Amber Kostoff

Willard Utah
B.A. Political Science (2004)
Utah State University

Webs of Social Significance: Examining social relationships in the Huanchaco and Trujillo area.

INTRODUCTION

An old, rusted out bus was waiting to pick us up in front of our hostel at 10:00 in the morning. As we boarded the vehicle I could smell a strong odor of gasoline and the floor was extremely greasy. I found out later that this gasoline was used to control the dust that collected on the floor of the bus. We made the drive to Trujillo fairly quickly as this was a chartered bus and did not stop for every person walking along the side of the road in order to offer them a ride. We pulled up to the University of San Pedro at around 10:30, and waited for those who would be going with us to board. Students began getting onto the bus, first a few, then a few more. Soon all the seats were full and many students were standing in the aisle. We made the drive to Moche like this; about 20 of us gringos stuffed in with about 35 other Peruvian students.

Our final destination was Huaca de la Luna, an ancient Moche ruin area outside of Trujillo. Our tour group was even larger than the group on the bus as some people had followed in cars. Because both Spanish and English speakers were present, it was necessary for a translator to interpret the guideÕs descriptions of the area. This was difficult as the descriptions were very detailed and members of the group were not always paying attention, carrying on conversations of their own in the back. In addition to this, I was often helping students from San Pedro practice their English and giving them my email address, yet another distraction.

After our tour of the ruins was finished we all loaded back onto the bus to drive to a small restaurant in Moche. Here we were served traditional Peruvian food and drink, and were able to observe some Peruvian dancing put on by the students from San Pedro. The trip lasted the entire day, and while it was a good experience, proved to be frustrating at times. This was due mainly to the large number of students present, and the amount of activities that had been planned.

Throughout the day I often wondered to myself why we did not split into smaller groups, or even into separate English and Spanish speaking groups. This would have helped in the confusion of trying to lead and translate a tour of over fifty people. I also thought it a bit strange that such a large group came from the University of San Pedro, and that the trip in general seemed to be such an event. Prior to our departure, our professor told us that this field trip was being considered a university wide activity for these students, and that many classes had been canceled completely in honor of it. Looking back on the experience now I realize that the explanation for this almost fiasco of a day is simple: the entire day was planned and carried out in order to establish social connections between our group from Utah State University, and the University of San Pedro in Trujillo.

The social connections that were formed that day were two sided. For one, the field school program that USU has here in Huanchaco has made some friends at the University of San Pedro. This is important in that when the program does return to Huanchaco next year, or the year after, there will be some friendly faces at the university that can be called upon should anyone need a favor relating to their project or trip in general. Likewise with San Pedro, their goal that day was also to create some bonds with Utah State that could be convenient in the near future. For example, should one of their students be able to travel to the United States, perhaps they would be able to come to USU and have a tour, a place to stay, or maybe even a place to study.

From the beginning of my stay in Huanchaco I have noticed the social relationships that characterize every day life here. These can be informal friendships and contacts that are helpful getting started in a new community, or in accomplishing specific goals you might have. They can also be more formal contacts which often come in the form of employed associates or even titles given to individuals in order to solidify ties. It is my intention to show how and why these types of relationships are developed, as well as how they help individuals in their day to day lives.

BACKGROUND AND METHODS

I recently completed my bachelorÕs degree in Political Science, and came to Peru with the intention of writing on a topic that was related to this field. I began with the idea of how people are able to bypass bureaucratic barriers that exist in government here. I was also interested in how these barriers push people into the informal sector of the economy. As I soon found out since this topic is be more appropriate for a doctoral thesis than a five week study abroad program, so I decided I would attempt to narrow my approach. While reviewing this larger topic and the leads that I had started to follow, I realized that there was a constant theme emerging. All the people I interviewed and spoke with used social contacts in influential positions in order to bypass bureaucracy and regulation, and those without these contacts often suffered the consequences. The old anecdote: "itÕs not what you know, but who you know" seems to be very appropriate here. Since I had multiple examples of these kinds of social interactions, combined with my own interest in the subject it seemed only natural to pursue it further.

I was able to interview multiple people, and conduct hours of participant observation in different environments. By doing this I was able to examine how individuals from different backgrounds use their contacts, and how necessary these contacts were to their situation. Hopefully, through these different methods I will be able to describe how and why people build their own webs of social significance in Huanchaco.

Informal Relationships

The Utah State University Ethnographic Field School is currently in its third year in Huanchaco. The entire group of students totals about 12, all of whom are doing different projects on different topics. These topics range from traditional healers in the area to local artists. In conducting ethnographic research it is fairly commonplace for a researcher to spend a prolonged amount of time in the area and with the people he or she is studying. This is not the case for our field school. We have a mere five weeks to complete our research and write our entire paper. Needless to say, this presents a problem in getting to know contacts, finding accurate information, and even choosing a topic. The fact that the program has been here for three years, as well as the fact that our professor has been doing research in Peru for the last thirty years both work to our advantage. Due to this we students have many contacts already available and willing to provide us with information, even though personally we are strangers to them. Often these contacts lead us to information that we would not normally have access to on our own.

For example, two students in the group, Robin and Danny, are studying adoption here in Peru, and more specifically in Huanchaco and Trujillo. Robin is focusing more on how children that need to be adopted live, while Danny is interested in the actual adoption process. Since their area of study is so similar both Danny and Robin have been working together on their projects. They have been able to conduct interviews with a set of parents who recently adopted a Peruvian child, they have volunteered at a halfway house for homeless, drug-addicted children, as well as two different orphanages in Trujillo.

Robin and DannyÕs project works well for this example in that every source they have been able to use, comes from some kind of social connection that the group has made from time spent here in Huanchaco. One of their most significant sources came from their volunteer work at an orphanage in Trujillo. They were able to help with daily chores, interact with the children, and even spend nights there, returning to Huanchaco early the next morning. The fact that both of them were allowed to volunteer at the orphanage for such a short period of time and without belonging to any kind of humanitarian organization specializing in these types of activities is remarkable. The contact they used was developed through the owner of the restaurant at the hostel the field school has been staying at for the last three years, Anna. AnnaÕs mother, Mrs. Wong, knows the Administrator of the orphanage. In order for Danny and Robin to be able to volunteer, Mrs. Wong had to travel to the orphanage with them and speak to the administrator. It seems that those in charge of funding the orphanage are extremely paranoid about bad press and individuals who would try to exploit the children there. These fears of course had to be calmed, along with assuring those working at the orphanage that the volunteers would be very respectful and appropriate at all times.

Had Danny and Robin arrived in Peru, on their own, and tried to volunteer at this orphanage, initially, they would have been turned down. If they had come with the intent of spending a significant amount of time gaining access to the orphanage their admittance would have been more likely. However, five weeks is simply not enough time to build such a rapport with the orphanage administration. This major aspect of their project was made possible by a social contact that normal visitors to the area are not going to have.

Another individual I was able to interview had experienced exactly what it is like coming into an area as an outsider with no contacts. Jenny, who is from the United States, has been living in Huanchaco for a majority of the last year, though when she first arrived only intended to stay for a few days. Over the last year Jenny has opened a restaurant/surf shop with a business associate, left the business, returned to the U.S. then back to Huanchaco, and now works at a local bar where she rents out surfboards on the side. As may be determined from her amount of time involved, the business was not exactly a success. This can be attributed to many different reasons, most of which originated from her partners dishonest dealings.

Jenny met Antonio in Trujillo at a local cafe. He started a conversation with her, telling her that he was a surf instructor in Huanchaco and would she like a lesson? She agreed to this and through their early subsequent relationship he explained that he and some friends were trying to open up a surfboard rental shop/restaurant. He asked if she would like to be a part of this and though she was wary at first, decided to give it a try. Even when eventually AntonioÕs friends backed out she stuck with the deal. To begin with Jenny bought at least 4 surfboards, some wetsuits, the security deposit on the shop they found and first months rent ($85 each). For her this was not such a dangerous venture as the gear she bought could be easily sold if need be and the rent was minimal. Should this fall through, she reasoned, the experience will have outweighed any monetary loss.

Early on in the process, Jenny realized that she would be the main source of funding behind their shop. In order to keep accurate records of the money being spend she would often specify that Antonio obtain receipts from the purchases he was making. His repeated failure to do this led Jenny to believe that Antonio was buying the supplies and just pocketing any of her leftover money. Jenny also purchased one of her surfboards through a local craftsman that Antonio knew. Later, she found out that while Antonio was telling her one price for the board ($350), he was actually buying it for less ($250). If Antonio owed that extra money to the craftsman already, or was making another unknown purchase is not known. These, as well as other incidences were enough to make Jenny discontinue her partnership with Antonio after their shop had been open for two weeks.

The way Jenny described her dealings with Antonio led me to believe that he was dishonest with her during a majority of their partnership. He was able to accomplish this partly because he was the one who knew where to buy supplies, the fact that Jenny did not know how to double check his sources made it that much easier for him. If this had been occurring in the U.S. for example, Jenny probably would have had more access to resources, such as local yellow pages or internet sources, with which she could have compared prices and products.

Despite her quitting the business and her confrontation with Antonio about his dishonesty, he continued to deny he had done anything wrong. Jenny thought he was hoping she would eventually leave town, along with all of her gear that he would then claim as his own. Fortunately, this did not end up being the case as Jenny was able to cut her ties to the business, move her things from the restaurant and AntonioÕs house (where incidentally she was living) and into a new apartment. From here she actually brought in a third party to act as a negotiator in order to sort out the remaining issues.

After this ordeal was finally finished Jenny began renting surfboards out of her apartment, either finding customers on her own or having them recommended to her by others she has met. At times other instructors would rent her boards from her in order to give lessons. This is to her benefit as it is something that she can keep control of. She just makes sure that she collects the money from the student, and then gives the instructor his or her share from that. Currently, Jenny works at a local bar in town which puts her in a better situation for getting the word out about her boards. She also has been able to develop some relationships in town that have made her business a little easier.

What is especially interesting about this particular story lies in the aspect that Jenny did not just leave town after her failed business attempt. She stuck it out in Huanchaco, developed her own social connections, and now to some degree participates in the system that initially duped her. She is able to determine when a customer might be willing to pay more for her services than normal, simply because they have no kind of basis to compare prices. Often in these types of retail and service oriented environments, prices can be adjusted according to who the potential buyer is.

Though Jenny probably became more involved in this type of scheme that many individuals might, it seems like this type of manipulation is quite common. However, Jenny has turned her experience with Antonio into something fairly positive. Through her ordeal she learned to surf, purchased the necessary equipment to rent out surfboards, while making legitimate contacts. In this aspect Huanchaco is no different from any other place in the world. In order to make social contacts the necessary aspect is time. Anyone coming into an area in which they are not familiar with is likely to run into the same problems that Jenny did. It takes time in order to find out who your friend is and who is not.

Both of these examples show how informal contacts can have a huge influence on your life here in Huanchaco. Danny and Robin had their contacts from the beginning, and Jenny had to develop her own over some time. While it is much easier to accomplish ones goals when the contacts are there for you, it is possible to make it without them in the beginning. If the latter is the case, hopefully you have some extra money to work with and nothing too precious is lost. I have also observed more formal relationship, within businesses and education systems that are more vital to survival.

Formal Relationships

Business owners in Huanchaco often need intermediaries that interact with the government here for them. These often come in the form of accountants, who depending on their skill level can make or break a business. They are necessary because the process of starting and maintaining a business is a complicated matter. Registering and applying for licenses can take months, while the tax system currently in place is crippling for the small business so characteristic to the area.

Every legitimate business must be registered with SUNAT, a government entity responsible for tracking business in Peru. After registration each business is assigned a RUC number. This allows you to give out the required sales receipts (boletas) for the services or products you provide your customers with. In this way SUNAT is able to keep track of each businessesÕ respective sales. Each business must pay SUNAT a monthly tax on their net profits. Different types of businesses pay different types of taxes. Since David owns a bar (this tax structure is the same for other establishments of this type) he must pay an 18% tax on any money he makes after expenses. Expenses are determined by collecting another type of sales receipt called facturas. These are given out when a business owner buys supplies or spends money on anything having to do with a particular establishment. For example, should a local bar need beer to sell, they would put in an order at the brewery where the beer is made. In return for the payment they would receive, along with the beer, a factura documenting this purchase.

When determining how much taxes are owed at the end of each month, business owners must take into account two different amounts. First, they add up all of the boletas they have given out to determine how much money they made. Second, they add up all the facturas they have collected, to determine how much money they spent on the business. Since expenses are not taxable, the facturas are subtracted from the boletas and this is the amount that is taxed (the net profit for the month).

In discussing this process with a local bar owner I learned that should he adhere to this system it is very likely that his bar would go out of business. The amount of taxes that he is charged is simply too much for his business to compensate for. In order to accomplish this, alternative routes must be used. It is in the development of these alternative routes that the intermediary comes into play.

As mentioned above, many businesses characteristic to Huanchaco simply do not have the money to pay the 18% tax on their net profits in full. In order to avoid paying this amount, it is necessary to collect as many facturas as possible. The idea behind this being that if your expenses are as much as you can make them, you will always pay the least amount of tax each month. This can include actual business expenses, personal expenses, and even purchases being made for friends. A good accountant will be able to take the facturas you do acquire and balance them with the boletas you gave out to customers in order to pay the minimal tax amount each month. For example, if DavidÕs bar were to make s/3,000 in a month and have s/2,000 in legitimate expenses they would pay the 18% tax on the s/1,000 left over. However, if their expenses happened to be more, say s/2, 500, David would have to pay the tax on s/500 only, and again if their expenses were s/ 2, 900, they would only pay the tax on s/100. Essentially you are able to write off your expenses, legitimate or not, from your taxes.

Besides gathering facturas from expenses not directly related to the business, there are other ways to lower the taxes you pay. These options revolve around people doing business with each other as far off the books as possible. Transactions that do not exist on paper do not have to be adjusted in order to compensate for sales that did or did not take place. For this reason, many business owners will often buy a portion of their supplies from a friend and not ask for a boleta or a factura. This way the product is bought completely under the table and neither person has to account for the sale or the purchase. The accountant will usually report that the business was closed or going through a slow period, showing how both formal and informal contacts can work together quite well. Accountants make the bureaucratic mess of taxes and penalties manageable, while fellow businessmen area able to help one another avoid the mess altogether.

I saw another example of these formal relationships between the professor working with the field school and the University of San Pedro that was mentioned before. The university recently completed construction on a new cafeteria and copy center on their campus. In honor of this occasion Professor Glass-Coffin was asked to be the godmother of the cafeteria. Another professor from SPU was asked to be the godfather of the copy center. I was able to witness the ceremony, which was a fairly basic function. A small gathering of people with short speeches made by the honorees all seemed fairly normal. The only thing out of place was the fact that the cafeteria was in need of a godmother.

At first glance this may seem to be a bizarre custom, full of formalities, but of not much use. However, were one to look closer at this specific instance, they would see that this relationship is developed for a very specific reason. The honor of godparent is often extended to an individual who can provide support, monetary or otherwise, to the family. The same is true in this case, except that instead of a child we have a cafeteria, and instead of a family there is a university.

While I am sure that the offer to Professor Glass-Coffin was meant in order to show that her continued association with SPU is desired, there are other motives here as well. By making here godmother the University is assuring that they will have this association with her as well as Utah State University. I also think that it is notable that this invitation came after Dr. Glass-Coffin declined to establish a Memorandum of Understanding with SPU. These agreements are quite common between universities and allow for partnerships to be maintained between the schools. They are used to establish study abroad programs, assure the flow of information between schools, and other similar things. Unfortunately, through her work in Peru, Dr. Glass-Coffin has already established many such agreements with other universities here, making this one impossible.

Not to be dissuaded, SPU opted for the next best thing. By asking Dr. Glass-Coffin to be the godmother of the cafeteria they were able to secure a formal relationship while at the same time bypassing bureaucratic limitations that exist at Utah State as well. One could say that since these people have lived with such a complicated, slow moving, bureaucratic system for so long they have become masters at finding new and innovative ways for getting around it.

WHAT DOES IT ALL MEAN?

Life in Huanchaco revolves around different types of relationships and interactions. These associations are developed out of a need to protect oneself and resources, as well as a way to bypass social and bureaucratic barriers that exist. At times, friendships are sufficient Ð merely knowing the right people in the right places. However, more formal contacts are also necessary to certain situations. These assure that the benefits received from the relationship will be at least semi-permanent.

While this system seems to work fairly well, it is extremely complicated, and at times dangerous. There are those individuals that seek out others inexperienced in the system, with the intention of exploiting this weakness. In addition to this, the system is not always the most efficient way to conduct business. The need for developing contacts often comes from complications that already exist. For example, complex and expensive taxes imposed on businesses make it necessary to employ individuals who can navigate, and even manipulate, the system. However, if the government were able to account for illegitimate businesses better, perhaps the taxes could be lowered for everyone. High taxes do demonstrate a monetary need on the part of the government, but this need will never be fulfilled by over-taxing businesses who just find ways of getting around this.

Of course I do not pretend to have a representative picture of these relationships. I have been able to examine only a few of the more universal methods individuals in Huanchaco use in order to accomplish their day to day goals. Complicated social systems are created in order to cope with complicated governmental systems. Any recommendations that I could make in order to simplify these systems would be extremely premature considering the amount of research I was able to do in my own limited amount of time. However, I do strongly believe that people participate in these social systems because they provide them with a level of comfort an familiarity, despite their inefficiencies. Governmental systems may seem alien and unapproachable to the everyday citizen. In order to remedy this situation, further study of the systems that are created in order to bypass governmental regulations and bureaucracy may prove extremely beneficial. By studying what people avoid dealing with, one may be able to pinpoint areas in need of overhaul.