Friday, October 17, 2014

home loans for System D!

Now here's a great thought: home mortgages for the vast numbers of people in System D. Caroline Wangui Kariuki, managing director of The Mortgage Company in Kenya, made the suggestion in an interview with the women's section of Standard Digital. Money quote:

“The pay slip and its contents determine if you will own a house or not. That is very unfair to the millions in the informal sector with fluctuating earnings. There must be a way of harnessing their earnings through a mortgage tailored to their circumstances,” she says.

According to Caroline, the Government as well as financial institutions fear the risks associated with this group, especially because cannot be assessed in terms of along term income.

This, she says, is a shallow way of looking at this category. There are precedents showing how the micro- finance sector has harnessed the small earnings in the informal sector to boost their financial base.

“If banks such as Equity have found ways of assessing the risks associated with banking the informal sector, surely they can come up with ingenious ways of financing the home market using the same principles,” she says.

Exactly! And not just in Kenya. All over the world. The global majority works off the books. Banks are more than willing to take their deposits but won't give them loans.

Suggestion to System D workers: don't put your money in a bank that won't work with you.

Wednesday, June 11, 2014

what's a little irrationality among friends?

An interesting essay about Pakistan's near-total informality, from Harris Khalique. Money quote:
Some friends celebrate the informal and underground economy. Maybe they are right to the extent that the poor are at least able to survive as formal institutional arrangements of our national economy are not only limited, they are also exclusionary and pro-rich. But who is actually making the real buck from the informal economy? The same idle rich class, isn’t it? This class absolves itself of any duty of care for its workers when economic activity takes place in the informal sector.
True. The rich have a way of profiting from every kind of economic relationship. But there's nothing less devious or more caring about the formal economy. Being part of the formal economy doesn't automatically mean owners feel a 'duty of care' for those laboring under them. And, indeed, formalization often takes away some elements of control that workers in System D have over their labor and their lives. Things that are irrational and inefficient in economic terms can also be positive and creative in social and political terms.

Wednesday, April 30, 2014

Kenya's essential economic engine

Let's unpack this article from Nairobi's Standard newspaper.

Government statistics show that Kenya created 724,800 new jobs last year.

  • 26,300 were government jobs
  • 89,700 in the private sector
  • 626,800 in System D

Meaning that 86.5 percent of the new jobs in the East African nation were off-the-books and informal. That's some economic engine.

As the Standard says, "Despite being essential in employment creation, the informal sector has largely operated with little support from the government, which to a large extent failed to offer a conducive environment."

Tuesday, April 29, 2014

Brazil wages war against 20% of its population

How long can a country pretend to be a democracy and treat 1/5 of its population like criminals. That's my thought after reading this article, about continuing violence in Rio's favelas. Since when is supposed safety on the highways an excuse for moving tanks into a working class community? Since when should police not care that the drug dealers are a minority in these self-built communities that are home to more than 1 million people in Rio and tens of millions across the country?

What would you feel if a major sporting event came to your city and, in preparation, the police moved tanks and guys with assault weapons in front of your home?

Yes, the drug gangs are heavily rooted in the favelas. But they are an opportunistic infection. They made merry in the self-built squatter areas because the government pretended those communities didn't exist and treated all the people there as lower than 2nd class citizens. The police are not people's friends. In my time in Rio --  a dozen years ago now -- I was only harassed or threatened with guns by the cops. The police represent an alien unwanted occupying force doing no one no good.

Even calling this program pacification is sick. There's obviously nothing peaceful about it.

Monday, April 21, 2014

everything from self-development; nothing from the government

Buried in this article from the InterPress Service is this fascinating factoid:

In Harare, there are now 18,500 people working in informal carpentry, up from 7,000 five years ago. During the same time period, formal carpentry jobs fell by almost the same amount, declining from from 22,000 to 13,000.

Conclusion: the jobs have moved off the books. As Tracy Chikwari, a 36-year-old single mother and System D entrepreneur told the news service, "I bought two houses here in Harare by trading in furniture that I guy from the informal market and I have no doubt this feat is taking me to greater heights."

An anonymous official complained to IPS that the carpentry business is so strong that the government is losing $32 million a month in unpaid taxes. But, as one sensible carpenter noted, taxation is a social contract: "Paying the government tax for our activities depends on what we also get from them. But we are getting nothing."

Monday, March 24, 2014

a little 'urban disorder' among friends

This article, from the Cameroon Tribune, unfortunately demonstrates the insanity and inanity of most writing about System D.

As a symptom of persistent "urban disorder," the newspaper in the Cameroonian capital presents this scenario: "It's 10 am and the weather is bright. Pauline Mangne, 27, a Yaounde inhabitant who works as a housemaid, was seen buying some food items in a small market or 'petit marcher.'"

The article continues: "A market normally is constructed and well planned in any city. But that is not the case in Yaounde. These unplanned markets are found mostly in main junctions, entrance into some schools and institutions of higher learning, financial institutions and beside motor parks. The items that are commonly sold in these markets are vegetables, fruits, palm nuts and maize among other perishable foods." Martine Messina, a roadside merchant who journeys from her farm to the city and back every day, told the paper, "Anything I harvest in the farm I come and sell in Yaounde." She insisted that it was the only way for her family to survive.

It's astonishing to read articles that assert that a farmer selling produce at the side of the road is pernicious. Just what is so disgraceful about a farmers market?

No matter where you go in Africa and Asia and South and Central America, city-built markets don't work for small-scale merchants and farmers. The obvious conclusion: the planners who keep planning these unsuccessful markets are wrong. And the folks who sell at the side of the road are right. Let's hear it for a little 'urban disorder' among friends.

Wednesday, March 12, 2014

are street vendors terrorists?

Is this man part of a terrorist network? A retired Tunisian military man sure thinks so. Mokhtar Ben Nasser, a retired colonel and former spokesperson for the Tunisian military, is the sole source for this International Business Times article asking the question.

“There is a confirmed relationship between smuggling and terrorism,” Ben Nasser told the paper, arguing that militants offer the smugglers protection, sometimes in the form of extortion, in addition to demand for their supplies, while smugglers provide food, equipment, untraceable cash and knowledge of unguarded routes in the country’s interior and across borders. “Militants and smugglers have shared interests."
But, at a conference at Stanford ten days ago, a respected security analyst came to the exact opposite conclusion. I asked Niklas Swanström, head of the Institute for Security and Development Policy, who spends a lot of time in criminal havens like North Korea, Tajikistan, and Dagestan and is an expert in transnational crime, about this exact issue.
He insisted that most smugglers and informal wholesalers and retailers don't need or want to work with terrorists. He said that, by their nature, terrorist organizations are slow and cumbersome -- more worried about ideology and furtive spycraft than rapid action. Smugglers, by contrast, have little use for ideology. They simply need to move their goods -- and getting in bed with terrorist networks doesn't make good business sense.

Tuesday, January 7, 2014

the tshukudeur

On a seriously good day, Biamungu, who lives in Goma, in the Democratic Republic of Congo, makes 10 euros, transporting goods on his handmade wooden bicycle, called a tshukudu.

"I make sure to bring home the basic necessities: flour for the fufu [cassava paste], cooking oil and salt. If I have some money left, we feast on tomato sauce or meat," he tells Radio Netherlands (via allAfrica).

Being a tshukudeur is incredibly taxing work -- requiring brawn and energy. And his work has been made harder by the rebellion and conflict in that region of the DRC.

Two caveats about this report, though:

first, I cringe when any reporter, no matter how sympathetic, says, "Riding his large wooden bicycle, Biamungu, with his muscular, sweaty body, looks like a character from a novel." 

second, in many African countries, fufu, sometimes called garri, is the staple food. I ate vast quantities of it every day in Nigeria. When I was in Kenya, I ate massive amounts of ugali -- a similar starchy sponge concoction made with corn. Though I am sure Biamungu's family's limited diet is nutritionally lacking (I most often had some vegetable stew and a small piece of boiled meat with my plate of fufu), a messload of starch and carbs was, to me, the perfect way to eat in that climate.

the street market of life

Juan Goytisolo's novel Makbara, which starts in the 'self-confident Eurocraticonsuming city' of the West, culminates in an appreciation of its Hegelian antithesis--the street market (his real-life model is Jemaa el-Fnaa, in his adopted hometown, Marrakesh):

'an agora, a theatrical performance, a point of convergence: an open and plural space, a vast common of ideas
peasants, shepherds, soldiers, tradesmen, hucksters who have flocked to it from the bus terminals, the taxi stands, the street stops of the jitneys poking drowsily along: coalesced into an idle mass'

'offerings on the open market, within reach of anyone willing or able to give value for value received: far from the irreducible molecular order of the great industrialized European city: the hostility of the clock, the pressure of time, rush hours, infinite loneliness shared bumper to bumper'

'creating structures to welcome the world-wanderer'

'survival of the nomad ideal as a utopia: a universe without a government or a leader, the free circulation of person and goods, land owned and used in common, the tending of flocks, sheer centrifugal force: the abolition of private property and hierarchy, of rigid spatial boundaries, of domination based on sex and age, of the ugly accumulation of wealth: emulating the fruitful freedom of the gypsy who respects no frontiers: encamping in a vast present of quests and adventure....a calligraphy that over the years is erased and then retraced day after day'

Here, in the gaudy market, his omniversal unipresent characters find a 'tiny little island of freedom and rejoicing in an ocean of wickedness and misery, giving them and giving myself the necessary strength to complete the day's journey, to gather up our belongings and prepare to move on, to seek shelter, to lull ourselves to sleep with the idea that tomorrow everything will be better and they will still be with you, as will I, all ready to invent new and even more marvelous adventures, finding a welcome refuge, if it be God's will, in the free and easy, kindly tolerance of the public square'

This is, of course, the endless presence, the eternal now--duplicitous and dramatic, monotonous and unique, shared and solitary, everything and nothing

The street market of life

Thursday, January 2, 2014

Against Economics

Andro Linklater’s latest and, sadly, last book (he died as it was being published) started as his attempt to make sense of the global economic crash and mutated into a paean to the potential and problems inherent in private property.

He knew this was an extraordinarily old-fashioned approach to modern fiscal analysis. But, as he writes toward the outset of Owning the Earth, “The idea of individual, exclusive ownership, not just of what can be carried and occupied, but of the immovable, near-eternal earth, has proved to be the most destructive and creative cultural force in written history. It has eliminated ancient civilizations wherever it has encountered them, and displaced entire peoples from their homelands, but it has also spread an undreamed-of degree of personal freedom and protected it with democratic institutions wherever it has taken hold.”

This shouldn’t give you the idea that Owning the Earth is a heartless, self-congratulatory free-market screed. Rather, Linklater’s villains are the Austrian School (those two patricians, Ludwig von Mises and Friedrich Hayek, in particular) and all those who confuse the production of individual wealth with democracy and the promotion of purely private interests with the public good. “The iron law of private property,” he concludes, “turns out to be a paradox. Although it promotes individuality, it only works by giving equal weight to the public interest.” His heroes, then, include Adam Smith (not for the “invisible hand” but for its corollary: the idea that the market is designed and tempered to the public interest), James Madison (for having “embraced the diversity of opinion as evidence of free society”) and Wolf Ladejinsky (who pioneered land redistribution while working for Douglas MacArthur in the 40s and early 50s.)

Linklater romps through history with the insouciance of Minnesota Fats attempting a five-ball bank-shot combination to either beat or sucker a pool hall opponent. The book hopscotches centuries and continents and moves from the Levelers to Lehman Brothers, with Locke, Lenin, Lincoln, Ladejinsky, Linux, and the Louisiana Purchase in between. He concludes that private property promotes democracy – but only when it’s an expanding resource, available to all, cheaply and efficiently. Once the frontier closes or is disposed of (or, in global intellectual property agreements, if patents held privately are given the force of law while varieties of communal ownership are not) the egalitarian and equitable teamwork between property and democracy breaks down. 

His assertion that the massive government-led rescue plans developed after the recent financial meltdown proved that "the Austrian experiment had failed" may be an overstatement--after all, free market absolutists are still vocal, almost everywhere. But Linklater is more interested in small futures than big ones. As he notes, rivalries over land and resources may create vicious conflicts, but don’t always cause the many types of legal and quasi-legal sharing arrangements to rupture. “Even three wars between India and Pakistan have not caused either of them to break the Indus Water Treaty they signed in 1960. Underpinning these formal regulations for sharing water, as well as thousands of other informal arrangements, has been the understanding that it is worth limiting individual needs so that everyone benefits from a limited resource. However bitter the disputes, it is overshadowed [grammatical oddity in the original] by the realization that taking whatever one wants risks destroying the entire system and ruining everyone.”

Owning the Earth flips traditional pieties about property on their head. Linklater doesn’t cite Peter Kropotkin or Karl Polanyi or E.F.Schumacher or Elinor Ostrom – but his work is imbued with their spirit.

“There is an alternative to the single, ultimately unviable measure of success imposed by economics,” Linklater concludes. “Around the world and throughout history, neighborhoods have succeeded in a million different ways.”

In that spirit, he offers a political slogan for the 21st century:  “It’s the neighborhood, stupid.”



one querulous cavil: Oddly, Owning the Earth contains some grammatically questionable constructions and lots of oddball spellings (among them: Hayek is "Friederich" instead of Friedrich, the Chinese city Shenzhen is "Zhenzhen," Mao Zedong is spelled "Zhedong" on first reference, and George H.W. Bush is referred to as "George H. Bush.") Misspellings can creep into any volume, but these seem egregious.