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BET Founder Robert Johnson's Liberian Resort: An Oasis of Calm

Emily Schmall — Sat, 19 Feb 2011 09:00:00 EST

Follow the signs for Bones Beach down a newly paved road in Monrovia, Liberia, and an octagonal structure the color of the sand emerges in front of the sea, surrounded by poppies, tiger lilies, hibiscus, lemongrass and bougainvillea.

Inside, Nigerian musician Fela Kuti plays on the stereo, and guests lounge on high-backed bar stools or on the zebra-striped dining room chairs. Painted wooden masks adorn the walls. It's Saturday night, and out on the deck, the first flames of the fire pit for the weekly barbecue begin to flare. Guests watch the sun disappear behind the huge crash of ocean waves.

While much of Monrovia is on the mend seven years after the end of more than a decade of civil war, just out of town there's an oasis of calm -- Kendeja, a resort built by African-American multimillionaire and Black Entertainment Television (VIA) founder Robert Johnson, who's also chief executive of RLJ Companies.

A five-star resort, Kendeja is the first new hotel to be built in Liberia in a decade, providing a glimpse of how the tropical West African country could begin to look if its fragile political stability and fast-growing economy remain intact.

A Responsibility to Support Liberia

After hearing Liberian President Ellen Johnson Sirleaf speak in 2006 at a Clinton Global Initiative conference in New York, Johnson was moved to create a business that would establish a connection between the African-American community and Liberia.

"I believe passionately that African Americans have a responsibility to support Liberia, much like Jewish Americans support Israel," Johnson said in a statement. "Given the long historical relationship between our two countries, we have a special responsibility to do whatever we can to ensure that President Sirleaf succeeds in her effort to rebuild the country. There is a window of opportunity, and we have to be sure that the opportunity is realized."

Kendeja represents Johnson's "continued support for President Sirleaf," RLJ partner Cory Printup tells DailyFinance. Sirleaf is running for a second term in elections scheduled for next October. Johnson, whose net worth Forbes estimates at $550 million, also partnered with the U.S. Overseas Private Investment Corp. to create a $30 million development fund for small and midsize businesses in Liberia.

Tapping Pent-Up Demand

Since opening in March 2009, the $12 million resort has become the place to stay in Liberia for U.N. personnel, visiting government officials and celebrities -- Emma Thompson, Tony Blair and President Sirleaf herself. It's also attracting wealthy Liberians returning for the first time since the civil conflict forced them to flee the country.

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It seems there was some pent-up demand for a place to escape hot and crowded Monrovia. The hotel occupancy rate averages 85%, says Printup. "We reached break-even three months after opening," he notes.

A new Delta Air Lines (DAL) flight direct from Atlanta -- a deal Johnson helped broker -- should make it easier for more Americans to rediscover their roots.

Much of Liberia remains in tatters years after fighting that wiped out infrastructure and drove up foreign debt. The country was founded by freed black slaves in 1822. A revolt against the long-standing Americo-Liberian elite led to a coup in 1980. Former President Charles Taylor, who is currently on trial in The Hague for war crimes in Sierra Leone, instigated a series of civil wars in 1989. A peace agreement ended fighting in August 2003 and sent Taylor into exile in Nigeria.

Sirleaf is the first democratically elected leader since the war ended. In five years, she has slashed $4.9 billion in debt, attracted $16 billion in investment and increased income per capita by one-third.

Beyond the Hotel, a Different World

Nevertheless, at Kendeja, two security guards man each side of the private beach -- and beyond, the differences couldn't be more striking.

About 85% of Liberians are unemployed. There are an estimated 10,000 ex-combatants -- most of whose schooling was cut short by the war. Liberia is one of the poorest countries in the world, with the majority of the population living on less than a dollar a day.

In October, hundreds of demonstrating employees barricaded the main entrance to Kendeja, demanding higher wages. Residents of the area complain they were kicked out of their homes with false promises of jobs. And when the Kendeja cultural center, the only of its kind in Liberia, was razed during construction of the resort, local artisans lost a venue to perform traditional dances and sell their wares. "There's a large artist community here, but the hotel management gives us no assistance," says James Sibley, a wood carver.

Kendeja provides power for an elementary school next door, but residents complain there's not enough clean water and sanitation. And the children who lost a soccer field in the construction of the resort now have nowhere to play.

Something Good From the Bad

But for some, Kendeja serves as a sweet reminder of life in Liberia before the war.

"When I came back, I was literally in tears. I couldn't recognize anything," says Kuo Dolo, the food and beverages manager and a Liberian who fled to the U.S. in 1993. "To see good things coming out of something like that, it makes me feel good about coming back."

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Haiti's Hotels Thrive Amid the Earthquake Disaster's Long Aftermath

Emily Schmall — Tue, 07 Dec 2010 11:45:00 EST

Filed under: Small Business, Economy, People

The vista from the private terrace of the John Barrymore Suite at the Hotel Oloffson in Port-au-Prince is a vision of verdant hills and a brilliant blue bay, a dramatic postcard that reveals not a hint of the mountains of rubble and trash left over from Haiti's catastrophic Jan. 12 earthquake, nor the escalating cholera epidemic, nor the slums just beyond the hotel's gate.

The suite named for the American actor boasts an open-air, king-size bed draped in mosquito netting, two bedrooms, artisan-painted armoires, high ceilings and lace curtains -- lavish quarters that are the jewel of Haiti's most famous hotel, which served as the setting of Graham Greene's 1965 novel The Comedians.

Up until three weeks ago, foreign visitors were advised against staying there, says the hotel's manager, Richard Morse.

Despite the advisory, the historic hotel, which began its life as a private home and served later as a U.S. Marine hospital during the American occupation, has been fully booked since Jan. 12, when a devastating tremor leveled much of the capital, claiming an estimated 230,000 lives and causing as much as $14 billion in damage. The disaster drew huge numbers of aid workers, journalists, medical personnel and volunteers, all looking for a soft bed, potable water and reliable WiFi.

Some of Port-au-Prince's largest hotels, including the upscale Hotel Montana, were leveled by the earthquake, which shrunk the market and jacked up occupancy rates. "Many hotels crumbled in the quake so those that remained standing had to serve a lot of people," Morse says during an interview on the Oloffson's wraparound porch.

A Year Later, Haitians Still Live Under Tarps

That greater demand is boosting an industry that has been battered by years of political turbulence and natural disaster. It has also inspired dreams of catered excursions outside the city for foreign workers and tourists interested in a glimpse of Haiti's mellower countryside and Caribbean beaches.

Right now, the tourism offerings for foreigners visiting Haiti are fairly limited. Cruise ships from Royal Caribbean International still deliver tourists to Labadee, a private resort port 95 miles north of the quake's epicenter, for a day of sunbathing, jetskiing and rum cocktails. The Maryland-based Choice Hotels International plans to open two hotels in Jacmel, an artists' haven 25 miles south of Port-au-Prince known for its white sand beaches.

In the capital, residents' feelings are mixed about the big-spending foreigners. Nearly a year after the earthquake, 1.3 million people still live in makeshift camps. "The people from the NGOs drive around in their fancy cars and go to Jacmel, while a year later, we are still living under tarps," says Elie Elifort, 43, a community leader of a 4,000-family camp known as Canaan 3.

Opportunities Lost to the Quake

Thirty minutes and a world away, the Hotel Karibe, with its soaring brick-and-marble lobby, intricate iron inlays and swanky bar, is widely considered Port-au-Prince's most upscale hotel. Heavily damaged in the earthquake, it reopened its doors in October. On a recent weekend, foreign workers sunbathed around a swimming pool shaded by eucalyptus trees.

"It's luxurious by international standards, not just by Haitian standards," says a U.S. embassy employee, lounging poolside with his girlfriend, a World Bank staffer visiting from Washington, D.C.

Former President Bill Clinton, the U.N.'s special envoy to Haiti, chose the hotel to host a conference in October 2009 for 300 private investors to encourage a trade and investment mission. It was a high point not only for the Karibe but also for Haiti's tourism industry, said the hotel's owner, Richard Bouteau. "There was a lot of fresh air, a lot of hope, a lot of doors opened, but of course the earthquake shut it all down," he says.

After the earthquake, Bouteau spent $1.3 million for a firm to draw plans to retrofit the hotel to California building codes, replacing the brick and stone structure with reinforced concrete.

Envisioning the Day When Sun and Culture Lure Visitors

If Port-au-Prince's hotels are doing well today, it's because of the city's massive needs, rather than its fine food or tropical weather, but hoteliers hope that will one day change. "There are not too many people on vacation right now, but hopefully, vacationers will start to come and replace the disaster tourists, because that will really determine the future of Haiti," Bouteau says.

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The Oloffson's Morse, a musician and the first-cousin of Michel Martelly, a popular kampa singer and a leading presidential candidate in Haiti's Nov. 28 elections, gets a bit squeamish when asked whether Haiti's woes have been good for business.

He admits though, that, in the weeks following the January earthquake, hotel rooms were so hard to come by that he charged journalists and aid workers $100 a night to camp on his property's sprawling front lawn.

Like Buteau, Morse says the Oloffson hasn't been entertaining many tourists lately. But he, too, envisions a time when visitors come not in response to a disaster, but to take part in Haiti's rich culture, including the exuberant Carnival, the three-day celebration before Lent, and its calendar full of festive patron saint days.

"I don't think the cruise ship should be the focus. I don't think our tourism plan should be taking people who go to the Dominican Republic and come to Haiti for a day and then go back to the DR. The focus should be: What is Haiti about culturally? It's the music, it's the food and it's these religious festivities," Morse says. "Right now I'm just talking about it, but I'm trying to get a president in power so that we can do more than talk."

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Ciudad Juarez Residents Flee New Homes to Escape Drug War Violence

Emily Schmall — Mon, 06 Dec 2010 12:00:00 EST

Across the border from El Paso, Texas, a mass exodus triggered by a murderous war for drug trafficking routes into the United States has left huge swaths of Ciudad Juarez uninhabited, rocking Mexican home builders and gutting the large industrial city of its upwardly mobile working class.

Residents are fleeing many towns along the Mexican border, but the migration is perhaps most acutely felt in Juarez, which until recently was among Mexico's fastest-growing cities, its industrial jobs attracting immigrants from across the country and Central America.

Before the border violence escalated, Mexico's biggest builders were successfully weathering that nation's worst recession since the 1930s, banking on the quick assembly of millions of new homes fueled by government-subsidized mortgages. But now they're canceling projects in Juarez and other border cities, and abandoned homes are attracting the side effects of Mexico's drug war: violence and extortion.

In May, Consorcio Ara, Mexico's third-largest home builder by market share, halted a housing development in Reynosa, a border city in the state of Tamaulipas, after squatters demanded payment in exchange for protection. Ara also abandoned a development in Ciudad Juarez after repeated threats and robberies.

"We decided it best to finish the work we had started and leave the investment for another time," said Germán Ahumada Russek, Ara's chief executive.

A Construction Surge to Meet Huge Demand

The economic situation underlying the current crisis is far different than it was during the peso devaluation crisis of 1994, which sent interest rates surging and led to widespread mortgage defaults. Now, the Mexican government has imposed rigorous credit standards and capitalized a collective mortgage fund with mandatory contributions by workers. The model was hailed as foolproof, and the Mexican government sold billions in bonds supported by new homeowners' monthly mortgage payments.

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Mexico's five main home builders worked rapidly to satisfy what the government estimated in 2009 was a 8.5-million unit deficit in housing. Empresas Ica, Mexico's biggest construction firm, opened a prefab housing plant in September where 90-square-meter homes can be assembled in as little as three hours.

Today, more than 100,000 houses backed by government mortgages in Ciudad Juarez now stand empty, almost all of them vandalized, the daily newspaper El Diario reported. The population of Juarez has diminished, and unemployment has shot up from virtually zero to 40% as the violence has taken on a fever pitch.

"Some people have gone back to where they are originally from because of the economy," said Hector Arcalus, Juarez's city manager, adding that at least 15 new housing developments had been planned for the city.

From Prosperity to Murder Capital of Mexico

Ciudad Juarez, until recent years the emblem of the prosperity Mexico enjoyed in the 1990s, is now the country's undisputed murder capital, as hundreds of abandoned and vandalized homes at the Riberas del Bravo project attest. The new development of two- and three-room homes, built expressly for maquila workers, is now a wasteland of bloody shootouts.

Diana Olvera Castro, 29, and her husband, a maquila worker, live with their three children in a downtrodden abyss of vandalized homes, missing doors and windows and tagged with gang graffiti.

"They put me in charge of the home next door. The following day they started dismantling it. We preserved what we could but the following night they came back," she said. "You can't leave, not even during the day, or you'll come back to find your house in shambles."

Riberas del Bravo is a microcosm of Juarez's steady destruction. "It's not the worst of the slums or the squatter settlements where we're seeing this violence, it's these middle class developments that are becoming increasingly dangerous places to live," said David Shirk, head of the Transborder Institute at the University of San Diego.

"It's the people who were working at the maquilas, who lost economic opportunities that were created for them by globalization, so it's their kids and their young family members that fill the ranks of the so-called ni-ni's - those who neither study nor work," he said.

Juarez has seen an estimated 7,000 killings since late 2007, when President Felipe Calderon took office and declared war on drug traffickers and the criminal organizations who had gained strength in the power vacuum of Colombia. But until the violence abates and the jobs return, this once-thriving city will continue to unravel.

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In Peru, Tiny Loans Add Up to Big Business

Emily Schmall — Sat, 06 Nov 2010 09:00:00 EST

Filed under: Credit, Small Business, Economy

Back in February, in the crowded district of San Juan de Lurigancho in Lima, Peru, where offices advertise English classes and instant loans, Maria Sanchez opened a Yumi juice stand out of the first floor of her home.

"I've worked two jobs for 15 years. It's nice to have my own business," she says, surveying the small cafe outfitted with bright new appliances and furniture, which she purchased with a 15,000 nuevo sol ($5,400) loan from MiBanco, Peru's largest microlender.

Sanchez's is among hundreds of new businesses to open here in recent years with the help of microloans.

Others are using their access to microcredit to improve already-existing small businesses. Zulma Mendoza, 46, pays 380 soles ($136) in monthly debt payments on the microloan that enabled her to purchase a high-tech machine for her hair salon that allows clients to try on different styles virtually. "We started with zero. We were five, and no one was taking a salary. Now even my two children work and get paid."

Latin America Leads on Microloans

Microloans have taken off in Peru, where informal employment is high and access to credit is low. The concept became widespread around the world through the efforts of the Grameen Bank of Bangladesh, and its pioneering founder, Muhammad Yunus, who jointly won the 2006 Nobel Peace Prize for their successful microloan program.

Now, Peru ranks No. 1 in the annual Economist Intelligence Unit survey of world's best business environments for microlending. Five of the top 10 countries are in Latin America.

Private capital has played a part in microlending for a decade, but it wasn't until Mexico's Banco Compartamos went public in 2007, generating $407 million, that interest in the business among investors became clear. With 1.75 million clients, Compartamos is Latin America's biggest lender. But the bank, which mainly lends to groups of women in rural areas, came under fire from Yunus in 2007 over interest rates that averaged 90%.

$4.5 Billion in Peruvian Loans

By contrast, in Peru, which has the largest microlending industry in Latin America, a competitive lending environment has driven down rates, while the average loan size has increased to $1,300, according to the Microfinance Information Exchange. More than 200 lenders made small loans totaling $4.5 billion in 2009, a sevenfold increase from 2000. Lionel Derteano, vice president at microlender Edyficar, estimates that the sector could expand by 40% annually in coming years.

"The banking system is very profitable, and yet there's a huge unserved market," says Enrique Ferraro, head of investments for Washington, D.C.-based nonprofit ACCION International, which holds a 15% stake in MiBanco and also holds publicly traded shares in Banco Compartamos.

Strong returns and an established set of norms are now attracting big commercial banks to the industry, according to Lucy Conger, co-author of The Mustard Tree, a history of microfinance in Peru.

"The regulation is excellent, and there is international recognition of that," she says. Borrowers face credit checks, and the savings deposits lenders use to steer capital into microloans are federally insured. "There is actually a successful channeling of resources from the cities out into the rural areas," Conger says.

Expanding in South America

Mineral exports and private investment are fueling strong growth in Peru, where the economy is projected to grow 8% this year, one of the fastest paces in the world. Still, Peru's poverty rate hovers around 33%, and only 25% of the population has formal access to credit, according to the country's banking regulator.

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MiBanco's parent company, the nonprofit Grupo ACP, is expanding into Brazil, Latin America's largest country, through a $38 million joint venture with Brazilian microlender Ceape Maranhao. Banco de Credito del Peru, the country's leading bank, bought majority control last year of Edyficar, Peru's second-largest microfinance institution, from CARE, the Atlanta-based antipoverty organization.

And BBVA Continental, Peru's second-largest bank, is finalizing its purchase of Financiera Confianza, another leading microlender, founded in 1992 to provide credit to women in rural areas, the Spanish parent company BBVA confirmed.

Says Luis Derteano, Grupo ACP's chairman: "Commercial banks have discovered that microfinance clients do pay, better even then middle-class clients because they appreciate this chance to improve their lives."

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Could Peruvian Politics Shake Mining, Oil and Gas Investments?

Emily Schmall — Tue, 05 Oct 2010 13:00:00 EST

Filed under: Energy, Economy, Investing

Regional elections in Peru are keeping investors in suspense as small progressive and independent political parties appear to be beating out more traditional parties, at least in partial ballot counts. Peru is South America's third-largest country and the site of the region's most important mining and gas resources, as well as one of the world's fastest-growing economies.

The surprising results so far, for the Oct. 3 election, have cast uncertainty over next year's presidential race and the sustainability of the country's commodities-led growth. Some worry that a shift to the left could discourage investment if newly elected officials roll back market-friendly policies that have helped the economy boom.

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For example, some business leaders are concerned that the election of human-rights advocate and educator Susana Villaran (pictured) as the mayor of Lima, Peru's capital, could prove bad for business, according to Dow Jones Newswires. Villaran, whose Fuerza Social (Social Force) party represents a coalition of left-wing parties, including some socialist groups, appears poised to become Lima's first female mayor and its first left-wing politician in decades.

Despite her history as an activist, Villaran says she favors private investment in Peru. "Our proposal is the promotion of private investment with a slightly more active government that ensures the distribution of public goods, like quality education and healthcare," she said last week in a meeting with members of the foreign press.

Meanwhile, popular conservative legislator and presidential candidate Keiko Fujimori has made economic policies a key platform, claiming that her administration would always welcome foreign investors.

Is Peru Leaning Left?

While moderate, left-wing movements have made headway around the region in recent years, Peru has served as a notable exception. And for obvious reasons: a left-leaning military dictatorship that instituted a failed agrarian reform in the 1960s was followed by two decades of internal conflict with the Maoist Shining Path insurgency. When President Alan Garcia was serving his first term in office, from 1985 to 1990, he introduced nationalist policies that led to disastrous levels of hyperinflation and foreign capital flight.

But in Lima, Villaran's message of social inclusion appeared to appeal to low-income residents who feel left out of the country's economic boom. "Most politicians are petty thieves, but she seems to really care about poorer people," says Guillermo Martin Falcon, a parking attendant in Lima's gritty Rimac neighborhood who, at age 40, was inspired to cast a vote for the first time.

The plight of the poor is likely to be a key issue in the presidential race, as well. Fujimori has said she also would work to prevent social conflicts by spreading the wealth more evenly. A strategy of inclusion could benefit the roughly 30% of Peruvians in poverty, but also could slow the pace of development.

Still, it is early to gauge how the municipal elections will factor into the presidential campaign. According to a September poll, Fujimori -- the daughter of former President Alberto Fujimori, who is currently serving a sentence for human rights crimes -- is the front-runner in the presidential race. Ollanta Humala, a nationalist who nearly won the presidential election in 2006, unnerving investors, is trailing in fourth place in the polls.

Clashes Over Natural Resources

Peru's rich natural resources have attracted strong foreign investment in the past, but as global demand for commodities has grown in recent years, dozens of people in Peru have died in clashes with authorities over the management of these resources.

"People are quickly understanding that the way to [politically] negotiate in Peru is by way of really strong action, by blocking roads and by protests," said Jorge Bave, a political risk analyst for Export Development Canada, a consultancy that promotes Canadian investment abroad.

Protests have halted multibillion-dollar mining projects and forced companies to come to the table and -- in some cases, such as the Camisea natural gas project in central Peru -- to negotiate new contracts, winning higher royalties for the communities affected by development.

Opposition to oil drilling in Bagua, a district in the Peruvian Amazon, led to a violent clash in June 2009 in which more than 30 indigenous people and policemen were killed. Bagua remains "a vivid and very powerful image for investors," Bave said.

Newly formed leftist parties have prevailed in elections in Cajamarca, Peru's most important gold-mining region, and in other areas rich with metals and natural gas in Peru's Andes and Amazon, which could further raise investor concerns.

But Peru's rich natural resources will likely continue to draw investors who factor some level of public opposition into their cost-benefit calculations.

"Everyone can assume there will be opposition. The worry is that the national government will side with the regional governments," said Pedro Tuesta, a Washington, D.C.-based economist with 4Cast.

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Juarez Chic? Fashion Companies Make Wrong Turn at the Border

Emily Schmall — Sat, 24 Jul 2010 15:00:00 EST

Laura and Kate Mulleavy (pictured below), the sisters behind avant-garde fashion label Rodarte, recently took a road trip to the Texas-Mexico border. With Ciudad Juarez in mind, they designed couture that reflects the gloom of the troubled Mexican industrial city across from El Paso, Texas.

The line, developed in collaboration with Estee Lauder's (EL) M.A.C. Cosmetics, features off-white chiffon and lace garments and lipstick and nail polish in shades such as Factory, Sleepwalker, Juarez and Ghost Town. There is even a light-pink blush called Quinceanera, in homage to the traditional Mexican coming-of-age party for 15-year-old girls. The sisters were inspired by the "lines of women workers making their way to factory jobs in the middle of the night," according to a company press release.

Exploitation or Inspiration?

Not everyone has applauded the efforts to bottle up the women of Juarez. Beauty bloggers and border activists accused the designers of exploiting the sordid lives of poor women, and the estimated 800 victims who have died since 1993 either in what the Mexican government has called a femicide or in Juarez's increasingly vicious drug war.

"It is absolutely exploitive [sic] of women's pain and grossly not in touch with the role that globalization is playing in the perpetuation of systemic forms of discrimination against women," said Elvia Arriola, executive director of the U.S. nonprofit Women on the Border.

"Words fail me..." wrote Mizz Worthy. "It doesn't need to be said that their choice of names for these products was ill thought out and in poor taste. For both MAC and Rodarte to romanticize a place which is so full of violence, misogyny, and exploitation against women is baffling to me," scorned the UK blogger of Healing Beauty.

Many of Juarez's female victims were maquiladora workers between the ages of 12 and 22 who had migrated to Juarez for the "opportunity" to earn $15 a day. Most of the killings remain unsolved.

Last week, M.A.C. announced it will donate $100,000 to a Ciudad Juarez charity and will change some of the product names. The Mulleavys, who could not be reached, issued the following: "We recognize that the violence against women taking place in Juarez needs to be met with proactive action. We never intended to make light of this serious issue and we are truly sorry." The sisters went on to say that the M.A.C. collaboration was "intended as a celebration of the beauty of the landscape and people in the areas that we traveled."

An online petition launched Thursday demanding the cosmetics firm and fashion house donate all the proceeds of the Juarez line has generated 183 signatures by Friday morning. "I believe M.A.C. and Rodarte can afford to dig deeper, much deeper," said Tracey Hollom, among the petition's signers.

In a press release issued Friday, the team at M.A.C. and Rodarte said: "The response over the past week to the upcoming M.A.C Rodarte makeup collection has educated us more fully on the extremely difficult circumstances of the women of Juarez. We are deeply sorry that the M.A.C Rodarte makeup collection offended people. It was in no way inspired by the reprehensible violence against women in Juarez."

The companies will announce their charitable initiative in the next few weeks, the release said.

Crossing the Border from Edgy to Offensive

The collection, which debuts Sept. 15, reflects a city in its death throes. Models in white dresses of tattered lace in photographs released in June appear to be the ghosts of the city's female victims and the opal nail polish reflects the grim factories people in the city's outskirts are bussed to in the early dawn.

Indeed, the harsh reality of Juarez isn't pretty. The fight for control of lucrative drug routes into the U.S. has killed more than 5,000 people in this city of 1.8 million in less than three years. The misery has only been compounded by a global recession that last year drove unemployment from virtually zero to 20%. A majority of workers toil in the region's 339 maquiladoras on assembly lines that make the TVs, kitchen appliances and car parts for American consumers.

Rodarte, which counts Michelle Obama, Chloe Sevigny and Cate Blanchett among its many celebrity clients, is known for being edgy. And this is not the first time the theme of urban disintegration has been taken up by the Mulleavy sisters, who graduated in 2001 from the University of California, Berkeley, with liberal arts degrees. Last fall's collection was inspired by a piece of insulation the sisters spotted on the side of a freeway near Los Angeles, according to the Rodarte Web site.

The fashion house has made its mark by deviating from the traditional mandate to create clothing based on predominant standards of beauty, instead incorporating art theory and political statements into their designs. In a January issue of The New Yorker, fashion critic Amanda Fortini described the duo as "the most celebrated American designers working today."

"Their recent designs, while arresting, do not perform the simple duty of most women's clothing-to make the wearer look either pretty or sexy," Fortini wrote.

Wonder what the women of Ciudad Juarez think?

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Violence Puts a Chill on Jamaica's Vital Tourism Industry

Emily Schmall — Sat, 05 Jun 2010 09:00:00 EST

Filed under: Economy, People

In Jamaica, where tourism is a $4 billion industry that accounts for around 20% of GDP, more than a week of negative headlines poses a serious risk to the island's economy. The Caribbean nation's second-largest industry has taken a hit since a four-day gun battle in Kingston's Tivoli Gardens erupted last week, leaving dozens of people dead. The military is still looking for gang kingpin Christopher "Dudus" Coke, who was based in Tivoli Gardens, for extradition to the U.S. on drug- and weapons-trafficking charges.

The violence has put the brakes on a record level of travel to Jamaica in the first three months of this year. More than 500,000 foreigners visited Jamaica in the quarter, a 9.2% increase over the same period a year ago. But the U.S. State Department has issued an advisory urging Americans to defer nonessential travel to Kingston, and airlines began rescheduling flights to avoid landing after dark. So, the city's famous music clubs and businesses have been shuttering early, and the reservation lines have been quiet at Jamaica's resorts and hotels.

"I Don't Feel Safe, It's As Simple As That"

At the Red Bones Blues Café, a Kingston dinner club, several acts canceled and there are fewer diners. "It's slowed down. We are not seeing the amount of guests who usually come," said Sheryl White, a cashier.

The swanky poolside bar at the Spanish Court hotel in New Kingston, an up-and-coming business district, was nearly empty. Meghan Fabulous, a fashion designer from Los Angeles, and her company president, Sacha Hason, who had come to Kingston to do a trunk show at a boutique clothing store, were among the few present. Their trip had been planned for months, timed to coincide with the Kingston premier of Sex and the City 2.

Despite the State Department advisory, they decided to come anyway and hired security to follow them from the airport and to trail them on a sightseeing tour of Kingston. "It's clear that it's going to hurt tourism in Jamaica, but overall, it's not as bad as it seems on the news," Fabulous said.

Down the bar, a trade officer for the Jamaican government disagreed. He was ready to return to his home country of Singapore. "I don't feel safe, it's as simple as that," he said.

Near the scene of the shootout on the city's West Side is the Trench Town Culture Yard, a museum located in the home where Bob Marley learned to play the guitar. When a small group approached, a surprised tour guide with a baby on her hip rushed to the entrance, saying that because of the recent disturbances in the area, she hadn't expected anyone.

Skittishness Affecting Business Far From Kingston

The impact of the violence has spread outside Kingston to Jamaica's famed North Coast resort region. Jamaican Minister of Information Daryl Haz tried to assure visitors that the resort areas were unaffected by the unrest in Kingston. "This is a situation that is taking place in certain parts of Kingston in downtown. It is approximately anywhere from 100 to 140 miles from our resort areas," Haz said.

At Dolphin Cove, visitors pay up to $600 to swim with dolphins, sting rays and nurse sharks. The interactive aquarium is a main attraction in Ocho Rios, among Jamaica's biggest cruise ship ports of call. So far there have been five cancellations, says executive assistant Roger Kerr. "It has affected bookings," Kerr said. "Some of our Jamaican visitors canceled because they were fearful of driving through Spanish Town," Kerr said, referring to a suburb of Kingston that has become part of the police operation.

Further up the coast on the new Highway 2000, the private, white-sand beach at Secrets, a 700-room all-inclusive resort in Montego Bay, was nearly empty. The resort, which opened in late March, said about 120 guests canceled over Memorial Day weekend. "We were finally seeing some positive growth in Jamaica. We over here are hoping like hell this thing in Kingston doesn't stop it," Delwin Rochester, Secrets' resident manager, said. Rochester hopes to boost traffic in June with two nights for the price of one deals and coupons for the property's spa and restaurants.

"Jamaicans Are the Best Salespeople"

Meanwhile, the couples-only resort chain Sandals is dispatching personnel abroad to spread the word that Jamaica is safe, Sandals Chairman Gordon "Butch" Stewart told The Jamaica Observer newspaper. "It is now a matter of doing everything to push Jamaica," he said.

The Ministry of Tourism says it will spend $10 million on a massive advertising campaign to get the message out that Jamaica's mountains and beaches are safe and open for business. John Lynch, the chairman of the Jamaica Tourist Board, believes simply getting people to Jamaica will help counteract the image of the shootouts in Kingston. "We've gone through hurricanes, and this is as bad as a hurricane. But Jamaicans are the best salespeople. And you know the old saying, seeing is believing," Lynch said.

For more information, visit the Jamaica Tourist Board at www.visitjamaica.com.

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Ciudad Juarez: From Boom Town to Ghost Town?

Emily Schmall — Tue, 20 Apr 2010 12:00:00 EST

Filed under: Economy

With its strip malls, pristine roads and American fast-food restaurants, Ciudad Juarez looks on the surface more like the U.S. than it does Mexico. But after three years of escalating violence and disappearing jobs, this once-thriving industrial city no longer seems like an extension of El Paso, Texas, its neighbor across the border. In fact, it's feeling more like a war zone, with three people connected to the U.S. consulate gunned down here on March 13, just feet away from their destination, a bridge that crosses the Rio Grande into El Paso.

The deaths rattled the entire Western Hemisphere, not just because of the brazenness of the crimes but also because Juarez is a critical link in the global production chain. Nearly 80% of the workforce here toils in the region's 339 maquiladoras, or assembly lines that make the TVs, kitchen appliances and the parts for cars Americans know and love. A growing number of multinationals that have long done business here are starting to get cold feet, potentially jeopardizing the $1 billion a year that maquiladora production represents.

While no one has yet been tried for the consulate killings, authorities blame the deaths on the Aztecas, a gang of hired assassins who work for the Juarez drug cartel, which controls the trafficking route where as much as $1.5 million in illicit drugs move across the city's border daily. Shoot-outs in broad daylight in nice parts of town are becoming a common sight as the Juarez cartel battles to maintain control of its turf from the incursion of Jose "El Chapo" Guzman's Sinaloa cartel.

Big Fallout from the U.S. Recession

City leaders here say things got worse as this city of 1.8 million began to feel the effects of the U.S. recession. Since 2007, unemployment in Juarez, which has more factory jobs than Detroit and Atlanta combined, has climbed from virtually zero to 20%, says Jorge Pedroza Serrano, executive director of the city's Association of Maquiladoras.

The fallout has been dramatic. Once among Mexico's most prosperous cities, Juarez has lost 120,000 jobs and 6,000 businesses in two years. Seven maquiladoras have closed. The city's main commercial corridors have been gutted, restaurants, dance clubs and pool halls have been firebombed and hundreds of homes have been abandoned. American tourists, who used to make the 10-minute trip over the border in droves to party and shop, are now a rare sight.

Juarez began to feel the pinch of a worsening U.S. economy around the same time President Felipe Calderon began sending federal troops to aid the beleaguered city police, in late 2007. Economic woes and a spike in violence, triggered by the arrival of the troops, account for businesses shuttering and rising unemployment, Pedroza says. "Everything begins when our president decides to make a war against the cartels," he says. "We're still waiting for the problem to slow down."

Maquiladora Work Lures Mexico's Poor

"With more jobs, delinquency will go down," Pedroza predicts. But that may be wishful thinking. The U.S. recession -- and in particular, the troubles of the Big Three automakers -- have devastated the maquiladora business. After all, a full 70% of them are devoted to making seat belts, dashboards, car batteries and other parts that then cross the border to be retrofitted by union workers at American car companies. In 2009, production was cut in half from year-ago levels in Mexico's largest manufacturing sector.

The first maquiladoras set up shop in Juarez in 1966, replacing its expansive alfalfa and cotton fields. The North American Free Trade Agreement of 1994 pushed the manufacturing of even more goods across the border from the U.S. In Juarez, it could be done with far cheaper labor, tariff-free.

Across Mexico, the chance to work at the maquiladoras has been a big draw for the country's poor. As much as a third of the city's residents were born elsewhere, flocking to the border city seeking $15 per day maquiladora jobs. "If they come here it's because they had nothing there," Pedroza says.

Cartels Thrive on People's Desperation

But it's not economic nirvana by any stretch. Arnulfo Castro-Munive, a human resources manager at a maquiladora that makes air filters, says workers who migrate to Juarez still pretty much just scrape by. "The plant serves them a decent breakfast," Castro-Munive says, "and it's often the only decent meal they have that day."

Although the maquiladoras also provide benefits like free health care and transportation to work, salaries are low in a city where the cost of living is only 10% cheaper than in the U.S. Still, maquiladora jobs are competitive, leaving many looking for work and desperate for money.

So as the local economy sputters, more people in Juarez have become involved with the cartels out of economic necessity, experts say. A recent poll of 4,600 students in Chihuahua state revealed that 40% of them aspired to become sicarios, hired killers, said Alejandro Junca, chief executive of Grupo Reforma, Latin America's largest media company and the publisher of the Mexican newspaper Reforma. "They would rather live a week like a king than have 70 years of misery," Junco said, during a recent talk in San Antonio, Texas.

Killers Make as Little as $40 per Week

Turns out, though, a hired killer may not exactly get rich. The city has caught sicarios who were making 500 pesos, or $40 a week, says Juarez Mayor Jose Reyes Ferriz. Thanks to the increased military and police presence in Juarez, the amount of cocaine and other illicit drugs trafficked through the city has diminished, Ferriz says.

Problem is, that has inspired the cartels to make money by other means, and employ more people to do it. "The money they were getting from retail drug sales was not enough, so we started getting kidnappings, carjackings and extortion," Ferriz says.

It has gotten so bad that business leaders and even politicians are abandoning the city. Pedroza and Castro both commute to Juarez from their homes in El Paso. Ferriz is believed to live in El Paso as well, but adamantly denies it, saying that he only keeps a home there. Nevertheless, Ferriz, an international contracts lawyer, started receiving death threats when he was still campaigning for mayor.

Maquiladoras in the Line of Fire

The city's industrial parks are not immune to attack. In late March, after the consulate killings, the manager of a maquiladora was shot as he was leaving work. In fact, one of the three victims connected to the U.S. consulate killed in March, Jorge Alberto Salcido, was a manager of an assembly line for Dallas-based information technology company Affiliated Computer Services Inc.

Last year, five maquiladora managers reported incidents of extortion and one was killed during a carjacking. "We've designed secure routes with state police for moving goods and high-level executives," Pedroza says. "Police have secured these routes since 2005, but there used to be 50 units. Now's there's 12. We've been pushing and pushing that we need more security."

Even as the warring cartels act more brazenly, Castro-Munive thinks companies are too vested in Juarez to pull up the stakes. "I may be an optimistic person but I think that we have been down here so many years, and we have been investing such a huge amount of money on the know-how of the people-we know how to build products; we know how to comply with customers' needs in terms of quality and cost."

He adds that the maquiladora industry is highly efficient. It doesn't compete with the U.S. market but rather with the international market. "What has been happening to us in the last 24 months has been a nightmare," Castro-Munive says. "You wake up from a nightmare, and we'll wake up from this one."

With Ciudad Juarez playing such a big role in global commerce, the world is hoping that Castro-Munive is right.

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