Sunday, July 21, 2013

ace on congo micro economy

"perhaps the main economic activity in Kananga involves trying to insert oneself in a chain of transactions between two parties. To change money you don’t go to the bank or an official moneylender. You go to a person on the street. The rate is a little worse, but convenience greater, you give him or her the dollars, they exchange these for Congolese francs at a slightly better rate than they give you. That person exchanges with another person who gives a slightly better rate etc. Eventually the money ends up in the bank and 4 or 5 people got enough to eat that day.
Even an apparently simple transaction like renting a vehicle to drive to Mushenge, the Kuba capital, turns into a long relay. Say, you want to rent a car. Someone owns the car. A simple deal should result but it doesn’t, because somehow 3 or 4 people manage to insert themselves into the transaction, relaying the deal from one to another, and thus make enough to eat that day.
At some level, the relay economy is “institutionalized”. Nobody does things themselves, you ask someone to do it for you, they ask someone else, who asks someone else and eventually the word gets to the person who has the thing you want. This delivers great convenience, like beer or food delivered to your front door, at just a little extra cost and it keeps people fed."