Detail of Sakawa calendar

 

By Marleen de Witte

In the streets and homes of Accra, the impact of the global financial crisis appears slow. Analysts say this is due to the weak integration of the largely informal local economy with the global financial market. But this is not to say that people do not experience financial crisis.

They do. Many face a crisis of survival on a daily basis. People complain about the high cost of living, the escalating prices of food, fuel, and school fees. Without proper jobs or with salaries that are insufficient to pay for all living cost, many people struggle to get through the day. One real effect of the global crisis on ordinary Ghanaians’ lives is that remittances from relatives working abroad, who keep many families back home afloat, are coming down. But even so, there is nothing so new or extraordinary about this situation. This is not a ‘crisis unlike any we have seen in our lifetime,’ like Obama said about the crisis in America. As one Ghanaian web commentator put it: “As far as 80% of Ghanaians are concerned, there has been a credit crunch all their lives.”

The term “credit” traces its etymological roots to the Latin word credere, to trust, to entrust, or to believe. The credit crisis is also literally a crisis of trust, of belief. We have tended to trust the financial system of the neoliberalist economic order to the extent of taking it for granted as a self-regulating process. Now, with the collapse of banks like houses of cards, this taken-for-grantedness, this unquestioned belief in the value of money, has suddenly broken. In Ghana money has never been taken for granted, but instead is often highly mistrusted. People’s strong desire for wealth goes together with a deep-seated suspicion about the sources of wealth, especially if acquired suddenly and shown conspicuously. This suspicion of money finds many expressions, one of which is the urban legend of Sakawa that held the Ghanaian public in its grip when I was there last summer.

So-called ‘Sakawa Boys’ are a frequent appearance in the streets of Accra. Driving brand new luxurious cars that are far too expensive for their young age and donning flashy clothing styles that are obviously inspired by the American rap scene and its blingbling jewellery, they raise many a suspicious eyebrow. At night you see them hanging about in Internet cafes. How could such young boys lead such expensive lifestyles, especially without being engaged in any well-earning job, many people wonder.

The answer can be found in a wide range of media. Calendar-posters, tabloids, radio, television, video movies, and video documentaries expose in word, sound and image what happens in the darkness of the night and in the hidden shrines of juju men and mallams. These popular media sell like wildfire and Sakawa ‘news’ reporting has become a lucrative venture that blurs the boundaries between news and fiction.

Sakawa is a new term used to denote Internet fraud (also known as ‘419’) by young boys, mainly directed at white people overseas, and made successful with ‘occult’ rituals performed by indigenous shrine priests (popularly known as juju men) or Islamic mallams. These rituals range from sleeping in a coffin for several nights if not weeks, walking naked in a cemetery at night, or bringing hard-to-get-by offerings, such as menstrual blood or even human parts. The boys then receive a magical belt, which is in fact a snake, or a magical ring. Tapping the computer keyboard with the finger that wears such a ring sends the spiritual power right through the Internet connection to the email receiver overseas. The victim will then not be resistant to requests for sending large sums of money. Cash starts flowing, but not for long…

The video jacket of the video movie Sakawa Boys reads:

“In a quest to fulfil each other’s money problems, one old friend introduces them to a simple way to make quick cash. But forgetting the consequences behind this better shortcut, they live a very rich and prosperous life, until everything starts getting worse … “

Numerous cases have been reported in the media of Sakawa boys having turned deaf and dumb, gone mad, or, more dramatic, turned into snakes, dogs, vultures, or other creatures. Calendar-posters show their pictures, the eyes or other facial features of the boys photoshopped into the animals’ heads. “Don’t you see it’s really him”, people commented. Sakawa stories can easily be read as a critique on quick money. They express and also feed the suspicion that sudden and conspicuous wealth can be immoral, because it is acquired at the expense of others and also because it is used for individual pleasure instead of being socially distributed.

The stories confirm that such immoral wealth is ultimately unsustainable. In one scene in the film Sakawa Boys, one of the guys who has become rich through Sakawa ritual, opens the boot of his car to take out some money, only to find out that all the dollar bills he had packed in it have suddenly turned into blank, worthless paper. Baffled, he stares at the papers in his hands, unable to believe that what he had taken for granted as real money, and (relatively) hard currency too, turns out to be nothing at all. A bafflement that we have all seen on the faces of American bankers, stockbrokers, and other finance professionals. And that some of us have felt ourselves when we realized that our savings in Iceland or Wognum had suddenly evaporated.

Although there is no direct link between Sakawa and the global financial crisis and stories about ‘money magic’ date back much further, the parallels between the events in America, and elsewhere, and the current Sakawa hype in Ghana are not far-fetched. The central lesson of the credit crisis – that money, in whatever form, may not be what we believe it to be – has long been thematized in Ghanaian popular culture. Sakawa stories comment on the immorality and unsustainability of quick money, created by obscure or mysterious means – was it not the financial sector’s creation of virtual money that started the bubble that eventually burst? The stories also question the widespread dream of owning a big house and a hummer – also the middle-class American dream that lay at the basis of the current global crisis – and the evil that this dream can lead to.

Marleen de Witte is a postdoctoral researcher working at the department of social and cultural anthropology at the VU. She works on the NWO funded programme  ‘ Heritage Dynamics’.

Brazilian miner shows gold in the pan

By Marjo de Theije

At the end of the summer of 2009 the price of gold passed the barrier of 1000 US$ an ounce for the second time since the financial crisis started. Early November it passed the 1100 US$ barrier and outlooks say the limit is not in view. I immediately think: “Good News,” when I hear such information. Rising gold prices make me happy because this will eventually result in a higher income for the people I work with in Suriname – the maroon and Brazilian gold miners in the southeast of the country.

This is not to say that the crisis does not reach Suriname or the gold sector. Some of the effects were that international investors in the local gold business run into shortage of financial resources and had to stop their exploration activities by the end of last year. Others however, profit from the rising gold prices. The only large scale mine in Suriname is the Rosebel mine, owned by a Canadian company called Iamgold. This company opened the operation a few years ago, when the gold prices were only starting to rise and is now fully in production, reporting high profits again and again. Many Surinamese complain about the fact that the government has no large share in the company, nor made an interesting tax agreement when it gave the concession to exploit the gold in Rosebel. However, with the high prices for the gold, the whole country will profit even when the percentage of taxes paid is low.

The many small scale miners in Suriname also profit considerably from the financial crisis. Not only because the gold price increased, but also because the price of fuel (oil) went down. Gold miners main operational costs are in the oil they use to operate their machines, and they typically calculate the profitability of their mining enterprise in the grams of gold they produce burning one barrel of diesel. With low gold prices and expensive oil you may need to produce 200 grams a barrel to make it worthwhile to run an operation. In the current situation 80 grams may be sufficient for example. And of course, if you continue to produce the 200 grams a barrel, the profits are very good. Notwithstanding the fact that these miners may live in precarious conditions in the forest, at the margin of so-called development, they may fare quite well under such favorable circumstances.

Paying the bill in grams of gold, Antino (by Marjo de Theije)

In fact, these small scale miners do not only “think” their investments to produce gold in terms of gold. Everything they buy is paid with gold. This case of the small scale miners in Suriname shows how global processes may lead to very specific local constellations. The miners live in a kind of alternative economy, which makes them relatively less vulnerable for the effects of the financial crisis as they do not use much of the financial system. They produce gold and they pay their purchases in gold.

Marjo de Theije is Associate Professor at the Department of Social and Cultural Anthropology at the VU University in Amsterdam.

For more stories in this weblog series Financial Crisis Worldwide see for instance Ton Salman’s story on Bolivia.

Photo by Archerten

Door Ton Salman “Hesitating at the doorstep — the impact of the global economic and financial crisis in Bolivia”

Financial and economic crises as the one currently haunting us, inevitably affect the whole world — we are too interconnected for anyone to escape its impact. The way the crisis lands in various countries and regions, however, differs considerably.

Take Bolivia. As a reminder: since early 2006 Bolivia is governed by its first indigenous president, Evo Morales. He attempts to pull through economic reforms, to strengthen the country’s sovereignty vis-à-vis external agents, and pursues reforms in favor of the Bolivian poor. In his political discourse he combines an ideological (‘socialist’) with an ethnic vocabulary, accusing the West of a history of exploitation of the South, and additionally charging Western political and economic models of being instigated by greed, by obsession for accumulation and expansion, and of neglect of the environment and the depletion of natural resources. The crisis, in his view, is a leaf out of one’s own book. This does, nevertheless, leave the question open: will the crisis hurt in Bolivia?

Beyond any doubt the answer is a yes: the remittances from the approximately 2 million Bolivians abroad, both in neighbouring countries, in the USA and in Europe, have contracted approximately 20 to 25% since late 2008. Additionally, a group of migrants are returning home (although reports from Europe suggest that many ‘wait it out’). Both the decrease of remittances and the return of migrants will affect the country: family incomes decline and unemployment will rise. Additionally, exports will go down, both in terms of volume due to abating demands and due to lower prices for the ‘raw material’ commodities Bolivia mainly sells abroad. In sum: yes, the crisis will hurt.

However, there are some additional elements to take into account: Bolivia’s economy is still growing, both in 2008 and 2009, some say 3, others say up to 6% a year. Arguably, explanations for these achievements are the fact that commodity prices rose between 2005 and 2008. Obviously, the price drops since September 2008 are affecting national incomes. Nevertheless, due to the much more profitable contracts and conditions with regard to natural resource‑exploitation that are Evo Morales’ achievements, revenues are still higher that they were before 2005.

Additionally, the social policies of the current government, including a rise of minimum wages and several subsidies for the elderly, pregnant women and young mothers, and other poor sectors, contributed to a rise of national purchasing‑power, and hence to good times for the national industry and agriculture — including a rise in employment. Although debated, several spokespersons claim that it compensates for recent drops in exports and foreign investments.

Moreover, the financial sector of the country came out quite unscathed precisely because it had no connections whatsoever with the transnational financial world. The whole problem of bad loans leading to terrible domino-effects between banks and other financial institutions left Bolivia unaffected. Bank loans in Bolivia are assessed as solid and healthy, and the banking world as willing to provide credits to solid business-plans (to which it should be added that micro-credits are still a thing the national banking system is not sufficiently enthusiastic about). Nevertheless, this point suggests that in times of crisis, being ‘marginal’ might bring some advantages, in particular if you have your internal financial affairs in order.

The government also did its share. Since 2006, state incomes have grown substantially due to nationalizations of strategic enterprises and the re-negotiation of contracts on the exploitation of natural resources such as gas, oil and minerals. The current administration has put significant parts of extra state incomes on solid accounts, so that the national reserves have grown to over 7 billion US$. This is more than at any other moment in Bolivia’s history. For this reason, Bolivia has recently been heralded by the IMF as a country with large and sound financial reserves.

Talking about the impacts the crisis might have on employment, a couple of things need to be included in the equation: less than 40% of the Bolivian labor force is in the formal economy. Over 60% is informally employed, earns low wages but is at the same time not or less dependent on the vicissitudes of the formal economy, such as lay-offs because of diminishing exports.

This fact, moreover, needs to be interpreted in the context of the existing variety of values and attitudes concerning economic behavior in Bolivia. Responsible for decisions concerning employment, investments and planning are considerations about being in charge of one’s own time, friendships and loyalties, celebrations and ‘belonging’,  just as much as are monetary calculations. As a consequence, ‘nature-based’, ‘family-based’ and ‘market-based’ economic spheres coexist in Bolivia, and feed back upon each other, prompting both the inability of the labor market to absorb the available labor force and a resistance against the labor discipline the market demands.

The result is that many prefer the low yields of informal jobs and chores above the (often also very low) salaries that would come with formal jobs’ strict demands in terms of timing and ‘reliability’. And people can afford to stick to these strategies because these informal activities provide just enough to survive more or less satisfactorily. The price the country pays is low productivity, and relatively low growth. But what it wins is a degree of invulnerability with regard to external catastrophes.

A final interesting detail is that some believe that a possible tendency towards a negative trade balance will in part be compensated by drug-trafficking. Coca will in the near future remain one of Bolivia’s hotly debated ‘non-traditional exports’.

In sum then, the direct effects of the crisis in many other countries, such as increases in unemployment, people unable to pay their loans and mortgages and losing their houses, banks going broke and making people lose their money or entering a big struggle to recover it with state help, national industries losing money due to drops in consumption, state interventions in financial institutions that are too important to go down — all these things are not occurring in Bolivia. It is plausible that this has to do with the fact that Bolivia, although vulnerable because of its dependence on exports and remittances, is relatively immune to the more severe impacts because of its informality, marginality, and disconnection with the global and big-scale economic and financial system.

Ton Salman is associate professor at the Department of Social and Cultural Anthropology (VU University). He is specialized in social movements and citizenship, with Latin America as his regional specialization. He wrote earlier (in Dutch) on Standplaats Wereld about human rights  in Bolivia and crime with supernatural help.

Earlier posts in the Financial Crisis Worldwide series: introduction (Kim Knibbe) and Indonesia (Juliette Koning).

By Julliete Koning

From the point of view of Indonesia, the current crisis is merely one in a series. To illustrate this, I will reflect on the Asian Financial crisis of 1997 and the subsequent crises that ‘hit’ Indonesia up until the eve of the present global crisis.

The end of 1997 was the start of a severe financial crisis in various Southeast Asian countries, including Indonesia. The country encountered 13% of economic downfall while the currency went from about 3,000 Rupiah to one US dollar, to a low point of 14,000 in roughly a year or so.

The financial crisis was followed by a series of crises that created extremely insecure living conditions for most Indonesians, both in a material and in an immaterial sense. The financial crisis was just the first domino-stone to tumble.

Politically the country was unstable: there were various reform movements, interim governments, rising forms of corruption, and separation wars in East Timor, Aceh and Papua New Guinea. The country also encountered extreme natural disasters such as the Tsunami in 2004, a severe earthquake in 2006, and terrorist bomb attacks in Bali 2002 and 2005. In addition to all this turmoil, there were various religious conflicts, in particular between Christians and Muslims.

In all, this decade of multiple crises not only hit the Indonesian economy very hard (for example, the tourism industry almost came to a standstill), it also created an atmosphere in which people were just waiting what catastrophe would hit next. During these troublesome times (in 2004 and 2007), I investigated the upsurge of Pentecostal-charismatic movements at the time, and the influx of, in particular, ethnic Chinese citizens to these movements.

The ethnic Chinese in Indonesia, who are important players in the economy, have nonetheless, as an ethnic minority, been confronted with a long period of forced assimilation, discrimination and suppression. The decade of crises was particularly traumatic for this group, because the start of the crisis went hand in hand with severe violent outbreaks against ethnic Chinese: houses and shops were burned and ethnic Chinese women were raped in various major cities on Java. Being active in the economy, they were also under a lot of financial stress because of the lingering Asian crisis. Many left the country for Singapore and Australia, and some never returned. The majority however, stayed and had to cope.

The life, business and conversion stories that I assembled during this particular research, reveal a common turning point in the lives of the ethnic Chinese in my study: economic problems in their enterprises, fear for their safety, and a feeling of insecurity about the political changes and how the new regimes would ‘treat’ them.

For some, this turning point meant conversion to Pentecostal‑charismatic Christianity. The charismatic movements in fact were thriving at that time (as they did during the economic boom years of the 1980s). It seems that the explicit prosperity narratives found in many charismatic churches worldwide, offers answers both in times of plenty (endorsing wealth creation) and in times of hardship (giving guidance in times of insecurity).

For ethnic Chinese in Indonesia, this connectedness to a global religious community reduced their insecurity and created a forum where they could share and discuss their insecurities. There was care and relief, the get‑togethers with fellow Christians and in most cases co‑ethnics bringing them moral and material support.

In a sense, amidst ongoing crises, one specific ethnic minority found a safe heaven in a religious movement that provided moral support and guidance, at a personal, group and professional level.

Julliete Koning is lecturer at the Department of Culture, Organization & Management of VU University.

The Financial Crisis Worldwide: short introduction to this series.

See also Freek Colombijn’s posts on Indonesia on this weblog (in Dutch).

References:

http://www.insideindonesia.org/

issue January-March 2009: on Chinese Indonesians

issue January-March 2007: on Religion in Indonesia

issue April-June 1998: on Financial Crisis in Indonesia

Street selling in The Gambia (by red hand records)

By Kim Knibbe What do a window washer at a cross-roads in a metropole who starts washing your window unasked, an old lady from a village in Africa who visits her son in the big city to ask for financial support, a beggar and a pickpocket have in common? According to the anthropologist James Ferguson, they are all involved in what he calls improvisational distributive labour. Ferguson said this during the seminar The Financial Crisis: views from anthropology, which was held at our department last week. 

By taking these cases together, he calls attention to what he sees as one of the biggest challenges of the economy at the moment: that of distribution. However, the tendency in most countries with high income disparities is to create enormous physical barriers between the worlds of the rich and the worlds of the poor, making ‘improvisational distributive labour’ virtually impossible. The rich can just forget about the poor.

In South Africa, this problem is debated seriously, since the end of apartheid has not really led to a better income distribution. Some families are ‘lucky’ because they have a grandmother who receives a government pension that constitutes the only regular and dependable source of income in some families. This had led to the idea that it would be better to institute a Basic Income Grant (BIG).

The next speaker at the seminar was Howard Stein, who treated us to a lecture that showed, with detailed tables, how the IMF and the world bank have messed up African economies, how their power declined as countries started paying off their debts and how happy they are to have some of that power back since the financial crisis. A second chance! And this time, IMF and Worldbank  mean to get it right, they will be more sensitive, more caring….

However! According to Stein, the rhetoric may have changed, the measures have not changed at all: drastic cutbacks on public spending, opening up economies and letting the free market do its job. Young economists, Stein suspects,  have been reared on a diet of neo-liberalism and therefore simply don’t know any other ways to manage the economy…. Bad news for Africa.

The third speaker, Anton Hemerijck, recently appointed as Dean of our faculty, focused on the West. As a member of the Scientific council for the government (WRR), he interviewed a long list of political and economic superstars to ask them their opinion of what should and could change as a consequence of this crisis. The interviewees were asked explicitly to take into account the political feasibility of their suggestions for (institutional) change.

Finally, several anthropologists delivered ‘views from the field’  on the financial crisis. It became clear that while the crisis had different consequences in Indonesia, Ghana, Bolivia and Surinam, in all of these countries it did not seem to be such a major event as it is here. However, it was of course a major event in ‘the City’ of London, one of the main financial centres of the world. Tijo Salverda is initiating research on this topic. The next few weeks we will bring these stories to you in our series on the ‘Financial Crisis Worldwide’, to give another perspective on the crisis that keeps our imaginations in thrall…

Kim Knibbe is a post-doctoral researcher at the Department of Social and Cultural Anthropology at VU University Amsterdam.

By Chris Madden (with permission)

Tijo Salverda explains what the financial sector can learn from a former colonial elite.

Hedge fund managers, the City and Wall Street’s top bankers, regulators and politicians involved in reshaping the financial markets, should take a look at the tropics. They can learn a great deal from the former white colonial elite of Mauritius.

The Franco-Mauritians have a history of power struggles but are still sipping their gin tonics (a British legacy) in their bungalows overlooking the turquoise Indian Ocean. Their historical experience shows regulators that financiers (hedge fund managers, bankers, etc.) can accept change, while financiers on their turn will see that they could still enjoy the luxuries of Mayfair and Upper East Side even if they compromise some of their power.

Mauritius, an originally uninhabited island, relied predominantly on its sugar industry, controlled by the Franco-Mauritians. In the early twentieth century labourers of Indian and African descent started to push for change. This was the beginning of a radical shift in the island’s political landscape.

Until then the Franco-Mauritians had successfully defended and maintained their elite position. The Franco-Mauritians were, notwithstanding, the source of occasional resistance to the British, an effective collaborative elite through whom the British ruled the island from their takeover in 1810 until the postwar period.

But under mounting pressure from non-white Mauritians, especially the Indo-Mauritians, the British substantially increased suffrage in 1947. The Franco-Mauritians were furious with the British because, contrary to in the past, the British colonial administration virtually ignored their suggestions.

This new policy stemmed from the fact that the British were now of the opinion that, for the well-being of the colony, the working classes and other non-whites should be given a voice. It lead to Mauritian independence in 1968 under the leadership Sir Seewoosagur Ramgoolam. An event opposed and dreaded by the Franco-Mauritians.

Financiers in the current financial centres equally fear their positions and oppose and dread the decrease of their bonuses and stricter regulation. They feel they are being blamed for all the wrongs of the financial sector and, understandably, don’t like this. And like anyone else they neither like a setback of living standards.

They will probably only gradually come to terms with the new situation, just like the Franco-Mauritians who only in the early 1980s realised that their (in)direct political role had to come to an end in a democratic Mauritius.

But the Franco-Mauritian case also shows that forty years after independence they are still a business elite controlling a number of the island’s largest business groups and hotel chains. They have a rather carefree life at their seaside bungalows with pampering by nannies and servants who look after the children and take care of a number of daily chores.

The Franco-Mauritians, indeed, lost their political power but could maintain their economic power and help to make Mauritius the success it became (for Mauritians of all backgrounds). Briefly put, Franco-Mauritians survived by effectively giving part of their power away.

Hedge fund managers who ‘threaten’ to relocate from the City and bankers vehemently opposing change will probably lose some of their power. But more importantly they should realise that it is highly unlikely that they will lose so many privileges that they will no longer enjoy a very pleasant life style. The UK, US, France and Germany will not change into socialist states where hedge fund managers earn as much as their cleaners (though they may have to pay as much tax).
 
The global financial centres are a far cry from the sandy beaches of Mauritius. Bankers and hedge fund managers can easily direct their money and business to a Swiss canton. Franco-Mauritians, on the other hand, had no lever because their sugar plantations and hotels were immovable. Regulators and politicians are, therefore, understandable wary to not be the first and scare their bankers away.

But they should realise that financiers, rightly or wrongly, perceive themselves to be under threat and act accordingly. People go up in arms when they perceive their position to be challenged and react defensively to such situations even though they then often end up gradually accepting the new realities that in many cases actually turn out to be not too disadvantageous for them anyway (conversely, more threatening changes seem sometimes to be harder to notice before it is too late).

Regulators should, thus, not easily give in to opposition but realise that financiers eventually accept their new situations and often prefer their life styles in London over a Swiss canton.

But for restructuring the financial markets regulators also need financiers and better not pressure them too much but rather strike a balance. The Franco-Mauritian case shows that when the perception that the outside world is against you takes the upper hand, a strong sense of victimisation is reinforced. This prevents self-reflection and thinking outside the box (because all, even sensible, arguments, are labelled as ‘anti’ and cannot therefore be supported). This is undesirable because for reinventing the financial markets all creativity and free-thinking from financiers and regulators is needed.

Tijo Salverda is a PhD candidate at the Department of Social and Cultural Anthropology at VU University Amsterdam and part-time lecturer at the University of Amsterdam. He will defend his dissertation Sugar, Sea and Power: how Franco-Mauritians balance continuity and the creeping decline of their elite position, later this year.

He wrote earlier about the ‘culture of the crunch’ (Dutch).

Beeld van alles-schlumpf's

This coming Thursday the faculty of social sciences at VU University Amsterdam will host a seminar on the financial crisis with lectures by James Ferguson, Howard Stein and Anton Hemerijck and views from the field contributed by various anthropologists at VU university.

How does the global financial crisis affect people around the world? What is its effect on the global labour market, migration flows and economies in the South? Is its effect less or different in economies that are less integrated into the global financial systems, or in parts of the world that have not benefited from neoliberalism?

This promises to be a very interesting seminar, not to be missed to get a well-informed view on what is happening around the world after the financial crisis!

time: 13.00 to 17.00

place: room Z009 in the Metropolitan building (to the left of the tramstop Boelelaan/VU when facing south)