MGM vs. Grokster

Today the Supreme Court will hear MGM vs. Grokster. For the uninitiated, Grokster is a peer-to-peer software that allows users to share content such as music, movies, games, etc. over a decentralized network. Last summer, p2p networks such as KaZaA, Morpheus and Grokster escaped Napster's fate by claiming that, because there is no central server acting as a clearinghouse for content piracy, the proprietors cannot control how the users use the software.

This case pits the major labels against file-sharing services in a battle royale that, as CNN/Money notes, has attracted all sorts of strange bedfellows:

Grokster has drawn extraordinary interest, not just from the technology industry but from groups like the Christian Coalition of America, the American Civil Liberties Union, the National Taxpayers Union and the commissioner of major league baseball.

One pair of strange bedfellows: religious and "pro-family" groups -- typically at odds with the entertainment industry over on-air nudity and profanity -- are backing Hollywood and the music labels in the case because they think peer-to-peer is widely used by pornographers and other miscreants.

In Grokster's corner are a lot of artists and emerging technology companies, who have filed friend-of-court briefs, according to Wired. These include Feedster, Kaleidescape and Slim Devices, along with 20 artists so far, including Heart, Chuck D, DJ Spooky and Brian Eno.

Also joining the fray is Dallas Mavericks owner Mark Cuban, who made his billions by selling the multimedia and streaming company he founded, Broadcast.com, to Yahoo! in July 1999. Cuban is funding the Electronic Frontier Foundation's defense of Grokster, arguing that shutting down Grokster would stifle innovation in the digital media space:

If Grokster loses, technological innovation might not die, but it will have such a significant price tag associated with it, it will be the domain of the big corporations only.

It wont be a good day when high school entrepreneurs have to get a fairness opinion from a technology oriented law firm to confirm that big music or movie studios wont sue you because they can come up with an angle that makes a judge believe the technology might impact the music business. It will be a sad day when American corporations start to hold their US digital innovations and inventions overseas to protect them from the RIAA, moving important jobs overseas with them.

Thats what is ahead of us if Grokster loses.

Of course, there's some self-dealing in Cuban's stand, given his big bets on digital film production, distribution and exhibition, but I don't fault him for it. Among the things I appreciate about p2p networks is how they've democratized the delivery channel for content, wresting it from major labels, large record store chains, Clear Channel and MTV, and placed it in the hands of anyone with an Internet connection. In a sense, these networks represent a symbiosis between distribution and consumer preferences, hence the existence of Big Champagne.

I admit that I'm skeptical that Grokster will be able to successfully argue that its technology is used to do much besides violate copyright, but I think the bigger question is whether p2p poses the threat of sustained, long-term damage to content creators and owners. For the little guy who just wants to get his music or film out there and any artist trying to reach new audiences, p2p has been a blessing. For well-known acts, p2p has been a real threat because, let's face it, you don't need p2p to discover OutKast or Usher.

Long-term, p2p represents an opportunity for content creators to cut costs and market more broadly than ever before, particularly as broadband adoption hits critical mass. For customers, that means an ever-increasing diversity of content offerings and, for the short-term, of means to receive content. Invariably, the market will reject most of these models and coalesce around a handful, but that timeline shouldn't be cut short artificially because old-line businesses have the deeper pockets and thus the better lawyers. Those are some of the reasons I hope Grokster manages to survive this battle.

Still, the absence of any licensing structure to date has made monetizing the p2p distribution process shaky at best. And it may stay that way for a while, given the barriers posed by publishers like BMI and ASCAP, who, presumably, will want their 8.5 cents a spin no matter what happens.

My last thought is that it's easy to thumb your nose at the majors and demand that they adjust their business models to respond to the technology, as if a changing a business model is something that can be done with the flick of a switch. Change hurts and it's proportionally more painful as the organization gets larger. It's usually accompanied by layoffs, which I suppose are inevitable in this situation.

Big Music opened a Pandora's Box when it released the CD and thereby put music in binary code. Music and, by extension, film have gone from being packaged goods to information goods and, as Cuban grasped early on, any business that hopes to continue in this space should have a model that reflects that fundamental shift in economics. For a cautionary tale, see Kodak.

As I've seen firsthand studying the unit economics of iTunes, there economies of scale are certainly there in the single-song, mp3-style model of packaging and delivering music. The question is whether this model will ever bring the gross margins that Big Music wallowed in during the late 1990s, when $20 CDs were, for the most part, the only game in town and people had the disposable income to afford them.

D'oh.

D'oh.
Originally uploaded by Tommy Perkins.

So I'm out snorkeling and I have no idea what I'm doing or what I should be looking for, besides the obvious fish, rocks, coral and such. Jamie gets the camera. The camera is in the same shirt pocket as the ring I'm about to offer her. I look up as she's taking this photo and go under water again. When the realization hit me, my body contorted as thought I'd been electrocuted.

Mountain Shrine Buddhas

Mountain Shrine Buddhas
Originally uploaded by Tommy Perkins.

Jamie and I had marched 1,237 steps up a mountain to see this site and had to hustle to make sunset. Of course, you'd need a fisheye lens to capture a statue so huge, so I had to be creative. This shrine is near Wat Tham Seua, or Tiger Cave Temple, and the views were breathtaking.

TP and JH atop elephant

TP and JH atop elephant
Originally uploaded by Tommy Perkins.

I had a few caption ideas for this one:
"Sure, an SUV will get you there faster, but, for style, nothing runs like ..."
or
"And here we are atop a mobile Chang brewery."
There's probably something exploitative about this excursion, but I just had a dumb curiosity about elephant trekking. An hour later, I was sated.

Signing off from Singapore

[I’d hoped to post this before heading off to Thailand, but I never had the chance. I’ll be following up with more from Thailand and, looking ahead, I hope to discuss more on another passion of mine, digital delivery of music, film and other art. Anyway, here’s what I wrote roughly a week ago upon leaving Singapore for Bangkok:]

Following an eight-hour Powerpoint marathon of presentations (mercilessly, ours came last) at the National University of Singapore and a subsequent “capstone” dinner, things are concluded in Singapore and thus for the school portion of this excursion. So, before I mentally check out for Thailand, I’ll try to divine whatever lessons on this trip that recency permits.

I’m satisfied with our work and feel some indifference about whatever grade we receive. I don’t mean to sound sullen or defiant about this, but I’ve noticed that business school tends to train consultants, rather than managers. No surprise, considering the rate at which MBAs take consulting posts. I guess my thoughts echo those of Henry Mintzberg, whose book, Managers, Not MBAs, I look forward to reading. Still, nowhere is this tendency more evident than in the style-over-substance, analysis-over-action emphases in the average MBA presentation. Business schools are notorious for being havens for Excel and Powerpoint virtuosi who, upon penalty of a Singaporean caning, couldn’t tell you which way is up in the simplest business scenario.

Personally, I suspect a lot of the As I've gotten have been for projects that are still collecting dust on comapanies' shelves (probably deservedly so). So, for a swan song project, perhaps this one will be different.I think our work answered some hard, granular business questions. Our client is considering moving a substantial portion of its hard assets to a third-world country and to address the matter with a 30,000-foot view would be wildly inappropriate. I doubt I need to be disabused: I'm sure we bored people to tears with our detailed risk analysis, in-depth discussion of tax considerations and business entity formations, to say nothing of our extended commentary on what Vietnam’s impending WTO accession implies for business law and accounting standards there.

Apologies for the rant. This really was an exceptional trip and I hope this blog shows how enlightening this experience was for me and how much I enjoyed it. I got close to a lot of classmates with whom my only previous interaction was a nod in the halls at McCombs. I managed to unburden myself of some of my churlish, Western-centric view of the world. I avoided the plethora of illnesses that can wrack a large group of Americans traveling in Southeast Asia.

I look back on all of this with gratitude: to the trip organizers who kept our activities informative and efficient, to my classmates who refused to suffer a dull moment, and to God or whatever divine force that afforded me the mental clarity to get as much out of this as I have. Lastly, thanks to you, the reader, for playing along and offering valuable feedback.

Cheers,
Tommy

Shiny Happy Singaporeans

Singapore Skyline
Originally uploaded by Tommy Perkins.

I think that, to understand where China is going, you should take stock of where Singapore is. Shanghai and Beijing have, after all, openly announced that this region's economic pearl is their model.

Singapore recruits companies the way Duke recruits basketball players -- for the long haul. The country knows that one of its real risks is that its standard of living could price itself out of the market for foreign direct investment. According to a presentation to us by the US Embassy, Singapore hosts 7,000 multi-national companies, of which 1,500 are from the US.

In spite of its running-away success at luring foreign direct investment, Singapore's ruling PAP (People's Action Party) worries extensively about how it could lose it. Hence the security, the modern development, the aesthetics, the marvelous schools and the security (I know this is repetitious, but it'€™s appropriate). You can'™t see the police, because they're all undercover, but you can rest assured that this place sweats terrorism in Indonesia, Malaysia and the Philippines like nobody'€™s business. They've foiled a lot of plots since 9/11 and, as you might expect, they deal pretty severely with the perpetrators.

So Singapore is a real microcosm of that tradeoff between security and personal freedoms, and of a government for the people, but not necessarily by them. PAP holds all but two parliament seats and all they can think about is how to win those seats. They control most of the public discourse and, by virtue of their 100% stake in Temasek Holdings, the biggest private equity firm in the area, they control most media.

It also reminds me, in a way, of the uber-developed parts of Florida. Everything is gleaming and new, immaculately laid out, with well-defined districts that were all deliberately charted in the past few decades. No grandfathering, no accidents. Walk through any of Singapore's many shopping districts and brand names like Cartier, Hermes, Burberry and others parade the spotless streets. You may not be able to own real estate here, but, by God, you'll be immaculately tailored as you cruise about town in your 5-series Benz.

But there's nothing even vaguely indigenous about this place. Celebrating St. Patrick'€™s Day here was farcical, in spite of having done so along a scenic strip of shops, bars and restaurants that line a riverwalk and sit across from the city's dazzling skyline.

A few stats and then a question: 8.4% growth in 2004; 3-5% expected for 2005. Resident unemployment was 3.7% in 2004, a significant improvement over last two years. So what's Singapore's encore? Now that you’ve packed this city/state with cash-rich corporations and ensconced the population with safety in every possible context, how do you fight complacency and prevent Shanghai, Hong Kong, Kuala Lumpur, etc., from co-opting your model and taking everything you’ve earned?

I’d posit entrepreneurship. At some point, you’ve got to get as much of your growth organically as you do by essentially buying it with tax incentives. With 77% of its population Chinese, a historically entrepreneurial group, turning Singapore into Asia’s Silicon Valley is hardly a far-fetched proposition. But, given the high salaries and relative comfort level the average Singaporean enjoys, where’s the incentive to make the Hail Mary pass that every entrepreneurial venture represents?

US Embassy officials noted that, to stave off competition, the PAP simply co-opts the ideas of dissidents, offers them posts and thus absorbs, rather than combats, its competition. I wonder to what extent corporations here would use the same model, thus quashing startups. I also wonder to what extent banks and economic development groups here can shift their focus from foreign direct investment to indigenous new venture creation.

Wrestling the Elephant in the Living Room: In (feeble) Denfense of Outsourcing

With admitted reluctance, I should address the whole globalism/outsourcing issue, lest I be taken for a stooge in this process. I suppose I’ve hesitated thus far about the topic because, frankly, the size and scope intimidates the hell out of me and I’m cowed by the towering minds of economists who come out on both sides of this topic.

When I told acquaintances that I was traveling to Southeast Asia to explore outsourcing opportunities, I received more than a few raised eyebrows. Never mind that we’re talking about textile manufacturing, a vocation that educated Americans haven’t pursued since the Great Depression. Outsourcing anything, even the production of golf shirts, is bad for America because it ships jobs overseas, right?

This bit of populism played fairly effectively under John Edwards’ “Two Americas” banner, but I really don’t buy it.

First, the only circumstances in which outsourcing is inherently and absolutely bad for America are ones in which globalism doesn’t exist, i.e., there are no trade agreements and every country except ours operates under some policy of economic protectionism. Well, globalism does exist and all the WTO protests in the world aren’t going to put that toothpaste back in the tube. Speaking of tubes, turn one on and tell me how many American flags you see getting burned in the streets of countries that have long-standing trade agreements in the US. Now count the number of burning Old Glories in countries that don't do business with us. I realize this is a very simplistic argument for free trade as an antidote to terrorism and if you'd like me to elaborate further, please post a comment below.

At some point, making a case for or against globalism starts to sound like a discussion of how long it would take a one-legged monkey to kick all the seeds out of a dill pickle, to borrow a metaphor forever embedded in my mind by a high school teacher of mine. It has its benefits and its ugly sides and any country whose leaders don’t think long and hard about how to do business with China and the US is likely a fatally misled country.

Secondly, implicit in the anti-overseas outsourcing argument is the notion that a person, by virtue of being a tax-paying American citizen, is entitled to produce buggy whips until he drops dead. In that scenario, the implications for innovation and entrepreneurship – the two movements that catapulted America to its current global position – are pretty horrific.

Third, poverty. This is the morally dodgy piece of the argument, since a government has an obligation to concern itself, first and foremost, with the welfare of the people it governs. But I’m not a government official. I’m a traveler who’s seen just a sliver of the kind of third-world poverty that most Americans can’t comprehend and will never witness firsthand. Anti-globalists gnash their teeth about sweatshop scandals and wage rates that resemble the pittances paid during America’s pre-union Industrial era. But those supposed pittances are a multiple of the average household incomes in many of these areas. Indeed, in Vietnam, a primary reason the government acts as a labor broker for foreign corporations is to prevent members of the intellectual elite, such as lawyers and teachers, from leaving their posts to take better-paying jobs in factories.

If you take a truly egalitarian mindset to outsourcing, then it’s tough to look away from people living in absolute squalor and insist that the opportunities that could uplift them should be reserved for Americans, where new business creation, job growth and GDP expansion are each, in both relative and absolute terms, greater by an order of magnitude. Now, I know this can be a pretty self-righteous spiel to deliver to someone whose job just got sent to India, but, in my case, it’s coming from someone who’s every bit as unemployed and upon whose head rests nearly six figures’ worth of student debt. Anyone who thinks MBAs are somehow immune to outsourcing and other economic ebbs never spent any time in the Bay Area in the past few years.

UT Singapore Alumni Event

UT Singapore Alum
Originally uploaded by Tommy Perkins.

Well, apologies to the delightful and talented Yana Kristal on this one, whose headbanging skills, I presume, were quite overstated in this photo. The rest of us looked relatively intact for what turned out to be a rather wet outing. I've been to University of Texas business alumni events in Austin, in a penthouse atop the Wells Fargo Tower in San Francisco's Financial District and, now, at Singapore's China Club. The Eyes of Texas may at times be a bit bleary and cross-eyed, but, I've taken it as an article of faith that they are upon you nonetheless.

Singapore at night

Singapore at night 3
Originally uploaded by Tommy Perkins.

It is a sparkling city. I'm reminded of Chicago, but with far more daring architecture. I'm not sure that's captured here, but I hope to do the city better justice later on.

Yours truly, Hong and Charlie

Tommy Hong and Charlie
Originally uploaded by Tommy Perkins.

Again, shot from Singapore's Economic Development Bureau. Hong Le (middle), as mentioned below, is a Vietnamese MBA with the National University of Singapore's Business School and is assisting with our project. Working with these students as has been as much an education as has been any encounter with any of the agencies and companies we've engaged thus far on this trip.

War Room

War Room
Originally uploaded by Tommy Perkins.

We had two double beds stacked with various resources and propoaganda from the countries we'd visited -- inches-thick volumes on country-specific tax codes, business law and a variety of marketing materials from various banks, law firms and government economic development agencies. We were in the process of reconciling that data with feedback we'd gathered from foreign companies we'd interviewed in those countries. To the left, teammate Rand Wrighton, our team's equivalent of the A-Team's Col. John "Hannibal" Smith and a presumptive hedge fund mogul, bangs out a financial model and regional risk profile, while Charlie, aka Capt. H.M. "Howling Mad" Murdock, assembles the powerpoint.

Arrival in Singapore

Yesterday evening, we arrived in Singapore, a city/country about which I’ve always had mixed feelings. It’s a city notorious for its Orwellian and antiseptic vibe, but it has its charms as well. I can only give first impressions at this point, which is that the city is well laid-out and features eye-catching ultra-modern architecture at every turn. Singapore obviously invests quite a bit in aesthetics, given its palm-lined boulevards and the bright, lush vegetation along its medians and bridges.

The weather is Houstonian in its mixture of heat and humidity, but the traffic bears no such resemblance. To limit traffic, the government requires Singaporeans to buy a $10,000 permit for car ownership.

Last night our project team met with our counterparts at the National University of Singapore, whose business school is one of the most selective in Asia. Hong Le and Nagajyothi (“Jyo Thi”) Bathula, respectively from Vietnam and India, seemed affable and highly capable.

Hong’s focus is in marketing and her primary charges will be getting us more detail on a government quota scandal in Vietnam that has so far held up that country’s entry into the World Trade Organization, a timetable for the country’s entry into the WTO and an understanding of what WTO entry will mean for stumbling blocks such as quotas, direct hiring, accounting standards, etc.

Jyo Thi, an operations specialist, will gather comparative operations data between Indian and Vietnamese plants. As previously mentioned, Andrews Sport is happy with its operations in India. But Vietnam’s seemingly imminent WTO entry presents an attractive opportunity, as many of the country's clogged, often corrupt bureaucratic processes (most notoriously, its quota system) would have to be drastically streamlined to meet the WTO accession requirements.

At this point, we’ve gathered much of the data we require for our project and our excursion in Singapore will serve mostly to plug the financing gap in our report. Obviously, wealthy Singapore is no candidate for manufacturing, but banks here could offer objective risk analyses of doing business in the countries we’ve discussed and thus give us some sense of the risk premiums that would be assessed to a project in any of these countries.

Last night we wrapped the evening up at The Raffles Hotel, of whose many claims to fame is the invention of the Singapore Sling. This is probably an amateurish comment, but the only differences I could discern between this fruity gin-based drink and a garden variety Hurricane was about $8, an expense largely due to Singapore’s exorbitant liquor taxes. Both are red, sweet and mixed in large five-gallon buckets. Still, the hotel’s historic Long Bar is an attractive, two-storey bar was inspired by Malayan plantations in the 1920s.

(Unrelated) thoughts en route to Singapore

“Oh my land is like a wild goose,
It wanders all around and everywhere.”

Gram Parsons drawled this airy bit of nostalgia through my iPod on a flight from Penang to Kuala Lumpur and I was suddenly overtaken by a homesickness I’ve felt many times since leaving Georgia nearly eight years ago. In a half-sleep reverie I contemplated longleaf and loblolly pines that reach up to bulbous cumulous clouds. I tasted pulled pork sandwiches drenched in vinegar-based barbecue with steaming sides of Brunswick stew, sublimely sweet peaches, salty boiled peanuts that melt in your mouth like chocolate. And grits, that blessed delicacy colloquially known as Georgia Ice Cream, a versatile dish that, depending on the meal and the ingredients, can supplant cous-cous, rice, oatmeal and more. I thought of the long, flat stretch of Corridor Z that carried my family every summer past South Georgia’s cotton fields and peach orchards to St. Simons Island and Sea Island, both of which have long since given way to multimillion-dollar developments. The thrill of bourbon-soaked fall football Saturdays coursed through my synapses. I also thought of a wet heat, much like the one here, that envelops you like a loving but overbearing mother.

“Billboards and truckstops passed by the grievous angel.
Now I know just what I have to do.”

Nostalgia wafts through the mind like ether, bathing the brain in warm recollections, all the while dousing it with delusions about the past. I suppose it is with some cocktail of stoic pride and sheer necessity that I knock back this kind of sentiment. Thomas Wolfe’s admonition about going home usually holds true, but I’m not sure it’s axiomatic. The way I’ve previously read his comment, it’s an observation that you can’t hold time, space and circumstances constant. Even if you could, why would you? The three likely were never as good as you remembered them and, regardless, you’ve still grown older and, one hopes, wiser. Thus, you would be hopelessly out of place. It’s a pointless scenario to consider.

But a crisis in my family has taught me the contradiction implicit in Wolfe’s statement: You must go home again. Because circumstances don’t stay constant, you must tend to that garden of friends and family, clear the weeds (or kudzu, in my family's case) and renew the ties that bind. After a stretch that’s taken me through both Carolinas, from Tennessee to Texas and to California and back, I feel that obligation more strongly than ever in my life. I used to joke that, when God places his hand on you, it usually hurts like hell. Job, the Jews and Jesus Christ could all attest to this. But there’s a lot of growth that comes from pain, just as there’s a lot of wisdom that comes from taking stock of one’s ignorance. So I’ve been getting a fair dose of both phenomena as I approach my 30^th year on earth and no doubt it's about damned time.

Penang, Day 2

While walking on the south end of the beach at Penang, I encountered an ex-pat Malaysian man now residing in the UK. A warm and funny old guy, he noted my Vietnam infantry hat and jokingly asked if I was still fighting the war. We talked for a while and I’m somewhat annoyed with myself that I didn’t get a photo of the man.

He offered several insights that helped shape my impression of Malaysian multiculturalism, particularly as it affects the country’s economy. We were discussing my client’s prospects for outsourcing textile manufacturing and he pointed out how the balance of ethnic power in Malaysia would play a role in hiring, although I later learned during a tour of Dell’s facilities in Penang that these rules applied to public institutions, such as government agencies and universities. Roughly 30% of managers must be Malaysian, and that means of Malay descent, rather than nationalized Malaysians including ethnic Chinese, Indians, Indonesians, etc. Such rules represent an interesting nuance in globalism. Every country has its own take on economic protectionism, particularly as it relates to the bull in the global economic China shop that is China, and this, I reckon, is Malaysia’s version of it.

The old man and I talked for a while longer about the trade imbalance between the US and its Asian partners and much of the discussion centered on China as an economic force of nature and of the attempts by smaller Southeast Asian countries, like Vietnam, to hem in the red bull or, at best, withstand its onslaught. It seems undeniable that this century could see the US cede its global hegemonic status to China as an expanding middle class there gets a taste for open consumerism and thus capitalism. The persistent tension is whether the country can liberalize quickly enough to accommodate its burgeoning middle class.

In Malaysia, he observed, much of the capitalist-style individual competition is driven hardest by ethnic Chinese, an irony considering the Malay contempt for communism. Perhaps that’s not so ironic, if you place that phenomenon in the context of the historically aggressive industriousness of US immigrants, who account for the vast portion of entrepreneurial activity stateside.

At Dell’s facilities, we learned quite a bit about the labor environment in northern Malaysia. Vigorous competition for foreign direct investment exists not only at the national level, but also at the state level. Think of the concessions afforded to Mercedes, Nissan and BMW by, respectively, Alabama, Mississippi and South Carolina. Presumably states hope to make up the concessions from the rising tax base. While it was unclear if incentives are targeted at specific industries, the state of Penang has attracted more than its share of technology companies, such as Dell and Sony. Following a labor crunch in the early 1990s, competition for labor seems to have stabilized as the local population surged to meet the demand. At Dell’s factory, which churns out 35,000 products a day – mostly laptops – (48 per worker per day, not counting overtime), annual salaries for line workers begin at $700, although that can vary greatly, as overtime can average 30 hours a week with hourly rates averaging 1.5x to 2x standard rates.

Sweatshop activists and outsourcing opponents will likely howl at such rates, but my fellow beachcomber, a native of Malaysia’s rural countryside, expressed amazement at how the country’s newfound wealth had trickled through to his birthplace, where new construction and homebuilding had rendered the area almost unrecognizable to him. To be sure, all the old forms of commerce predominate – everything from fishing to guava juice stands, but it’s impossible to ignore how the inflow of money from sons and daughters working everywhere from local factories to abroad in Japan and the US has catapulted the region’s standard of living. “Vietnam will learn,” he observed.

Ho-kah Hey!

TP beach 1
Originally uploaded by Tommy Perkins.

A friend of mine, Stanley, said I had a Hunter S. Thompson look about me this day. I had a friend who ate his gun about 10 years ago and I wonder about others who are, in a sense, doing so passively. Enough about that.
It was a beautiful day and if I could have been shot through a cannon across any harbor, why not this one? "Ho-kah Hey," as I recall from Larry McMurtry's biography of Crazy Horse, is the Oglala Sioux cry for "Today is a good day to die" and was the ascetic warrior-hero's pronouncement before cascading on Custer's brigade.
Anyway, a cloudless sky bathed an otherwise empty Malaysian beach. A fine day, indeed.

Lunch in Ipoh

chickens dangling 1
Originally uploaded by Tommy Perkins.

Some days are just weird all around. We'd just been touring a coffin factory (more on this later) in Ipoh, Malaysia, and were having lunch with the proprietors, when I stepped out to the loo to happen upon this site. Incredibly, I finished matters in the washroom and finished my meal. I like to think it's a virtue, but it takes a lot to gross me out when I've gone without breakfast, which obviously was the case the day I shot this gem.

Combing Penang, pt. 2

TP and local ladies
Originally uploaded by Tommy Perkins.

This group of women came screaming up to me, demanding photos. Naturally, a bit of reciprocity was in order. I think they thought I'm Australian.

Combing Penang

Fishermen 1
Originally uploaded by Tommy Perkins.

Cake eating doesn't photograph well, so after a few drinks with classmates at the Shangri-La's beach resort, boredom set in and I began exploring the stretches of beach that extend beyond Penang's resort areas.
This group of fishermen were delighted to take a break from plucking the fruits of the sea from their net to have their photo taken and the gentlemen at the far right seemed to be in much the same shape as my colleagues at the pool.

Last day in Kuala Lumpur

KL Street Scene 3
Originally uploaded by Tommy Perkins.

Our last night in KL followed a round of Rusty Nails at the Marriott and began with a stroll through Chinatown, which, as best as I could tell, exists almost exclusively as a market for pirated goods. Although the satay and fruit stands and the non-existence of open container laws make this area a feast for the feast for the senses, provided one has a tolerance for intense open air hawking and haggling.

Earlier in the day, I went for a walkabout in KL's Golden Triangle with my new camera, in hopes of capturing interesting street scenes and to document architecture beyond than the two landmarks for which the city is justifiably famous, the Needle and the Petronas Towers.

KL is an exceedingly safe town, although the traffic that careens around the city's winding and perpetually merging streets, coupled with limited sidewalks, lend the city less to walking than do cities like Saigon, Rome or New York.

As a former photojournalist, I'€™m still quite conditioned to the notion that anything in open air is fair game for shooting, and, given this region’s willingness to sacrifice privacy for security, I took to KL’s as though it were public gamelands. I still feel that way about the city, although an altercation with one man gave me cause to reconsider my position.

The owner of a parked motor scooter had about a dozen homeless cats dozing all over his bike, with a sign attached that solicited passers-by to provide homes for the felines. There were some really gorgeous Siamese among the cats and I stopped to snap a few shots, before politely nodding to the bike owner and walking off.

I have a really tortured appreciation for cats, in that I find them to be quite beautiful, affectionate and intelligent animals. But my allergies and my pit bull rule out any room in my life for these creatures.

Regardless, within less than a minute, another man nearby chased me down and demanded that I delete the photos.

Taking a page from Charlie's book, I feigned ignorance via an maddeningly halting Russian accent. One of the things I've learned traveling is that Americans unwittingly walk around with neon signs above their heads that exhort locals to take advantage of them and their gobs of cash. Given such realities, I find it is always best to pretend to be of some other nationality whose language I am confident no local would have bothered to learn. Sometimes it’s French, sometimes some Slavic-Russian combo, sometimes it’s my native Georgia Redneck.

This time, I sputtered Russian-sounding gibberish at my accoster and pretended not to know how to operate the camera (Agh ... ugh ... I heef buy theesz ... agh ... to-deee, yeesz?€). Finally, the poor bastard realized that this was a competition to see who could waste the most of the other’s time and that I was bound to win this war of attrition.

Notwithstanding that encounter, seeing the KL by foot affords an extraordinary glance at a city that is multicultural to a degree that renders such boasts by American metropoli laughable. Draped Muslim women stroll past an endless array of Chinese restaurants, while dark-skinned Indians and Pakistanis man the doors of gleaming new hotels. Elsewhere, Maylay, Japanese, Australians and countless other ethnic groups mill about the area’s shopping districts.

Later that night, a cab driver who claimed to be of the same clan as the ousted Taliban of Afghanistan talked at length about the virtues of KL as a multicultural city. The notion that separation of church and state is anathema to any predominately Muslim society is exposed as a myth in Malaysia. The country government is a constitutional monarchy and the driver touted cultural mixing as a real point of pride here. He predicted that the prolific ethnic mixing would, in a generation, result in a unique, ethnically homogenous society that contained strains of every race in Asia and Australia.

Back in Chinatown, the air was perfumed with the carcinogenic delights of a hundred satay stands and the fruits of the land were represented abundantly at dozens of markets, but the primary commodities the packed district are pirated DVDs and CDs, imitation Rolex and Cartier watches and all manner of imitation brand name leather bags and apparel. It's a marvelous place to test one's bargaining abilities. I was initially pleased at having settled at $17 for a stainless steel Rolex Explorer II. Buyer’s remorse, valid or not, inevitably follows such transactions, but given the types of prices pitched to Americans, who are widely presumed to have vastly more money than street wisdom, I felt good about the deal. Fellow travelers experienced in such things agreed the watch was in relatively good shape for a fake and I took some strange comfort in seeing the salesman’s prodigious array of tools next to his wares. Compared to the other hucksters in the market, my salesman was a veteran, blessed with a kind face, a rare patience with the process and a genuine sense of pride about the quality of his fakes.

Later we proceeded to Passage to India, one of the city's many delicious offerings of Indus fare, before heading to one of an inexplicably large number of Cuban-themed bars in this city. Almost as inexplicable is the absolute dearth of Meyers Rum in these places. Watching large quantities of East Asians salsa en masse to an all-Asian Latin group is truly one of those "Lost in Translation"€ moments where a relatively giant gringo like me struggles helplessly to make sense of a scene of mind-bending cultural absurdity.

The next day at 7 a.m. we had to depart the Ritz post-haste to take a bus ride to Penang. Estimations ranged from four to eight hours. Planned visits included a coffin manufacturing factory. More strangely, given our program’s proximity to Dell’s headquarters in suburban Austin (Round Rock), a visit to a Dell factory is also on tap. Now don't get me wrong: As a student of business, it's hard for me to regard Dell with anything less than admiration for the way its direct model practically rival Gutenberg's Bible and Henry Ford's first car factory for revolutionizing the relationships between operational efficiency and cash flow management. But it takes the average Texas MBA less than one semester before he's damn near intellectually constipated by Dell Holy Writ in the form of endless case studies on the company.

Chinatown Rolex dealer 1

I was initially pleased at having settled at $17 for a stainless steel Rolex Explorer II. Buyer’s remorse, valid or not, inevitably follows such transactions, but given the types of prices pitched to Americans, who are widely presumed to have vastly more money than street wisdom, I felt good about the deal. Fellow travelers experienced in such things agreed the watch was in relatively good shape for a fake and I took some strange comfort in seeing the salesman’s prodigious array of tools next to his wares. Compared to the other hucksters in the market, my salesman was a veteran, blessed with a kind face, a rare patience with the process and a genuine sense of pride about the quality of his fakes.

Chinatown Rolex dealer 1
Originally uploaded by Tommy Perkins.

Homeless Cats

Homeless Cats 3
Originally uploaded by Tommy Perkins.

The owner of a parked motor scooter had about a dozen homeless cats dozing all over his bike, with a sign attached that solicited passers-by to provide homes for the felines. There were some really gorgeous Siamese among the cats and I stopped to snap a few shots, before politely nodding to the bike owner and walking off.
I have a really tortured appreciation for cats, in that I find them to be quite beautiful, affectionate and intelligent animals. But my allergies and my pit bull rule out any room in my life for these creatures.
Regardless, within less than a minute, another man nearby chased me down and demanded that I delete the photos.
Taking a page from Charlie's book, I feigned ignorance via an maddeningly halting Russian accent. One of the things I've learned traveling is that Americans unwittingly walk around with neon signs above their heads that exhort locals to take advantage of them and their gobs of cash. Given such realities, I find it is always best to pretend to be of some other nationality whose language I am confident no local would have bothered to learn. Sometimes it’s French, sometimes some Slavic-Russian combo, sometimes it’s my native Georgia Redneck.
This time, I sputtered Russian-sounding gibberish at my accoster and pretended not to know how to operate the camera (“I … ugh …. I heef buy theesz … agh … to-deee, yeesz?”). Finally, the poor bastard realized that this was a competition to see who could waste the most of the other’s time and that I was bound to win this war of attrition.

Charlie and Tommy in Chinatown

Here are Charlie and I in Chinatown, where the air was perfumed with the carcinogenic delights of a hundred satay stands and the fruits of the land were represented abundantly at dozens of markets, but the primary commodities the packed district are pirated DVDs and CDs, imitation Rolex and Cartier watches and all manner of imitation brand name leather bags and apparel. It’s a marvelous place to test one’s bargaining abilities.
Charlie and Tommy in Chinatown
Originally uploaded by Tommy Perkins.

Kuala Lumpur, Day 2

On our second day in KL, the A-Team divided its efforts between meetings with the Malaysian Textile Manufacturers Association and the Malaysian Industrial Development Authority. Our usual song and dance about lost luggage preventing us from having business cards was met with polite understanding by government officials eager to pitch foreign direct investment in their country, which this year had vastly exceeded last year’s goals. Both authorities provided enormous insight into doing business in the country, which, for the purposes of textile manufacturing, appears more focused on the production of fabrics than on garments, the manufacture of which Malaysia seems content to cede to Vietnam, China and India, among other neighboring states. Again, an array of tax incentives exist here, depending on which side of the coast a company intends to operate and its level of partnership with local business entities. As in Vietnam, capital remittances back to the US, such as dividends, go untaxed and the standard corporate tax rate in Malaysia is 28%. However, discounts on that tax range from 60% on operations built on the west coast and 100% on the east coast, where labor is more plentiful but access to other major Asian cities is more constrained.

Alfred, a third-generation Chinese, proved a worthy tour guide, shuttling us around KL in a 500-series Mercedes, taking us to opulent hotels for lunch and cocktails and offering fascinating insights on the idiosyncrasies of Malaysian society. This city has one of the most Byzantine traffic systems I’ve ever encountered. If Houston’s buildings had been designed by I.M. Pei and its roads were laid out by an acid freak, you’d have a fairly good proxy for the climate, scenery and navigability of Kuala Lumpur. Security at major buildings can be quite rigorous and non-Muslim drivers dropping off passengers can expect to have their cars searched by security officers with little to no warning whatsoever.

Even though early Spring temperatures routinely exceed 90 degrees Fahrenheit and humidity levels rival bayou cities such as New Orleans and Houston, air conditioning is not nearly as abundant here as it is in those towns. The city’s business casual dress is easy to understand and more than 15 minutes spent walking about in suits bordered on torture.

After returning, Charlie and I perused a local electronics shop to negotiate fantastic prices on 5.1- and 7.2-megapixel digital cameras for prices not likely to be seen in the US for another 18 months. As soon as my batteries are charged, I look forward to uploading a raft of new photos. Afterwards, we availed ourselves of the Ritz Carlton pool for a swim and some Tiger Beer, which during my time in Saigon and KL, has become a fixture in my bloodstream.

Petronas Towers in KL

At 1483 feet (452m) tall, the tallest building in the world at the date of its completion, measured to the highest point. However, the Sears Tower in Chicago still has the highest occupied building floor, more than 200 feet higher than the highest occupied floor of the Petronas Towers.
Each of the twin Petronas Towers is 88 stories plus an additional architectural point (at 1242 feet), plus a tall spire to 1483 feet. Compare to the Sears Tower in Chicago which is 110 stories, and the twin World Trade Center towers in New York, which were each 110 stories. Although these other skyscrapers were created with higher occupied floors, they are not considered as tall under the arcane rules used for rating the world's tallest, according to which architectural spires count towards building height, but antennas atop a building do not.
Petronas Towers in KL
Originally uploaded by Tommy Perkins.

A Word on the Working Girl and other observations on a heretofore wildly underrated Eastern Metropolis

I believe this topic is a bit overdue. In Vietnam, a few days ago, was a day of The Woman. I can’t remember the exact name of the holiday, but the day marks a milestone nonetheless for a culture traditionally bound to the Confucian decree that a man is worth 10 women, a heritage that squares poorly with women’s 85% concentration in factories. I will refer new visitors to this site to a previous discussion of Vietnam’s added emphasis on bringing women from the farm to the factory, where current GDP growth is most concentrated. An official at Vietnam's Department of Planning and Investment explained to us that Vietnam hopes to compete with China on the basis of quality, rather than quantity, and thus women's meticulous attention to detail is an asset in textile plants.

The sudden emergence of women as a social and economic force is a fairly salient point to consider as one navigates Southeast Asian urban society. As in Vietnam, Malaysian bars, such as the Beach Club, which is a short walk from the Ritz Carlton, can seem overrun with prostitutes. In Kuala Lumpur, the rule of thumb (which I gathered from a helpful Australian) is that two consecutive eye contacts constitutes a deal in the making. It should be acknowledged here that AIDS represents an explosive and devastating epidemic in Southeast Asia – although not quite on the order of the disease’s ravages in Africa – and thus the insane idea of transacting with a crooked-toothed prostitute, regardless of one’s level of desperation, must be weighed against a blood-serious concern for one’s longevity of life. As bemused as I was by the profuse compliments by would-be hostesses and by their invitations to “the toilet,” I was mostly depressed by this sad convention's prominence in such an otherwise first-world city.

What I have to offer at this point about Kuala Lumpur is woefully inadequate and I look forward to providing more useful information in the next 18 hours. This is, after all, a city of 1.4 million in a country whose median age is 23.8 years.

“KL,” as international hipsterati insist on referring to Kuala Lumpur, on first blush resembles Las Vegas minus the casinos, or a Los Angeles minus the celebs. Neon signs reign supreme and visual curiosities such as bars with shark tanks above them are par for the course. Naturally, such comparisons do the city a massive disservice. The city has the effect on a first time visitor that New York or Tokyo has on same. One’s neck throbs from constant craning to admire post-modern architectural landmarks such as the Petronas Towers, which are every bit as staggering as any to be found in Paris, Tokyo or New York. The city fairly teems with all manner of Mercedes, Ferraris and other luxury vehicles, which stream past store windows gleaming with exotic gems, advanced electronics and tailors who deal cheaply in some of the finest materials. A tailored cashmere suit can cost roughly $300, although I understand better deals can be had in Singapore and Bangkok.

Kuala Lumpur is, like most cities in Malaysia, a city dominated by Muslims and yet, most commonly understood Muslim conventions, such as frequent prayer breaks that halt business and women draped in hijab, are relatively subdued. English and Chinese are the most commonly spoken languages and the area is an ethnic gumbo of a variety of Asians and Australians. The commonness of English was a happy circumstance for my team, which, in booking a driver and translator and interpreter, got both in the form of a single person, "Albert," who drove us all over the city in large-bodied Mercedes.

The next day’s dispatch will deal, presumably, deal more directly with the mores of doing business in KL and our specific experiences.

Day 3 in Saigon

Tuesday was a remarkable day that really underscored the country’s willingness to do business with Americans. Absent any qualifications, including even business cards, my associates and I were able to arrange meetings with an array of bankers, government economic development officials, lawyers and private equity partners in an effort to gather preliminary data for a comparatively small textile producer that’s considering moving some of its manufacturing operations from India to Southeast Asia. At each meeting, we expressed profound embarrassment at our lack of credentials, but our apologies were politely accepted and quickly bypassed. That we were able to arrange meetings with these people on the fly attests to this country’s thirst to do business with the west, its anxiousness to join the World Trade Organization and its general amenability to entrepreneurship and economic development – to say nothing of our own prodigious ability to bluff our way through almost anything.

Our day began just after breakfast, when Charlie and I traveled to the Sheraton to book a driver and interpreter, “Henry,” the combined services of which cost $90 for four hours. We picked up Brian and Rand back at the Sofitel and proceeded to the Department of Planning and Investment. Vietnam observes lunch in much the same way that the ritual is observed in Spain and Italy. Workers are known to take long lunches and equally long naps – often stretched out atop their desks. To pass the time, we went to a book store to purchase rather hefty volumes on Vietnamese tax codes and business law. After lunch, we returned to the DPI to meet with a bureaucrat in charge of meeting with prospective foreign direct investors.

We were extremely reluctant to present ourselves as students, as we believed meetings with higher-ups in both the public and private sectors would be much easier to achieve if we presented ourselves as employees of our client, Andrews Sport. But the inherent complication in our chosen position was our lack of any qualifying documentation, including business cards. So, for the rest of the trip we repeatedly flogged the hackneyed excuse that the airline had lost our luggage and professed extreme embarassment at our lack of business cards, which, per Asian business etiquette are exchanged and received with the kind of care afforded the transfer of Faberge eggs: recipients accept cards with both hands and study the information intensely before commencing talks. Perhaps one of the more terrifying moments on this trip was sitting before a communist party official without such qualification and proceeding with a detailed line of inquiry about the country's business regulatory environment.

Given Vietnam's notoriety for poor quality and missed shipping dates, a primary interest of ours was in the robustness of the Vietnamese legal system and the degree to which contracts were upheld and penalty clauses were enforced in Vietnamese courts. Reading between the lines, we became convinced that local courts represented something of a home field advantage for prospective local business partners. International arbitration bodies represented a more viable alternative, as their rulings would be upheld in local courts, but actually getting money from partners in the event of a missed deadline still seemed to be a dubious prospect, the futility of which is akin to suing a bankrupt entity in the US. Henry, who had lived in Australia for 15 years and had been a cotton trader in Dallas for several years as well, advised us that the best strategy was to bake some delays into our production schedule and to nurture soft relationships with business partners through tennis, meals and even less savory pastimes, depending on what can be gleaned about the partners’ tastes.

Far more encouraging are the tax incentives afforded to foreign companies operating in Vietnam. The corporate tax rate in Vietnam is 28%, but companies pay no taxes for the first two years, receive a 50% discount the following two years and pay a flat rate of 20% for the next 10 years.

Notwithstanding our concerns about quality (and, in fairness, I think these mostly centered around the quality of the raw materials themselves, rather than around the workmanship), we were told repeatedly of the quality workmanship provided by Vietnamese textile workers and, specifically, the strict attention to detail that is the mark of female workers, who, as a result of government efforts to move them from farms to factories, account for as much as 85% of the factory labor force. While agriculture accounts for 65% of the country’s labor force, it accounts for roughly a third of the country’s Gross Domestic Product. DPI officials made no secret of the country’s fierce efforts to compete with China’s prodigious manufacturing capacities and its intention to do so on the basis of quality rather than on quantity.

Of course many pitfalls lie ahead, primarily corruption in the public sector. While Vietnam operates in a very centralized, federalist system, with little variance in local laws, a much greater variance exists in the application and enforcement of national laws. “Tea money,” common parlance for bribes, is a regular cost of doing business and manifests itself in every facet of life, from dealing with traffic cops to dealing with higher-ranking government officials. Our first encounter occurred as our driver transported us from the Department of Planning and Investment to HSBC Bank, whereupon a local bicycle cop extracted the equivalent 126,400 Dồng, roughly the equivalent of $8, from our driver under the guise of what Henry smirkingly explained was “improper driving.” Given that Saigon traffic resembles what follows when a Roman candle is fired into a hornets’ nest, it is quite beyond my imagination what sort of driving could possibly be deemed improper. Indeed, traffic officers must pay to have their jobs, because of the potential to earn as much as $300 a day in tea money. Interestingly, Henry explained that foreigners rarely, if ever, get shaken down for tea money, because language barriers prevent cops from explaining the situation effectively.

Perhaps taking its cue from Singapore, Vietnam has begun aggressively prosecuting corrupt officials. As mentioned previously, death by firing squad awaits those found guilty of corruption at a cost greater than $100,000. Unlike the US, Vietnamese judges do not decide innocence or guilt, but, rather, punishment.

At HSBC, Charlie and I met with a manager in charge of business development and a lending officer who specialized in the textile manufacturing industry. After exchanging pleasantries and the usual round of profuse apologies for our lack of qualifying documents, we were served espressos and treated to a fairly wide-ranging discussion of the Vietnamese business lending environment.

Our intent was gain an understanding of collateral policies and rate and term structures. The Vietnamese equivalent of the prime rate is known as the “Cost of Funds,” and textile manufacturers can generally expect to pay between 1% and 4% over the COF. The longest term loan available is seven years and working capital loans can come in under a year. One of the last vestiges of communist economic policies in Vietnam is the inability to own land (although, like quotas, this encumbrance can be expected to fade with Vietnam’s entry into the WTO), which adds to the risk borne the country’s lenders. “Rights of use” documents associated with the land act as collateral, along with more conventional assets such as plant and equipment. In spite of the deliberate vagueness of our description of the business, the HSBC officers wasted little time enquiring about our specific lending needs. We dodged this question by explaining that our mission was largely one of gathering facts that we hoped would inform a decision on whether to build a factory or to lease excess capacity from existing factories. HSBC representatives helpfully explained that capacity lessees do have input on the types of raw materials purchased by major factories. This was a critical, given both the tax incentives afforded by US customs officials for imports made primarily from US-grown commodities such as cotton and the preponderance of cotton in Southeast Asia imported from China and India.

State-owned factories are considered a much riskier venture in the eyes of the bankers, presumably because the institutionalized inefficiencies of a communist enterprise raise fundamental doubts about the entities’ abilities to generate sufficient cash flows and in their attention to debt coverage ratios. Spurred by global capitalist motivation, private factories, by contrast, could be expected to pay greater attention to efficiencies, steady cash flow and international accounting standards – all attributes that made them vastly more appealing to both debt and equity financiers.

Meanwhile, Rand had managed to arrange a meeting with a managing partner with Baker McKenzie, one of the most prominent business law firms in Saigon.

And now, on to Kuala Lampur, Malaysia

Farmers bringing produce

Farmers bringing produce
Originally uploaded by Tommy Perkins.

Boats loaded with produce from nearby orchards of the Mekong Delta converge to the floating market. They carry mostly fruits but also coconuts, vegetables and fishes.

Cobra wine

Cobra wine
Originally uploaded by Tommy Perkins.

Cobras are often soaked along with herbs in large flasks of whisky which can be bought in the snake market in Phung Hiep. This potent drink is believed to boost libido in men and virility in women as well as cure all sorts of illnesses. Live snakes are also for sale in the market and are exported to other Asian countries to be used as food and medicine.

Mekong floating market

Floating markets are held every morning from 5:00 to about 11:00. Phung Hiep market is the biggest since it is located at the intersection of 7 major canals. Cai Rang and Phong Dien are two other notable floating markets in the delta.

Mekong floating market 1
Originally uploaded by Tommy Perkins.

Sing Chao from Saigon!

After a prolonged absence from the blog, I’ll be updating it almost daily with observations and insights gleaned from my travels in Southeast Asia, where I will be from March 7 to March 27.

The following covers my first two days in Southeast Asia, in Ho Chi Minh City, aka Saigon.

This has really been a wild transition. The jet lag was really nothing, since I slept much of the way here. So when we arrived in the morning, it felt like morning to me anyway. I will try to give you a recap of my activities and some observations.

First, Saigon (or Ho Chi Minh City, as it has officially been called since reunification) is a large and fairly dirty city. It's about 7 million people and, along with Hanoi in the north, is one of the two most desirable cities in Vietnam, in terms of educational and economic opportunities in Vietnam. EVERYONE drives a motorcycle/scooter and it's very chaotic. I'm amazed that there aren't more wrecks. People steer right into large streams of bikes to get where they're going. Adhering to traffic signals seems optional. It's very polluted. From the top of our hotel, where the pool is, we can look out over the city. A haze seems to separate us from the streets and walking a few blocks in any direction makes you feel like you've smoked a pack of cigarettes.

This is a socialist country in name only. In 1986, the government finally confronted one of the inevitable shortcomings of communism, which is that equally distributed wealth destroys individual initiative, thus killing productivity and efficiency. So people own property and operate businesses (often in the same place). Growth has been fairly fast. Gross Domestic Product growth has averaged 7-8% over the past few years, which is 2 or 3 times the US rate. In keeping with communism, the government is a totalitarian, one-party regime and corruption is an issue. That said, corruption that amounts to over $100,000 is punishable by death by firing squad.

We hit the ground running yesterday, having lunch at a wonderful restaurant that served atomically spicy beef, wonderful pho and other delights. We visited the War Remnants Museum, which is dedicated to the "American War." Mostly it was a lot of old photos as well as several preserved US tanks, artillery and fighter jets. But it was still pretty moving. It's amazing the side of the war that we are shielded from in US history classes. While 58,000 US soldiers died in the war, about 3 million Vietnamese died in the war, of which 2 million were civilians. The effects of Agent Orange and fire bombings can still be seen on the bodies of street people here. It can be quite appalling and, sadly in several cases, revolting. Amazingly, this country has proved willing to move on. Everyone we’ve encountered has been very eager to interact with Americans, although we are incredibly rich in their eyes, so some skepticism is warranted.

The older generation remains very bitter, a guide told me, but people our age, who have grown up in a period of rapid, Western-style economic advancement, have tuned our their parents’ grumblings about Americans amid optimism about their future as a country. The country remains quite impoverished in many areas and we were a bit incredulous at a guide’s claim that Vietnam would be one of the world’s richest countries in 10-15 years. I was very interested in her observation that the single most valuable set of skills a young person could develop in Vietnam was language skills. Foreign direct investment is critical in this country and, because foreigners cannot buy property directly here, liaisons fluent in other languages are critical players. The challenge is that, as in America, pay for teachers is quite low and there’s a lot of incentive to work in other fields, even in factories, because of the better pay.

We spent most of today in the Mekong Delta, which is really like nothing I’ve ever seen in my life. This muddy river is to Vietnam what the Mississippi was to the US and the Nile is to Egypt. Much of Southeast Asia’s agricultural activity and its rice production in particular, is based in this region. Whole cities cluster along the river as long-tailed motor boats sputter up and down it. Farmers come into town to sell their wares at various markets. Families take their boats out and indicate what they seek to purchase by hanging, for example, a watermelon, from tall bamboo shoots off the bows of their boats. There’s no bartering; everyone uses cash, but the American dollar is accepted everywhere. I bought a military-style sun hat for $1. This is known as the “floating market” in that hundreds of boats putter along the Mekong and its tributaries to buy and sell all kinds of textile and agricultural goods, as well as many cheaply produced goods and illicitly delivered downstream from Cambodia, where labor rates are incredibly low. Anything from cigarettes and cosmetics to narcotics can flow from this route. What’s also interesting is the story behind the boats. Men with fortuitous, auspicious-sounding names are chosen to paint eyes on the bows of boats. These eyes are meant to scare off crocodiles.

We had tea and lunch deep in the delta at a beautiful garden restaurant/home. The first course was elephant ear fish, a large fish about the size and shape of an elephant’s ear, fried so deeply that it didn’t need to be scaled. The entire fish, head to tail, was presented to each table and guests took turns plucking the meet off of the fish and onto rice paper, which they rolled like tortillas and ate. Along with tea, they served what they call whisky, but which is actually very fortified rice wine (about 45% alcohol). Now, I’m not gonna lie to you; this is where things get a little weird. Snake is a big part of the diet here and, as I mentioned, one of its perceived benefits is virility in men and fertility in women. Indeed, snakes are wildly abundant in the delta region. So, it naturally follows that in a region that supplies rice to all of Vietnam and to much of Asia, snake wine would be very common here – like the local moonshine. We were introduced to a proprietor who drinks two bottles of it a day. In markets, it was very easy to find bottles that contained large snakes, many of them cobras, steeping in the rice wine/whisky. One that we sampled came from a bottle containing a cobra with a large scorpion in its mouth. After lunch several of us were brave enough to sample a shot of snake wine that had been distilled with snake blood. It tasted like bad tequila, but I felt strangely empowered by the libation, so much so that I had a second round at a subsequent stop.

Saigon street scene

Saigon street scene
Originally uploaded by Tommy Perkins.

With a population of over 5 millions people, Saigon is one of the densest urban area in the world. On many streets, it is common to see houses with the ground floor converted into a business front while several families share living areas on the upper levels.

Saigon

View from top of Rex hotel in center of Saigon. Probably the most famous among a cluster of older hotels in this area. It is very popular with local crowd on weekend. This area is however abound with pickpockets, hustlers and professional beggars preying on unsuspecting affluent tourists.
Saigon
Originally uploaded by Tommy Perkins.