Shakespeare and the debt crisis

PARIS
In Shakespeare's most famous play, Hamlet, one of  the characters, Laertes, is about to embark for Paris and receives from his father some wise advice:

Neither a borrower nor a lender be,
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.   

Hamlet, Act I, Sc. 3, 75-77.

Had our rulers heeded this sound advice proffered by the Bard half a millennium ago we would have been spared the disastrous budget crisis which many countries are suffering from. So many pixels have bounced on our screens on this topic that I feel I must bring my  own contribution to the debate.

There's something wrong when people's livelihood is directly decided upon by the financial markets' diktats: cut people's wages and pensions so that you can repay us, bankers and bondholders tell our governments who fall over themselves to accommodate their (and our) true masters. Aren't these modern-day Shylocks (another Shakespearean reference) fat enough? or are they so greedy that they won't stop until they have sucked us dry?

If the weight of debt has become so intolerable that governments can't pay their loans back, well, then don't. I can hear some of my detractors shriek that debts are sacred and should be honored. This is disingenuous and pure hogwash (if hogwash can ever be considered as pure.) Every day companies and people go bankrupt and their creditors don't get paid, why should government be different? After all, the interest rates charged by bondholders reflect the risk they may not be paid: a country deemed solvent (such as Germany) can borrow at a low interest rate, a very risky one such as the PIGS (Portugal, Ireland, Greece and Spain) have to pay much higher rates because they are deemed a riskier investment. So, investors have already been largely repaid by the bigger amounts they extract from governments. Isn't that enough? If I decide to invest in a bakery and customers don't show up, I lose my investment, right? Will anybody come and rescue me? Certainly not the government. That's the purest expression of the market, and I have no problem with that. Why then should bankers and bondholders, who are much wealthier than I, be spared this basic tenet of capitalism? They made a bad investment and should suffer the consequences remembering Shakespeare's words: "loan oft loses itself."

Of course, the consequence for governments is that after they default they will be unable to borrow money in the future. Well, that doesn't strike me as a bad thing at all. After all, wasn't the crisis precipitated by borrowing in the first place? I would argue that we should remove the cause of the problem, and the problem will be solved. As any household knows it's never a good idea to borrow, at least for a long period of time. Sure, when you face an emergency (an unexpected health bill, or a house renovation or student fees for your children) I can understand that you should borrow on an exceptional basis and pay back as soon as you can. But keep on borrowing and pay your debt through even more borrowing and we all know how it will end: in tears. "Never a borrower be," said the man from Stratford.

Now, in my first paragraphs I've been very critical of the financial markets, especially bankers and bondholders, and their responsibility in the current crisis. But intellectual honesty dictates that a big mitigating factor be acknowledged: they have not forced governments to borrow. Criticizing bankers for being leeches and greedy is like badmouthing Dracula for hanging around the blood bank. What else do you expect? But the point is that they haven't held a gun to government's head in order to force them to borrow. Governments have willingly thrown themselves into this vicious cycle which, like its private-consumer variety, is now ending in tears.

Why do governments borrow? If for exceptional reasons, such as a war, a natural disaster, or economic crisis such as a recession, that would be fine. But look at France, a country that has been blessed with no natural disaster in living memory, nor a war for 60 years, and just a few mild recessions. Why then has the French government been unable to balance the books for over 30 years? Yes, you've read right: the French government has been spending more than it's earned since the 1970's, and tears time has come: wage freezes, longer retirement date, cuts in valuable public services such as education, health (I still cannot understand why we are spending €60 billion in defense with no threat from any of our neighbors.) Look around you and most other governments in Europe are in a similar situation (at least, Germany had to pay for the huge one-off cost of Reunification; what has the French government to show for its big debt?)

They say that one should not waste a good crisis. Let's hope that our rulers finally heed the great Will's words that "borrowing dulls the edge of husbandry" and enforce a very simple and common-sense principle: if you cannot have the means of your ambitions, then have the ambitions of your means. If this precept is good for my family, it should be good for the government.  

The unbearable dullness of the Academy Awards

RIO DE JANEIRO
One of life's greatest mysteries is how come that Hollywood, which churns out some of the best entertainment for the world to consume, consistently fails with the annual Academy Awards presentation. The show is a long, tedious, boring affair that drags on for hours. I stopped watching it in the last millennium as I could think of other "pleasures" to inflict on myself, for example corporate PowerPoint presentations (which unfortunately come minus the glamour of Tinseltown.)  News reports keep apprising me of how right my decision was, with last week's presentation no marked enhancement on the usual fare.

To make matters worse, the winners are often largely undeserving with some choices utterly puzzling, so we cannot even give the Academy the mitigating circumstance of having picked the truly best, to make up for the horrid show.  The prizes (also known as Oscars), awarded by the somewhat grandiosely styled Academy of Motion Picture Arts and Sciences, aim at honoring "outstanding achievement in filmmaking" as its mission statement says. Well, as you could tell from last year's two main contenders (dreadful Avatar and pointless The Hurt Locker) "outstanding" is not exactly the word that comes to mind. In the runup to the Oscars last week I watched some of the most nominated movies and candidate for top honors. 


Christopher Nolan’s Inception was interesting, even intriguing  in its major concept: can we control people’s minds through their dreams? What about interferences by people’s projections, fantasies and traumas? And dreams within a dream? This attractive idea is served well by impressive sound and visual special effects but in the end it fails to deliver as it is basically all a pretext to just one action stunt after another. Disappointing. 


The same adjective applies to The King’s Speech, the winner for Best Picture, Director, Actor and Original Screenplay. The British movie clearly tries to capitalize on the Queen precedent: take royalty, the British variety never ceasing to fascinate, mix the big historical events with an intimate look at the players and you have a crowd pleaser. What was astonishing in The Queen because never done before (along with a brilliant script, assured direction and first-rate performance by Helen Mirren) becomes a bit déjà vu here.  Or, to be more accurate, déjà entendu when you hear hackneyed lines such as “These doctors are idiots” – “But they’ve been knighted” – “Which makes it official.” Or “It’s Ma’am as in palm not as in ham” (actually used in The Queen), the marbles trick used in My Fair Lady etc. The  desire to humanize the royals at times is absurd: who would believe that the Duchess of York would go on her own to visit a doctor or that she tucks her daughters in bed without the help of a nanny. I almost expected her to start fixing scrambled eggs for her husband in the morning. 


Now, I know that films, even based on true events, don't have to be a copycat version of reality, but at least they should have some credibility to them. Who would believe that the father of the Queen of England played the penguin (especially when seeing how stuck up she turned out to be) or that he would use a full range of expletives such as the F word? The latter apart, everything about the four- member Royal Family seems to come straight  from a Disney movie (did they produce it?- I checked and the answer is no.) Again such a stark difference with The Queen, which showed that you can express admiration for the monarch while being critical. Sorry, although The King’s Speech is a well made, amiable movie with fine performances, The Queen was definitely a superior movie and this is just another example of the Academy's famous failures at recognizing great cinematic achievement. (It also clear that after Charles Laughton in The Life of Henry VIII in the 1930's, Katharine Hepburn as Eleanor of Aquitaine in the 1960's, Judy Dench as Elizabeth I  and Helen Mirren as her 20th century namesake and successor, playing a British monarch gives you a leg up over your Oscar competition.) 


The Social Network, another of the major nominees, with a great storyline (sorry for my lack of modesty, but the way they depicted Facebook's founder was very similar to the Silicon Valley CEO I describe in my book, High-Tech Planet). The dialogue at the beginning was quite brilliant and I felt it was a better movie than The King's Speech and therefore should have won.  


Actually the best movie-watching experience of these past weeks turned out to be neither of these three but two excellent productions from the 1940's and  which I had never seen before.  The first one is a 1946 film noir by Richard Siodmak: The Killers, starring Burt Lancaster in his first role and a dazzlingly beautiful Ava Gardner, truly one of the most beautiful animals to have graced the silver screen. Based on a short story by Hemingway, which must have been substantially adapted as I always found the great man a powerful bore, it has all the ingredients of the genre: femme fatale, crime, corruption and unexpected ending, all woven together brilliantly. The other one, The Man Who Came to Dinner, a delightful comedy with Bette Davis in a  surprisingly smaller role than usual, was made in 1941, an amazing 70 years ago, and is more enjoyable than most of last year's productions. 


These two movies are proof again that only a handful of movies  a year are worth spending time on and that if you want quality cinema, then go back to the oldies. As I always tell whomever cares to listen, it is much more satisfying to see a great old film than a mediocre new one. 2010, like 2009 before it, will not remain as a vintage celluloid year.  


(Now I can go back to Carnival revelries, today being Mardi Gras is the last day of the annual Rio bacchanalia.)

Arab Revolution - Phase 2: Pharaoh Falls

BOGOTA
Even from the other side of the world there is no escaping the momentous news, which explains why for the second time in a row I am posting on political developments in the Arab world. Last time, a month ago, when I wrote on the  Tunisian uprising which ended the dictatorial rule of Ben Ali, I predicted that Egypt, the heart of the Arab world, would be next. Last Thursday I emailed an old friend of mine: "This is the end of the game for Mubarak.  Following his refusal to leave power, the Egyptian people will mount an even bigger rally and protests after Friday prayers in now world-famous aptly named Liberation Square  and there is no way the military will allow him to stay. So by next week, and maybe even this weekend, he'll be gone." I was gratified to see I was right: the next day, as the weekend started, Hosni Mubarak, the last pharaoh, the absolute ruler of 80 million Egyptians for 30 decades, resigned in ignominy and fled to his home in the Red Sea resort of Sharm-al-Sheikh probably on his way to Saudi Arabia where, like an elephant cemetery, dictators retire to die.

What does this purport for the region, the world and US foreign policy? Well, much has been written, said, pontificated, hollered about by more knowledgeable people than I, so I don't need to expostulate at length. I would just like to lay to rest some myths.

Myth # 1. A lot is being said about the respect in which the Egyptian armed forces (which are taking over  during a transition period) are held. Well, if respect it is, it is the respect spawned by fear, not admiration. What is respectable or admirable about the Egyptian army? Abroad, they waged war against Israel three times, and were defeated three times. At home, they have been the backbone of the dictatorship for decades. Mubarak himself was a general, as have been all Egyptian presidents since the military (yes, they again) overthrew the monarchy in 1952 in what was a coup and not a popular uprising. How ironic that they got rid of King Farouk because he was too subservient to British interests (the power of the day) and they ended up just doing America's bidding.

Myth # 2: Don't believe a single word of all the lofty talk of Obama and Clinton about "the voice of the Egyptian people". Until this week they were backing newly appointed Vice-President Oman Suleyman to take over a vaguely defined transition. But Suleyman is as bad as Mubarak: as head of the intelligence services he has overseen every repressive policy of the last decades including torture, brutal crackdown, censorship, arbitrary arrests, rigged elections and stifling dissent. How can that be a change? Well, it isn't, and that's what America was/is after: to keep the same regime in place under a veneer of pseudo-democracy so that it can continue to implement America's policies in the region. But Vox populi, vox dei. Sometimes you just can't go against the people when they rise in their millions.


Myth #3: The free and responsible media. Yeah, right! I was mesmerized by CNN's coverage  which turned shrilly anti-Mubarak referring to him as the dictator at the height of the protests. And yet for decades you never heard anything like that. Had the Egyptian people not risen against the oppressive regime, CNN would have been glad to continue reporting on "Egyptian elections won by the president's party" and leave it at that when it was obvious that last November's elections had been rigged beyond belief. But that didn't seem to bother CNN unduly nor the US government who was quite happy as long as their buddy stayed in power. It was mind-boggling to hear US Vice-President Joe Biden refer to Mubarak as "not a dictator" and this ...as recently as two weeks ago when he was sending his armed thugs against peaceful demonstrators. Just like French minister Frédéric Mitterand protesting on TV channel Canal+ Sunday program that "Ben Ali is not a dictator" when his police was shooting his own people, and five days before he was to flee. The hypocrisy and duplicity of both mainstream media and politicians are seemingly endless. (Do I need to remind my readers about the New York Times endorsing Bush's Iraq war?)


Myth # 4: The Arabs are happy with their lot and never rise up. True, the last major Arab uprising was almost a century ago, in 1916 when they rose against their Turkish overlords in what was to be known as the Arab Revolt (with the help of legendary Lawrence of Arabia) and would lead to the creation of the modern Arab states that we know today and which are in deep crisis. Tunisia then showed the way and the Egyptians were so shamed by this little country to have done what they hadn't dared do that it galvanized them into taking their fate into their own hands. After all, don't Cairenes call their city Umm-ad-Dunia, center of the world? How could they fail where a small Arab country succeeded, they the heart of the Arab world, its most populous country?


Three more points are worth mentioning:



- Technology and especially social media were instrumental in mobilizing protesters and getting the word and pictures out. When Zuckerberg created Facebook in his dorm room several years ago I guess that if he never suspected it would quickly be worth billions of dollars, it is a safe bet to say that it never crossed his mind that it would have such political impact in countries on the other side of the globe. In the tug between the immovable object represented by Mubarak and the Egyptian protesters' irresistible force the latter won because it has Facebook on its side. 


- US foreign policy in the region is in complete disarray. It tried under Bush to foment democracy (or so it pretended) for nothing. So when Obama came to power he soon went realpolitik accepting Arab autocrats (but then did he really ever want that to change?) and, bang, Arab democracy explodes in his face. It is too early to make a definite judgment, but I believe that the maturity and commitment of the Egyptian people have shown that they will not accept anything less than a free society and democratically elected leaders. And representative government in Egypt means that US policy (especially as regards Israel) will never be the same, because "Egypt will never be the same again" in Obama's words. 
  
- So, who's next? As (bad) luck would have it, the longest ruling dictator in the Arab world, buffoon Qaddafi (he came to power two months after Armstrong walked on the moon, that is 42 long years ago) just happens to be wedged between Tunisia and Egypt, the two countries  which have just chucked their dictators. You can bet that the Libyan dictator is not getting much sleep these days. And today Mahmoud Abbas, the Palestinian president, announced presidential and legislative elections for next September. Considering that his term ended in January 2009 and he decided to stay on without bothering to ask his people how they felt about it, not too soon you might think. And yet CNN has yet to call him a dictator nor does the US administration criticize him for not being elected. Algeria is another low-hanging fruit with its explosive mixture of emergency laws, repressive gerontocratic single-party government and economic. The Saudi king who rules like a medieval monarch supported Mubarak to the hilt until his last moments in office understanding very well what it would mean for his family's shocking and continuing  control of a major and wealthy Arab country if Egypt went democratic. Another same-name Middle Eastern monarch, Jordan's Abdallah II, would be well advised to stop appointing the Prime Minister and leave it to elections to decide the makeup of a government. Of course, that means that the Palestinian majority in his country and probably the Islamists would come to power, something the US (as a sponsor of  Israel) would hate to happen. But isn't democracy about letting the people choose freely their leaders, whether you like them or not?


- A lesson for US foreign policy is to accept Islamist parties, realizing that (a) the US can't anymore force its will on the Arabs, an ancient and proud people (b) that just like not all Socialist governments in democratic Europe or Latin America mean rabidly anti-American policies, some Islamist parties such as the Muslim Brotherhood may well turn out to be people the US can do business with (along the lines of the AKP government in Turkey.) And remember, most of these opponents of the US became so only after the US engaged in anti-Arab policies. Be more friendly to the Arabs, and the Arabs will be friendly to you. 


Finally, to close my thoughts on this truly remarkable and historical achievement, let me share with you  three jokes making the rounds in Cairo.


1. Why did it take Mubarak three decades to appoint a vice-president? − Because he couldn't find anybody as stupid a he is.

2. Where does the $1.5 billion in US military aid to Egypt go? − Half is spent on military equipment and half on black dye for Mubarak's hair.

3. As Pharaoh-Mummy Mubarak lies on his (political) deathbed, his counselors gather by and tell him: "Excellency, the Egyptian people are here to bid you farewell." − "Farewell?", the dying man says, "but where are they going?" 

After the Tunisian Revolution, which Arab country is next?

PARIS
In the late 1970's, I was a teenager spending part of the summer in my mother's hometown in Romania when the inhumanity of the Communist regime of the self-styled Danube of Human Thinking, Nicolae Ceausescu, hit me. The paucity and bad quality of goods in stores; the weird cat-and-mouse game we had to play in Bucharest when staying with a cousin so that the resident man from the Securitate (Ceausescu's answer to the Gestapo) wouldn't see us spending the night with her (yes, you've heard right, my mother, as a foreigner, was not allowed to spend the night at her cousin's house!); my great-aunt spending time in jail, after the Communists took over, because she had grown up in France where her sister (my grandmother) still lived thus making her a dangerous counter-revolutionary and Western agent; my mother not being allowed to inherit the house built by her grand-parents (because she was born in Paris and had left Romania); nobody allowed to travel abroad - it all struck me as too weird and inhuman to last. "Maman, this can't go on. Sooner or later the system will collapse," I exclaimed. My mother shook her head and replied with a sad voice, "Look around. Has any Communist regime that has taken over ever lost power?  Why do you think your grandmother insisted that I go back to France?" It was true that at the height of the Cold War the Communist-bloc dictators seemed unassailable.

And yet, at the end of the next decade, while pursuing my master's degree in the United States, I was mesmerized by a scene on my TV screen, a scene I never thought would happen. In December 1989, during a speech at the soon-to-be-renamed Revolution Square in Bucharest, something unthinkable took place: Ceausescu, who among his self-granted titles used "Genius of the  Carpathians", was booed by thousands of Romanians. Yes, the docile Romanian people who had put up like sheep for decades finally said, "That's enough, we can't stand this anymore. Go!" and rose against the tyrant. Vox Populi, Vox Dei. Three days later, on one of my most memorable Christmas Days, the hated dictator and his wife Elena were executed. Justice and democracy had finally come to long-suffering Romania. But too late for my great-aunt who had died a few years before of a lung disease contracted while in Communist jails.

In the next two decades democracy would soon conquer all of Eastern Europe, Latin America (with the exception of the Castro-engineered hell in Cuba), many Sub-Saharan African countries, part of East Asia including Chinese Taiwan. Only one region held out: the Arab world. From the (Persian) Gulf to the (Atlantic) Ocean, as the phrase in Arabic goes,  feudal monarchies, military-backed single-party regimes and presidents-for-life hold sway, impervious to the winds of freedom blowing all over the world, and often actively aided and abetted by Western democracies (now that is an irony.) It was absurdly claimed that Arabs were not wired for democracy, that Islam was the reason, forgetting that many Muslim countries such as Turkey and Indonesia had embraced multi-party democracy quite successfully, some of them even electing female rulers. But Arab countries were still the exception. No velvet revolution there, sheepish Arab citizens just seemed willing to accept their sad lot forever.

When my father's home country of Mauritania, where I spent part of my childhood, elected Sidi Ould Cheick Abdallahi (who went to school in France with my parents) as president in 2007, I held my breath: could that tiny country teach the Arabs a lesson? In Arab League meetings, "Sidioca" (as he was familiarly known) was the only Arab leader freely chosen by his people and you could tell it grated on his colleagues. And you could hear the collective sigh of relief from Arab rulers when 18 months later Sidioca was overthrown in a bloodless coup by a general who wanted to be top dog. Things were back to normal.

So when Tunisians started rioting a couple of weeks ago (almost 21 years to the day after the fateful event in Bucharest) about their economic conditions, neither Arab rulers nor the Tunisian regime's Western backers worried too much. Nothing that a good crackdown, censorship and a few deaths can't fix. And yet day after day, week after week, the ranks of protesters kept swelling as the  nature of their demands grew: from lack of employment opportunities to disgust with corruption and, as the death toll rose, to outrage at the killings perpetrated by the police and, finally, demands that President Zine El Abidine Ben Ali, whose 23 years' reign had turned the country into a police state, step down. Then last Thursday, with the whole country in full uprising,  I saw on Al-Jazeera TV  Ben Ali speak in Tunisian Arabic, to be better understood by a majority of his subjects, that " I have understood you, I will not run again in 2014." My first reaction was, "I don't think you will because you'll be gone well before that." I knew then the game was up for him and it would be just a matter of months, maybe weeks, before he was consigned to the bins of history.

I was wrong. The next day the dictator who had run Tunisia with an iron fist for so long fled the country. Vox Populi, Vox Dei.

The Tunisians had achieved something unique in the Arab world: for the first time an Arab ruler was overthrown not by the army, or a foreign invasion, or a coup, but by the people themselves. For the technology person I am, I was gratified to see that this was also the first digital revolution on record. Tunisians, especially the youth, made great use of Twitter to coordinate rallies and protests, used their iPhones to make pictures of what was happening and posted them on Facebook. With the government preventing foreign reporters from entering the country and covering the events, most of the images we first saw were amateur videos. Tunisians filmed themselves making their own revolution and shared it with the world.


I bet you anything you want that no Arab ruler slept comfortably last night. Most of them are feeling quite edgy, and several must be shaking in their boots. The military-backed FLN party-run regime next door in Algeria is wondering whether its days are counted. Ominously there were riots in Algiers at the same time as in Tunisia, but they were quickly subdued (for the time being?) The Tunisian case, however, shows that any insignificant event  can turn into the sparkle that will ignite a full conflagration (in Tunisia it all started with a college-educated street vendor setting himself to fire in protest at lack of opportunities and heavy-handedness by the police) and that no matter how long a people has been cowed there comes a moment when they conquer the fear, break their shackles and there is just no stopping them.

Tunisia's other neighbor, Libya to the east, whose buffoonish dictator has (mis)ruled it for 40 years, could be the next domino. But the biggest prize for popular overthrow of a dictatorial regime  would be the country next door: Egypt. This ancient land shares many traits with the situation in Tunisia: heavy-handed security apparatus, corrupt regime, a pauperized majority and a relatively well-educated youth who have been watching with fascination the events that their fellow Arabs have shaped in Tunisia. The current Pharaoh, Hosni Mubarak, who has maintained himself in power for an incredible 30 years (yes, you've read right, he came to power in 1981 when Reagan was president and Gorbachev had not even come to office!) through repression, rigged elections (like Ben Ali in Tunisia he claims at every election an improbable score of 90 to 99%) and support from the United States government. And once Egypt, the heart of the Arab world, falls, the other Arab countries will follow through. History is on the march and it is exhilarating to watch it.

(Tunisia also broke another record. Yesterday at noon Ben Ali was still president, in the evening his Prime Minister had officially taken over only to be succeeded this morning by the Speaker of Parliament. Three presidents in less than 24 hours, that must be  a world record, even better than the three presidents Argentina had over ten days back in the early 2000's.)

Can software dinosaurs reinvent themselves as cloud-based vendors?

PARIS
Lou Gerstner, IBM's legendary CEO, famously claimed that "elephants can dance" when describing his amazing success at turning Big Blue from a hardware-cum-software company into a services group. This feat is, however, quite unique and cannot be easily replicated. In a recent Linkedin discussion of the HR Technology group, claims were made that traditional software vendors such as SAP or Oracle can turn their offering from on-premise systems (ERP) to web-based ones, also known by the acronym SaaS.

First, let's get the issue of terminology and acronyms out of the way. I've always hated the ERP term, so  typical of the IT industry to throw unintelligible acronyms at every technological innovation. Most laymen would just stare at you blankly if you told them they needed an Enteprise Resource Planning to manage their business functions in an integrated way. Why not call it Integrated Business System (IBS)? Wouldn't this letter combination be as good as any, with the added advantage of actually meaning something? (The rational French translate ERP as PGI- Progiciel de Gestion Intégré or Integrated Management System) Now that a new IT model is taking root, guess what? We need a new, incomprehensible acronym to befuddle people even more. And thus was SaaS born to refer to software that instead of being installed in your own computers within your company's walls, is accessed to, and your data saved, online (just like Hotmail versus Outlook.)  But why call it Software-as-a-Service, when web-based or online software does the job as adequately and more meaningfully?  But the IT industry wouldn't be what it is if it spoke in plain English. Maybe we are subliminally implying that the older, on-premise systems were software-as-a disservice? In which case it would make sense to me. (According to another buzzword and misnomer, often used in conjunction with SaaS, these applications are supposed to reside in a somewhat magical world called The Cloud. Nothing could be further from the truth as these applications are dished out by servers parked in data centers grounded on terra firma.)

With this off my chest, let us get back to whether the traditional software vendors (or dinosaurs to remain with an animal-kingdom image) can reinvent themselves by embracing this brave new world of SaaS. The first question that many people will ask is whether that is an issue at all. Surely, there will always be companies that would rather own their HR system (or other business software) than rent it, won't there? Well, if you look at the evolution of IT, not really. Why bother having huge inhouse data centers with legions of IT specialists when you can have somebody else bother about it and you just pay as you use it, like a utility? Actually the comparison with utilities is spot on. When electric power came about, most companies had their own generators. But when power transmission prices came down it was easier to be far from the source and then companies realized they could sell their surplus power to other companies. From then on it was a short hop for specialist companies to produce and distribute power. Who now in their right mind would want to have their own power generator?

Some defenders of the software ancien régime will press the point that with your own product installed within your company's walls you can customize it to your heart's content, something you can't do with a web-based application. Let me remind you that (just like with electric power) initially companies built their own business applications before realizing it was more cost-effective to buy it from a software vendor. The buy-vs.build debate was won by the package-software firms who won the resistance of the home-made lobby who led a rearguard battle to keep IT inhouse as the only guarantee that "all our requirements can be met."

The arrival of SaaS heralds another sea change in IT summarized by the phrase I used in the earlier paragraph: "Why buy it if you can rent it?" Configuration capabilities will win over customization defenders. And even if the traditional-software vendors, as befits an incumbent industry, still make out the lion's share of the business-application market, the trend is unmistakable: a growing number of HR system projects are now implemented through a SaaS model. The minority is soon going to be a majority. The question is therefore no longer whether old software companies should or want to test SaaS waters , but whether they are capable of doing so with a modicum of success.

In the Linkedin discussion I alluded to in the opening paragraph, it was claimed that the flagship product of one such dinosaur, Oracle EBS, in its release 12 variety had morphed into a full multi-tenant product. For you laymen, a multi-tenant system is one where many different companies can be managed in a single instance of the system, something that traditional software vendors never bothered to do since they sold their products to a single customer. However, now that consumers (of the corporate variety or not)  do NOT want to own the system, but are happy to access it online, it becomes vital to be able to provide it to many users at once. This issue of multi-tenancy actually predates the rise of SaaS since to be able to provide outsourcing services on traditional ERP systems (oops, sorry, integrated management systems) required such a feature and yet Oracle never managed to develop it until now. But has it?

To add to my list of bestial metaphors, can a zebra really shed its stripes? Can an old dog learn new tricks? I doubt it. Oracle's DNA was in the database business which explains why it never managed to become the leader in the applications business  thus obliging it to resort to buying the leaders in the various business software spaces (PeopleSoft in HR, Siebel in CRM/marketing, Hyperion in analytics.) But even there it remains a traditional, on-premise vendor. As Naomi Bloom, our grande dame of HR software, quite rightly said, no amount of functional enhancements can change that fact. The SaaS business is radically different from the traditional software one. Let's consider the just two points:

1. Even if Oracle has managed to add an extra layer in EBS 12 to allow storing data across several companies, that doesn't make it true multi-tenant. What about cross-customer processes? Can Oracle EBS truly launch a single payroll process for several customers at once? Produce reports? So far, the only ERP partner that has had some success in multi-tenanting  an old system is NorthgateArinso with their SAP-based platform, euHReka. (All outsourcers who did not build their own platform are struggling with this issue, from Fidelity to the big Indian  BPO powerhouses.)

2. Even if Oracle were to truly multi-tenant its offering (a big if, knowing that most of their R&D resources are focused on Fusion), there is more to SaaS than just a multi-tenant model. The existence of multiple versions, for one thing, precludes it being considered as a true SaaS offering.

The future of cloud HR

If you look at the emergence of SaaS vendors, all have been products that were designed from the start as such (Workday, Salesforce etc.) Jurassic vendors such as SAP and Oracle are not nimble enough in their business models and product architecture to reinvent themselves as true SaaS vendors. There is a reason, after all, why dinosaurs who once roamed our planet as its undisputed masters disappeared: they share many traits with these old software vendors - big strong bullies who couldn't adapt and had to make way for humans, a much smaller species. Our software dinosaurs can tweak their systems any way  they want, it will not make them a true SaaS offering. It is more likely to end up as a turkey since it will be nothing more than lipstick on a pig- and I shall stop this software bestiary at this last four-legged image.

Better late than never! Vargas Llosa receives the Nobel Prize for Literature

The blogger's personal collection of Vargas Llosa books

PARIS
Exactly twenty years ago, while doing my master's at the University of Georgia I visited a childhood friend of mine who was teaching French Literature at the University of Virginia in Charlottesville and, while book browsing in a bookstore, one of my favorite hobbies, he recommended buying La tia Julia y el escribidor by Peru's greatest writer, Mario Vargas Llosa (MVL.) Although I didn't speak Spanish then I said, "why not?" and bought it. Little did I know that less than four years later I'd be living in Spain, learning the language and finally getting to read the first Spanish book I bought. And boy was I in for a treat: switching between the daily life of an 18-year old writer-to-be, clearly modeled on the author, and between stories that seemed to have nothing to do with the main storyline, I was fascinated by the power of his writing, the sights, sounds, emotions, family drama of living in Lima, Peru, and beyond that Latin America. And when I reached the "aha" moment, when the link between the seemingly disparate stories and Varguitas' life is suddenly understood, it was quite an epiphany.

Ever since that moment I was hooked on MVL's writing. Not only the comedies such as La tia Julia or the brilliant satire of Pantaleon y las visitadoras (the description of a brothel business run by the government for its military, couched in bureaucratese language is hilarious) but the more politically engaged ones such La ciudad y los perros or La fiesta del chivo. The latter is one of the best books, novel or non-fiction, ever written on power, in particular the autocratic variety: it dissects the mechanics of a dictatorship and how a tyrant, in this case infamous Trujillo in the Dominican Republic, manages to hold his power on a whole country for so long. A fast-paced historical novel, it is a fascinating read which I'd recommend to anybody interested in Latin America, politics and fine writing. Read it and you will understand more about autocratic power than any lengthy academic tome. (A decade later I would find myself lost in thoughts across the Presidential Palace in Santo Domingo reflecting on the people and events described by MVL) 


With such a record, it had been a mystery to me that the Swedish Nobel Prize Committee could still ignore such a giant. But, then, have they not ignored Marcel Proust, Franz Kafka, James Joyce, Jorge Amado and Graham Greene? And have they not awarded the coveted prize on unknown writers such as last year's Herta Muller, a German-Romanian I had never heard of - and being half Romanian myself I should. Or Le Clezio, a French writer also unknown to me: yes, although I was born in France with French as my first language and a voracious reader of  the country's literature I had never heard of this winner of the Nobel Prize for Literature a few years ago. And I'm not mentioning the countlesss other obscure ones, nor the puzzling choice of Barack Obama last year as the recipient of the Nobel Peace Prize: not only had he done nothing noteworthy in the pursuance of peace but he's managing two wars (true, he didn't start them, but neither has he brought them to an end yet.) You get my drift: awarding a Nobel prize is a hit-or-miss thing and I was gratified that this year was a vintage one with unanimous applause for the choice of MLV.

The only debate now is which of he or the other great Latin American writer, Colombia's Gabriel Garcia Marquez, is the greatest? One can say that MVL is more intellectual while Gabo's language is more poetic, but also that if you were to pick one single book of each writer, Garcia Marquez will win with One Hundred Years of Solitude which is one of the best novels of the 20th century and is therefore a more uplifting read than any single book written by MVL. However, if you look at the overall output, MVL has written more satisfying books than Gabo. So it's probably either a draw, or a slight advantage to MVL.


At the glittering ceremony in Stockholm this month, MVL made an acceptance speech that is already considered a classic. A PDF is available from the El Pais website. For non-Spanish speakers let me translate (approximately) some highlights of a profoundly intelligent, humanist, courageous, beautiful and emotional speech entitled "In praise of reading and fiction."


     Flaubert taught me that talent is a stubborn discipline and long patience...If I were to call up all the writers in whose debt I am, their shadows would throw us into darkness...Just as with writing, reading is a way of protesting against the inadequacies of life...We invented fiction in order to be able to live the many lives that we would like to live while we only have one....


     Literature creates a brotherhood inside human diversity and hides the frontiers that ignorance, ideology, religion, language and stupidity put up between men...I never felt I was a foreigner in Europe, nor in reality anywhere else. In all the places where I've lived I felt at home. I carry Peru in my guts, because that's where I was born, grew up, was trained, and lived those childhood experiences which molded my personality and created my vocation: there I loved, hated, enjoyed, suffered and dreamed....Peru is the whole world in a smaller format. What an extraordinary privilege for one country not to have one identity because it has them all...


     I hate all forms of nationalisms because they make a supreme value of the pure random circumstance of one's birthplace... 


     I was 11 when I lost my innocence and discovered loneliness, authority, adult life and fear. What saved me was reading, reading good books, taking refuge in those worlds where life was exciting, intense, one adventure after another, where I could feel free and become happy again. And it was the fact of writing, in hiding, the way one yields to a shameful vice or forbidden passion. Literature stopped being a game. It became a way of resisting adversity, protesting, rebelling, escaping what was intolerable, it became my reason to be alive... 


     It has always fascinated me to imagine the uncertain circumstances in which our ancestors, barely different from animals, having recently developed speech to allow them to communicate among themselves, started, in caves and around fires, during nights full of danger - lightning, thunder, beast grunts - to make up stories and tell them to one another. That was the crucial moment of our destiny, because in those groups of primitive beings hanging by the voice and imagination of the storyteller, started our civilization ...


     That is why, we have to repeat it incessantly until we convince the new generations: fiction is more than entertainment, more than an intellectual game that makes your sensitivity more acute and develops your critical sense. It is a vital necessity for civilization to continue to exist, renew itself and preserve the best of our humanity...And because a world without literature would be a  world with neither desires nor ideals, a world of robots shorn of what makes a human truly human: the ability to grow out of themselves into somebody else, somebody molded from the  clay of our  dreams.


(All of Mario Vargas Llosa's books have been translated into English. I am using here the original Spanish-language titles since that is how I know them but here are some English-language titles: La Fiesta del chivo was translated as The Feast of the Goat and La tia Julia y el escribidor as Aunt Julia and the Scriptwriter.)


     

The pros and cons of being an IT early adopter

PARIS
One of the trickiest issues faced by a company about to select a new business software (HR or otherwise) is the early-adopter dilemma. Imagine that you have a favorable view of your IT vendor, probably because of a long association or due to a great rapport with your account manager whom you have come to trust over the years. When a new need emerges (say, you are expanding into a new country and need to manage and pay the local workforce) you naturally turn to your vendor who had already provided you with a payroll engine and the "legs and regs" (local rules in our HR tech jargon) for your home country.

Like all IT vendors, yours will tell you through an enthusiastic sales rep, "no problem, can do." Except that there is a little snag: that local payroll is still being developed (if work has started on it at all) and there is no customer live...yet! Actually they are offering you the great honor of being the first customer, or "early adopter" in softspeak. In plain English, they want you to be their guinea pig.

If you have followed a  strict software-selection methodology (such as the one I advocate) you'll probably pause for thought: Shall I do this? Can I trust them? If nobody's bought it yet, or they haven't developed it, maybe there is a good reason for it. This is not an academic question: Oracle, to take one example, developed in the early 2000's a French payroll and failed to get a first customer to use it since the market had serious doubts about the quality of the product. Not even Oracle France was willing to "eat their own dog food" as the phrase goes!

The above are all valid questions and don't let your account manager brush them off as if they were insignificant specks of dust. Not weighed carefully, these issues may well make all the difference between success and failure in your software project.

If you've had a long association with the vendor and like your account manager, shouldn't this be enough? These are helpful points but should not sway you unduly: after all, the account manager can leave the next day and be replaced by an indifferent or incompetent executive. (That is if they are replaced at all - I've seen customers left with nobody to manage the relationship for years!) And just because your vendor was good at one offering is no guarantee that they will be good at another one: many recruitment vendors have lousy learning features and vice versa.

On the plus side, there is one key advantage which the vendor's sales rep will probably be trumpeting high and low: as a first customer, you get to drive the direction of the product, ensuring your needs are covered. "Your requirements, your whole  requirements, nothing but your requirements," your account manager will be waxing lyrical (and commercial.) And who can deny the appeal of having a customized product built as a package system? Doesn't it sound like the best of both worlds?

Maybe, unless the vendor is less than forthcoming with you and is using you just to test the waters. You need to be convinced that after the initial release the product will not be shelved, as it has happened with several products under so-called "controlled availability." Sure, there is no guarantee of eternity in the IT industry (just ask PeopleSoft customers), but you need to factor that in as part of your due diligence. In particular make sure that the vendor has done their market research adequately and that they're in it for the long haul so that, should the first customers trickle in at a snail's pace, the vendor will still stick by the product and not fold it after a couple of disappointing sales quarters.

One thing to check is the vendor's historical credibility. Are they close to their customers? Have they consistently developed according to plan ("the roadmap" in our lingo.) Is this new product of theirs a key area for which you can expect them to make every effort to be successful, or is it just one among a huge portfolio? If the latter, then the risks are definitely higher. And look at yourself in the vendor's larger business scheme of things: are you a major customer? You don't have to be  a global one, but be clear eyed as to the place you occupy in your industry or geography. To remain with another example of a French payroll (successful this time), are you like Société Générale, a major company, in a  major industry in a  major market? If yes, then chances are that the vendor (in this case it was PeopleSoft and the first country extension of their new Global Payroll) will go to great lengths to deliver as promised. (For how to deal with a software vendor bent on reneging on their commitments - apologies for hawking my book - you may find useful Chapter 7 "Going 'Glocal' " of  High-Tech Planet: Secrets of an IT Road Warrior, on the politics of arm-twisting to get what, after all, you've been promised and have already paid for handsomely.)

Another criterion you may want to take into account is the fact that there is a difference between being asked to be a guinea pig for for a new product covering a mature function (such as the abovementioned payroll) and one which deals with a newish area, such as onboarding.  In the former case, the market requirements are generally well-understood and the only doubts are about the vendor's ability to translate them into bytes and pixels. In the latter, the risks are multiplied by the still fuzzy understanding of what will be automated. In particular, pay attention to the internal resources the vendor is committing to the product.

Although personally I don't believe in the concept of co-development between a vendor and a customer (there should be only one development organization, and its place is within a vendor's walls since that's their business) you as a customer should be quite vigilant about what goes on within those walls. Otherwise you may come to regret having traded the peace of a "laggard" for the excitement of an early adopter. The software graveyard is littered with the bodies of early adopters who ended up being the only adopter.

Lula wins "third" mandate but is it for "presidente" or "presidenta"?

The blogger in the World Heritage Portuguese
town of Oporto the day Dilma Rousseff was
elected. Even the Brazilian community
in Portugal voted for her in similar
proportions as back home

OPORTO
When Ronald Reagan ended his second term with high approval ratings, since the Constitution prevented him for running for a third one ("an infringement on your right to choose your leader" the Gipper told he American public) he campaigned for his heir, his vice-president George H. Bush, who duly won the election. It was said then that was Reagan's third electoral victory. This week's victory by Dilma Rousseff as Brazil's first female president, can be considered even more so as Lula's victory (he is on record as saying during the campaign that "my enemies [from the PSDB party] will not defeat me" as if he were on the ticket - which, in some fashion, he was). It was his astonishingly high approval ratings (over 80% after eight years in office, something Obama can only dream of this week that saw him repudiated in the mid-term elections) that allowed him to pick his successor. Dilma (according to Brazilian usage, celebrities, especially politicians, are referred to by their first name) had never run for office, let alone won any, and although a competent administrator, was not a political force in her own right - unlike neighboring Argentina's Cristina Fernandez who, before succeeding her husband as president, was a powerful senator.  It is a testament to Lula's popularity and charisma that, first, he imposed Dilma on his Workers' Party as their official candidate and, then, campaigned relentlessly for the Brazilian people to vote for her. But Brazilians are more politically mature than one might think, and they forced Dilma through a runoff before giving her the presidency. And her share of the vote (56%) was much less than Lula got in 2006 (60%) itself slightly less than he got in 2002 (61%). The trend is unmistakable: it reminds me of the Socialists in Spain in the 1980's/90's. Under Gonzalez they had an overwhelming majority which shrank and shrank until they became a minority having to resort to an alliance with regional parties (from Catalonia and the Basque country) to remain in power before the opposition finally got a majority of the vote.

My prediction: in 2014, provided the economy is still purring along (when I look at the 80% real estate price increase in Rio de Janeiro's posh neighborhoods, I wonder about a bubble in the making) and the World Cup is not a disaster, Dilma may scrape through with just over 50% in a second round of voting. 2018 will see the opposition come back to power, never a bad thing after almost 20 years of same-party rule.

In the meantime a first controversy awaits Dilma: will she be known as "Presidente" (the masculine form in Portuguese) o "Presidenta" (the female version)? (Also, I have yet to see her referred to as "Dona Dilma" the usual form for Brazilian first ladies from the days of the monarchy until now.) One of Brazil's most respected newspapers has already made up its mind: the Folha de São Paulo  has decided it will be "A presidente", but Dilma in her first speech after her victory referred to herself as "presidenta."  (In France we might have a similar issue in 2012 if a woman runs for president, many people, especially conservatives, insisting that a female leader is "Madame le président"; in the Hispanic world the feminine is used: Cristina Fernandez in Argentina is known as "la presidenta" as Michelle Bachelet was in Chile.) When linguistics and politics meet, things rarely remain dull.

UPDATE: The following picture (from May 2012 in O Globo daily) summarizes the previous issue quite well.

The event organizers gave her the title she wants:
the feminine "presidentA" but "O Globo" has decided
it is the masculine "presidentE" that matters

(The blogger has a second home in Rio de Janeiro where he spends part of the year. When the blogger is not in residence, his penthouse can be rented. Check out the Airbnb listing, also available on TripAdvisor/Flipkey and Homeaway. You can also rent it straight from the blogger)

Who Will Inherit PeopleSoft's Crown?

PRAGUE
Spending a few days in the fairytale Czech capital where I presented the DOs and DON'Ts of HR technology projects at the HR Directors' International Summit, I was surprised by how many of the 150 attending HR leaders asked me which vendor I saw most likely to inherit the mantle of HR technology leader now that PeopleSoft is slowly but steadily fading into the sunset. Here is my list of pretenders to the crown of industry leader.

The official heir apparent, Fusion, touted by Oracle as the successor product, can safely be ruled out since it has yet to be born (meaning it hasn't been shipped), has no customers live on it  and from what has been shown at various events and leaked, is missing many ingredients of a global Human Capital Management-HCM (payroll, localizations, recruitment).  Could the other ERP behemoth, SAP, take over? Its qualifications are indeed stronger as they include a higher number of customers around the world and a proven HCM system which, for all its faults (overly complex, not particularly user friendly, expensive) is now well established. However, to be recognized as the undisputed HCM leader as PeopleSoft was for a good decade, requires to be a visionary and trendsetter, something nobody has ever accused SAP of being - and let's face it: most SAP customers don't choose it for its HR offering, but usually for other business functions such as Finance and Manufacturing and then adopt HR which SAP still gives the impression of having developed as an afterthought.

What about the latest kid on the block: Workday? Although they are still missing  recruitment and learning modules and are pretty thin on the localization front, they have unmistakably provided the kind of innovation not seen since the PeopleSoft days. And I'm talking here not only about their SaaS architecture (nobody has ever tried a SaaS payroll before) but also about their unique customer orientation which has all the marks of transforming the industry. However, it's still early days to say whether this promising young prince has come of age to claim the crown.

These three previous contenders are all ERP vendors (or integrated business systems to the layman.) What about HCM-only vendors? After all, when PeopleSoft came to the market it was an HR-only product which, even after it morphed into a full-fledged ERP, remained its flagship product. Could the new king come from the rank of pure HR players? In the US, Ultimate and Kronos, while established vendors with solid products, cannot be seriously considered as they  fail on both the talent-management front and globalization. Neither can Lawson, too, whose half-hearted attempts at becoming a global vendor have been met with matching results.

Could it be that the next leading HR vendor would come from the Old Continent? After all, this is where SAP hails from. Spain's Meta4 was once upon a time close to being anointed as official heir with a revolutionary object model, full HCM offering, various localizations, a visionary knowledge-management approach. It had all the makings of a king in waiting until it f(l)oundered on a string of acquisitions, buyouts, management shakeouts from which it never recovered, happy to live off its established customer-base maintenance. IBM's high hopes in France-based HR Access never materialized  and it sold it off to Fidelity which, eight years on, is still unable to develop it in its own home market of the US (Meta4 wasn't more successful there, either), and it remains mainly a payroll provider with limited HCM functionality and an old technology focusing on some European geographies. 


What about outsourcing vendors? Taking a (smaller) leaf from the Oracle book, ADP has been beefing up its offering with various acquisitions, but it still remains to be seen how it will all play out and for the time being the Grand Old Lady of Roseland can only be considered as a long, long shot in the race to the top.


Casting our net wider in our search for this elusive king maybe that some talent-management vendors, the fastest growing segment of the HCM market, could grow into a mature HCM offering with all the thought leadership required to become the industry's leader. There are indeed some amazing products in this space. Will New Zealand's Sonar6 show that the sun indeed rises in the East? Although its performance product is one of the most innovative (with a truly impressive user interface) and the company one of the most creative around, it is way too niche to ever blossom into a full-fledged HCM offering, the key prerequisite to be considered as the leader. Only integrated talent-management vendors have  the wherewithal to reach the throne, or at least the steps leading to it. Taleo? Could be, if it manages to integrate successfully its newly acquired learning offering and decides to develop an HR administration module. Will it bring something altogether new to the industry?   


And here's the rub: none of these HCM suite/integrated talent-management vendors has really brought knock-out innovation, with the exception of Workday on the delivery model and, to some extent, customer relations. Here are some ideas that current or prospective vendors could consider:


1. What about a vendor that will rearchitect their offering, or build a new one, around a new HR data model that will bring a new way of managing employees, organizations, jobs and positions? Provide the flexibility and depth of functionality along with the ease of use required by 21st-century companies?   Will SuccessFactors, a clear leader in the talent-management space (but still without a learning system)  develop such a product that would be a marked enhancement on the old data design of  "SOP" (SAP, Oracle and PeopleSoft)? 


2. What about bringing to the market a full HCM solution built along the lines of a social network? Just like when PeopleSoft introduced release 8.0 with a full internet interface: since most people were used to working with a browser why not give them an HR tool based on such an interface, was the thought then. Following the same thought process, wouldn't it be great to have an HCM solution that looks like Facebook or LinkedIn? After all, many key HR processes such as recruitment or career paths, are better done now using social networks than any other tool. (I'm not talking here about the collaboration features slapped by some vendors on their offering more for show than for substance, but of a full-fledged social HR)


3. Or a user experience ( à la Sonar6, say) or quality of service/support that will at long last reconcile vendors and users? There is little doubt in my mind that whoever manages to reinvent the long-broken dialog between software provider and users will be offered the crown by legions of enthusiastic customers disillusioned by years of poor service and lousy support. 


4. What about open-source HR? So far, the only vendor that has gone down that road with some visibility has been OrangeHRM, but it still remains a very confidential offering and success for this model is far from assured. Or using Google  features (such as Google Search Appliance) for a recruitment tool whose database is the whole internet: after all, most CV's are now available for anybody's perusal on the web. Wouldn't it be great to just enter some key words in your Google search box and you get a list of relevant candidates?


5. Maybe "mobilizing" HR:  with a workforce increasingly mobile, maybe the market is ready for the first fully mobile HR offering. Again, as with social networks, I'm not talking here about redesigning a few screens so that users can fill their timesheets or do their expenses on their iPhone or Nokia (something which already exists), but having the full application written for smartphones. Just as people are spending more and more time on social networks so are they getting glued to their cell phones (even accessing the former through the latter.) What would be better than to give them the HR tools they need on their device of choice? 


6. Anything else that my limited cognitive abilities have yet to envision?


It is obvious that an indisputable leader has yet to emerge and convincingly claim PeopleSoft's crown. The King is dead, long live the King...if we can find one!

Colonial towns: Brazil's hidden gems

The Imperial Palace, former homes of  viceroys, kings and,
when the country was a monarchy, the Emperors of Brazil 

RIO DE JANEIRO
Ask most people what images they have of Brazil, and the four S's are conjured up: sex, sand, sun and soccer. While there's little doubt that the long Brazilian coastline is among the most beautiful ones in the world, that Brazilians have elevated the Beautiful Game into an art form and that the obsession with physical beauty is translated into perfect bodies galore (arrived at through nature or science) which  in turn mean a constant incentive to engage in Brazilians' favorite other sport, I would claim that there is a fifth S which is often overlooked, even by Brazilians: hiStory. That is a shame because throughout the five centuries since Brazil was conquered and settled by the Portuguese, they have dotted the continent-sized landscape  of the country with beautiful palaces, squares and churches which remain well-preserved to the day, thanks to Brazil never having had big wars fought on its territory nor particularly destructive natural disasters.

Since most visitors to Brazil are likely to enter through Rio de Janeiro, the country's gateway, let's start here, as I did in January 2003 leaving  behind me a snowed over Paris. (It was a historic date since Lula was being inaugurated as the first Brazilian president to hail from the country's majority poor people) Most visitors tend to congregate on the southern city beaches of Copacabana and Ipanema not realizing that just a 20-minute drive north, downtown Rio is packed with vestiges of its ancient past as colonial, imperial, royal and independent capital.

The Candelaria church stands its ground
amidst Downtown Rio's highrise buildings

The Renaissance-cum-Baroque Candelaria church is a splendid example of colonial Brazil, and one of its most opulent churches. It was initially built by a sea captain to express his gratitude for having survived a shipwreck, which explains the large panels above the nave. Nearby is the Paço Imperial or Imperial Palace with a long and distinguished history. Originally the residence of the Portuguese governor of Brazil (when Rio became capital of the colony in the mid 18th-century) it became in 1808 a royal residence when the Portuguese court, fleeing from Napoleon's invading armies, was transferred to Rio lock, stock and barrel (meaning King, Government and bureaucracy.) For the first time in history, a colonial city became the capital of the empire it belonged to. It's as if at the height of the British Empire, Queen Victoria had decided to move her court and the British Government to Toronto, Cape Town, Cairo or Hong Kong. This was the first and only time that a European monarch ruled from the Americas as well as from a colony. And when Brazil became independent in 1822 under the only local monarchy ever to exist in post-Columbian Americas,  Rio remained the capital city of the newly independent country which, unlike the nearby Spanish possessions which splintered off into separate states, remained a unified country under Dom Pedro I who ruled from this Paço Imperial. It was from the Palace's steps that Dom Pedro I's granddaughter, Princess Isabel, proclaimed the Freedom from Slavery Act in 1888. That enlightened gesture didn't bring her family good luck as the next year saw the monarchy abolished and the establishment of a (undemocratic) republic. The palace is now a museum/exhibition center, bookshop and café. Landmarks from royal rule in Brazil  abound in the area, incongruously mixed with modern skyscrapers in a  typically Brazilian disregard for architectural harmony. Particularly charming is the cobblestone street known as Travessa do Comércio lined by beautiful two-story colonial townhouses and which is accessed from the Palace through an arch known as Arco de Teles. For those fond of literature, many of the books written by Machado do Assis, Brazil's greatest writer, are set here as is, more recently, Era no tempo do rei, by Ruy Castro, a contemporary Carioca writer/commentator/journalist.  Between Old Rio in the Downtown area and the southern beaches (known to locals as Zona Sul), remnants of colonial life can be found. One of my favorites is the exquisite church NS da Gloria  (Our Lady of Glory) which commands lovely views over the sea-reclaimed Flamengo park.

Glorious church in Gloria

The Lapa Arches and Viaduct on top of which
runs the Santa Teresa tram known as the "bondinho"

The hilltop church, one of the finest examples of religious colonial architecture in Brazil, dates from the early 18th century and was the favorite of the Royal Family upon their arrival in 1808.  Seeing it suddenly emerge as you drive by, or magically lit at night, is quite eery.

Another great landmark is the Arcos da Lapa or Lapa Viaduct which gives the delightfully shabby  neighborhood of Lapa its distinctive air. Weekend nights are traffic free and the bohemian atmosphere of the area where students, artists, working class and posh Cariocas mix freely, is quite a heady mix, with or without the help of a caipirinha and to the accompaniment of  frantic samba rhythms.

I could spend acres of prose on the Marvelous City as Rio is known to the native Cariocas, so I'll stop here and move 200 miles southwest, towards the stateline with São Paulo. Here lies a jewel of a place: Paraty. Amerigo Vespucci, who gave his name to the American continents, said, when he spotted this shoreline of jutted peninsulas and secluded beaches, "If there were paradise on earth, it wouldn't be far from here."  And that is no hyperbole. Until recently the only way to get to Paraty was by boat; the scenic road winds along emerald-green mountains and takes about four hours between Rio and Paraty where I arrived in the last days of 2008 in less than glorious shape, bending over and relieving myself of my breakfast from where I had absorbed it: I had forgotten to take my motion-sickness pill. That was the only bad memory I have of the place. The pousada where I stayed was well located: a few minutes walk from both the old town across a narrow river, the Perequê-Açu, and a dazzling beach with pristine water. The views from my room on the bay and the town were breathtaking: few things beat sipping a caipirinha (the local cachaça or sugarcane liquor from which the drink is made is quite famous and I must say rightly so.) Its geographical seclusion meant that Paraty remains to this day both a great colonial relic and beach paradise, still safe from the horrendous hordes of mass tourism. But for how long? I'm pretty sure that in my lifetime Paraty will go the way of Dubrovnik, Prague and many other Disneyfied places. The town's irregular cobblestone streets are known as pés-de-moleque (street urchin's feet) and are often washed clean by rains or high tides, giving the city a tropical Venetian look. You can tell tourists from locals easily: the former tend to watch their feet as they negotiate the irregularly-shaped stones to avoid any mishap, whereas the natives just walk indifferently and never miss one. "How do you manage it," I asked them?

And they explained that you shouldn't step on the stones, but rather slide on them until your heel gets a firm grasp of the interstice between two stones. Then you shift to the other foot and repeat the same exercize. It takes a little while to get the hang of it, but after that you can just go about your business, enjoying the beauty of the place without ever risking to stumble.

Town view from the Perpetual Defensor Fort rebuilt in 1822, the year Brazil became independent

What makes Paraty so beautiful is not so much the architecture itself which, attractive as it is, isn't dazzling, but the homogeneous nature of it, the building's earthly colors and texture that magnify the natural beauty around it.

Let's now cross this gigantic country and hop 1,400 miles north towards the equator, towards Recife and Olinda which I visited over Christmas 2007. Recife, a  friend recently told me, has the largest colonial area of all Brazilian cities. It may be so but the day I spent there what I found overwhelming was the poverty and filth of this industrial city so by the mid afternoon I hailed a taxi and got back to Olinda, the sister city a few miles away.

Recife looms in the horizon from Olinda

The town's historic center sits on a hill overlooking the Atlantic and Recife.The twisting streets of colorful old houses and a plethora of scenic churches in various degrees of repair and decay make this well-preserved town a charming place to visit.

NS do Carmo church built in the late 1500's but rebuilt, like most other buildings, after the Dutch burnt the town down in 1631 

With New Year's Even upon us with a group of tourists I met we complied with the Brazilian tradition of seeing the New Year clad in white, as you can see in the picture where Dominique (a French teacher) and I are sipping from a coco gelado. Reveillon is a much tamer affair in Olinda than in Rio whose New Year's Eve bacchanals are as famous. (Olinda's Carnival, though, is considered as the second best in Brazil after Rio's.) By 2 am the streets were largely empty, which suited me fine as I was flying out the next day and needed some rest.

The Blue House, just down the street from the pousada where I stayed

Ceiling from St. Francis Convent in Olinda

Salvador's Pelourinho district

Of all Brazil's major cities, Salvador is the one with the largest and best preserved colonial neighborhoods (São Paulo, established almost at the same time time as Rio, has quite a few vestiges of its past in its old town dwarfed by the sheer size of South America's largest city.) Salvador's Pelourinho, with its African heritage, beautifully preserved houses, upper and lower towns was  immortalized in Jorge Amado's book, Dona Flor And Her Two Husbands which saucily and vividly captured the sights, sounds, smells and sensuality (another four  S's!) of Brazil's first capital city like nobody else - and it was adapted in a great movie made in 1976 with Sonia Braga. (I still cannot believe that he never won the Nobel Prize for Literature, when so many obscure and mediocre writers have.)

In terms of sheer density of beautiful colonial towns, nothing beats the state of Minas Gerais in the Brazilian hinterland which I visited earlier this year.  Scattered across the state, colloquially known as Minas (and from which hails Dilma Rousseff, Brazil's soon-to-be first female president ) are exquisite towns of wich the jewel in the crown is undoubtedly Ouro Preto. The City of Black Gold reached its heyday in the mid-18th century with a population of 100,000 people (New York then only had 50,000) before the gold boom petered out. The town, a UNESCO mankind heritage landmark, was the state capital until the end of the 19th century and still regains symbolically that status once a year when the state government moves there for a day. Being downgraded was a blessing in disguise as it helped the town preserve its colonial splendor.

NS do Carmo church on top of the hill,and to the left the Grand Hotel, the only 20th century building in Ouro Preto, by Brazil's most famous architect, Oscar Niemeyer who at age 102 is still working

Ouro Preto is cut by deep ravines and divided into several hills upon which narrow, crooked streets have been built. The gradient on some of these streets is so vertiginous that one can almost speak of vertical streets. Almost every hill is topped by a church such as the NS do Carmo across from which I stayed in a pousada occupying an old home. Since not all slopes of a hill have been built up, this with the surrounding mountain lend a unique and soothing bucolic atmosphere to the town. You feel, you are, in the countryside, as well as in a town with all urban amenities.

Church of NS das Mercês seen from my room at the Pousada Chico Rei

A close up of NS das Mercês

The Church of St. Francis of Assis is considered as one of the most important pieces of Brazilian colonial art, the work of prodigy artist Aleijandinho who carved the soapstone medallion to the cannon waterspouts and the military two-cross bar on the façade.

Fountain on the way to Santa Ifigênia Church. The long, vertiginously high way I should add

Traveling through the colonial towns of Minas Gerais is no easy task if you're a solo traveler relying on public transportation. Inter-town bus lines are few and fewer between with a resolute attempt not to coordinate their schedules: thus to visit a nearby town may mean waking up at 6:00 am and not being back before 9:00 pm. So I rented a car service, at the expected extortionate rate, to take me on a rainy morning from Ouro Preto to   Congonhas, further south. Congonhas is a small industrial town which has been saved from complete obscurity by the extraordinary collection of lifesized statues of the Old Testament Prophets outside the local church. They are considered as Aleijandinho's masterpiece and to be able to walk around them and see them perform their miraculous ballet is worth the trip to the town.

Aleijandinho's Prophets in Congonhas reminded me of the outdoors  statues in Florence. And like Michaelangelo's David, they will soon be transferred under the roof of a nearby museum. I was lucky to be one of the last to see the originals where they stood for over two centuries. just as I was lucky to see the Lions of the Sacred Way in the Greek island of Delos before they were removed to an indoors location  

One the 12 items that make up Brazil's best known work of art. When he worked on them, Aleijandinho was old, sick and crippled. Fingerless, he had his tools strapped to his hands  

Late morning saw me resisting my driver's entreaties to drive me to Sao João del Rei (at another outrageous rate) and asking him to drop me at the local bus station where I knew there should be a bus within an hour for my last destination, which I reached a little around two pm, heading straight for the Ponte Real, the town's only 4-star hotel. Of all the colonial towns of Minas, SJDR is the only one that has managed to grow a modern city that sits next to the old one in a complete symbiotic relationship. (It is also the home of the powerful Neves political dynasty)

Church of NS do Carmo designed in 1732 by Aleijandinho (Brazilians seem to be lacking in creativity when it comes to church naming) 

Baroque St Francis of Assisi, south of the canal. Aleijandinho did the sculpture of the Virgin  above the door. 

St. Francis is a gem. The church's oval shape, which can be seen both from outside and inside, is stunning, as well as well as the polychromated wood sculptures. I visited it one afternoon under a scorching sun. 

Typical Aleijadinho cherub with
chubby cheeksand wavy hair

A Beetle passes St Francis

Ten miles down the valley from SJDR lies one of the prettiest towns I have ever seen. Smaller than Ouro Preto, its quaint colonial houses stand against a dramatic background of Serra de São José mountains and, when lucky as I was, stunningly blue sky. They sure don't make pretty towns like Tiradentes anymore. And to reach it is on a  par with its quaintness and charm. You board a rickety, smoke-billowing 19th-century train which chugs its way along a beautiful bucolic scenery.

Despite the less-than-discreet presence of sundry antique stores and whimsical boutiques, the town retains a powerful allure.

St. Antony's Church named after the town's patron saint. The frontispiece is by (who else?)
Aleijandinho. The church has an stunning all-gold interior

At the end of what was by all accounts a lovely day marred by only a mediocre lunch, I took the chugging train back to SJDR and the next day I was back in Rio, closing the loop on what had been the most comprehensive and satisfying of all my "colonial" trips. Visit Brazil and miss these urban and historical gems at your own loss. (Another loop was also closed as Lula, after an amazing 8 years in powers in which the country surged to big-power status, economic prosperity, lesser income inequality making him the most popular elected leader in the world with an astounding 80% approval rating, was about to stand down)

(The blogger has a second home in Rio de Janeiro where he spends part of the year. All the pictures were taken by him. When the blogger is not in residence, his penthouse can be rented. Check out the Airbnb listing, also available on TripAdvisor/Flipkey and Homeaway. You can also rent it straight from the blogger)