Fred Hoyt's Travels

Mum’s the word
May 12, 2019 Livingstone, Zambia
If you’re looking for a way to impress Mum on Mother’s Day, here’s what worked well for me today:

First, select a four-star resort in an exotic location. Say, Zambia, a country of 16 million people, with 72
languages, 11 of which are considered major enough to be province specific and taught in the schools.
Studies indicated students achieved more if taught in the local languages than in English (at least
through high school). Check.

Second, it helps if the resort is in the midst of one of the seven wonders of the natural world, (I think
there must be hundreds of top seven) like Thunder in the Smoke Falls (the original name before
Livingstone honored his queen and they became Victoria Falls. Check.

Third, make sure the resort offers an interesting variety of optional activities (other than the usual
Olympic-sized swimming pool, superb dining room, and bedrooms with mosquito netting and other
exotic indications that you are in the tropics).These options could include:

1) A private tour of Victoria Falls, along a part of the trail that’s handicapped accessible and dry, in
case she’s concerned about having wet hair. Be sure it is early enough in the day to boast
multiple rainbows. That makes for neater pictures, along with the mist (smoke) and roar
(thunder).

2) A view of the falls from above is a must, whether it’s an ultralight (personally recommended), a
helicopter, or, for the risk takers, a multilight flight. You can’t take a camera with you for the
ultras or the multis, but a go pro takes pictures every ten seconds, and you can buy that as a
once-in-a-lifetime gift. It’s an added benefit if the pilot drops down over the national park to
show you the endangered white rhino or a herd of elephants.

3) It’s a long walk to Zimbabwe, which shares the falls with Zambia, an extra visa, and an extra
charge for admission to the Zimbabwe side, but you do have the opportunity of getting another
stamp on your passport, a walk across a bridge that was originally part of the vision Cecil John
Rhodes had for a Cape-to-Cairo railroad (and now in addition the site of a bungee jumping
station). The Zimbabwe side has the deeper channel, with most of the water all year round. In
May, the beginning of winter, the falls are almost at their peak, so it’s not essential to go to the
other side. It does, however, offer access to the town of Victoria Falls, which has a wonderfully
luxurious colonial hotel.

4) Fourth, there should be a lot of nature walks—a safari, a boat safari, a lion walk (they’re fed and

tame), an elephant ride, and a walk with cheetahs, which can be lovable cats, we learned, if

they’re born in captivity and well fed before you arrive (about 10 pounds of meat a day).

5) Fifth, a sunset cruise on the Zambezi River (almost 2000 miles, but we did not do that much of
it), or a canoe/kayak trip, doing your best to avoid the most dangerous animal—the

hippopotamus, while enjoying that floating submarine from a safe distance. (and you doubt it
when I write that tourism is the world’s biggest business).

Finally, top off the day with a dinner at the five-star sister resort, the Royal Livingstone, whose
dishes include venison (it’s a kudu, we were told)—and you can sample some local dishes, including
worms, which some of our faculty did. (Incidentally, they were ok).

And if you stick around for a few days (we’re leaving for Botswana tomorrow), you’ll eventually
learn why it took so long to find Livingstone; I’ve been asking for Dr. Livingston, and, as you clever
readers have discovered, it’s spelled with an “e”. He’s now commemorated as one of the few
colonial heroes with a statue on both sides of the border, and spelled with an “e.”
Hope you’re mum’s day was as pleasant as ours.

Cape Town, May 8, 2019

The Chinese word for scenery combines the characters for mountain and water.   In that sense, the Western Cape certainly has the two, which help explain both the allure and the history of the Cape Colony.

The Cape of Good Hope was first rounded by the Portuguese explorer, Bartholomew Diaz in 1488.  Being a sailor, he named it the “Cape of Storms.”  King Joao of Portugal (or his astute marketers) rechristened it the Cape of Good Hope, based on his good hope that it would help Portugal secure the spice trade recently closed off by the Ottoman conquest of Constantinople, effectively closing the Mediterranean route to the Spice Islands.

Joao was right; it did open up the way for Portugal’s global sea empire, but not necessarily the opening of Cape Town.  That took the Dutch supplanting the Portuguese (and nearly 200 years) until the Dutch East India Company established a fort, now the Castle of Cape Town.  We visited this wonderful outpost of the VOC (the company in Dutch) and learned a bit more about the colony under the Dutch.  Come and settle, help us re-provision ships bound for the Indies, and increasingly, fight off the locals (the Khoi-an and the Dutch fought some 17^th century wars; the Khoi-an were outgunned, but recognized the matchlocks did not fire when wet, so attacked during rain storms, and thus stalled the inevitable).  In the meantime, the Dutch built a hedge around the colony to keep the Khoi-an at bay, and the company also invited French Protestants (who had fled to the Netherlands when Louis XIV revoked the Edict of Nantes, which had tolerated Protestants) to add muscle and viniculture to the colony; the French were allotted another encampment, still today called French town in the Afrikaner language.

That lasted until the Napoleonic Wars, when, to keep Cape Town out of the hands of the Napoleonic French, the British seized Cape Town twice (giving it back during a temporary truce in the Napoleonic Wars), then landing 7,000 troops, armed with a letter from the Prince of the Netherlands, then an émigré in England, to hand over the property; the command at the Castle, despite working under the Batavia Republic (Napoleon’s stopgap until he could name his brother King), and facing the overwhelming force, surrendered what was to become South Africa.  

The local Dutch, known better as the Boers, then began nearly a century of efforts to either accommodate or expel the British.  After Britain abolished slavery in the 1830s, the Boers trekked across the mountains to another area, and set up at least two Boer-led states (the Orange Free State and the Transvaal), lasting until the Union of South Africa was created in 1911.  The existence of three capitals attests to the lingering results of those wars.  Parliament meets in Cape Town, the Executive capital is in Praetoria (recently renamed; Praetoriawas the commander of a contingent that defeated the Zulus in the Battle of (aptly named) Bloody River, when 5000 Zulus were slain; and the Supreme Court is housed in Bloomfontein.

I said mountains is part of the scenery, both literal and historical, too.  One handle is provided by Cecil John Rhodes, who at the time of his death in 1902 was the richest man in the world.  Like the robber barons in the contemporary United States, Rhodes was both ruthless (and in this country a racist), and a philanthropist.  He came to South Africa from London to seek a cure for TB, and wound up taking advantage of the discovery of gold and diamonds (he forced his competitor to sell, creating the DeBeers company, a relative monopoly on diamonds). The philanthropic part included the National Botanic gardens (we were there; that’s where I saw part of the hedge the Dutch governor had planted in one of the early efforts to separate the races), Rhodes Scholars, and the grounds and buildings of the University of Cape Town, one of the three premier institutions of higher learning in this country of almost 70 million. I think when I was here four years ago, there were student protests to remove Rhodes’ statue from the most prominent part of the UCT campus, and my understanding is that it is now in the National Gallery in London.

As for Cape Town, the setting really is scenic.  The harbor has been one of the major transshipment points for the country, though during the apartheid period (1960s through the 1990s) South Africa was an international pariah, and the port languished.  A company recreated the area as a major tourist shopping and eating mecca (we’re a block away), but we’re visiting the Port Authority so I should have a better handle on what happened to it.  Table Mountain, a 3500 foot high block of granite is one of the three most visited sites in the country, accessible on foot or by a $50 funicular trip; it was ranked as one of the seven wonders of the natural world, alongside Ha Long bay, which is high praise indeed.

And there is something spectacular about the end of the peninsula, about 45 miles away, where sits the Cape of Good Hope, the furthest Southwest point on the African continent.  I still marvel looking south and seeing nothing until Antarctica (I swear I saw it last time I was here), and we’re only at the 35^th parallel, roughly even with Buenos Aires.  I wonder what Diaz would have said had he had to sail another 30 or so degrees further to round the Cape.  Storms might have been one of his gentler  epithets.

The election today dictated the day of our nonbusiness visit to the Cape, which included one of my favorite stops—the penguin colony near Simons’ Town.  From a couple (they’re monogamous) in 1982, along with some serious environmental efforts including reduced fishing in False Bay, the colony has around 2,200 cute-as-a buttons in tuxedo-like attire diving and swimming (7 km per hour) to the amusement of nearly half a million visitors a year.  There are only four species of penguins and they all live in the southern hemisphere.  The colony here has been renamed African Penguin; they used to be called Jackass Penguins (and if you hear them, you’ll know why), but that probably is no longer politically correct.

Speaking of which, I’ll have some reflections on what has been billed as “the most important election in the history of South Africa.”

May 6, 2019

School started today when we officially gathered the 30 faculty who are on this trip for what was our (so first day of schoolish) introduction to the teachers, each other, and the topic of the course.  Professor Rolfe, our host from the University of South Carolina spoke for about an hour and a half describing doing business in Africa (mostly sub Sahara Africa), covering as only he can, past and present, cultural and economic, and putting the economy and the election into perspective.

However, Carolyn and I  had already spent our last “weekend” before school enjoying just being in Cape Town.  I think the indulgence was deserved.

We arrived Saturday and that in itself was adventure (her bag arrived Sunday; someone mistakenly took her black suitcase for hers; we took someone else’s black suitcase thinking it was hers—don’t ask).  So we had a day and a half to exorcise our substantial jetlag.  Even though my GPS says we’re “only” 8590 miles from Bloomington, it’s a loooong flight.  1 ½ hours to Atlanta; almost 9   hours to Amsterdam; and about 11 hours from Amsterdam to cover the almost 6500 miles to Cape town.

Carolyn spent much of the flight (you can run out of films you want to see pretty easily, and peasant class is a tough one to sleep through) questioning my routing.  “Why didn’t we go straight from Atlanta to Johannesburg?  We’re flying home that route.  Planes must go both ways.”  Turns out THAT route is 18 hours, too, depending on headwinds, so there’s nothing to be gained.  The Atlanta Johannesburg route, apparently, is the second longest in the world.

But we got here, eventually, and had arranged a tour with my guide from four years ago, targeting some places I had not seen last trip—Table Mountain and Stellenbosch—together with some sampling of the famous vineyards of South Africa.

Sunday, I had wanted to take the cable car up Table Mountain, but it was Sunday and mobbed; if we’d gotten into the lines, we’d probably still be waiting for the ride up.  Table Mountain, which looks like a table (it’s sandstone peak has eroded, and it is flat, marking Cape’s location as one of the most memorable physical locations for a city);alas, we contented ourselves with the view from the road, a trip to nearby Signal Hill (where Carolyn firmly said  No Way to my plea to test paragliding),  thence to the “Green belt” and the winelands around Cape Town.

Our guide has an interesting perspective on South Africa, being descended on her father’s side from the original 250 Huguenot (French Protestants) welcomed by the Dutch in the mid 17^th century to help establish the colony as an agricultural way station on the route to the Indies.  Grow crops and raise beef, and reprovision ships on the route, and you can settle in French town; even then, the Dutch (better known as the Boers) had thoughts about who belonged where. The Huguenots brought viniculture, and thus was born one of South Africa’s prominent exports.  Though not being able to label bubbling wine “Champagne” –I learned that’s protected by the treaty of Versailles (since the US never signed it, Taylor can label its New York bubbly Champagne), the region produces world class wines. One, pinotage, is a local contribution, grown from pinot noir and another variety, perfected by a professor (we’re not all theoreticians) in 1925, but not commercialized until the 1960’s, as well as a mix of mostly dry and some sweet wines.  We hit three of the wineries, one for lunch, about two short of what is “recommended”. (Can you imagine the consequences of sampling 5 wines at four wineries?) We learned about the varieties—four of chardonnay for example, and why this area is so good for growing wines, and how different wines depend on process, weather, kind of wood, how long aged, shape of bottle—an education no doubt.

Our guide,who speaks Afrikaans, a simplified descendant of Dutch with no genders, which is one of the major languages in South Africa (there are 11 or so), told us about her family’s history during the Boer War.  We know it primarily because of Baden-Powell, the general commanding British forces during the siege of Mafeking; as a result, he thought British boys needed to become more “manly” and started Scouting for Boys (resigning from the Army in disgust after World war I to turn scouting into a force for peace.  Christelle’s “grannie” and her family were put in concentration camps (the Boers fought the British for nearly ten years in the second Boer War).  She said they survived because her aunt was a nurse who was able to get extra food rations.

For South Africa, the result of the war was the peace among the whites that led to the formation of the Union of South Africa in 1911.

The other discussion in the winelands had to do with the important issue in the “biggest election in South Africa’s history”—land reform, since the vineyards are large plots of land in a country where 73%  of the land is still owned by whites.  One of the 3 parties, a new populist spinoff from the ruling (since Independence in 1994) African National Congress has introduced a “land seizure without compensation” amendment to the current constitution.  The political situation is quite complex, since the parties list their candidates (all 400 apparently, in order of preference) and the election is based on the number of votes for the party.  If you poll 60% of the vote, you get 240 seats in Parliament. And the party votes for the chief officer.  The theory is that every one gets represented.  It will be an interesting time to be here.  We’re doing a tour on Wednesday, partly since most businesses will be closed in this national holiday.

How Beer Saved the World
Posted on May 25, 2019 by Fred Hoyt
May 17, 2019 Sandton City, South Africa

How Beer Saved the World was not a term paper turned in (year after year) by the Sigs, although I know several who might have penned the original. Instead, it was our introduction to “The World of SAB Beer” museum, belonging to the newest member of the InBev global empire. The museum spoke more generally about the origins of beer (the Save involved the Egyptians, who initially developed the drink) than it did about SAB. While there was an African libation made with sorghum (we were given a sample in the mock up of an African village), the Castle brand—still made today—originated in the gold rush around Johannesburg in the late 19th century. Interestingly enough, blacks could not buy the beer legally until the 1960s, but a thriving social community invented the shabeen, a saloon in a house (as part of apartheid, blacks were segregated into townships), where African jazz developed.

SAB has a footprint in Africa, which is part of the reason InBev bought it. This is a great place to do business if you can navigate the drama, and SAB seems to have done so. We saw exhibits involving the growing of hops and barley and malt—I think my fraternity lads would have treasured every moment, though they might have been impatient for the taste test. The exhibits also included a gold mine (so you could see why miners were thirsty), a pub, and several huge copper pots. The major change we saw was the availability in the gift shop of Budweiser, Stella Artois, and Corona mementos, in addition to the local brews.

The other business visit was one of my favorites three years ago, to AngloGold Ashanti. The company is the biggest in Africa, and one of the top three in the world. Headquartered in Johannesburg, it’s in the process of putting its last mine (“you’re sitting on it,” he said) up for sale. South Africa, he reminded us, has been responsible for 2/3 of the gold in the world. Today, however, AngloGold has operations in Australia, Latin America, elsewhere in Africa, and is eying projects in Minnesota and Nevada. 27,000 employees work for the company, though the days of cheap labor are long gone. Our faculty guide pointed out that to get mine workers, the government ordered blacks to pay a new tax in hard currency, which broke the agricultural economy and weakened family structures in Africa as the men moved to the cities to work in the mines. Unions came in the late 80s as an important part of the struggle to end apartheid, and he said personally he was glad to be able to negotiate with a union rather than 27,000 employees.

The speaker talked about sustainability—in a way that initially surprised me. “Sustainability,” he suggested, “is not what you do with money, its how your make your money.” Bear in mind he’s in a business that is dangerous and certainly under fire from activists. As he noted, everyone wants the iPads and cars and other goods made from metals, but “not in my back yard.” He showed us a list of projects that were either cancelled, delayed,, or put on permanent hold. Hence, the mining industry has had to factor sustainability into its thinking. He talked especially about working with communities as the key to the mining industry. Another challenge was to make sure the revenue went to improve society, rather than lining the pockets of politicians (today’s local newspaper had a letter to the editor questioning whether there were any honest politicians in South Africa).

He did make one point, though, that I hadn’t considered, and I’ll have to work it into my strategy class…the prevalence of funds that invest in companies that are sound on Environment, Society, and Governance (ESG). I think he mentioned something like 7 trillion dollars at stake. And if you don’t qualify, the cost of capital (interest on borrowing) moves upward. His conclusion was that’s the only way companies will respond to ESG activists. Interesting perspective! He was one of my favorites this year, too.

“Africa is a great place to do business . . . if you can navigate the drama”
May 16, 2019 Sandton City
“School” started again (loved that four day weekend), and we had a full day of business speakers. The
overall theme reminded me of a comment a speaker in India contributed to my repertoire, “Whatever
you say about India, the opposite is also true.” The same may be said about the African continent, as
our four speakers assessed business options from the optimistic to the (at least my conclusion)
pessimistic, “Who’d want to do business here.”

The optimists tend to point to the future. There’s the simple demographic of a young population,
growing exponentially, now reaching about the size of China/India. There is no doubt that there is
wealth, some of it potential.

Johannesburg is a case in point for both extremes. Located on the site of the discovery of a gold mine in
the 1880s, the city remains the commercial capital of South Africa, and perhaps the single most
important business center on the continent (Kenyans and Nigerians might take exception). The area
where we are located, Sandton City, has the most expensive real estate on the continent. On the other
hand, though the mines once supplied over 2/3 of the world’s gold, AshantiAmerican (we’ve visiting
tomorrow), whose pedigree traces back to Cecil John Rhodes, announced it is selling its last mine in
South Africa. That mine is 4 kilometers underground, requiring half of an eight hour shift just to get to
the vein. Plus, doing business in South Africa can be costly. Once using coerced labor under apartheid,
the mines are now unionized, and the unions are one of the three legs of the ruling African National
Congress (the others are the Communist Party and the revolutionary descendants). Strikes are allowable
in the constitution, and it’s difficult to fire workers. It costs the company more to mine the gold than the
current price on the world market.

There you have both the alpha and the omega of doing business here. Potential, some reality, and many
problems. As another example of the wealth, we’re located across from the Nelson Mandela Mall, which
makes Oakbrook look like K-Mart. If there’s an upscale store anywhere, it’s here. And the mall is
multistoried and several blocks long.

As for Johannesburg itself, it’s unusual to have a major commercial city that’s not on the coast or a
waterway. Its population is about 4.5 million. The central business district, when apartheid ended,
suffered from violent riots. We’re driving around it tomorrow, but I remember the area had very high
vacancy rate, with the tall buildings having perhaps shops on the ground level, and broken windows
above. The major businesses then moved to suburbs like Sandton City. It’s rather like Chicago with all
the corporate headquarters moving to River Forest, to take a Chicago comparison.

One of the businesses that presented today I remembered well from three years ago. It’s Discover
Vitality, in South Africa, an insurance and financial services firm with a distinctive spin. When you
become a member, you get an Apple Watch that you can get for free—if you practice healthier living.
For example, you get points for working out, for eating healthy, for stopping smoking. Your rates go
down, and you qualify for prizes, such as plane trips. Discover rolls out new products every year to keep
the buzz, and has added auto insurance (your watch monitors your driving) and a bank (get extra
rewards for saving more for retirement). Discover has also bought companies overseas (UK), and
partnered with or franchised its software to the US (John Hancock) and China (Ping An Insurance
company). It reinforced what one of our speakers (he runs a company that consults with various state
governments, and American and foreign businesses on how to do business in Africa) suggested was a
potential for the future: African solutions to global problems. The global problem is the BIG FAT
problem, which Discover has addressed by changing behavior. It’s not surprising that one of the
company’s consultants was Dan Ariely, one of the leading behavioral economists. His book, Predictably
Irrational, is a primer in the field.

While Johannesburg still has some mining—platinum, for example—South Africa’s biggest challenge is
the need for social initiatives (to decrease poverty and reduce really high unemployment) and economic
initiatives (encourage foreign investment to aid, for example, in the renovation of obsolete power
facilities). The system of Black Enterprise Empowerment puts some restrictions on foreign businesses in
the South African market. There are requirements for black ownership (26%), black management, use
of black owned suppliers, skill training, etc., that the GE speaker described as requiring him to plead with
corporate headquarters for additional funding and support. We were also told that American
businesses, though providing only 2% foreign direct investment, have been responsible for 20% of the
“transformation” of the economy (“I meet a lot with our compliance people,” the GE executive said),
demonstrating the challenge of balancing social and economic initiatives.

And as he pointed out, “Africa is a great place to do business… if you can navigate the drama.” Right
now, the drama is probably higher in South Africa than in many other places on the continent. South
Africa, once touted as one of the BRIICS (Brazil, Russia, India, Indonesia, China and South Africa) for the
future of business, has had slow economic growth and a slew of problems. The business community is
no doubt looking to see what happens as a result of last week’s election. That’s part of the drama here.

May 11, 2019

Perhaps the most famous words in African journalism in the 19^th century were Stanley’s quest to find Dr. Livingston [sic] , a medical missionary/explorer who was the first European to see Victoria Falls.  Partly in honor of finding what is the number one tourist spot in Zambia, the grateful British renamed Constitution Hill in his honor.  That’s the city we’re at today, 1200 miles and 16 degrees north of Cape Town (I almost said “Los Angeles,” a city it resembles), and we’re here to “discover” Victoria Falls for ourselves.

We packed a lot into the last day in Cape Town before we left at  5 am this morning.  We had three visits that helped put a little more heft into our understanding of the Western Cape’s role in the South African economy.  Cape Town generates 11% of the country’s GDP, mostly by providing financial and business services, as well as being the hub for agriculture and agricultural exports.  The economist for Wesgro, a kind of chamber of commerce for the region, gave us the kind of reasons she gives potential investors: if you’re seeking a footprint on the African continent, Cape has an educated work force (4 major universities), a 17% lower cost of living than Johannesburg and 60% less than New York, and a business friendly government.

A visit to the Port facility confirmed many of her statistics.  Part of a government run business that manages freight trains, pipelines, as well as 8 ports (the largest being Durban, in the Indian Ocean, the harbor at Cape moves 86% of the country’s fish exports, 60% of its beverages (read l million bottles of  wine), and 50% of its agriculture in general.  The biggest exports to the United States are usually metals and minerals, especially platinum.

The dockage includes some exotic features, such as a freezer terminal (to keep the fish at -10 C), and two rather interesting special features.  We had to take a breathalyzer test to get into the facility; the manager emphasized the importance of safety.  The port requires one of its pilots to get the ships into the harbor, and sobriety is essential.  What was probably the neatest feature of the visit was that the control tower is 11 stories high, and from its walkway, we had stunning view of the waterfront area and the harbor.

On the way back to our hotel, I got dropped off at one of the museums I had marked as a “must do”—e the Old Slave Lodge, which had been an old slave lodge where the Dutch East India Company kept its company-owned slaves.  Ironically, the building subsequently saw service as the location of the Supreme Court before it was reconstructed.  What I learned was that 1) the first ship carrying slaves arrived from Portuguese Angola in 1658; 2) the majority of slaves came from Mozambique or from the Indies.  The latter helps explain the persistence of a Muslim community in Cape, the so called Bo-Kaap area, with its colorful homes and mosques; 3) Britain outlawed the slave trade in 1807, and frequently enforced the law by capturing slavers and releasing the victims (though frequently as indentured servants); and 4) Britain banned slavery in 1834, which was one of the triggers that set the Boers (Dutch for farmers) trekking east and establishing republics, that were to last until the second Boer war.

I didn’t want to leave the subject of Cape without mentioning the election last Wednesday.  Our third visit yesterday was to a newspaper agency which had a post that captured “much about muchness.”  The ruling African National Congress got a majority, as expected, but was down about 5 per cent from the last election five years ago.  The Democratic Alliance won the Western Cape and will have the premier, but it also lost percentages from five years ago.  The winners were the left and right extremist parties; though they have small numbers, they still will be represented in parliament because of the proportional seating.  Everyone claimed victory.  Perhaps we’ll know more when we return to Johannesburg next week.

One other important (for me) Cape factoid: in 1641, before the founding of Cape Town (and maybe one of the impetus for it), a Dutch ship’s captain was lost.  What was “found” was the Legend of the Flying Dutchman, one of my favorite Wagnerian operas.

We’ve got a variety of activities available tomorrow, but tonight I’m looking up at Orion, who left our hemisphere a few months ago to move into the southern hemisphere.  As I mentioned, we’re 17 degrees south of the equator.