Dear fantastic readers:
Today´s masterclass is about releasing the historical essence of the Colombian Coffee sector, and how crucial it is to understand the roots of a nation that has tried to build an identity out of the dark shadows of the 20th century. Yet, we were compelled to visit the origins of the coffee plantations of New Granada, and the journey began at the moment in time in which Simón Bolívar y Palacios gathered the Grand Colombia under his “eagles’ wings”.

Our agenda for today is included in the document. Feel free to share our content with your family, friends, colleagues, and professors. We will post our strategic inferences next Monday. We recommend printing the package of slides for your reading over the weekend.

We kindly ask that you return next Monday, the 28th of September, to review our strategic reflections on this chapter.
We encourage our readers to familiarize themselves with our Friday master class by reviewing the slides over the weekend. We expect you to create ideas that are or are not strategic reflections. Every Monday, we upload our strategic inferences below. We will discuss these in the next paragraph. Only then will you be able to compare your own reflections with our introspection. We always give our students a couple of days to prepare well before our final reflection.

Strategic reflections on this episode.
These will be in the section below on Monday, the 28th of September.

Cacao and Coffee 101. Success Strategies for Small Farm Holders. Episode 15. Financing & Access to Capital. Colombian Coffee

Historical Standing.

The Grand Colombia: The dream of the Venezuelan Simón Bolívar (1783-1830). Bolívar was another orphan leader in history, who held pure aristocratic blood in his veins. According to our historical hypothesis about royal members coming to America under a “Criollo identity” after Charles V HRE to our days, Bolivar is another candidate that would have been a royal of pure blood or pedigree, but without that imperial or majestic branding, living “under-covered or concealed” in Venezuela. We cannot prove it, but we bet with at least 60% probability that this scenario may have been feasible.

From his biographical details about him residing in Europe in convulsionary times (1804-1809), Bolivar was influenced by the European Enlightened thinkers, particularly Voltaire and Rousseau. The “liberator” visited the United States before returning home, and upon his arrival, he faced the independence movements in his own land, so he looked to Britain for help. From this period on, the history of Bolivar changed the destiny of New Granada (now Colombia). This phenomenon of finding sovereignty from Spain, while keeping the conquered land of the Habsburgs out of the Bourbon agenda, is what we have seen back and forth in Latin America, since Bolivar was born. Furthermore, unbelievably, this conflict has continued to our days.

Bolivar is cheered by the leftists of the Latin American political spectrum as a savior, godlike figure of deliverance of the Indians (pardos), African-Slaves, and accomplishment of revolutionary promises. He is also attacked by political liberals who saw in him a dictator with no idea how to lead and align his own subordinates. And finally, he was also embraced by the genuine conservatives of the Grand Colombia, including the Catholic Church summit priests, because all of them knew by heart that Bolivar agenda was not left-wing, not even one milligram of it. The fatherless Simon Bolivar was simply a moderate traditionalist with some enlightened education, which was the European trend of his epoch. Bolivar was trying to rescue the land (that by historical design) was supposed to be defended from the Bourbons. For us, Simon Bolivar was only an endorsed leader who was protecting the Grand Colombia from the potential anti-royalist consequences of revolutionary France. The Bourbons (and other related royals) were having trouble, almost expelled from Europe during the first quarter of the 19^th century, and it was natural for all of them to take refuge in Spanish America (or Brazil). However, since its conception, Spanish America was either a Habsburg or Castilian complex collection of small states, with certain hubs of importance. Additionally, all the  Bourbon-Wittelsbach (German families linked to the British Hanover) were expanding and growing their own monarchical plans. After the expulsion of the Jesuits, it was a matter of time for a Noble Criollo class (Habsburg or Castile) of Spanish America to clash with the new Spanish Administration of the Bourbons. The phenomenon of Bolívar is explained at this crossroads. This is why Hudson (1) is accurate to state that Bolivar always retained the support of the “very cream of the traditional aristocracy” of his Grand Colombia estates. The defense of the territory of the Viceroyalty of New Granada (including where is now Venezuela, Colombia, and part of the Brazilian Amazon) was a natural reaction against the anti-monarchical revolutionaries who were bleeding Europe. The great Mother Spain-France-Portugal under the Bourbons was in total chaos, and there were other priorities for Britain, which was busy acquiring North America. So, please, we believe it is advisable to refrain ourselves from tagging Bolívar as a revolutionary anarchist individual who built his own empire for the poor and needy in South America, because that is a myth. As explained above, the exceptional character of Bolívar and his actions between 1810 and 1830 is attained in another mission of political power, which is far from what everyone believes.

With that introduction, let´s begin our strategic reflections. Studying this region, from the perspective of coffee plantations, is a one-of-a-kind event. I have faced it with curiosity, but with an intense sense of fear. The few times I had the opportunity to visit Bogotá, Medellín, and Zipaquirá, I was captured by the loveliness and majesty of its temperate climate, natural mountainous surroundings, its amazing flowers, and the beauty of its towns. Coffee is now an ingrained part of Colombian cultural splendor, and it is also a medium to explain our topic of today: how do smallholders of coffee farms finance their expansion plans? Honestly I don´t have an answer for this nation. And you will understand why at the end of this masterclass.

The history of Colombian coffee, counting from the Bolívar epoch, can´t be described as a steady progressive ripple of effects. It has been organically tumultuous, turbulent, dark, extreme, violent, conflictive, and bizarre. The 20^th century was “unlit” for this beautiful nation. A sustained war of more than 50 years, with several entangled forces: its government, the anti-régime guerrillas, narco-traffic actors and their businesses, horrendous crimes, insecurity, and a complete obstruction to rural economic development, characterized Colombia. After the final peace agreement of 2016, it is too soon to sing the complete emancipation from those illnesses. Coffee lands are the witnesses to this latter historiography. However, we certainly believe that after all the mess of two centuries after Bolívar´s death, if these terrains could talk, we would listen to a testimony of true-to-life hope in the middle of agony and despair.

Colombian coffee was decided to be grown in lands of gold. Slides 5 to 11.
Originally, after 1499, the Spaniards were clear about this land: It was the El Dorado treasure. This golden legend was, in reality describing the New Kingdom of Granada (including Venezuela). From the rivers of this particular land, there was a flow of gold. From its coasts, there was an abundant source of pearls, and from its rocky veins,  there was a fountain of precious stones of immense value. It was not a fable, if the elite dynasty bankers of the Habsburgs tried to profit from Venezuela without success. No banker was going to leave Augsburg to assume the risk of colonization of Little Venice during the 16th century, unless there was a golden reason to do it. The Welser family (from Augsburg), who financed Maximilian HRE and Charles V HRE endeavors, were granted permission to colonize Venezuela with certain contracts allowing exploration voyages and colonization in the New World, with the direct authorization of the HRE emperor to extract resources. This concession period lasted from 1526 to 1556. With this unappreciated example, we wish to remark that there is evidence of German-Austrian-Dutch people (not only Spanish) traveling to Spanish America with mining privileges, a monopoly of black African slave trade, rights to colonization, and grants for settlement. This Welser adventure in what is now Venezuela occurred before the establishment of Santa Fe de Bogotá (1538) by Jiménez de Quesada. In summary, in the territory of New Granada, there weren´t only Castilians. All the conquerors or colonizers from Spain and the Holy Roman Empire lands (including the Jesuit missionaries who evangelized and formed villages to expand the internal territories in the name of the King of Spain) were focusing their efforts on the domains of New Granada. Between 1556 and the 1800s, the objective was to extend as much territory as they could, fighting for every inch of land against the pre-hispanic peoples, and from its Portuguese neighbor, colonial Brazil. This is why the viceroyalty of New Granada was not productive enough in comparison to other Spanish American nations. It took them a long time. These new European residents (and criollos) had a long struggle to establish themselves as the new landlords of New Granada, who were subjects of the King of Spain. The data about gold extraction is blurry until Simón Bolívar´s arrival in Colombia. Given the secrecy of gold affairs in terms of the required confidentiality ordered by the Spanish Crown, we would probably never know the exact statistics of gold extraction between 1526 and 1800, but several scholars have dared to bet that Colombia produced 40% of all the gold riches pulled from Spanish America during these three centuries previous to Bolívar´s rise into power. Since gold was by far one of the most important goods available in the territory, it attracted numerous Europeans, and the Germans, curious about it, were not left behind. See slides 5, 6, 7, and 8. This is why we comprehend the presence of the Prussian Alexander Von Humboldt (who not only traversed the Orinoco River from Venezuela to New Granada), but he also managed to verify and validate that there was gold in the area. We discovered that Von Humboldt and Bolívar had a meeting in Paris, right before the time in which Bolívar organized the Grand Colombia project.
Additionally, we have detected that if we overlay the Colombian maps where there is current gold extraction, coffee plantations, and the Colombian Guerrilla forces´ settlements since the 1960s, all these maps coincide with the same region visited by Von Humboldt, an expert in mines and natural observations, who was the equivalent of a polymath genius geologist of our times. See slides 10, 11, and 12.

Despite the fact that coffee was being introduced by the Jesuits in the 18^th century, it wasn´t after the unsuccessful tobacco experiment (1845-65), that Colombian criollos decided to accelerate the plantations of coffee as a potential export commodity. We believe this occurred because they observed the parallel success of Brazil in relation to this commodity, and it coincides with the introduction of the crop to all the tropical American new republics. According to historians, coffee cultivation for export began in northern Santander and then spread to Cundinamarca, then to Antioquia, then south into Caldas, the Quindío, and the Cauca Valley. By the end of the 1880s, coffee had become the country’s principal export. With coffee, the construction of the first railway projects began. See additional slides about the progression of coffee exports until the 1970s.

Colombia, current economic structure, social and labor outlook, and education. Slides 13 to 18
All these slides are self-explanatory. We have selected economic data that could help us to see where Colombia is standing right now. After removing the years 2019 to 2022, which clearly were affected by the COVID-19 pandemic; since 2023, the GDP per sector holds a puzzling outlook, assuming our breakthrough of a Colombian imbalanced economy. See our discussion about the gross fixed capital formation of Colombia in slide 14. Although the digital pros are trying to convince us that the utilization of artificial intelligence will create a sound and robust wave of “new manufacturing” business models, our judicious verdict is that for a country to progress with steady and consistent growth (above 7% of GDP rate Year over Year), there is no shortcut for it. The creation of prosperity takes time, and it requires a sound, high-quality education of numerous minds working together for wealth creation. No nation has progressed without a solid, dedicated education of its citizens, and no state has prospered without hard, real work. And the more, the merrier. There is no free lunch for prosperity. Artificial Intelligence (AI) is not adding value to the already damaged brains of those digital natives born after Y2K. AI can´t be the shortcut to replace the lack of well-educated citizens. AI is not going to substitute the “real brainiac skills needed” for the majority of the Colombian population to jump from low-income to mid-income class. On the contrary, we are going backwards. The inequality has not been reduced in Colombia during the last 25 years, despite the fact that there has been a reduction in the three poverty thresholds established by the World Bank (population headcount % at $3pppd, $4.20 pppd, and $8.30 pppd). Latin America public education lacks a robust scholastic foundation, and AI is definitively not the shortcut required for students to think properly either. This is not a surprise for anyone who has a certain level of discernment. There are a few Latin American elite, strict schools which can produce students at the level of Singapore, the USA, or even above the OECD average, but this is just a minimum percentage of “outliers,” of which I am blessed to be one of them, but we are not a critical mass. We are such a small, tiny reduced group of people without any sort of relative weight to raise the quality of education of the whole crowd, which is required with aggregated talent that only comes through high-quality teachers, who are the foundation for our economy to grow. Artificial Intelligence pulling information from the Internet is not a shortcut to escape from the grind, the discipline, and the effort for cultivation of the talent of Colombia, and the rest of Latin American nations. See slides 17 and 18.

Colombian Coffee and its Financing. Slides 19 to 22.
The slides are self-explanatory. We are literally avoiding the theme of the Colombian illegal plantation activities which have persisted in the same coffee regions. We are not experts on those matters, and as corporate strategists we can´t engage in the complexity of the Colombian current situation, because the war and conflicts of Colombia are not our domain of specialization. We deeply apologize for it. Since our next publication has been moved to October 9^th, there is a window of opportunity to explain the financing structures and access to capital in general terms, and we will revisit this subject to train or at least provide certain elements to our readers before our next masterclass. Thank you very much for your kind understanding. See you then.

Announcement.
In 15 days from now, we will publish our last country review about key partnerships. Our selected nation is Honduras. After the Honduran coffee chapter (to be published on October 9th), we will return to our usual schedule of one publication per week. The reason why we have spent so much time in history on Brazil, Ethiopia, Indonesia, Colombia, and Honduras is straightforward: the nature of plantations can´t be separated from history. Only then we are able to comprehend the complexity of the troubles that exist in tropical nations at the level of financing smallholders.

Musical Section.
This saga is committed to elevating traditional musical instruments and their respective musicians over digitally produced sounds. This saga is dedicated to chamber orchestras. 
Today, we have chosen the artwork Clarinet Concerto in A major, K. 622, by Wolfgang Amadeus Mozart, performed by Orchestra La Scintilla (Zurich Opera House) under the direction of Ada Pesch.

Enjoy!

Thank you for reading http://www.eleonoraescalantestrategy.com. It is a privilege to learn. Blessings.

Sources of reference and bibliography utilized for today´s inferences. The bibliography is listed on the last slide of the reference reading material. Click the respective URL to trace them.

Bibliography in this post: This will be added accordingly with the strategic reflections.

Disclaimer: Eleonora Escalante paints Illustrations in Watercolor. Other types of illustrations or videos (which are not mine) are used for educational purposes ONLY. All are used as Illustrative and non-commercial images. Utilized only informatively for the public good. Unless otherwise stated, I do not own any lovely photos or images.