Into Afghanistan via Rashkent Uzbekistan

Afghanistan: August, 2002: On Friday, July 26, Anna Marie, Jason and I met at Denver International Airport. We flew from Denver to Chicago and on to Germany. We arrived in Tashkent, Uzbekistan at 10:30 p.m. following a frustrating five hour delay in Frankfurt due to Uzbekistan Air mechanical problems. I was given a note to call my good friend Dr. James Terbush before I went to bed. He was also in Tashkent and staying at a nearby hotel. I apologized profusely for awakening him. We set a time to meet the next morning. 

Sunday, July 28

It was good to see Dr.Terbush. He works for the U.S. State Department as an embassy doctor and medical liaison in different regions of the world. Jim and his wife Leigh have been special friends of ours for several years. He had just been to Kabul, the capital of Afghanistan, and also Mazar-e-Sharif where I was planning to go. He gave me a thorough briefing on the terrorist situation. Of course, he had the advantage of riding in an American government convoy with gunners on each corner point of the procession. But nevertheless, his trip had been extremely risky and dangerous.  

Dr. Terbush asked if Project C.U.R.E. would be willing to get involved in sending medical items into Kabul and other southern parts of Afghanistan, as well as Mazar-e-Sharif in the north. He let me know that the government thought it would be an advantageous gesture if Project C.U.R.E. would, as a third party, increase our involvement of humanitarian aid into Afghanistan. He said that if it was of interest to Project C.U.R.E., he would set up a meeting with the necessary people the next day.  

Monday July 29

Mr. Sung Han Kang told us that for a period of time the people in Afghanistan, primarily the internally displaced persons (IDP, sometimes called internal refugees) had only grass to eat and infected water to drink. IACD had tried to help them build earthen ovens where they could bake bread. They had been able to get blankets to give to the refugees and some bread to deliver to them. Mostly they encouraged them not to stay in refugee camps but rather to try to return to their old home areas and start over. They explained that things in refugee camps never get better, only worse. 


For lunch, Jason and Anna Marie went to the Kim’s home, and I left to keep my appointment with the folks at the US embassy. My meeting went extremely well as we discussed the possibility of Project C.U.R.E. getting involved in medical aid not only in Mazar-e-Sharif, but also in the other major cities in Afghanistan. The Afghan embassy in Tashkent and the United Nations were each requiring lots of information regarding our applications to go into Mazar-e-Sharif. But as of Wednesday they had not rejected our requests. We knew we were making progress when they asked for our passports and valid photos to be delivered to them on Wednesday morning. I wanted to be sure to include Jason in the meeting so that he could catch the feeling for what Project C.U.R.E. was required to do on the diplomatic front.  

Dr. Sharipov’s looks and features were more eastern European than Uzbekistan. He carried himself well, dressed very Western and had a fresh haircut. He certainly fit the role of being a part of the top cabinet ministry of Uzbekistan. The two of us hit it off very well from the beginning. He was extremely complimentary of what he had seen at our Project C.U.R.E. operation when he had visited us in Denver. He just flatly admitted that he wanted us to work with him at the top levels in Uzbekistan and promised to introduce me to all the cabinet members who were the decision-makers in the country.  

We rushed back to the rehabilitation center where we received a very fine and thorough briefing on what we would be doing on our trip into Mazar-e-Sharif, Afghanistan. The trip had been approved and we would be traveling in a group of Koreans who would be performing a free medical clinic for the refugees. We would also be delivering 5,000 loaves of bread and fruit to areas of desperate need.  

Saturday, August 3

Anna Marie would be checking out of the hotel that morning at the same time I checked out. She would go to the home of Dr. and Mrs. Chong Soo Kim where she would be safer and better looked after. Jason and I had to be at the airport at 7:30 a.m. to catch our flight to Termez, Uzbekistan, near the Afghanistan border. From there our group of 18 Koreans plus Jason and me would travel by bus across the border and continue on into Afghanistan.  

The Amu Darya River makes the boundary line between the two countries. The process at the border crossing took nearly four hours. We just patiently waited in the hot sun for the officials to do their work.

The road from the border to Mazar-e Sharif was fraught with lots of drifting sand dunes. A bit of wind and the road would totally close over with several feet of sand. Of course that would make the travel very dangerous. It was not only bad on the vehicles, but if you would get stuck you would be absolutely helpless and very vulnerable to being attacked, robbed, or kidnapped by desperate predators. Nearly all adult males carried rifles or automatic weapons, or shouldered rocket launchers.  

The sun was setting when we arrived in Mazar-e Sharif. The streets were crowded with donkey carts, taxi carts pulled by ponies, and old beat-up automobiles and trucks held together with the best repair patches available to the drivers.

The streets were mostly dirt and sand. The previously paved roads were deteriorated and full of potholes. The men all wore beards and Afghan turbans. Everyone and everything was dirty. The women all wore scarves over their heads and the majority of women wore the full-length dress called a “chadiri.” It even covered all the head and face, leaving a woman to peer out of a patch of lace about five inches square. A lot of the men wore the “parahan turban.” A knee-length shirt was worn over baggy pants that were pulled tight at the waist by a drawstring.  

Almost all Afghans were Muslims. In the previous years the radical sect of Taliban had completely taken over the country and had carried on a cruel and unusual campaign to strictly enforce the most severe of the Muslim traditions and laws. All men had to pray five times a day at a local mosque. Women not only had to completely cover themselves, but they could not work outside their homes and could not go to school or attain any formal skills. Any non-compliance to the Taliban’s interpretation of the codes resulted in severe beatings in public and other forms of intimidation and humiliation. Death to anyone resisting the Taliban or their carrying out of their rules was not at all unusual. It had become a terrible and inhumane system of control by cruelty.  

Our bus inched its way down the dirt streets between ramshackle structures. We made an abrupt right turn barely squeezing the bus around the corner. Down about a block on the left side of the street was a walled compound with a small sign on the gate reading Young Nak.

The sign stood out as a bit incongruous. All the turbaned men, women in chadiri, donkeys, dirt, carts, and rag-a-muffin kids, and in the middle of all of it was a clean, well painted, well maintained compound with a Korean sign on it!  

Quite honestly, it was a welcome sight, because I didn’t think that there was a decent hotel in the city. We were fed a good meal of rice and cooked vegetables and fresh Afghanistan bread right out of an earthen oven from down the street. After dinner we were assigned sleeping spots in the different rooms. We slept on mats on the floor. It was so hot that no top blanket or even a sheet was supplied. Jason, Mr. Kim, and I slept in one room. We were really quite fortunate because our room was furnished with a ceiling fan. It was miserably hot in Mazar-e Sharif in August. 

Next Week: Meeting with the Main Warlord

© Dr. James W. Jackson   

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Embassy Travel Warnings: Afghanistan

Afghanistan: August, 2002: I had known that it was next to impossible to even get into Afghanistan as an American because of the extreme danger associated with acts of violence toward Americans following the bombings and air strikes by the Americans and their coalition. But I was also confident that if Project C.U.R.E. had the clearance and approval of the United Nations it would probably be safe to proceed under their direction.  

I also knew that the Afghan embassy in Tashkent would probably not issue a visa to an American to go into Mazar-e-Sharif if there was an eminent possibility for an international incident. But, of course, there was never any real assurance of safety where all the men folks were carrying automatic weapons and rocket launchers around as just a way of life. 

As I was considering the possibility of my traveling on into Afghanistan, I received the following travel warning released by the United States Department of State regarding any travel into Afghanistan by any American. 

The American Embassy in Tashkent
Afghanistan - Travel Warning
July 3, 2002

This Travel Warning notes the growing number of attacks against
humanitarian workers in Northern Afghanistan and continued security
concerns. The security threat to all American citizens in Afghanistan
remains high.
This Travel Warning supersedes that of February 28, 2002. 
The Department of State strongly warns U.S. citizens against travel
to Afghanistan. The ability of Afghan authorities to maintain order and ensure the security of citizens and visitors is very limited. Remnants
of the former Taliban regime and the terrorist Al-Qaida network, as
well as criminal elements, remain active in the country. U.S.-led
military operations continue. Travel in all areas of Afghanistan, including
the capital Kabul, is unsafe due to military operations, landmines, 
banditry, armed rivalry among political and tribal groups, and the
possibility of terrorist attacks. Several foreign journalists have died
covering the current situation in Afghanistan, including four murdered
near Sarabui in November 2001. Several humanitarian assistance workers, 
including Americans, have been assaulted and/or killed in the last month in
the northern area of Afghanistan. The security environment remains
volatile and unpredictable in Kabul and the countryside. On June 18, 
an unidentified group launched rockets within the city, and several
rockets landed in the vicinity of the Embassy. As stated in the
current Worldwide Caution, the Department of State has received
reports that American citizens may be targeted for kidnapping or other
terrorist actions. 
An estimated 5-7 million landmines and large quantities of un- 
exploded ordnance are scattered throughout the countryside and
alongside roads posing a danger to travelers. Some areas of the
country are facing food shortages. There is little infrastructure, 
and public services are extremely limited. Afghan authorities have
imposed curfews in some areas. Due to a growing number of
attacks against United Nations (UN) and private humanitarian workers
and non-governmental organizations in the northern areas of
Afghanistan in and around the city of Mazar-e-Sharif, the U.S. 
Government warns American citizens, including those with experience
in the area, against traveling to or residing in the Mazar area. Those
currently in the Mazar area should review their security arrangements, 
contact U.S. military forces in the region to register their presence, 
and make preparations to deport.

The brightest spot of the whole trip was that Anna Marie would be traveling with me from Denver to Frankfurt and to Tashkent. Then she would return to Denver via Frankfurt and Washington, D.C. as I proceeded on to South Africa and Zimbabwe. Should I go into Afghanistan she would remain in Tashkent while I was gone. The risk would be too great for her to travel to Afghanistan. 

Another interesting twist to the trip was that I had decided to take with me to Uzbekistan Project C.U.R.E.’s Denver’s city director, Mr. Jason Corley. It was time that I should take him on a training trip to instruct him on how to perform a needs assessment study. He would not go on to Africa, but Uzbekistan would be the perfect learning situation, and if the plans materialized for an Afghanistan entry, I would see if he could also go. He would be one of a very small handful of Americans who could say he had been in Afghanistan following September 11, 2001. 

Next Week: Into Afghanistan via Tashkent Uzbekistan  

© Dr. James W. Jackson  

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Need vs. Risk

Note: This very week Project C.U.R.E.is faced with another very strategic decision. Our contacts in Afghanistan are urgently requesting us to return to their country with more ocean going cargo container loads of needed medical supplies and pieces of medical equipment. In the past, Project C.U.R.E. has been one of the very few humanitarian organizations that have been successful in delivering the life saving goods into the country.  

In 2014, the Obama administration announced a timetable calling for a complete U.S. withdrawal by the end of 2016. Many contend that the surge's rigid timetable undermined U.S. leverage at a moment when maximum military pressure was being brought to bear on the insurgency, and that the anticipated withdrawal has likewise diminished the Taliban's incentives to negotiate. It appears to have emboldened the Taliban’s aggressive activities.  

Afghanistan is a very dangerous venue right now. So, does the desperate need warrant the risk involved of Project C.U.R.E. delivering help and hope to the people of Afghanistan?  

I thought it would be interesting, and perhaps enlightening, to share with you some of Project C.U.R.E.’s actual involvement in Afghanistan. 

Afghanistan Journal: July, 2002: 

I had a lot of good memories of Central Asia. I had at one time or another visited most or all of the individual republics of the old Soviet Union. The history was rich and colorful and included such eccentrics as Genghis Kahn, Timor Tourmaline, and Alexander the Great. Ancient tales of adventures along the Old Silk Road are still retold around Uzbek and Afghanistan firesides. 

But new sailing routes replaced the long camel caravans that plodded through the shifting sands of Central Asia, and upstart eccentrics like Stalin, Khrushchev, and Brezhnev exerted their dirty games of civil manipulation on the more recent political chessboard. 

I vividly remembered sitting on the cold floor of a rural Kyrgyzstan farmhouse in the dead of winter eating a late evening dinner as the snow blew into the old house from between the ancient logs. The entire oblast had run out of natural gas, and I had been invited to sleep around the wood burning cooking hearth in the kitchen with the rest of the farm family. I graciously declined, protesting that I did not want to inconvenience them or intrude into their privacy. 

Honoring my request to stay in the room where we were eating, they brought me blankets made from horsehides and a thin mat for the floor. Before the night was over I realized that I should have opted for the kitchen floor. As the snow continued to blow into the room where I was sleeping, I rummaged through the contents of my suitcase in the darkness of the old room. 

I was so cold that I had tried to pull my head under the blankets. But that had not worked at all. The old horsehide blankets still smelled terribly like the barnyard and I could count the time duration of my head under the covers in nanoseconds. 

But, finally, I pulled from my suitcase a couple of pre-worn undershirts and promptly wrapped my head with them turban style in order to stay warm and made it through the wintry Kyrgyzstan night. Great memories! 

I also recalled the hundreds of hospital and clinic facilities that I had visited throughout Central Asia. Project C.U.R.E. had made a great impact on the health care delivery systems within Central Asia and I felt proud to have been even a small part of that memory building. 

Over the years we had built some great partnerships in Central Asia with organizations like Vision International, Caleb Project, and Boulder Valley Hospitals; we had also done extensive work with various Korean missions groups. The longer we were involved in Central Asia the broader our reputation and influence had grown and the more groups there were that had come knocking at our doors. 

Project C.U.R.E. had previously worked in partnership in Tirana, Albania, with a Korean missionary group called Messengers of Mercy. One of their members, Mr. John Kim, who worked for United Airlines in Chicago, traveled with me to Albania for our needs assessment study. Project C.U.R.E.’s partnership with the Korean group has proven to be very successful in many places. 

Toward the end of 2001, Dr. Choi, from the headquarters of Messengers of Mercy in Chicago, asked if I would travel to Tashkent, Uzbekistan, and check out several projects there in which they were involved. I had agreed to go contingent on Mr. Kim’s traveling with me. They agreed and we began to work on a mutually agreeable date in 2002 for the assessments. 

At the same time I had been contacted by Central Asia Free Exchange (CAFE), one of our previous partners in Uzbekistan regarding some urgent medical requests made to them by the highest-ranking cabinet minister on the president’s council of Uzbekistan. If Project C.U.R.E. could participate in providing for the cabinet member’s request it was felt that many doors of opportunity would be opened in Uzbekistan. 

The high-ranking cabinet member, Dr. Alisher Sharipou, was so interested in working with Project C.U.R.E. that he traveled to Denver to promote our involvement and also to check us out. It had become quite clear that I needed to make a trip to Uzbekistan. We finally agreed to travel on the dates of July 26 through August 7. I was quickly running out of any available travel dates for 2002.

Almost equally as pressing was a request for me to return to Harare, Zimbabwe, Africa, to perform an urgent needs assessment study there. After a lot of consideration we decided that the only way I could possibly make another trip to southern Africa was to combine the African trip with the Uzbekistan trip. 

I would travel to Frankfurt, then to Tashkent, Uzbekistan, and then back to Frankfurt, and south to Johannesburg, South Africa, and north to Harare, Zimbabwe, then back to Frankfurt and back to Denver via Washington, D.C. 

Following the terrorist attacks on the US on September 11, 2001, Tashkent, Uzbekistan, had become an important hub for the war on terrorism. It also had become a very dangerous place. 

As the time drew closer for my travel into Uzbekistan, a strange thing occurred. One of the Korean groups, with whom we would be shipping partners in Uzbekistan, suggested that I go with them into Mazar-e-Sharif in northern Afghanistan. They felt that the United Nations would approve our travel into the war area to assess the situation. 

There were thousands of refugees in the area without adequate food, water, or medical attention, and perhaps Project C.U.R.E. could offer some relief in those areas. 

Next Week: Embassy Travel Warnings

© Dr. James W. Jackson   

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Meet My Brazilian Friends: Roads I Have Traveled ... Transition Journal

Dr. Heraldo Neves: 

One day, quite separate and apart from Lorena’s family activities, I visited a little doctor in an area just outside Rio de Janeiro called Mesquite. I had met the fellow earlier and he had invited me to come and see what he was doing to help the people in a populated area of about 300,000. Previously, there had not been any health-care facility in the whole area, but Dr. Heraldo Neves and his friends had purchased an old house and had converted it into a very humble clinic. 

When I arrived, I was startled at what I saw. There were hordes of people gathered in the hot sun crowding their way toward the front door of the old house. Mothers were holding crying babies, and old ladies were waiting their turn to get in by resting up against the building, where they could find a splinter of shade. Many people had been there since early morning waiting to see the doctor. He was their only hope for medical attention for their babies and for themselves. 

Dr. Neves would try to persuade his other doctor and nurse friends in Rio to volunteer and come out to his clinic and help him meet the overwhelming need. As I approached the front porch area of the old house, I saw an ancient dental chair and drilling apparatus that was run by foot pedals and frazzled cables. That was Dr. Neves’s dental clinic. 

As I entered the door, I looked to the right at a room that had once been the front bedroom. It was now painted a light blue color and had a poster of a baby pinned to the wall. On a rickety old table there was an old rusty set of baby scales. That was Dr. Neves’s pediatrics ward. What had once been a kitchen was now the emergency room that consisted of a canvas cot, an empty canister of oxygen, and a small metal cabinet with a glass front. I could see that re-rolled, grayish bandages were stacked inside the cabinet. That was it. That was Dr. Neves’s health clinic. 

“I don’t get it, Dr. Neves,” I said. “What is your problem here? You have all these people outside in lines that seem to stretch for a city block. They have come here thinking that you can help them, but when I come inside I can see that you have literally nothing in here to help them. Please tell me in your own words, what is your problem? Don’t you have anyone who comes here and comes along side of you and helps you? Doesn’t your government help you?” 

Dr. Neves was a short man with a high energy level and dark penetrating eyes. He looked straight at me and said, “Meester Jackson, you are the economista, you should know that we are experiencing inflation that is running over three thousand percent. I have no money, but even if I did I could not buy anything from the US or Great Britain or Japan. We are not allowed to buy anything outside Brazil, since our cruseiros currency would then flow out of our country and into the other country, causing more hyperinflation for us. And the government infrastructure here is not strong enough to help us. So, we are doing the best we can with what we have.” 

“Dr. Neves,” I confessed, “I do not know what I am talking about when I say this to you. But, I think I could go back to where I live in Colorado and get some medical supplies donated to help you.” Then I quickly added, “But if I were able to send some things to your clinic, you would have to guarantee to me that the goods would not get into the black market. I have been here in Brazil now long enough to know that I want to be part of the solution and not part of your problem.” 

The intensity of Dr. Neves’s countenance softened and he said to me with a little smirk to his smile, “Well, Meester Jackson, you are working directly with President Sarney in Brasilia; why don’t you get the guarantees directly from him?” 

Dr. Mauro Corbellini and President Sarney: 

I got on the airplane and flew back to the capital. I took Lorena with me to do the translating so that there would be no misunderstanding. There I began working on a medical donation concept with the President and Dr. Mauro Corbellini, Brazil’s Minister of Health. In our meetings the Minister of Health said to me, “if you will go back to the US and obtain donated medical goods for Brazil, I will see to it that you can import the things on a tax exempt basis. And, further, I will give you a large storage space on the University Medical School campus where Lorena attends in the city of Campinas. You will have the key to the storage area and you can decide where the medical goods should go based on your assessments.” 

I told the Minister of Health, “Thank you. That is all the assurance I need.” We shook hands and we parted. When I got back on the airplane, I slumped down in my seat and put my hands to my forehead and thought, Oh, my goodness, what have I just done to my life? I don’t even know where to go get a Band-Aid. 

I made two trips to Brazil in 1987. Our first load of donated medical goods was shipped in August of that year, along with a $5,500 cash donation from Anna Marie and me to Dr. Neves’s clinic. My trip to Brazil in March of 1987 had certainly changed my life. Dr. Neves could not afford to pay any money for medical goods. I would have to find a way to get the items donated. Additionally, the shipping costs to deliver the donations could be a humanitarian deal-killer. 

How would we develop a model that could be sustainable? Perhaps pursuing the idea of financial consulting with foreign governments like Brazil would help finance the possibility of additional gifting. There certainly appeared the possibility of creating some revenue stream from trying to develop the concepts of debt-for-equity swaps and other financial ideas that could assist the Brazilian government in their financial crisis. I would push to see if the US banks would be agreeable to pursue those kinds of ideas. 

The years of 1984 through 1988 were extremely busy and a bit complicated. I was not only getting more involved in Africa and South America, but I was still speaking regularly and conducting seminars with the What’cha Gonna Do With What’cha Got? project in the US. Now I had even been asked to hold two of the financial seminars in Brazil. 

It didn’t take any time at all for word to get out that we had begun to donate high-quality medical goods to Brazil. Before the end of 1987, I was also approached by contacts from Guatemala, wondering if we could include them in our donations. From those early days in Brazil the growth of Project C.U.R.E. has not slowed down. Twenty-eight years later we are shipping into over 135 countries and have well over seventeen thousand volunteers helping us just in the United States. But I will hold dear to my heart forever those early days where God directed my heart, ambitions, and efforts to help the beautiful people of Brazil. 

© Dr. James W. Jackson   

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Meet My Brazilian Friends: Roads I Have Traveled ... Transition Journal

Lorena: 
The next time I flew into Sao Paulo, Sostenez and his wife Miriam met me at the airport. They brought along with them the medical student, Lorena. She was a real winner, and for the rest of the many times I visited Brazil, Lorena translated for me. Little did I know at that time the importance and providence of that meeting at the airport in Sao Paulo. 

Lorena was from a medical family. They had moved to Brazil from Chile during the repressive regime of Pinochet. Lorena’s mother, Natalia, was one of the best known gynecologists in the whole Sao Paulo area. Her sister, Natasha, was a dentist, and Paulo, Lorena’s fiancé, was a doctor already well known for his outstanding work in infectious diseases. I was totally surrounded by medical people. They would invite me to go to their church with them and then would insist that I come to their home for Sunday dinner. Following dinner, I would be expected to accompany them on their hospital rounds. I got a real introduction to Brazil’s health-care system. 

At times they would insist that I join them as they visited the poorest of the poor favelas, or shantytowns, to perform free medical service to the desperate dwellers. It was so dangerous in some of the favelas that the police or military would not even enter the areas. Then, the family would tell me how every October they would fly in small airplanes into the remote villages of the Amazon region and perform free clinics for the native people, who would have an opportunity to see a doctor only once a year. I began to truly admire the members of the family and all the acts of goodness in which they were involved. 

I was fully engaged with my economic consulting work with President Jose Sarney and his chief economist, Antonio Bacelar on our plan that came to be known as the “Libra Proposal.” I was also becoming extremely sensitized to the urgent need in the Lesser Developed Countries for someone to go and help them with their health-care delivery systems. Even just the simplest of medical help was not available to millions of poor, but good, people. 

NOTE: Lorena and her family became a strategic keystone to what would eventually become Project C.U.R.E. (Commission on Urgent Relief and Equipment), the largest handler of donated medical supplies and pieces of medical equipment in the world. Over the years Anna Marie and I totally adopted Lorena and her family. We told our sons, Douglas and Jay,that Lorena and Paulo were as close as they would ever get to having a brother and sister. Eventually, I began working directly with the two medical universities in Sao Paulo state where Lorena and Paulo were affiliated. We visited them many times and had them come to our home in Colorado. In recent years Paulo and Lorena even came to the mountains of Colorado with their teen-age sons to spend Christmas with us in our home on the creek. We also brought them from Brazil to Colorado to meet all our friends when we celebrated the launching of my book The Happiest Man in the World. 

Over the ensuing years Lorena and Paulo have become very influential medical doctors in Brazil. Lorena and her mother, Dr. Natalia, now have their own successful medical clinic. Paulo is highly decorated as a researcher and professor at the university in the areas of dermatology and infectious diseases. Little did we know what God had in store for us when Sostenez and Miriam introduced me to Lorena at the Sao Paulo airport that day in 1987. 

© Dr. James W. Jackson   

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Meet My Brazilizn Friends: Roads I Have Traveled. . . Transition Journal

Sostenez Pimentel: 

By 1986, I was being recognized as a knowledgeable international economic player, and people began to contact me for my help and opinions. I had thoroughly enjoyed what I had been doing in helping people in an area that was comfortable to me. But in my quiet times I would keep asking why I was being taken on a trip to strange parts of the world where I was meeting and working with people of influence and high position. It wasn’t going to be very long, however, until I discovered the next installment of revelation on the quest. Then I would know just why I had been taken on such an adventure. 

When I arrived in Brazil, I was introduced to some very powerful people who had considerable influence in the capital, Brasilia. My credentials included letters of recommendation from US Senator John McCain and Senator Bill Armstrong. The Brazilian government had requested that I come to Brasilia, and our US Ambassador Shlackman, US Consul on Economic Affairs, Michael J. Delaney, and US Economic Minister to Brazil, John Bowen, would formally introduce me to Brazil’s Minister of Finance and Minister of Foreign Affairs. 

I endeavored to pick up some key phrases in the Portuguese language, but there was no way that I was going to become proficient in the language in time to adequately participate in high level talks. I was fortunate enough to make some friends in the British Embassy in Brasilia, and they were more than happy to help me. If they were not available to help me, there was a fine missionary gentleman in the Brasilia area who had volunteered to help me with the translating. 

Soon I met a young, ambitious man named Sostenez Pimentel. He also was an economist and had been employed by the Brazilian government. He was married to a lovely young schoolteacher, named Miriam. They wanted to get ahead financially, so they decided that Sostenez would quit his government job and become an entrepreneur. They both asked me if I would help them get involved in the import/export business. I agreed that I would help them, and in exchange they could help me with translating when I was away from Brasilia. 

 

The only problem with the deal was that Sostenez’s English was about as good as my Portuguese. We really had to work hard at communicating with each other. Portuguese was just enough different from Spanish to get things all mixed up, even though both languages were derived from the Latin root.  

One day we had time as we were traveling across Brazil by car for me to approach the language subject with tact. “Sostenez,” I said, “when I am in business or government meetings in Brasilia I can do very well. But when I need to travel to Rio or Sao Paulo or Belo Horizonte or Goiania and I have meetings, I really need to have someone to help me who can speak better English. I mean absolutely no offence to you, but do you know of someone who might be able to help me?”  

To my delight he was not offended, and quickly went on to try to make me understand that there was a very sharp medical student who knew English very well. In fact, she was coming over to Sostenez and Miriam’s house every Saturday morning and teaching them English. Sostenez agreed to ask Lorena if she would help out a crazy American in distress. I assured Sostenez that I would continue helping him get into business, even though he would no longer need to translate for me.  

One of the saddest incidents that I personally encountered during all my work in Brazil was about a year later on a Sunday night when a group of young, drunk Brazilian thugs forced Sostenez off the road and tried to rob him. He resisted. They killed him and left his body crumpled by the rear wheel of his small car. I lost a dear friend and it was another wake-up call for me as to the dangers of working in developing countries where the rule of law is not well established. 

© Dr. James W. Jackson   

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Journal Highlights: Roads I Have Traveled ... Transition Journal Excerpt # 5

Note: While recalling the experiences included in the 1986 Transition Journal and my early financial work in Brazil, I am persuaded to take a little “bird walk” and relate some of the things I learned in Brazil to what we are experiencing right now in our economic situation in the US. What are the implications of International Debt for Equity Swaps regarding the trillions of dollars of US international debt that we owe?

One of the problems we have in the U.S. stems from how we think about treasury bills and bonds. It is very convenient to play games with semantics when it comes to debt instruments. The media financial reporters tell us that “it was a very successful day in the sale of treasury bills and bonds.” That day the sales of T Bills and bonds set new records. We all cheer because it sounds like the government has been able to sell some of the fine products that they manufacture to domestic and foreign buyers and they have now successfully sold those items and have brought profitable revenues into our coffers. Wrong.  

Every T-bill or bond is an I.O.U. that has to be paid back . . . with interest. We just went further into debt when we sold the bond! So what happens when the borrower cannot repay the debt? Like in any other debtor relationship, the holder of the I.O.U. must look to the collateral that backed up or guaranteed that debt instrument. In my Brazilian experience in the 1980s, when the sovereign government could not pay back the U.S. banks with money it got sticky, because the U.S. bank regulators would not allow them to take foreign assets to satisfy the delinquency. It had to be money.  

So, the debt swap was initiated whereby Brazilian businessmen, who had financial statements strong enough to qualify, bought the debt instrument from the U.S. banks at a discount by signing a new note and assuming the Brazilian government’s I.O.U. position. Then the businessmen went to the Brazilian government and dictated which sovereign Brazilian assets they would take to redeem their I.O.U.s. The debt swap exchanged real sovereign Brazilian assets, like government buildings, raw land, prepaid port fees, transportation and communication rights, to satisfy the old debt.  

I raise this phenomenon here for consideration because of our own country’s unfathomable debt in the amount of multiplied trillions of dollars. Our I.O.U.s are held now by entities and governments like China that have no qualms about taking U.S. sovereign assets to satisfy delinquent sovereign debts. Our U.S. Treasury admits our collateral problem in the bond market. One consideration, as a temporary cure, is issuing ultra long dated bonds (more than 30 years) to fulfill collateral needs. The repo market is broken due to massive collateral shortages. There are pressures now to explain the causes for an increase recently in the “fail-to-deliver” aspect of the U.S. government debt market.  

Historically, without collateral to fund repo, there is no repo. Without repo there is no leveraged positioning in financial markets, and there is really nothing to maintain even the slightest exuberance in the stock market.  

Another alternative as to what to do with questionable I.O.U.s seems to be unfolding in the case of China’s Anbang Group’s pursuit of buying Starwood Hotels and Resorts. The deal would make the Chinese group the largest hotel chain in the world with 5,500 individual properties and more than 1.1 million rooms, including the Sheraton, Westin, and Regis hotels. How could any lender resist taking U.S. government, guaranteed promissory instruments as collateral to secure the funding of such international groups purchasing United States’ icon assets? I am curious at the possibility of the American family pulling up at the entrance of Yellowstone Park and needing to pay in Chinese currency or Chinese debit card for entrance.  

But these creative alternatives seem more plausible for the American constituents to accept than simply having foreign delinquent bond holders come in and possess large amounts of U.S. mineral rights, national lands, and nationally held assets that presently serve as sovereign collateral.  

So much for my concerned musings sparked by my memorable days in Brazil  

Next Week: Back to the Transition Journal

© Dr. James W. Jackson   

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Journal Highlights: Roads I Have Traveled ... Transition Journal, Excerpt # 4

(continued): Brasilia, Brazil, 1986: While I was still working with Zimbabwe, the embassy in Quito, Ecuador, heard what I was doing, and I went there at their request. I had a great opportunity to research and study the concept of the debt swaps or debt-for-equity exchanges. By this time I was working under my newly formed company, International Market Exchange, (IMX).

From Quito I went to Lima, Peru, then to Caracas, Venezuela, and finally I traveled to Brazil, where I worked for nearly three years with President Jose Sarney and his chief economist, Antonio Bacelar. Our plan became known as the “Libra Proposal,” and we were joined in the effort by Mr. Dilson Funaro, the outgoing Minister of Finance, the incoming Minister of Finance, Mr. Bressler, and William Canvallo, the Secretary of the Federal District of Brazil. 

My involvement with the financial leadership in Brazil ultimately included my leading a delegation to Washington D.C. of Brazilian leaders to meet with Honorable James Baker, Secretary of the US Treasury. That was before James Baker had assumed the position of Secretary of State for the US. 

The Libra Proposal was a plan that made it possible for the repayment of Brazil’s debt back to the American banks. Brazil’s economy was at that time experiencing runaway inflation of three thousand percent. By the time the money would get into their system there was nothing left to pay the debts. 

While working on the necessary research for writing the economic sections of the book, What’cha Gonna Do with What’cha Got ?, I had run into an interesting concept. Many of the US banks had been coerced by our government, the World Bank, and United Nations to make sizable loans to foreign countries as economic relief measures. Instead of our government simply handing over large sums of additional monies to the United Nations, who in turn would hand out the monies to foreign countries, especially in Central and South America, they pressured our banks to make the loans directly to those needy countries. That sounded like a great strategy to bypass the corruption of the United Nations and the World Bank. But there was a big problem. 

The banks insisted that the sovereign countries sign legitimate promissory notes guaranteeing the repayment of the loans. Perhaps the United Nations or the World Bank could allow the foreign countries to default on the loans and just write them off as bad debts. But individual banks in America were under the tight scrutiny of the US Federal Bank Examiners and Federal agencies like FDIC. 

It was true that under the Nixon administration in the 1970s, when the US economy was cut loose from the gold standard, banks were allowed to use foreign sovereign debt instruments as credits toward their necessary Fractional Reserves. But it was high risk to make foreign sovereign loans, and utter disaster for the US banks if those foreign loans should ever go into default. 

By the mid-1980s, many of the foreign countries were in default to the US banks. South American countries simply shrugged their shoulders and said, “Sorry, we can’t make good on our loan commitments.” That threw the US banks into a crisis. Once the loans were declared non-performing loans, the US banks had to write them off, and if they had used them as part of their fractional reserves, their assets and lending powers began to implode. 

But some creative financial folks in the US came up with a clever way to take care of the problem. That program, known as Debt Swap caught my attention. It simply utilized the common elements of the old barter system to save the banking industry in America. 

Here is a common way debt swaps worked: US bank examiners would require that a certain bank would have to declare a sovereign foreign loan as a non-performing loan. The bank could no longer use the sovereign foreign debt instrument as part of its fractional reserves, and its lending ratio would shrink by approximately twenty times the amount of the non-performing loan. That would spell really big trouble. 

At that point a group of individuals or an entity would agree to purchase the bad loan at an attractive discount from the bank, and their new note would heal the bank. Thereupon, the new holders of the foreign note would take the note to the country owing the debt and agree to swap the note for assets within the country to settle the debt. 

 

Those assets could include government controlled exports, natural resources like oil concessions, mineral rights, undeveloped real estate, government-owned buildings, fishing rights, rights to ports and harbors, or any other service or commodity of equally agreed-upon value. Simply, the indebted country could use its own assets to settle the debt where it could not come up with cash to make the payments. 

Many times, as was the case in Brazil, large corporations within the country would desire to purchase portions of their own government’s debt so that they could use the credits to purchase commodities from the government within the country, or apply it to their tax obligations. The sovereign countries would end up better off, the banks would be better off, and the arbitrators would be handsomely enriched for their efforts. 

Next Week: Implications of International Debt Swaps or Debt for Equity Swaps for the trillions of dollars of U.S. international debt situation. 

© Dr. James W. Jackson 

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Journal Highlights: Roads I Have Traveled ... Transition Journal Excerpt # 3

(continued): Harare, Zimbabwe, 1985-1986: Every dictator who desires to rise to power in a Lesser Developed Country promises the people two things to gain their political support: a better health-care delivery system and electricity to the rural areas. None of those who make such promises, that I have ever met, were capable of delivering on either promise. So, it did not come to me as a surprise that the Zimbabwean delegation was very interested in investigating the possibilities of acquiring both electrical and health-care items for their country. While I was in Zimbabwe I would try to help them with meeting those needs, since health-care and electricity were so important to the economic development of the country. 

Upon arriving in Zimbabwe I began working almost immediately with them on an exciting project dealing with their neighbor, Zambia. I was taken out and shown how the grain storage facilities in Zimbabwe were full and running over with maize.

For three years they had experienced bumper crops, and they had run out of room to store the grain. 

The reason we had purchased the burlap sacks while in US was for the storage of the overflow. I was shown stacks and stacks of sacks of maize covered with black plastic. The stacks were the size of very large buildings. But the rain was getting in from the top and the rodents were getting in from the bottom.

And all the while the tribes across the Zambezi River in Zambia were starving to death. The irony was that Zambia was rich in copper production. However, the price of copper had plummeted and no one was buying Zambia’s copper. 

As I surveyed the situation, it looked to me like there existed a great opportunity to simply put some uncomplicated trades together and make some enormous profits in a new and overripe field of opportunity. For hundreds of years Africa had suffered tribal conflicts and lacked any developed system of economics or a basic understanding of economic factors. Someone like me could come upon a situation like this and make a whole lot of money. 

It should have been a very simple deal for Zimbabwe and Zambia to have structured a fundamental counter exchange, like trading excess maize for devalued copper, and made it come out beneficial for all concerned. But tribal differences, and the lack of any established method for transacting the international exchange, left both countries in a negative position. It took someone who was neutral and on the outside to step in and broker the deal. Acting in that role as “deal broker” could result in huge profits in a continent like Africa. 

As I was thinking along this line, suddenly God reminded me of my commitment that I had made to Him well over fifteen years earlier: I would stop earning and storing up wealth for myself and give the rest of my life helping other people. But why then was I in Africa working with the very top people in power. I was learning a great deal about how the international world worked, but what was my specific role to be in all of what I was witnessing? 

I decided to stay out of participating in any of the profits of any of the new ventures, and I simply stood on the sidelines and coached the teams. I showed my friends in Zimbabwe how they could get rid of their inventory of maize before they lost any more of the production. I showed them how to rent warehouse space in London to store the copper until the world price once again stabilized. When the price went back up they could sell the copper and make a lot of profit and at the same time they would have salvaged their precarious maize situation and saved the lives of a lot of starving folks in the meantime. Many of the hungry people of Zambia ended up with supplies of maize that helped fill their empty tummies. 

While grappling with the African situation and my economic role for the future, I also had a chance to re-evaluate my commitment to doing good and not taking advantage of the business deals for myself that were so obviously available internationally. I vividly recalled some episodes in the life of my sometimes hero, Armand Hammer. He had been faced with similar temptations. Following the Bolshevik Revolution, Hammer visited the ravaged areas of the Russian Ural Mountains. He had witnessed the sickness and starvation and had told Lenin that he would with his own personal money purchase a million dollars’ worth of grain and bring it to Russia to save the starving people. He had been moved with great compassion. 

But by the time his shipments of grain had arrived in Russia, he had seen a phenomenal opportunity to pillage very valuable Russian antiquities from the dethroned Czar’s wealth. Instead of simply giving the grain to the Russians as he had offered, he changed the deal and insisted that they fill the ships that had brought the grain with the valuable Russian antiquities for his own keeping. There was no gifting at all! 

I didn’t want to renege on my commitment to God. I allowed the Zimbabwe situation to strengthen and reinforce my earlier promises. I remembered the old adage: The final temptation is the greatest treason: to do the right thing for just the wrong reason. 

I did the best I could to help Zimbabwe get their economy established, but there was considerable push back from some of the military generals who had just discovered a lot of new power and had designs on reaping a lot of benefits from their new positions of power. Even while I was in Harare, I overheard President Mugabe’s generals remind the president that he had gotten where he was because of their bravery and their fighting expertise, and he owed them for their loyalty and they expected to receive consideration. 

At that point I knew that my days of usefulness as a successful economist in Zimbabwe were pretty much over. Any idealistic dreams President Mugabe may have had for establishing a democratic free market economy in his new Zimbabwe would be swallowed up by the greed and entitlement corruption of those close to him. That spirit of greed and entitlement would be contagious, and it did not appear to me that the President had the resolve to counter it. 

Next Week: The idea and practice of International Debt Swaps. 

© Dr. James W. Jackson  

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UPDATE! New of the New Book Better Off

This is fun! Endorsements for the new book are rolling in. Take a look:  
 

Better Off (non-fiction), by Dr. James W. Jackson (author), 2016, Winston Crown Publishing, should be required reading for every young person in the US and anyone else looking for an understandable primer on economics. 
Dr. Jackson has managed to compress into 200 pages or so an entire college level course on economics. He takes on the current political campaign fascination with redistribution of wealth and offers a more American way of achieving success so that everyone is Better Off. In addition he uses his considerable international experience to highlight examples of humanitarian principles, which benefit millions of persons worldwide. His hopeful and positive approach toward a sometimes controversial and often misunderstood subject (economics) was refreshing. His personal insights and commentaries were spot on, supporting his logical arguments about what really creates wealth. I would expect this book could be a catalyst for a new American renaissance and spur an economic recovery in the US if policy makers and politicians would put this into action. A must read for anyone hoping for an alternative to the current debate about what really creates and sustains wealth. He makes it clear that America has succeeded in the past because of the unique economic and cultural experiment of 1776.
- Dr. James W. Terbush: U.S. Command Surgeon, NORAD/Northcom, Homeland Security 
Even for those who studied economics in college, the fundamental ideas that comprise the ‘economic way of thinking’ too often remain elusive. In this uniquely-styled, and very enjoyable book, Dr. Jackson provides important historical context while revealing the economic reasoning skills that will help people achieve success in their personal, business and civic lives. I highly recommend this excellent book which is a fitting tribute to a remarkable teacher-of-teachers, Dr. Paul Ballantyne, one of the giants of economic education.
- Robert L. Clinton: former President, Colorado Council for Economic Education    President of the Colorado Council for Economic Education from 2000-2015, also member of the board of directors of both the national Council for Economic Education and the National Association of Economic Educators   
I absolutely loved this book. Dr Jackson made the principles of economics easy and actually enjoyable to learn and then built on that to explain how the USA used these principles to become the greatest economy in the history of the world. Then he shows you how to apply these principles in your own life and inspires us by showing us how to succeed by making other people better off. I cannot recommend this book enough. 
- Jonathan Manske, Author, Coach: Law of Attraction
Dr. Jackson has a gift for bringing economics to life in a clear and conversational way. He provides a real service with this book, explaining the keys to economic success, and how we might lose our way if we forget these keys. He has seen much in his life that he brings to bear in this fine book, and it is a particularly important read for young people today. Good planning and hard work resulted in the achievement, creativity and productivity that has enabled Americans to be Better Off. This could be jeopardized if we are not aware of the economic realities this book so well describes. 
- Nicholas Muller, Attorney at Law

For those of you who received an advance copy of Better Off: How America got Wealthy and you can too!, you still have until April 29th to get your response submitted to: press@winstoncrown.com  

Thanks for making this important project so enjoyable! 
 

Next week we continue with the saga of the Transition Journal of The Roads I Have Traveled. 

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