How I killed newspapers, Part Two

OK, I didn’t really kill newspapers.

But my career began when newspapers were doing extraordinarily well, and continued as they did less and less well. For much of the time, I was in newspaper management. So I’m hardly blameless.

Looking back, it’s amazing how many mistakes we made.

In my early days at The Red Deer Advocate, we published two 96-page newspapers in the run-up to Christmas. Advertisers needed to use the paper, and we benefited. (The paper made lots of money, circulation was increasing and we were adding newsroom staff every year.)

A chunk of that advertising was from big grocery and department stores, which would buy six or eight pages of advertising at a time.

Then the stores thought of a cheaper way to reach readers. They printed flyers and pay us to insert them in the newspaper. Eight pages of actual ads might have cost them $7,000. The flyer would cost about one-third of that.

The newspaper industry didn’t like flyers, naturally. One response was to charge high rates to insert them in the paper. (Arguing in part that the charges were justified because being part of the newspaper added value.)

So other businesses charged less and grabbed the business, especially community newspapers that were emerging, in many markets, as strong competitors.

Newspapers were nicely profitable in those days. Revenue was strong and subscribing to your local paper was practically an act of citizenship. Technology was reducing labour costs. The days of a reporter typing a story and then having editors hand the copy to a higher-paid composing room employee who would type it again to produce the type were ending.

But there were already warning signs of trouble ahead, and not just from low-cost competitors. Any research showed newspaper readers skewed old. The younger people were, the less likely they were to pick up the paper. We made small and ineffective efforts to reach them, but mostly told ourselves they would grow into our products. And readership fell, for almost all papers, year after year.

The world changed much faster than we did. Newspapers were slow to experiment with the Internet and online distribution of news and information. We watched as Craigslist scooped away classified advertising. (A double blow that meant lost revenue and one less reason for people to read the paper.) 

And we never really worked at understanding how people’s information needs - and sources - were changing. In the mid-90s, when I was at the Times Colonist, we did a research project on readers’ needs and interests. After polling and focus groups, the consultant reported people in Victoria had very low news needs. They just weren’t interested in news as much as they were in working in their gardens or sailing. That’s partly a reflection of Victoria’s population, but I suspect they were in vanguard in terms of their attitudes toward news. Around the same time a young woman told me she didn’t need the media because if something important happened, someone usually told her about it. That attitude, amplified by a flood of information, is increasingly present.

There were certainly a few efforts to tinker with the product. But not many. And few sustained, bold experiments. (The National Post was innovative when launched, but hardly a bold new direction for newspapers.)

Why? I’d suggest four big reasons.

First, newspapers were a “mature industry.” Ian MacDougall, a consultant whose work involves corporate lifecycles, warns that stage brings the risk of complacency and an environment where innovation or even raising problems is discouraged. Short-term financial results take priority over long-term growth.

Second, corporate ownership brought a focus on short-term results. Corporate managers needed to report growing quarterly profits, or investment analysts would write bad reports, shareholders would sell and stock price would fall. Investing in research or new products doesn’t get much support in that kind of environment. And the response to any drop in revenue is to look for quick expense reductions, even if that risks long-term damage.

Third, many papers - most larger papers - had costly, inflexible union agreements, signed when times were good. National advertisers, for example, began sending completed ads for publication in the 1970s so they had control of the way they looked. Union contracts gave some composing rooms jurisdiction over all production. So, as a compromise, compositors typeset and made up versions of the ad, which was then thrown in the garbage. The Vancouver Sun and Province quit accepting inserts last year. The union contract called for mailroom staff to be paid more than $90,000 and ‘stuffers,’ who put the flyers into the papers, to be paid the equivalent of more than $60,000 a year. 

And, fourth, many people in the industry at every level were delusional. I started writing about newspapers after after a lively exchange on Twitter, which was started by a tweet from a journalist that “you can't beat your daily newspaper for value... less than a cup of coffee... ante up, folks.”

We kept telling each other what great value we were and how much people needed us, even as they were sending the opposite message. And, in many ways, we still are.

So what will work? That’s another blog post.

How I killed newspapers: Part One

Found myself in a lively Twitter exchange today about the future of newspapers, sparked in part by Postmedia’s grisly quarterly report.

Things look bleak for most newspapers. Postmedia is Canada's largest newspaper company. Its report set out the problem. Revenue - ads and circulation and digital - was down 9.4 per cent on the previous year. Expenses were down 9.1 per cent, thanks to a big cost-cutting drive. Based on those numbers alone, next year’s financial performance will be worse, and the next year worse still.

Circulation - the number of newspapers sold - is down by 14 per cent in the quarter. Some of the decline reflects the decision to kill Sunday papers in Ottawa, Edmonton and Calgary, which were judged money-losers. But that’s still a huge loss in readers.

Postmedia newspapers have been losing about five per cent of their subscribers a year. Which means a paper can shed 25 per cent of its customers in a little over four years.

Newspapers once sold themselves as mass media. Buy one ad, in the 1990s, and you had a chance of being seen by more than two-thirds of the adults in a mid-size city. (Numbers were higher in small communities, lower in big ones.) Now an ad might reach 50 per cent of the population in a mid-size city. Advertisers will pay much less - or find a more targeted media.

When everyone read the paper - or it seemed that way - there was pressure to subscribe. Otherwise, you might not be in on the next day’s conversation at coffee break.

And, of course, fewer readers means less circulation revenue.

Paywalls and digital subscriptions were supposed to help address the problem. It’s not a bad short-term strategy to pull in some revenue. But the early evidence is that - for almost all newspapers - the hope that people’s payments for online content will come close to covering the bills is delusional. (Which is the subject for another blog post.)

Postmedia has tested paywalls and introduced them in all its papers. The quarterly reported noted 100,000 people had signed up as digital subscribers. But it didn’t disclose how many were existing print subscribers, who would pay nothing, and how many were real, new, revenue-producing online readers. Which means there were not that many paying customers. Companies like to share successes.

Overall digital revenues - online ads and subscriptions - were up 2.2 per cent for the quarter. 

That’s not good. The corporation lost $21 million in ‘traditional’ revenues, and gained $500,000 in new digital revenues. Postmedia management has been pitching a “digital first” strategy, counting on double-digit revenue growth to help offset print declines. It hasn’t happened.

That’s a fairly bleak look at the industry. 

But we haven’t even got to one of the big problems.

Michael Brown, then the slightly scary head of the Thomson Corporation, talked about the virtuous circle. Newspapers would invest in the product and get more readers and advertisers, and use some of that revenue to make the paper even better, and on and on. (Brown made the decision to sell off Thomson's newspapers in the mid-90s.)

Now, the focus is on cutting costs. And the chosen approach involves reducing the quality of the newspapers, which will mean fewer people will buy them and more cost reductions will be necessary. The opposite of Brown’s virtuous circle is the death spiral. Why start paying for a newspaper as it cuts content?

Doom and disaster aren’t the inevitable outcomes. 

But they aren’t a bad bet. It was hard to see anything in the Postmedia report to shareholders that hinted at a strategy to build a sustainable business based on providing news and information in Canadian cities. 

Many Postmedia papers - like the two in Vancouver - are still operating with crushing cost structures. The  contracts were freely negotiated by both sides in the good old days. But paying a semi-skilled mailroom employee $90,000 a year, as the business crumbles, is folly. 

It’s not a pretty picture. But there is a powerful argument for the importance of newspapers, or at least news organizations that pay competent, trained people to report what’s going on, and offer commentary. That is not a slag on bloggers and citizen journalists. (I am one.) But there is value in having a paper that will stand behind you when you are sued, or come up with a cheque every week while you check out stories and gain understanding of issues. 

But the industry isn’t responding in a way that shows it understands the crisis. That is consistent with at least 30 years of failure in responding to change. 

That’s tomorrow’s blog post. (The post title - How I killed newspapers - is tongue in cheek. But I did work in the biz during the years of decline, for many of them as a manager. It's hard not to feel some blame is in order.)

Where have all those post-Olympic tourists gone?

The mass protests in Brazil are big news down here. In part, Brazilians are mad that the government is spending billions to host the World Cup and the Olympics, and don’t buy promises of economic benefit.

B.C.’s post-Olympic tourism stats support the protesters’ skepticism.

The promised increase in visitors didn’t happen. In fact, two years after the Games British Columbia actually lost ground as a tourist destination.

In 2007, B.C. had 4,837,000 international visitors, 26.9 per cent of the Canadian total. The numbers plummeted in 2008 and 2009, not surprising given the global recession and financial crisis. International visitors increased slightly in 2010, fell in 2011 and inched up 1.1 per cent last year.

The number of international visitors in 2012 - 4,220,000 - was 13 per cent below the 2008 total.

And B.C.’s share of the total visitors to Canada was 25.9 per cent - the lowest in  at least seven years.

You can rationalize changes in the raw numbers, pointing to external factors.

But B.C.’s tourist visits aren’t just flat-lined. They’re declining. The Games impact has been non-existent.

That’s not surprising. How many British Columbians decided to visit Turin after watching the 2006 Games?

But in selling the public on the Games, the government promised big benefits. It commissioned a study in 2002 that predicted the Games would result in 1.7 million to 2.7 million additional international visitors between 2008 and 2015. That’s at least 200,000 per year.

Those were among the benefits a contribution from taxpayers equal to some $450 per person - kids included - to pay for the Games.

And the promise of tourism increases has turned out to be entirely empty.

Those Brazilians have good reason to be worried.

International visitors

	BC	BC Share	Canada
2006	4,811	26.5%	18,175
2007	4,837	26.9%	17,975
2008	4,459	26.1%	17,089
2009	4,179	26.4%	15,804
2010	4,271	26.5%	16,093
2011	4,174	26.1%	15,976
2012	4,220	25.9%	16,311

You don't have to be religious to help - but the people who do mostly seem to be

I’d certainly argue that you don’t have to believe in God to help others. It seems a natural thing to to do for any thinking, feeling creature.

But it’s striking that the people who actually show up to help in Honduras are driven by their faiths. 

A posse from a Louisianan church was here this month to help an orphanage/care home in Copan Ruinas. They built beds for the kids, with cupboards for personal stuff. They worked hard, dealt with the inevitable problems and left the home much better off. The kids were big fans of the guys. The new units replaced wrecked beds with stinking mattresses, where kids often slept two to a single bed and gave them a place to store their few possessions. It simply would not have happened if the guys from Louisiana had stayed home.

There is personal satisfaction, I’m sure. A chance to see a new country. But really, the group were here because they believe helping others is a tenet of their faith. It’s what Jesus wants them to do.

There are many others. Last year, I rode up into the hills with a church group from Tyler, Texas. They were working on a water project. The core group had been doing annual missions for at least 12 years. Projects in their community and another country were built into their church plan each year.

When we were in Tomala, we bumped into a mission group doing eye care. They had collected thousands of eyeglasses back in the U.S., and volunteers had tested each pair, and labelled them with the prescription. The group tested people in poor communities and gave them the correct glasses so they could actually see to perform basic chores.

Missions are a big deal here. There are some 2,000 a year, according to an article in Honduras Weekly. Most days in the San Pedro Sula airport you can spot people - Americans - matching t-shirts, often with religious slogans. Honduras got about 286,000 U.S. visitors last year; 34,000 were on missions or aid work.

They aren’t all alike. Some groups are more interested in proselytizing than the day-to-day problems of Honduras. Some are poorly planed, and it probably would have been better if the people had just collected the money they spent on travel and donated it to an organization down here. (Although there is merit in simply giving North Americans a chance to see life in a poor country firsthand; no amount of reading offers equivalent understanding.)

And there is a lot of debate about the projects, and whether some actually have a negative impact. Will struggling communities learn that it’s easier to wait for a bunch of gringos to come down and fix the collapsed school roof, rather than come up with a solution? Will there actually be a teacher for the school? Will the new water system break down within a year because there’s no money, or knowledge for maintenance? (About 50 per cent of water projects in Honduras fail within five years, a consultant said at last year’s Project Honduras Conference.)

Those are all arguments for well-planned mission trips, not against the concept. (Or excuses for inaction.) And a certain percentage of failures - for missions, NGOs or anyone else - is just part of the process in a country like Honduras.

There are lots of people travelling here to contribute who aren’t religious. But they are wildly outnumbered by the faith-based groups who come down to work, or send cash or contributions. 

That’s true in Canada, too, according to most research. People who go to church give more to charity - secular charities, not just their churches - and are far more likely to volunteer.

I’m not prepared to draw any sweeping conclusions. And I still believe religious faith is no prerequisite for acting to help others.

But it is sure striking that the people doing most of the heavy lifting in Honduras are brought here by faith.

The Honduras' crime problem and 'advisories'

Another grisly warning from the U.S. government this week about travel to Honduras, and an off-key response from the Honduran government.

The State Department advisory cautioned in the first sentence that “crime and violence levels remain critically high.” Things mostly went downhill from there.

La Gringa, an ex-pat blogger living in La Ceiba, did a useful comparison of this advisory with the last warning from Nov. 21.

Generally, the new version paints a picture of greater danger. For instance, both documents say U.S. citizens do not appear to be targeted. But the new advisory adds “Crimes are committed against expatriates at levels similar to those committed against locals.” 

Not good when you’re writing about the country with the the world’s highest murder rate. And not accurate, based on my experience. Locals are at much greater risk of crime. 

The advisory is bad news. Hondurans need U.S. visitors and investors. When the American government talks about “critically high” crime, they stay home.

The Honduran government’s response was uninspiring. President Porfirio Lobo instructed staff to prepare a map for foreign visitors that would show where they should and should not go and provide safety information. But being greeted at the airport with a map of danger zones won’t likely inspire confidence. (And Hondurans might wonder why they are expected to live and work every day in areas too dangerous for foreigners to visit.)

There were the usual complaints that other countries also have crime and that Honduran media do too many graphic crime stories. Possibly true, but unlikely to have an impact on prospective visitors.

Pompey Bonilla, who was replaced as security minister but remains a presidential aide, said things aren’t so bad, but many Hondurans would disagree.

Bonilla also rightly noted that a lot of crime in Honduras is related to the country’s role as a big cocaine trans-shipment centre. The trade exists largely because of failed U.S. drug policies, he said, and Honduras pays the price.

The gangs are another big problem here, and the U.S. has a role there, too. The two main gangs developed in Los Angeles, among migrants from this region and their American-born children. When the gang problem grew too large, the U.S. government launched a policy of deporting people convicted of criminal offences. 

Between 2001 and 2010, the U.S. sent 44,042 criminals to Honduras, many of whom had been in U.S. prisons. Convenient for the U.S., but bad news for Honduras, flooded with gang members with skills honed on the hardest streets of America.

There aren’t many easy solutions to the crime problem. But there are some simple first steps.

For example, the State Department warning - like the last advisory - notes that “A majority of serious crimes are never solved; of the 18 murders committed against U.S. citizens since January 2011, police have closed none.”

Given the stakes, surely the government and police could have a made it a priority to solve a few of those murders. (The real goal, of course, is to improve the overall effectiveness of police and courts, so that literally getting away with murder isn’t the norm. But progress has been dismal.)

Americans still come here. There were 286,000 visitors from the U.S. in 2012, an increase from the previous year. 

But Costa Rica had 864,000 U.S. visitors in 2012. Honduras has similar, if untapped, potential.

And only 34 per cent of visitors to Hondurans - about 97,000 - were tourists. About 100,000 were visiting relatives, about 57,000 were on business and about 34,000 were on missions and aid work.

Honduras is a great country to visit. The two big cities, Tegucigalpa and San Pedro Sula, are dangerous and demand caution. Many Hondurans suffer greatly from crime.

But in Copan Ruinas, where we live, visitors are probably safer than in their hometowns. We’ve travelled pretty widely through the country and felt secure.

The country has extraordinary potential as a tourist destination. Mayan ruins, beaches, reefs, jungles, mountains, lagoons and rivers, indigenous cultures, wildlife - it is a knockout.

But the infrastructure isn’t there. And won’t be, if travellers and investors are scared off by grim travel advisories. 

Laurie Watt scores a win for real journalism over sycophancy

Score for one for competent, responsible journalism.

A communications officer in the Prime Minister’s Office sent an email to The Advance, in Barrie, Ont., encouraging the paper to do a story on a speech that Justin Trudeau gave in the community six years ago.

Trudeau got $10,000; the local college lost $4,118 on what was supposed to be a fundraiser.

An OK little story, although Trudeau wasn’t an MP at the time.

But PMO communications staffer Erica Meekes asked that the the information - including a poster for the 200 event - be identified as coming from a “source.”

Instead, reporter Laurie Watt reported the story, including where the information came from.

Why did Meekes want to hide the role of the Prime Minister’s Office? Maybe she thought it looked bad that people on the public payroll are spending their days on partisan work for the Conservative party. Maybe secrecy is just a way of life for PMO staff. Maybe she thought the story would be more credible if the source of the information wasn’t identified.

Who cares? She wanted to hide information from the public, and Meekes and The Advance recognized their role was to report, not keep secrets.

Sources sometimes require anonymity. People might have legitimate fears about repercussions. But at a minimum media should say why, specifically, they aren’t identifying the source of the information. It’s a critical part of the story for readers and viewers.

(And while they’re at it, media should push back against the growing and destructive practice of accepting vapid, anonymous email responses from government and other institutions instead of demanding real interviews and accountability.)

Why it's bad when ministerial assistants are transformed into chiefs of staff

Useful editorial in the Times Colonist today on the big increases in salary scales for political staffers in the Christy Clark government.

Noteworthy, for example, that salaries for ministerial assistants - sorry, deputy chiefs of staff, as they are now called - have increased 53 per cent since 2003, while the average British Columbian has seen a 28-per-cent wage increase. (The premier’s pay is up 60 per cent.) The top pay for minister's aides is now $102,000.

The grandiose new job title is alarming in itself. Ministerial assistants - usually one or two per minister - are support staff. The main responsibility is making the minister look good and keeping him or her on top of the ministry. The principal qualification is effective service to the party in power - active Young Liberals and New Democrats, keen campaign workers and volunteers. A few have broader work experience, but not many.

The Liberal government, for example, just gave one of the new chief of staff jobs to the party’s defeated candidate in North Island. His resume lists no work experience beyond a co-op stint in a paper mill.

‘Chief of staff’ also suggests some considerable responsibility.

But the chief of staff for Teresa Wat, minister of international trade, the Asia-Pacific strategy and multiculturalism, supervises one administrative support person. He's a Young Liberal with a work history as a government political appointee. (Nothing wrong with that, of course, for partisans of any party. Politics can be a career choice.)

It’s just a title, some might say. 

But if a ministerial assistant calls a business, or government employees, they assume he or she is seeking information or action on behalf of the minister, but that they are dealing with an assistant. If necessary, they will ask to hear directly from the minister.

But a chief of staff - even if there is only one staff - sounds rather grander. Maybe people won’t ask. And the people with the new titles can’t help but have an inflated sense of their own importance.

When Alberta MP Brent Rathgeber quit the federal Conservative caucus this month, he complained political staff in Stephen Harper’s office ran roughshod over MPs, telling them what questions to ask in committees and what to say and to vote “like trained seals.” Those are the federal equivalents to the new provincial chiefs of staff. And his complaints suggests the risk in elevating the power of political staff.

In my past days in the Press Gallery, we joked with ministerial assistants about their roles as ‘dog walkers,’ accompanying the minister to the caucus and legislative chamber each day, file in hand and earnest expression firmly in place, as if even the one-minute walk from the office could not be wasted. (We also joked that some ministers simply couldn’t find the caucus room without help.)

Practically, it’s an important political job. Ministerial assistants keep the minister informed and briefed, help decide who gets access and schedule the days.  They are valuable.

But the elevation of ministerial assistants to chiefs of staff implicitly redefines their roles and increases their authority. And increasing one person’s authority inevitably means diminishing someone else’s - in this case, likely the people actually elected to govern.

Taking on a culture of violence with street art in Tegucigalpa

I came across the Mona Lisa with a pink gun on a wall near a Tegucigalpa hotel on a previous visit.

The work is part of a series by a Honduran artist who uses the name Urban Maeztro. The prints mixed classic art images with the weapons that are part of life for many Hondurans.

Street art can be dangerous work here. Authorities don’t like it, as in most cities, but they express they’re disapproval more forcefully. And gangs aren’t sure if Urban Maeztro is mocking them.

It’s not going to end violence. But anything that challenges the status quo is a good thing.

You can read more about Urban Maeztro and his work here. 

The Canadian government and the Honduran drug business

You can draw a straight line from the Canadian government’s stupid and cynical drug policies to crime here in Honduras.

Canada and the U.S. continue to follow a drug policy that has failed every test since Prohibition in the 1920s. The governments spend billions in a futile effort to block the supply of drugs and lock up users and dealers. 

It has never worked. Over the 42 years since Richard Nixon declared the “war on drugs,” nothing has changed. Drug use and drug-related crime haven’t been reduced.

The beneficiaries are criminals. Gangs make big money because drugs are illegal and widely desired. The risks are worth the huge rewards. It’s simply a question of market forces.

Honduras has become a big trans-shipment point for cocaine bound from South America to the insatiable North American and European markets. Planes land on strips carved in the jungle, boats race to dark beaches. They even use submarines.

The U.S. state department estimates 80 per cent of cocaine bound for American consumers passes through Honduras. Maybe 130 tonnes, or $80 billion in street value. 

In a desperately poor country, the chance to be part of an $80-billion business is irresistible. At the low end, people can earn a month’s pay by carrying a backpack of cocaine over the hills and into Guatemala. At the upper end, there is big money to be made. A narco in a community about 40 kilometres from here has lives in a replica of the White House.

It’s not all bad. A woman told me a narcotrafficante was elected mayor in her hometown. He had money to fix things up, and muscle to discourage troublemakers. People were happy with his administration.

But an illegal drug trade always has fallout. Participants settle disputes with guns. They bribe police and governments to look the other way. Corruption become corrosive. 

The drug industry in Honduras thrives thanks to the policies of the Canadian and U.S. governments. 

That could be defensible if those policies were based on evidence and made sense.

But they aren’t.

The latest Canadian example is the government’s response to a Supreme Court ruling rejecting its effort to close Insite, the B.C. government’s supervised drug injection site in Vancouver.

The issue has travelled through the courts - the B.C. Supreme Court, the province’s appeal court and the Supreme of Court of Canada - since 2008.

The rulings have been consistent, and based on the evidence from supporters and opponents. The supervised injection site saves lives and reduces illness. People manage their addictions and some seek treatment. Public disorder is reduced and community life improved.

And opponents were not able to show any compelling pragmatic reasons not to allow the centre to operate. Significant benefits, including lives saved, and no good reason to close the site.

The Canadian government should have said we don’t like drug use in any form, but accept the evidence and ruling on supervised injection sites. Our polices will be based on what works.

Instead, it introduced new legislation governing supervised injection sites. The health minister has full discretion to say no, without appeal. Applicants must include letters of support from provincial cabinet ministers, municipalities and police forces and broad consultation.

The legislation is written to ensure the sites won't be approved, despite the toll in lost lives, health care costs and damaged communities.

If there was any doubt about the intent, the governing Conservatives erased it. Even as the health minister announced the new law, the Conservative party launched a website petition headlined “Keep heroin out of our backyards.” It warned “special interests” and opposition parties want safe injection sites across the country.

The governing party once again played cheap and sleazy politics with drug policy.

The results stretch across a hemisphere. Canadians are hurt, of course. But so are Hondurans. The continued allegiance to failed policies in Canada and the U.S. ensures a lucrative market and thriving illegal industry dedicated to meeting the demand. Decades of efforts have failed to change that equation.

How to write about Honduras, or ‘Death, Death, Death!’

It’s been striking how much of the commentary about Honduras in the world press or blogland seems to hit the same strings of clichés, shuffled to suit the bias of the intended audience. It’s been equally striking to see all sorts of claims about the country unsupported by facts, stats or evidence of any kind.

There are notable exceptions, like Alberto Arce, the Associated Press reporter in Tegucigalpa who is doing great work.

Tomas Ayuso offers his take on the lousy writing on the country in ‘Violence and voyeurism: A guide on how to write about Honduras.’

For example:

“If you are to include speaking parts for Hondurans in your piece make sure they are one dimensional husks, that although savory are also easy to digest,” Aysuo writes. “Some examples: The crooked cop, the poor farmer, the battered woman, the malnourished footballer and of course, the overwhelmed priest.’

He even offers help with photos.

“Limit your pictures to those of blood strewn over derelict pockmarked streets, or of black smoke and flaming wrecks. If covering a dynamic situation use instead interesting compositions such as small men with large guns, or sweaty human beings screaming. Otherwise a Caribbean sunset with a diagonally dipping palm tree and a silhouette of a gun will suffice.”

Worth a read. And worth remembering when you read many of the comment pieces on Honduras.

A gang truce in Honduras, with a Canadian connection

Gang members, Adam Blackwell, in El Salvador jail

The big news in Honduras this week is a gang truce, with a Canadian connection. The deal was brokered by the Catholic archbishop and a Canadian diplomat who works with the Organization of American States and played a similar role in El Salvador.

It’s a bit surreal. The gang leaders have issued press releases, just like any political leaders. (Except from prison, and with bandanas over their faces.)

It’s also a positive step, despite lots of questions. The two main gangs - Mara Salvatrucha, or MS-13, and Mara 18, or M18, - have signed on. They pledged to stop recruiting new members and committing acts of violence.

The truce in El Salvador, also brokered by the church and Adam Blackwell, the Canadian who is the OAS “Secretary of Multidimensional Security,” has made a huge difference in the murder rate. The rate in El Salvador fell by 52 per cent after the truce, the government says. (The murder rate fell to 38 murders per hundred thousand people. The Honduran rate in 2012 was 87; Canada’s was 1.7.)

The El Salvador truce was hardly a panacea. Gang members are still criminals, and - as in Honduras - extortion is still central to their business model. If you have a business, or drive a taxi or bus, or sell fruits and vegetables, gang members collect a weekly ‘tax.’ 

And truce or not, extortion only works when the victims fear violence and death if they don’t pay. 

The numbers - in either country - are staggering. An El Salvador business group did an informal survey of members, asking if they or their business had been affected by crime in the previous 12 months - extortion, kidnapping, thefts, assault. 

More than 70 per cent said yes; 55 per cent said they had been affected by crime more than once in the previous 12 months.

La Prensa reported last month that extortion is worth $63 million a year to the gangs, and that some 17,000 small businesses had just given up and shut down in the past year because of the gang’s demands.

And there are doubts that the impact will be as great in Honduras. Observers say the gangs are less well-organized, and the truce might be ignored on the street. And gangs here are claimed to be a smaller cause of violence than in El Salvador. A 2010 UN report found gangs were responsible for about 30 per cent of murders.

But people said much the same thing about the El Salvador truce.

Any reduction in the murder rate would be great news. The daily toll of some 20 dead bodies is terrible for families.

And the fact that Honduras has the highest murder rate in the world has become the only thing people know about the country. The news reports are grisly. Potential tourists don’t know that most murders are related to gangs, drugs or feuds, and crime is focused in poor urban neighbourhoods. Or that tourists are not targeted.

So perhaps only half the gang members will accept the truce. Based on the UN estimates, that would mean a 15-per-cent drop in the murder rate - almost 1,100 fewer murders in a year.

There are all sorts of issues still to be sorted. Gang members are worried about continuing police violence. Some Hondurans reject the idea that gangs might not face responsibility for past crimes as part of the deal.

And the government’s role and the future of gang members is unclear. Estimates vary wildly, but assume about 7,000 people are currently active gang members. They might stop killing each other, but without alternatives they aren’t likely to give up crime.

Still, even with all the caveats and unanswered questions, the truce is a good thing for Honduras.

Footnote: The two main gangs - Mara Salvatrucha, or MS-13, and Mara 18, or M18 - have their roots in Los Angeles, started by the children of a wave of Central American immigrants in the 1980s. They've grown into full-scale multinationals, in part because of a U.S. policy of deporting non-citizen offenders instead of dealing with them in the justice system. That's helped the gangs spread rapidly throughout this region.

For more information

Insight Crime has an excellent briefing on the truce here.

For-profit health care: When surgical complications are good for business

I believe market forces and the pursuit of profits often bring creativity and innovation.

But not so much for health care. The problem was nicely crystallized in a Business Week article I read years ago, profiling the star CEO of a hospital chain. He was lauded for increasing revenue per patient, a key indicator. A few more tests, an extra day in hospital, fees for every aspririn dispensed, and the corporation does well and the CEO gets a bonus.

The problem was set out more starkly in a Wall Street Journal I snagged in one of the airports on the way back to Copan Ruinas from Victoria. 

It reported on a study that found U.S. hospitals make more money when a surgical patient has complications after surgery. A lot more money.

Thus there was no economic incentive to reduce avoidable medical complications that cause thousands of deaths and add billions to health care costs.

In fact, market forces worked against reducing surgical complications.

The study was legit. It was reported in the Journal of the American Medical Association and done by researchers from the Harvard Medical School, Boston Consulting Group and Texas Health Resources.

They looked at more than 34,000 surgical patients in 12 hospitals owned by Texas Health Resources.

And they found surgical complications - many avoidable - were good for business. Infections, complications, strokes, they all boosted the hospitals’ bottom line. The study found hospitals made an average $56,000 in profit from each privately insured patient who suffered complications, compared with an average $17,000 when the surgery went well. There were complications in about six per cent of surgeries, a fairly typical rate.

I’m not suggesting corporate execs, wringing their hands like Montgomery Burns, are plotting to have surgeons leave instruments inside patients or skimp on handwashing. (The latter surprisingly common.) The managers go home to their families too.

But proponents of private care can’t have it both ways. They argue market forces - the push for bigger profits - will ‘incentivize’ improvements in care.

So they have to acknowledge market forces now discourage efforts to reduce complications.  

No managers would say they like surgical complications because they are profitable. 

But they might say that spending on projects to address other problems is a higher priority. It’s not easy to explain the benefits of investing in programs that will reduce the companies’ profits.

Free-enterprise extremists likely have answers. The insurance companies, they might argue, should be pressing the hospitals to reduce surgical complications. The smart insurers would use the safest, lowest-cost hospitals, and cut premiums and attract more customers.

Except that isn’t happening. There are some 200,000 preventable deaths a year related to U.S. hospital stays. The rate of deaths from surgical complications has been declining, but slowly. 

The market isn’t working. Maybe the hospitals have too much power, or the insurers can charge what they like and have little incentive to push for better performance. It doesn’t really matter to the people who suffer as a result of avoidable complications, or everyone who pays higher health insurance premiums that flow to hospital shareholders.

There are still useful ways to encourage innovation through competition in a largely public system. (And we have an largely public system. Doctors are effectively Health Ministry employees with a great collective agreement.) 

Hospitals that find ways to deliver successful surgical outcomes could get extra funding, or financial incentives for participants. Why not? Everyone benefits if we can cut complications, or do four hip replacements for the cost of three. 

Meanwhile, proponents of private care face a problem. The current reality is that surgical complications are good for private hospitals in the U.S. And that is bad for patients.

'Research fishery' for Queen conch and the tragedy of the commons

Sometimes news stories just set off all kinds of alarm bells.

Honduras has apparently learned from Japan’s bogus scientific whaling program, which lets that country’s operators kill 900 whales a year - and sell the meat - in the name of science.

The Honduran government has announced a Queen conch fishery, justified as “a research and evaluation project for monitoring giant snail populations.”

It looks more like a way around restrictions on the fishery.

A lot of people have seen golden Queen conch shells, with their pink-tinged centres and classic spiral shape. They were a popular souvenir of Florida a generation ago, and thrived in waters from Florida to northern Brazil. 

They’re considered tasty, and are easy to harvest. Not good for them.

Queen conch aren’t on endangered lists yet, but CITES - the Convention on Trade in Endangered Species - has recommended an embargo on exports from Honduras, Haiti, and the Dominican Republic. CITES pitches the embargo as a way to support government conservation measures - if there is no market, there is no reason to grab the conch.

It’s loosely observed, and fishers still harvest both for export and local markets - conch soup, with coconut milk base, is a popular item on the Honduran coast. 

The government’s research fishery looks like a way to get around the export ban.

Honduras is going to let six ships capture 210 tonnes of Queen conch. About 100,000 conch. 

And 95 per cent of the catch is reserved for export, mostly to the U.S.

It’s hard not to be suspicious. If the government wanted to assess Queen conch stocks, it could co-operate with a university or look for grants for a survey. Grabbing 210 tonnes of a possibly endangered shellfish in the name of research seems dubious.

The whole tragedy of the commons theory is lived out vividly here. Serious poverty is a factor. So is the near-total absence of effectively enforced laws and regulations. Why should a small fisherman obey limits on Queen conch catches when people with influence can get access to a “research fishery”? (Or why should a campesino respect a forest reserve, or water source, when others are conducting illegal logging?)

Of course, North Americans shouldn’t be too judgmental of practices that evoke our relatively recent past. We moved to Copan Ruinas from British Columbia. That province built its current prosperity by logging old-growth forests. Wild salmon runs were sacrificed for quick profits for the fishing industry, developers and forest companies. It’s no different than grabbing the last of the Queen conches, except Hondurans are more legitimately desperate.

The theoretical argument for conservation is sound. Manage the resource and you will have sustainable economic activity long into the future. 

But the argument didn’t persuade British Columbians. Why should Hondurans, so much poorer, think it a good idea?

It’s great to talk about tourist potential and the economic value of preserving tropical jungles and deserted beaches and coral reefs and vast mangrove shorelines. The economic argument for conservation.

But not realistic. We were in La Moskitia, the vast biosphere in  southern Honduras, and it is spectacular - unspoiled nature, beaches, lagoons, fascinating cultures. But the roads are poor to nonexistent, there is no tourist infrastructure and travel is a challenge.

And the Honduran government’s total tourism promotion budget this year is $2.2 million. Destination BC has $49 million to promote one province.

Still, the alternative is grim. The newspaper reported last week that a company had cleared 50 acres of protected mangroves for a new shrimp farm. The story said nothing about investigations, or sanctions. The lesson is to join the gold rush, in conch or shrimp or logging or African palm plantations.

And La Moskitia includes the Rio Platano Biosphere Reserve, a UNESCO World Heritage Site. But since 2011, the reserve has been in UNESCO’s World Heritage in Danger list. Illegal logging and farming are factors, according to the UN agency. 

But so are the Honduran government’s lack of capacity and “general deterioration of law and order and the security situation in the region.” (It is a popular transit point for northbound cocaine shipments.)

Ultimately, for the Queen conch and La Moskitia and the mangroves and rain forest and so much more, that’s the greatest problem. There are solutions, and perhaps international partners to help. But only if the Honduran government can play a role..

Too broke, or too disorganized, to keep the national gallery open

The Honduran National Gallery of Art locked its doors this week.

The government hasn’t provided any money since January. Staff haven’t been paid since November. They finally quit coming to work, and now management has chained the doors and started packing away some of the works.

The gallery is good. We visited, looking to kill time in Tegucigalpa, the capital, and liked it.

It’s in a 450-year old convent, a beautiful two-storey building with an open courtyard. There are about six galleries, and they cover art in Honduras from pre-Columbian carvings, through the religious art of the Spanish era and into the contemporary scene. There is a nice auditorium, and gardens in the courtyard.

The displays are basic, but that adds to the power of some work, especially the religious paintings and spectacular silver from the colonial-era churches.

I gave it a glowing review on TripAdvisor.

It’s a bad sign, I think, when a government can’t make the budgeted payments to the national gallery. It’s not even big money; gallery managers say $45,000 would be enough to open the doors and get through the next four months. The total annual budget is about $135,000.

None of this is surprising. Stories of government employees going unpaid for months - teachers, health workers, anyone - are regular features in the newspapers. Sometimes, it seems the government simply can’t get its act together to issue the cheques. Sometimes there is no money. (Sometimes, I’m sure, the employees’ claims are bogus.)

What’s surprising, for a North American, is that people keeping showing up for work for months without getting paid.

Mostly, that’s what happens when people really need a job and have no other prospects. You keep on heading into work, hoping some day that you’ll get some of that back pay and the regular wages will start flowing. Why not? There is nothing much else to do.

But it might also reflect a cultural value of just accepting life’s blows and keeping on. (Written down, that looks practically noble; in practice, it look more like learned helplessness.)

The failure to pay people also illustrates another problem. Hondurans talk a lot about ‘impunidad’ - the ability of some people to ignore laws without consequences. 

Honduras has a fine set of laws and regulations. They just aren’t enforced.

There are legal minimum wages, for example, based on the nature of work and size and location of company. But employers can ignore them without fear of consequences. Or they can simply refuse to pay people for months at a time.

It’s new to be in a land where the government doesn’t have the money to pay the bills. Canadian governments, even in deficit years, can borrow whatever they need to cover budgeted costs.

The Honduras government can’t do that. Tax exemptions and evasion are widespread, so revenues are low. The domestic borrowing market has been tapped out, and foreign borrowing is difficult and interest rates are high. Some months, there just isn’t enough money to cover costs, or pay salaries. And, eventually, people get fed up.

A national art gallery isn’t essential. (Though Tegucigalpa has few attractions for visitors - a couple of other museums, a great nearby national park. The gallery could be a draw. And it is a refuge just a few blocks from the central square and the quite ratty downtown - the neglected office buildings call up the end years of the Soviet bloc.)

Government could even have decided to close the gallery’s doors to save money in tough times.

But it didn’t. The Finance Ministry just failed to send the promised money, month after month.

And, finally, the national gallery closed its doors, for who knows how long.