 1987 while Surf, Unilever’s offering, shrank from 31% to 7% over the same period.[iv]

Prahalad’s assertion that BOP markets face less competition because MNCs have largely ignored them is challenging to generalize. For every underserved market there are rising indigenous companies that may be better suited to realize new opportunities in the midst of institutional voids. Emerging market companies have the knowledge and experience to navigate through these voids while utilizing talent and capital from developed markets to position customized solutions for local markets.[v]

Synergistic Partnerships

Different local requirements of resources and capabilities to reach BOP markets increase the importance of partnerships. Oftentimes, a for-profit MNC can achieve its revenue and profit goals by helping NGO’s achieve their social goals. For example, Telenor partnered with Grameen Bank to provide phones to budding entrepreneurs, as the “village phone lady” emerged. By demonstrating a social good byproduct, Telenor was able to shift some risk from its venture to public funding. Similarly, Map Agro was able to help Waste Concern, a non-profit focused on removing waste and improving sanitation of slums in Bangladesh, by purchasing waste at a discount and converting it to organic fertilizers, sold to local farmers at a profit. Map Agro gained goodwill from the government of Bangladesh, enabling smooth business license approvals and access to free land for composting. Map Agro had previously focused on chemical fertilizers, but had the distribution channels in place to provide organic compost to farmers.[vi] By recognizing the mix of goals, capabilities and weaknesses of different players in the marketplace, strategic alliances can be structured to achieve mutually beneficial outcomes.

Recognizing changing political and social trends can create opportunities for managers evaluating partnerships for BOP opportunities. Linking to the Millennium Development Goals or NGO’s engaged in social entrepreneurship may offer access to funding and free resources. Hindustan Lever’s success in creating job opportunities for entrepreneurs funded by the microfinance revolution is an example. By including job opportunities and income generation at the BOP as strategic imperatives, companies can increase their customer base and ensure revenue continuity. Managers should recognize and respond quickly to changes in the political environment and partner organizations; knowledge feedback loops enable agile decision making.
Disruptive Technologies

Karnani is correct in arguing that without new technological or institutional developments, opportunities are limited. However he may be shortsighted in asserting that new technologies are unlikely to develop in product areas beyond electronics and telecom.[vii] Disruptive technologies are valuable in BOP markets for multiple reasons: 1) they may unlock potential unavailable to existing products and services, 2) BOP customers have no reference point to existing offerings and thus less of a hurdle than developed markets, 3) they can lessen competition to enable a foothold from which to launch upstream marketing. However, venture capitalists may shun this approach because BOP markets may require a longer than average time horizon to reach profitability and disruptive technologies may limit the pool of potential acquirers, as they tend to reduce the value of existing offerings. Additionally, venture financiers may view social benefits as profitability not captured, and therefore at odds with their financial return motive.[viii] This finding means that venture-backed firms may be at a disadvantage to both small firms with financially supportive partnerships and stronger MNCs.

Strategic Fit of BOP Markets

Some argue that the near-term profitability is irrelevant for BOP opportunities, given the long-term strategic importance of reaching the next generation of mainstream consumers.[ix] This concept is challenging for managers under pressure from public shareholders for short-term results. To evaluate whether venturing into the BOP aligns strategically with a company’s imperatives, managers must determine the value that its shareholders put on corporate social responsibility, risk tolerances, and profitability time horizons. Hindustan Lever launched their Shakti project to sell products in rural villages through local entrepreneurs funded by micro-lenders. Their success was anchored in long-term benefits of branding to an expanding middle class as much as short-term profitability (evidence of profits is anecdotal). The company has received significant publicity for its innovative and socially responsible efforts that is likely to pay financial dividends in the form of brand loyalty for years to come.

Generalizing about BOP markets has been criticized due to the lack of cross-market success stories. Hindustan Lever began working with Indian rural development in the 1970’s and the Shakti project was initiated in 2001, but as of August 2008 no efforts to internationalize the project have been undertaken, likely due to the different opportunities and challenges across different regions and locales. Unitus is a “microfinance accelerator” that has developed a framework to qualify microfinance institutions for management support, best practice sharing and application, and funding.[x] The very concepts that screening frameworks can be applied and best practices can be shared throughout a BOP industry demonstrate that there are similarities between BOP markets. However, microfinance seems to be alone as an example of expanding BOP strategies across emerging markets, showing that knowledge transfer and scalability can be challenging.

Conclusions

Companies should consider the BOP as either a market or a source, and as a testing ground for new technologies and products. It is important to consider a company’s capabilities and gaps, and find partners to plug the gaps rather than investing heavily to develop new capabilities. Companies should be prepared to invest for the long-term, given that rapid profitability growth has been elusive. In the same vein, evidence that BOP markets can reduce overall risk is lacking, as the global economy seems to be inextricably tied and new markets tend to carry less certainty.

To evaluate BOP opportunities, the “Bottom of the Pyramid Strategic Decision Model” found in Exhibit A is recommended. Through a SWOT analysis, managers are encouraged to evaluate weaknesses or gaps that may filled by either a partner or a change in the competitive environment, referred to herein as a “wild card.” Similarly, once capabilities are determined, the value of specific markets should be evaluated in the context of available partners and wild cards. For example, if a medical product manufacturer has developed a breakthrough low-cost solution, but lacks a distribution mechanism, they may partner with an existing NGO that has access to needy markets. Additionally, if an East African nation was identified as the market with highest demand but political and legal institutions were lacking, it would be recommended to wait until stability was achieved or partner with an organization that can boost stability, such as USAID. Significantly, companies have the ability both to observe and capitalize upon these wild cards, but also to drive them to fruition and change BOP markets. By introducing a new technology, implementing a new distribution model, garnishing support from local institutions thereby adding stability, or bringing publicity and public funding to a need, astute managers can tilt these often flexible market structures more so than in developed markets. By recognizing BOP opportunities and risks and innovatively combining resources inside and outside the traditional MNC box, profitability can be achieved by corporations while social goals are achieved by partner organizations.
[i] Prahalad, C.K. The Fortune at the Bottom of the Pyramid. Upper Saddle River: Wharton School Publishing, 2006.
[ii] Ghemawat, Pankaj. “Why the World Isn’t Flat.” Foreign Policy 159 (2007): 54-60.
[iii] Mitchell, Alan. “The bottom of the pyramid is where the real gold is hidden.” Marketing Week 30.6 (2007): 18-19.
[iv] Karnani, Aneel. “The Mirage of Marketing to the Bottom of the Pyramid: How the Private Sector Can Help Alleviate Poverty.” California Management Review 49.4 (2007): 90-111.
[v] Khanna, Tarun and Krishna G. Palepu. “Emerging Giants: Building World-Class Companies in Developing Countries.” Harvard Business Review October (2006): 60-69.
[vi] Seelos, Christian and Johanna Mair. “Profitable Business Models and Market Creation in the Context of Deep Poverty: A Strategic View.” Academy of Management Perspectives 21. 4 (2007): 49-63.
[vii] Karnani, Aneel. “Misfortune at the Bottom of the Pyramid.” Greener Management International 51 (2006): 99-110.
[viii] Harjula, Liisa. “Tensions between Venture Capitalists’ and Business-Social Entrepreneurs’ Goals.” Greener Management International 51 (2006): 79-87.
[ix] Mitchell, Alan. “The bottom of the pyramid is where the real gold is hidden.” Marketing Week 30.6 (2007): 18-19.
[x] Unitus. “Unitus - What We Do: Accelerate Microfinance Growth.” Accessed August 19, 2008. http://www.unitus.com/unitus-in-action/what-we-do/accelerate-microfinance-growth.

Exhibit A

Thoughts on Poverty

Here are a few words I shared in church after the trip:

While I have seen poverty of many levels before, in Iquitos I changed from passive observation to active involvement. We shook hands, hugged, and prayed with people. We walked the same streets and rolled in the same dirt. And from this vantage point, I saw the poorest people of Belen in this poor city of Iquitos in the developing country of Peru as just people like you and me. I saw the beauty and freedom of poverty, that these people simply took care of their basic needs and the needs of their families, sharing what they had and borrowing what they didn’t, celebrating life and its daily challenges and victories. It made the desires built in me by American culture and media, desires for nice cars and clothes, the best food and the highest status, seem completely disgusting. Because the cost of these things was my time, my effort, my attention, all at the expense of what God could do with all of these. My daily strivings to have slightly better things seemed like a complete waste. These people that we shared our faith with were open and available for the Gospel and its power, and the Spirit was moving.

While God showed me the beauty and simplicity of a life of poverty, my eyes were also opened to the tremendous need. The jungle provided produce and shelter and there were fish in the river, but people had no money for things like fuel, vitamins, and medicine. Children live on the streets and stay alive by any means they can. Sanitation was poor, and life-threatening but preventable and treatable diseases like malaria are real concerns. I was raised in the US by a family of faith with the means to provide for more than I needed. This was not by my power or choice or merit. Our neighbors in Belen are brought into this world with major disadvantages in this respect. I don’t have the answers on how to respond, but I know that there is injustice in this world that God calls us to address. I share this with you because I believe that this injustice is not what God wants and is unacceptable to ignore. I am still struggling with how best to give or serve, but I simply invite you to explore how you can make a difference. I found that as we made ourselves available to God, He used us to reach those that desperately needed Him.

Saturday, June 7, Children's Ministry and Departure

I woke at 5 or so to suitcases banging on every step of the staircase by our room as PR and Cesar left for Lima to work with a church in Huaycan that may join the Grace Life Church family (http://www.gracelifechurch.com/). After another nap I was up around 6:20 to journal and read on the first rainy morning of our trip. I sat in the front staircase looking out to the courtyard enjoying a pleasant breeze and thinking about the people sleeping on the streets as the rain beat down. After a shower and breakfast we sat waiting for the kids to arrive.

Children come mostly from Belen, riding in motocars that YWAM pays for, starting around 8AM. A closed road and resulting traffic jam meant that we had to wait until 9:30 to really start. I sat and tried awkwardly to communicate with kids, but "my name is..." doesn't last 90 minutes, so we played some simple games to entertain. The ninos ranged in age from about 4 to 14.

Osmar and a few women responsible for the ministry led a few Chipmunks songs in Spanish that were fast, fun, and got the kids going. We then led a few interactive songs that we had practiced, but the Chipmunks are mean competition. Our group did Shackles, acted out a Bible story, and helped the kids with crafts of beaded bracelets and fish cut from paper plates to color while we explained the meanings of each.

The kids were then fed lunch of rice, noodles, hot dog slices, and bits of veggies, all mixed up, with a warm drink that looked like runny oatmeal. They were given seconds, thirds if they wanted, which must have been part of the draw. Jae, Danielle, and I washed, rinsed, and dried respectively the onslaught of bowls, cups, and spoons. Meanwhile in the opposite corner of the kitchen, Cecy and Julio's wife cooked for our team a traditional Peruvian dish of chicken pieces, peppers, onions, black olives, and potatoes in a spicy tomato sauce served over rice, which was one of my favorite meals of the whole trip.

I took a nano-nap before starting to clean up our space, pack, and shower in anticipation of a 4:00 departure to the airport. About 10 kids hung around, practicing a flag routine and dance to a big huge Christian anthem en Espanol. I heard the song about 30 times, becoming almost a meditative mantra, but it was perfect: a somewhat sentimental and appropriately encouraging reminder as we were leaving that these kids that we had ministered to are carrying the torch. Though there remains work to be done, these kids singing and dancing are an example of the roots and momentum we helped deepen and advance.

We loaded the bus and waved to our friends. The bus had no windows, just openings, topped with plastic coated with colorful paint, and the floor, windows, and ceiling were all made of wood. At the airport, security was appropriately lax given the far-fetched risk of terror. We thanked Carlos and Osmar for their friendship and hard work before entering the open air waiting area. We heard our incoming jet before it broke through the misty jungle air.

Friday, June 5, Prison and Belen

I woke at 6:30, walked outside and saw Tim Farmer walking into the lobby. We had agreed to go running this morning, so I quickly put on shoes and we walked out. Due to security concerns, buildings with anything valuable take all precautions. There were multiple locked doors, spiked tenements, and an electric fence throughout the base to prevent anyone from getting in. We walked out into a 30 foot square concrete courtyard in front of the building and closed the door behind us, then realized that we needed a key to get out to the street. About 20 minutes later, Carlos came to our rescue, and we hit the road.

The air was thick with humidity and dust and our energy levels were not 100%, but it felt good to run. We turned left out of the base, crossed an intermittently busy street when sidewalks ran out, and turned down a residential side street for a change of scenery. Houses changed from fairly nice to more simple as the road changed from paved to a single concrete sidewalk to packed, bumpy dirt. Soon we were in slums like Belen. Interestingly, the dogs also became more shabby and menacing, and for the first time I feared for my safety as a dog barked, growled, then chased us for a minute. People still seemed friendly and returned smiles and greetings of "Buenos dias," but these dogs knew no manners. We passed acrid smelling waste, a bustling lumber shop, and a bridge over a small stream with a gorgeous view of a verdant marsh and stilted houses in the distance. We turned around at a church with about 10 dogs outside.

Back at base, the cold shower felt great (there is no warm water in Iquitos), although I was still sweating as I dressed and joined the team for breakfast. At 8:30 we took motocars down a bumpy dirt road to share the gospel with a local prison. For reasons unbeknownst to me, we had to wear khakis and polos, the women in skirts. Barbed wire topped 20 foot walls, where we lined up and provided passports to gain admittance. Outside, we met the pastor responsible for the prison ministry, a large man, moustached with glasses and a big friendly voice. We knocked on a big metal door and a small panel slid open with surreptitious eyes looking out. Inside, guards wore black Under Armour-like shirts with the Peruvian crest on the front left breast pocket and "Policia Nacional" in white on the back, baggy pants with a subtle camo pattern, and black combat boots. They looked intelligent, powerful, and authoritative.

We followed an officer through a cafeteria area, saw almost all men, but some women, across a variety of ages although predominantly 30-45. They wore tank tops, jerseys, T-shirts, athletic shorts, rubber flip-flops, with no commonality. A futbol match was underway on a small concrete pitch, surrounded on three sides by 10 rows of benches, where we sat and waited for instruction. Across the field were the cell blocks, which oddly resembled the slum markets in Belen, with plastic tarps and metal roofs covering narrow paths. A church steeple rose above the walls to the left. The pastor went onto the field and made a few announcements, ending the game, and invited us down to the yard.

I had the guitar ready, and led "Cambiare mi Tristeza" (I'm Trading my Sorrows), then we did Shackles, then I gave my testimony, focusing on how poor decisions in my youth nearly ruined me and it is only by God's grace that I am alive. I introduced Doors, after which Mark gave the gospel presentation. As we ministered to men that came up, Carlos gave his testimony, a remarkable story of how he turned from drug trafficking in the US, spending a few years in prison, to give his life fully to God.

Danielle and I talked with a group of seven or eight men, walked through the tract, and prayed for their salvation. We spoke at length with two men, one stout with a bulbous nose and curly hair, the other skinny, shorter, with a tank top, both very open. The bigger guy tearfully said that Christians are mocked and viewed as weak by other inmates, then asked for a stack of tracts to give out in his cell block. This blew me away.

I then had my best conversation in Spanish of the trip, simply because he kept trying long after it became awkward. He said that he was a Christian and wanted to know more about God, but there were no Bibles available. I had no solution, but committed to finding a way to get Bibles for those that wanted them. Danielle and I also spoke for a while with a muscular guy with curly hair just short of his shoulders named Alex. He said that he would be free next week and asked where he should go to church. Others said they had a year or longer to go, and sentencing seemed to be a random process with little justice.

Outside, the pastor thanked us, and we him, and we returned to the base to put on shorts for a spell before we returned to the Yellow Rose of Texas to save Cecy from the chore of cooking. I had a fried alligator steak with yucca fries and potatoes in a creamy green sauce. Restaurants in Peru feel no obligation to serve the entire table at once, so while I waited about 15 minutes beyond the others, I helped Juanita with her ceviche (http://en.wikipedia.org/wiki/Ceviche), fresh fish "cooked" in a lemon juice marinade. It was delicious, with bright citrus flavor and cilantro that popped, but I had no idea if it was safe.

Back at base, I put on the same dirty Carhardt pants I had worn to Belen all week, since I had no other pants and there were plenty of other smells there to serve as a distraction. We got in a large canoe to go to a new area, but the weight of our crew beached the boat, and we had a jump and lean for a few minutes to get moving. Dogs barked viciously from floating houses while children swam the butterfly in the waste-ridden water.

We landed in the bright sun and saw a school across a grass-patched field of mud and bumps. Curious kids greeted us and we invited the neighborhood house by house to our presentacion gratis. Osmar entertained an overwhelmingly young crowd of about 100 for a bit before we did Tu Has Cambiado, Shackles, and Doors. Laura Farmer shared a Bible story and linked it to a gospel presentation. We gave tracts to the adults and candy and cross necklaces to the kids.

We crossed back to the main shore as the same dogs tormented us and threatened to jump onto our boat. We picked the next spot near a soccer field with ground so filthy with trash and human waste that we agreed not to fall on the ground in the drama, as this is usually involved at several points. However, I represented Jesus and did not know how to get around it, and eventually was flat in the mud with toilets dripping from stilted houses 15 yards away. I skinned my arm on the ground and put antibacterial gel on it as soon as we were done. We were drained of energy, but shared tracts with the crowd and prayed with people, then Jenn and Danielle and I walked over to the soccer field and met some young guys that accepted tracts and talked to us for a few minutes.

Back at the base, Cecy had made fried rice and french fries for us, which tasted great. The men relaxed and journaled while the women helped lead a women's ministry run through YWAM. A little after 9:00 they wrapped up and we went out to El Zorrito - Parrilladas, a traditional Peruvian restaurant with a glowing grill on the front patio. On the way, our motocar driver took us in a few circles and down bumpy dirt roads with no other vehicles, which concerned us, but eventually he admitted he was lost. Five minutes later we found our group and sat down to sample their chicken, beef, pork, rice, yucca, cow heart, fish, and palm shavings sprinkled with lime. PR also threw caution to the wind and ordered one pitcher of each of their three beverages, a yellow jungle fruit juice, blue maize juice, and something that tasted like iced coffee with floating lime pods. Everything was great, including the three sauces on the table that I tasted sparingly. We went to the plaza briefly, buying a few last souvenirs, and gave leftover change to a young mother. There are few beggars in Iquitos, perhaps because tourism is still lacking, perhaps because of the low cost of living with accessible natural resources.

Thursday, June 5, Children Prep and Belen

I was up at 6:20 and went on the roof to pray, read, and journal, but I was sweating and had to seek shelter by 7:00. After breakfast, we planned for the children's ministry meeting on Saturday, working through our motions for children's songs, crafts, acting out Bible passages, and general roles and responsibilities.

One of our hosts, David, had become very sick, and his wife Cecy was one of the main chefs for us. David came home and needed help setting up the IV's that the doctor gave him (apparently this is self-service in Peru), so Juanita and Danielle helped the other folks at the base. Cecy needed to take care of David, so we had to make new arrangements for a few meals.

We had a few minutes free, so we walked to a nearby store to get some chocolate, to provide an afternoon energy boost. About 20 men were playing soccer on a small field, and another 4-5 were watching. Slowly, more motocar drivers pulled up to watch as well. Don't these people have jobs? This is a weekday! Who knows. Women began to roll carts of sweets and treats up as well. Soon, mothers began walking young children out of a daycare center I had not noticed, which was the excuse for the drivers. But soccer players, come on! I tried to imagine rolling up my suit pants and knocking a ball around on Charles Street at lunch time back home.

Back at base, Cecy had made us an incredible traditional Peruvian meal of Papa a la Huancaina (http://en.wikipedia.org/wiki/Papa_a_la_huancaina), potatoes and rice smothered in slightly spicy creamy chicken sauce, topped with half a hard boiled egg and a black olive. We had purple maize juice as well, which was sold in plastic bags with a straw in Belen.

Around 2PM, we headed back to Iglesia Belen, and walking through the streets I got the same "Hola gringo," from the same kid, who must have gotten a kick out of my positive response last time. While waiting for some church members to arrive, I watched the street scene. Raw meat sat on brown paper on the cart right in front of the church, and prospective buyers came by and felt the pieces with bare hands before dropping it on a scale and taking it off in plastic bags. Across the street, alligator claws hung off the table, with larger cuts behind it. A woman deftly peeled fruit with a small knife and dropped finished pieces into a bucket of water to keep flies off.

We soon moved swiftly through the slum to a dock area where logs were set perpendicular to a waterway to allow walking over the muddy shoreline onto canoes, lined up like a pack of hot dogs. I got in a boat with Danielle and some locals, including Danielle's favorite, a young curly-haired spunky girl.

Houses by the water were set on logs to float with rising water. The boat was paddled about 200 meters to another shore as we passed a man in a canoe fishing with a craggy stick and some string, a la Huck Finn, while jubilant latin music carried across the water. We dropped our stuff at San Francisco (seriously, that's the name) and went door-to-door inviting people to our "presentacion gratis en cinco minutos."

Osmar entertained the local children until we began Tu Has Cambiado, Shackles, and Doors, which Juanita introduced and then gave the gospel message. There were mostly children present, but we gave everyone attention, providing candy and toys for the kids and tracts and prayer for parents nearby. I made friends with a chubby little boy that spoke about as much Spanish as I did, but understood peek-a-boo and liked when I tickled his belly. His mother is in jeans in the background of the picture, probably scared that I was going to take him with us.

Back on the mainland we set up another presentation near the dock, at a fairly busy intersection surrounded by houses on stilts. After Tu Has and Shackles, I introduced Doors and then gave the message, using illustrations of accepting a gift and a lifeless glove that is filled with a hand that I had seen used effectively in Young Life. This time I led all the way through the prayer and was encouraged to see a large number of people praying for salvation with me. Everywhere we went there were at least 100 people watching, but I always felt secure knowing that God would use whatever we did for His glory.

We then moved back to the large plaza with lights where we had been on Tuesday night, knowing that we would see a different mass of people. Tim Farmer introduced the presentation and preached the gospel, and there was a strong response. I had portrayed Jesus in the Doors drama, and at the end, the character signifies that all that Christ did was for each individual, by opening their arms towards the people three times and making eye contact. I constantly prayed for specific people in the audience and noticed many that I could tell sincerely understood the message. Danielle and I moved to talk to a crowd of men, including a thin, smallish man in a white tank top and blue soccer shorts. He asked some questions and read through the tract with us, then prayed to accept Jesus as Lord and Savior. This was one of many, but for some reason I knew this guy was special, that his life was forever changed.

After PR shouted, "Let's go!" we went back to the base, showered, and went to Chifa, the Peruvian version of Chinese food. Long Fung's Chifa was cool and bright with a fairly open layout, located across from the "Bienvenidos a Iquitos" sign in the main city square. PR and Cesar ordered and we pigged out after a long day.

Back at the base, we had a team meeting to share some of the interactions we had with people and general experiences in ministry, then headed off to bed.

Wednesday, June 4, Food Distribution and Jungle

The rooster woke me several times and I was up early for an early breakfast of eggs with tomatoes, peppers and onions, cereal with yogurt, bananas, and fresh papaya. We have two YWAM staff preparing our meals for us and they are awesome, both the people and the meals. We were on the road by 6:40. Glued to the window, I saw black birds with bright yellow underbellies, beautifully curved hilltop tree trunks with white bark, bushes overflowing with purple blossoms, and huge red and yellow flowers growing wild.

At Nauta, we stepped into a stilted house to use a family's bathroom, a wooden toilet seat with a hole channeling to drop 20-30 feet to the ground below. We played with kids outside, imitating all the animals that we saw on Sunday, and then some. Tim Farmer does a great sloth, by the way. I jumped on the speedboat on the way to the village, one closer to Nauta than San Jorge.

Upon landing, I met Diana, an anthropology professor at GW, studying village life and working towards a tenure track. She chose to work here because the people were particularly friendly, organized, and open to having her. She explained that their basic needs of food and shelter are primarily taken care of by natural resources, but they have little money and need soap, vitamins, basic medicines, and fuel. They have no real savings and frequently lend goods to each other as needs arise, so banks are not used. There is a "Mother's Club" that provides goods to mothers in need, and communal work is common. The village governor guides activities, a pastor heads up a church, and a school teaches at both primary and secondary levels. The latter is very uncommon, and students come from other villages to go to this secondary school. The government does a decent job of supporting villages in times of need, and NGO's do even more.

Most villagers stay generally where they grow up, but some go to Nauta, fewer go to Iquitos, and a small minority leaves the area for good. Some young people join the military to see more of the world for a few years before coming back home. This village had historically been located across the Maranon, but moved due to severe flooding in the early 70's. The whole village just picked up and moved.

We walked up a winding dirt path to a simple wooden church with simple wooden benches and a simple wooden pulpit. Walking over to the "radio station," actually a microphone with loudspeakers outside, I met Segundo, a 16-year old resident and student of English, which was pretty decent, and Danielle's Spanish made up the difference. He showed us to the top of a hill with an awesome view of the village and river below, then to the school area where we met his English teacher. Similar to the last village, classrooms surrounded a concrete basketball court sized futbol field. The teacher's English was quite good, although the phrase "at this moment" was a tad overused.

He thanked us for coming and asked if we knew any songs in English to make learning more fun. A minute later I was writing the chorus of "I'll Stand" by Hillsong United and "Better is One Day" on his blackboard, tuning up an old nylon string guitar, and singing praises in English with the students. Osmar came in to help explain the meaning and common mispronunciations.

I ate a butter and jam sandwich hastily as we began Tu Has Cambiado, then Shackles. We taught several students some of the moves and did it again. Then Mark intro'd Doors and gave the gospel presentation. Jenn and I talked to a few adults, including a teacher I had met earlier. They were very receptive and appreciative and prayed with us after we walked through the tracts. We encouraged them to start going to church to learn more, to which they earnestly agreed. The English teacher then took the mic and thanked us, in English, and said "thank you and goodbye," which sounded like he was awkwardly telling us to leave. He followed it with "for this moment," and a chuckle, and gave the mic back to Mark.

I then joined Osmar, Tim Farmer, and Carlos on the futbol pitch to challenge some youngsters, who played a very tight and clean game and left us sweating profusely in the tropical sun. We walked down the hill to help with food distribution, as the governor called family heads by name to come and pick up the packages we prepared.

Tim Farmer learned from our bus driver, who was not a Christian but wanted to see a village and the jungle, how to say "this is a gift from God," to the recipients lined up. Meanwhile, Laura, Jenn, Danielle, Juanita, and Catherine led the children through a craft, making mariposas (butterflies) of wooden clothespins, gold pipe cleaners, and bright tissue paper. The kids loved it.

We then donned our rubber boots and ventured into the jungle to pray for people that live here. The boots were required to protect us from snakes and parasites that can get through simple fabric. A few steps into our trek, we saw a speckled hawk swoop down and grab a snake off of the path. Our guide said the snake was one of the most poisonous around. We crossed over a large muddy pond on unstable logs and a handrail that fell off, up and down a hill to thickening brush. We saw colorful pointed flowers and a butterfly with a wingspan as broad as your extended thumb to pinky, shimmering bright blue as it reflected beams of light. We crossed several more streams, as we hoped no one would fall, but eventually Catherine lost her footing and tumbled into the water below. She was an incredible sport and kept on with the group despite her soaked feet.

We travelled through fields of flaming brush piles and climbed over downed trees to what our guide said was a waterfall, but translation was imperfect, and our destination was a bend in a 20 ft. wide river. Mark, Tim Farmer, and I travelled a bit further in total silence to try to immerse ourselves in undisturbed wild. Something large scampered off the path, and we soaked up the variety of plant and animal life. Monkeys and birds called out from above, although I could not distinguish which was which. Some local boys found bright orange huayuru seeds and gave them to us. We hurried back and got on the boat to travel home.

Tuesday, June 3, Markets and Belen

After a couple hours of reflection, prayer, and repast, we worked on preparing for food distribution at another river village tomorrow. We went first to a supermarket, much like our own, but bulk rice and beans were unavailable. I just bought a drinkable yogurt, all the rage down south, flavored with lucuma (http://www.lucuma.com/lucumafruit.asp) which tasted like an oatmeal raisin cookie grown on a tree.

Next we went to a busy street market with storefronts boasting everything from rice and beans to cosmetics to motorcycles. We bought massive bags of both rice and beans, 100 bags of salt, and boxes of matches, as well as smaller plastic bags to divide up the goods for distribution. Back at base, we became a processing unit and within an hour we 100 bags each of rice and beans ready to go. We then took time to be quiet and prepare for a solid night of evangelism, broken only by lunch of stir fried carrots, broccoli, and chicken over rice with fried plantains on the side, my new favorite. The day was relatively cool, cold by their standards, enough to warrant long sleeves.

Around 2:30 we took motocars to Belen and met at the church to pray and meet up with some young members who would be our guides and translators. They warned us to cover our bags and stay together, and make sure that women stayed close to men. I passed a boy that said, "Hola gringo!" to which I smiled and said hola, completely unmoved by the derogatory term. We walked through a plaza to a side park area with a circular stage area about 20 feet in diameter, surrounded by a salon, some houses, and vendors of juices in clear plastic bags and cups of jello.

We played salsa music to grab attention before Mark and Cesar introduced Shackles and Doors. Mark also presented the gospel afterwards and many hands went up to accept Christ. One woman listening from a second floor window had her hand up, so I climbed two old appliances and jumped up to put a tract in her hand. Jenn and I called out what it said to her and she prayed tearfully with us to bring her to Christ. She then hobbled downstairs and we prayed for healing in her legs so she could go to church. We then spoke with and prayed for a much less receptive group in and by the salon, just before PR called out, "Let's go!"

We grabbed our stuff and walked to an open street area where we plunked down in front of a house with a woman in front of a grill, plating up food cooked in banana leaves. Houses were all on one-story stilts, often painted in bright pastels, and kids laughingly chased each other through the maze of people and motorbikes. Osmar grabbed attention by rattling off jokes and talking in a high pitched child's voice, then Mark introduced Tu Has, Schackles, and Doors. I noticed a group of high-school aged kids in soccer jerseys off to the left side. Some more came up, then walked off, and I prayed constantly for those still there, that they would have open hearts and that they would feel the tug of the Spirit. We wrapped up our presentation, and while Osmar shared his testimony on the mic, Jenn, Cesar, and I walked over to these guys. They had apparently become Christians at a very young age, but lost their passion, and wanted it back. We prayed with them to begin a new life with Christ. Then, "Let's go!"

The third stop was the open plaza that we had walked through a couple times already. The sun was setting, but the plaza had lights (and roaming police officers). We did Shackles, then I introduced Doors, and after the drama I gave the message. I ran out of steam towards the end and asked Cesar to walk people through raising hands if they wanted to accept Christ and praying with them, but hands went up, and it was amazing to be used this way. Jenn and I prayed with a woman with an incessantly crying baby and a man who said that was already a Christian but did not know of any churches around. We connected him with one of the young members.

We walked with a feeling of victory back to the motocars and ate spaghetti and meat sauce back at the base in an exhausted state. Bedtime was immediate, since breakfast would be 5:30AM to get a jump on travelling to the next river village.

Monday, June 2, San Jorge

I woke to my rooster friend and sounds from the nearby kitchen for a 6AM breakfast. The bus left at 8AM to head to Nauta (http://en.wikipedia.org/wiki/Nauta), the only city connected to Iquitos by road (both are surrounded by rivers and isolated from other roadways). The drive took about 100 minutes, past small roadside houses of grass and wood, prisoners in orange jumpsuits clearing fields with machetes, women washing clothes in large metal buckets, and exotic trees scraping the skies with round tufts of leaves.

Nauta is a hillside town going down to the Maranon River, which flows north then east out of the Andes before it finds this little map dot. People sold food streetside and children greeted us with amazement and open hearts.

We got in a "real" motor boat, which was meant for fewer people than our group, resulting in a soaked left side of the boat. We cast out a few group members into a passing canoe of strangers that were willing to hold a few extra passengers while our first batch was dropped at San Jorge, our river village destination.

About 30 minutes later, we arrived at San Jorge, a beautiful little village of a few hundred people that live in open wood homes roofed with palm leaves. We explored the village and visited their small church, talking to residents and taking in the native flowers, birds, and trees. The people live simply and seem happy.

We gathered in a classroom at the school to eat sandwiches of butter and jelly or ham and cheese before bringing the schoolkids out for our presentation. We did Shackles twice, the second time with volunteers from the crowd helping us, then Doors. Mark spoke, translated by Cesar, about the gospel and asked for anyone that wanted to accept Christ to raise their hands. Jennifer Kim and I walked around to parents and gave out tracts and prayed for anything that they needed. I read the tract in Spanish to two ladies; my stumbling was humbling.

We gave out candy and small gifts to the children before a futbol game broke out. We played in loosely fitting rubber boots that the YWAM base said we would need, and the resulting blisters were intense. Once we finished, a new crowd had gathered, so we did Tu Has, Shackles, and Family, another drama more oriented towards children. Afterwards as we made our way through the crowd, Jenn and I spoke with a woman that asked for prayer. Her husband had left her for another woman, leaving their seven children (aged 1-19). She accepted our prayer for restoration and also accepted Christ as her Savior. We also spoke with a few men that stayed near the back. We read through tracts and prayed for them as well.

We were given the opportunity to buy local crafts, where I got a small turtle of wood and real shell that cost about a dollar. The first group went back on the speedboat, but Danielle and I took the open air canoe ride, which was such a better way to appreciate the glory of creation. Young kids paddled boats on their own alongside villages while I ate a yellow fruit that Carlos gave me. On the way back, Osmar (on the right side of the picture), a YWAM staffer and one of our local translators and guides, shared his story. He grew up in Iquitos to a broken family and frequently lived on his own on the streets. His friends got into drugs and alcohol at an early age (9 or 10) but he met some missionaries that he held onto and after gaining some language skills and working as a tour guide, he joined YWAM.


When we returned to Nauta, Cesar met a woman with a disabled child. Angie wore a bright yellow-green jumpsuit and was in a makeshift wheelchair with mountain bike tires and a plastic lawn chair seat bolted together. Nine years old now, she had fallen on her head five years earlier and has not walked since. She cries frequently for no apparent reason and has occasional seizures. We gathered and laid hands on her and prayed for several minutes. PR tried to help her up, but she was still unable to use her legs. We vowed to continue praying for healing and restoration and bid goodbye to her thankful mother.

Iquitos Exploration and Church Visit, Sunday, June 1

I slept well, waking only a few times to nearby crowing roosters. The breakfast bell rang at 8:15, welcoming us to scrambled eggs, white bread with butter and pineapple preserves, bananas, papaya juice, and tea. Bananas were small and tree ripened, tasting much sweeter and fuller than what we pick up in grocery stores. We met with Rene (http://www.ywamperu.com/en/lopez.htm) to get oriented, then practiced "Shackles" ( http://www.youtube.com/watch?v=xY848n09F_o)and "Tu has cambiado" our hip-hop dance and more tame body worship, respectively. Rene's son, Jaiel, a rambunctious and playful five-year old with endless energy, brightened the day with his laughter as we dribbled soccer balls around on the rooftop terrace.

We travelled in four motocars (http://www.youtube.com/watch?v=ldZvghfiKQY) to an Amazonian crafts market with beaded jewelry, dried piranhas, toy blow guns, and a little monkey running around.

Then we were off to the famous Yellow Rose of Texas, a restaurant with American and Peruvian food, owned and managed by a real Texan that spent time in Peru with the US military and never left. I chowed on alligator nuggets with yucca fries.

While our food settled, we travelled to a busy market area with countless grills serving up fish, fruit, chicken, and banana leaf wrapped goodies. We all got into a long canoe with a blue plastic tarp as a canopy and a long hand powered motor to get us around.

We moved from the wide Nanay river to the golden watered Momon river to an island zoo with monkeys rampant and a roaming anteater. The monkeys made friends with us quickly, climbing on our shoulders and heads. We saw and held anacondas, sloths, prehistoric turtles, and small gators. Juanita was the monkeys' favorite.

Back on shore, Carlos convinced us to eat grilled suri, a beetle grub found in decaying palm trees. I made the mistake of eating the head, a hard and crunchy part that you are supposed to discard, but it was otherwise rich and fatty with a slightly tougher skin, flavored with wood smoke. Not bad if you can keep your mind off what you're eating. We then had grilled nuts that tasted like roasted peanuts but were crunchier and more crisp. The abundance of the Amazon jungle is incredible.

Back at base, we showered and ate a supper of burgers with tomato slices and lettuce, trusting they were safe. We dressed in the best we had, old khakis and a blue oxford in my case, to head to Iglesia Belen, our partner church. We road motocars through less inhabited streets to a neighborhood with fewer streetlights, smaller houses, and plainly dressed people with years of hard life seen in the lines on their faces. Carrying our speakers and bags of props for dramas, we drew a few double-takes as we passed carts selling raw and cooked meats, peeled fruits, spices and sauces. I went into olfactory overload from piles of rotten produce and trash, fresh grated garlic and cumin, human and animal waste, wood smoke, and sweat. Two blocks down the road was the church, bright with yellow walls and filled with about 75 people young and old singing praises to God in the hot and stuffy air. I sat under what I realized later was the only working ceiling fan of about seven.

They finished two more songs, then introduced PR and our group. We did "Tu has," Tim Fermin gave his testimony, and we did "Doors," our primary drama gospel presentation. PR gave a sermon tying in Jeremiah 32:27 (I am the Lord, the God of all mankind. Is there anything too hard for me?), as written in Spanish on a banner over the pulpit, then called anyone that wanted to step up into church leadership to come forward, as well as anyone else that needed prayer. We layed hands on people and prayed passionately, and frequently they started weeping, sometimes shaking. This was an incredible reassurance of our usefulness and unity with the Spirit.