Friday, June 3, 2011

Cartier in Colombia, and What it Means

The Cartier Woman - Coming to Colombia?
Cartier, the luxury French jewelry store chain, is expanding its Bogotá store, making it its biggest in South America (at least until a new Brazil store beats it out).

Of course that's great news, and not only for those of us who trade in our diamond-studded watches every month: it'll also mean a few more jobs and more taxes paid, which hopefully will finance schools, parks and hospitals for those who don't shop at Cartier.

Not yet in the Cartier club: sock vendors on San Agustin Plaza. One told me that she earns about $6 on a good day.
But this symbol of luxury and pretention also says something about the chronic troubles of Colombia, which has a poverty rate close to 50% and an extreme poverty rate of 20-something percent. Those numbers are much worse in the countryside, where the poverty is between 60 and 70% and among the indigenous and Afro-Colombian minorities.

The violent and impoverished San Agustin
neighborhood in central Bogotá.
Colombia has one of the most unequal income distributions not only in South America, but the world, according to the GINI coefficient, which measures such things. The lower a country's GINI number, the more equal its society. Sweden, where things work well, scored a GINI of 25 for the years between 2000 and 2007. The United States, amidst the Bush tax cuts for the rich, scored 41. Uruguay scored 46, Brazil 55 and Colombia 58.5.

I couldn't find more specific data for Colombia, but here's a yardstick: in Sweden the 20% wealthiest people control 36% of the wealth. In the U.S., the richest 20% control about 84%. In Colombia, that number must be above 90%, leaving less than 10% of the wealth for the other 80% of Colombians. And for the poorest 20%, the numbers must be even more appalling: In the U.S., the poorest 20% control only 0.1% of wealth. It's hard to imagine an even more unjust wealth distribution, but Colombia has it.

Opulence among poverty is ugly and unjust. But, according to recent research, economic inequality degrades societies in many ways, including ones you'd never suspect. As inequality grows, social problems including drug abuse, obesity, mental health, imprisonment, social mobility, violence and teenage pregnancies all get worse, according to the 2009 book The Spirit Level.

Worlds Apart: A slum climbs up he hill beside Los Andes University's newest building, left, named after billionare  Julio Mario Santo Domingo. 

With lots of inequality and poor social mobility, those at the bottom feel they have no chance to take part in the country's riches and their frustration grows. That's true in Colombia, where the same families have dominated business and politics - and appear likely to continue doing so. I read that the lion's share of Colombia's business leaders come from Los Andes University. I don't think that's because Los Andes is so much better than other universities, or its students any smarter. But the children of elite families who study there network and then get each other onto the boards of directors.

The Santos watch. Satin and sapphire
crystals for not much over $4,000.
Luxury is now within everyone's  reach!
Of course, we can feel better knowing that Cartier jewelry is actually in every person's reach. A Cartier executive pointed out in an interview that their watches and jewelry start at an affordable $800 - just several times the Colombian minimum wage.

"People start there and then move to the high-price items," he said.

Start saving up!

On the other hand, what use is a $4,000 watch, especially in Colombia, where taking out a cellphone in public can be dangerous? Certainly not for wearing on the street, where it won't last long, or for wearing at home in the mansion, which is full of clocks and where everybody knows you're rich, anyway.

A $4,000 watch is for showing off and glancing at conspicuously and repeatedly at ritzy events with other important people.

Things like this only perpetuate and intensify the isolation of the wealthy from the rest of Colombians by giving them another reason to hide from the masses who get by without such basic necessities as Cartier watches and jewels.

What can Colombia do to address this social chasm? One thing is tax the hell out of luxuries, and use them to create quality common spaces and resources for all Colombians, such as parks, hospitals and schools.

By Mike Ceaser, of Bogotá Bike Tours

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