Money at the Margins

Global Perspectives on Technology, Financial Inclusion and Design

Bill Maurer, Smoki Musaraj, Ivan V. Small, Bill Maurer, Smoki Musaraj, Ivan Small

• Publisher: Berghahn Books
• Year: 2018
• ISBN:
  9781785336546
• Edition: 1
• Topic: Social Sciences
• Subtopic: Cultural & Social Anthropology
• Index: Social Sciences

Mobile money, e-commerce, cash cards, retail credit cards, and more —as new monetary technologies become increasingly available, the global South has cautiously embraced these mediums as a potential solution to the issue of financial inclusion. How, if at all, do new forms of dematerialized money impact people's everyday financial lives? In what way do technologies interact with financial repertoires and other socio-cultural institutions? How do these technologies of financial inclusion shape the global politics and geographies of difference and inequality? These questions are at the heart of Money at the Margins, a groundbreaking exploration of the uses and socio-cultural impact of new forms of money and financial services.

Part I

In/Exclusion

The Question of Inclusion

ANANYA ROY

Recently, I have found myself in a recurring debate with scholars and activists I admire greatly. As my research and scholarship increasingly focuses on the politics of inclusion, they insist that we pay attention to the entrenched and expanding contours of exclusion. As I trot out examples of various discourses and programs of inclusion—from financial inclusion to paradigms of inclusive growth to slum legalization and upgrading—they shake their heads in disagreement and even despair. “The poor are still getting screwed, and all of this is simply the latest fashion in how to dress it all up and make it look pretty,” said one of them, a human rights activist, to me the other day. I do not disagree with him. Persistent poverty and growing wealth and income inequality, along with vast disparities of political power between the rich and the poor, are defining features of our present historical conjuncture. How can anyone argue against the simple and seemingly incontrovertible fact that the poor keep getting screwed?

But my interest in the politics of inclusion, manifest in my previous work on microfinance or my current work on the efforts in India to craft something akin to an urban welfare state, is not a naïve neglect of exploitation and dispossession but rather an attempt to formulate a nuanced understanding of how such exploitation and dispossession actually takes place, and most of all how they continue despite the devastations they usually wreak. I am also interested in the discourses and programs of inclusion because they tell us something important about the complex role of the state in governing and managing poverty and inequality. That role is too often reduced, in our critical theoretical formulations, to the handmaiden of neoliberalism. But there are many aspects of the state that such formulations ignore, notably the ongoing reinvention of the developmental state in several countries of the Global South. Financial inclusion is a key part of this renewal of development, and, in turn, the deployment of information technologies is a key part of financial inclusion. This book, with its meticulous attention to how the “unbanked” come to be included and integrated into programs of development and governance, is timely. In particular, it broaches the important question of how we study discourses and programs of financial inclusion while being attentive to the transnational geographies of global capital and the enclosures enacted by technological innovation. To this end, I suggest that we carefully consider the analytical device suggested by Taylor and Horst in their essay on financial inclusion and exclusion at the Haiti–Dominican Republic border—that of the “living fence.” For them the living fence is a “metaphor,” one that allows us to “interrogate and move beyond the inclusion-exclusion binary.” I think this is immensely useful. As analytical tool and metaphor, the living fence allows us to understand the brutality, even violence, of enforced borders, as well as the negotiations and contestations that unfold in how these borders are lived through ordinary practices of ordinary people. As the authors note, it gets us out of the bind of having to prove exclusion or justify inclusion.

To pay attention to the “living” in the “living fence,” it is necessary to consider the methodologies through which financial inclusion, associated technologies, and everyday practices are studied. The editors of this book advocate “a distinctively ethnographic approach,” calling this “an anthropology of low finance.” This is an important and compelling research agenda, and the various chapters in this book, especially in this part on “In/Exclusion,” demonstrate its contributions. Writing against stereotypes of the financial practices of refugees, Omeje and Githigaro foreground how Somalian refugees mobilize diasporic capital to create business communities in Nairobi. This is not a story of the inherent entrepreneurial capacity of Somalian refugees but rather a historicized analysis of local and transnational kinship networks and (re)emergent cooperative forms of financial lending and pooling.

In relation to an anthropology of low finance and the metaphor of the living fence, I want to pose two questions. The first concerns the organization and institutionalization of financial inclusion. By this I mean the proliferation of programs and platforms of inclusion, some initiated as state policy, others as nongovernmental, even profit-making, endeavors. What is the relationship between these norms and rules (the word “structure” could be used here but perhaps would overemphasize a structuralist understanding of these processes) and everyday practices of low finance? I see this to be one of the main issues at stake in the essay by Niiti and Mutinda on “vulnerable populations” in Kenya. This term signals a category, one produced through the norms and rules of governing. As their work demonstrates, governing is not only financial inclusion or poverty reduction but also the special concessions made for specially designated “vulnerable populations.” Put another way, the question of inclusion necessarily raises the question of how vulnerability, disability, and disadvantage mark and categorize social difference and how such social difference is managed and governed. My second question has to do with the relationship between low finance and high finance. My own interest in financial inclusion lies in how it is implicated in what I like to call “bottom billion capitalism,” the diverse efforts to integrate the world’s bottom billion—the billion or so people living under conditions of extreme poverty—into new global markets. For example, many of the financial practices made visible in this part, from remittances to ROSCAs (rotating savings and credit associations), are also those that are seen to generate forms of value that can be monetized and capitalized. I thus end with the self-description provided by NextBillion.net, a website and blog dedicated to “development through enterprise”: “We chose Next Billion for its dual meaning: on the one hand, the phrase represents the next billion people to rise into the middle class from the base of the economic pyramid (BoP); on the other, it indicates the next billion(s) in profits for businesses that fill market gaps by integrating the BoP into formal economies” (http://www.nextbillion.net/About.aspx). Here then, in a pithy sentence, is the politics of inclusion. As the living fence is a metaphor, so is “next billion”—for the aspirations of a global economy premised on inclusive growth, for a vision of capitalism in which socioeconomic mobility and expanding profits exist in harmony. This too demands of us ethnographic scrutiny.

Ananya Roy is professor of urban planning, social welfare and geography and inaugural director of the Institute on Inequality and Democracy at UCLA Luskin. Previously she was on the faculty at the University of California, Berkeley. She is the author of Poverty Capital: Microfinance and the Making of Development (Routledge 2010) for which she received the Davidoff Book Award of the Association of Collegiate Schools of Planning. Her most recent book is Encountering Poverty: Thinking and Acting in an Unequal World (University of California Press, 2016).

CHAPTER 1

A Living Fence

Financial Inclusion and Exclusion on the Haiti–Dominican Republic Border

ERIN B. TAYLOR AND HEATHER A. HORST

Introduction

Financial inclusion is often understood to be about choice. The logic of “banking the unbanked” and providing access to services such as mobile money and microfinance is that access to a greater range of products allows poor but rational consumers to choose products that best fit their needs, lowering monetary and transaction costs and relieving the stress of meeting everyday needs. A design or cultural logic might also suggest that when products—even financial ones—are put in the hands of human beings, they take on heightened symbolic meanings. Yet, studies by social scientists have demonstrated that most people already have a significant degree of financial choice, even when formal financial products are not available (James 2014; Stoll 2012). As the financial diary studies in India and South Africa demonstrated conclusively, poor people have access to a broad range of financial tools for saving, borrowing, lending, investing, and insuring (Collins et al. 2009). Moreover, these are often socially embedded in local communities and family networks. What, then, does formalization of financial services offer to those who have already been navigating a diverse (if unbanked) financial landscape?

The introduction to this book suggests a way to address these kinds of very real questions from the perspective of the poor. It is not formalization per se that provides greater choice, but rather, as Musaraj and Small suggest, that the technologies and infrastructures upon which formal financial products operate provide possibilities that informal products generally do not. Telecommunications infrastructure permits transactions to take place at a vastly greater speed over large geographic distances than do informal products. Transaction data is disembedded from its local context, “remembered” by computers rather than being kept in the ledgers or memories of transacting parties. Consumers are theoretically freed from the material constraints entailed in cash and paper records.

And yet, the newly “banked” (or mobile moneyed, etc.) tend to continue to use informal products. As Musaraj and Small note, the division between formal and informal financial tools is a false one when viewed from the perspective of consumers. Rather than switch completely from old to new when they gain access to formal services, people often choose from among the entire array at their disposal. Formal financial services offer some superior features, but they do not replace informal services completely. In some cases, this is due to the fact that other aspects of people’s lives transgress the formal/informal divide: people may, for example, be unevenly incorporated into state apparatuses, lacking identity documents for instance, or they may operate primarily in a localized informal economy and have little need for long-distance transactions.

Straddling a formal/informal divide becomes all the more complex when consumers live and work across a national border. In this chapter we present a case study of two towns on the border of Haiti and the Dominican Republic to illustrate how Haitians negotiate the restrictions and advantages of border crossing for financial inclusion. We use the term “living fence” to describe how the border simultaneously generates sources of insecurity (through state control and economic exclusions) and possibility (through its permeability and differential economies). This chapter includes the perspectives of consumers, employees, and entrepreneurs in order to demonstrate how relationships and technologies mutually shape the economic and social lives of Haitians living on both sides of the border region. The border of Haiti and the Dominican Republic is an example of what Sidney Mintz (1962) called the “living fence.” Through this analysis, we problematize notions of inclusion and exclusion through demonstrating the contingent nature of the power relations embedded within the economic and social relations formed across the living fence.

The Living Fence

In what follows, we use the notion of the living fence to analyze how Haitians develop relationships and navigate through the “border” to achieve economic and social mobility, what is sometimes referred to as “inclusion.” Mintz described the hedges that demarcate the boundaries of the lakou (homestead) in the Haitian countryside as “living fences” that keep out trespassing humans and other animals, provide shade, prevent soil erosion, and are aesthetically pleasing. Their purpose is not only exclusion; they are also decorative, inviting, and often permeable. In key ways, the border region resembles these living fences. At once porous and closed, inclusive and exclusive, the border is far more than a container; it also facilitates productive activities, and it often invites rather than repels visitors. Moreover, the border is constituted as much by the people and objects that cross it daily as by state regulation. Conceptualizing the border region as a living fence enables us to explore how it shapes and reshapes Dominican-Haitian relations, which ebb, flow, and change over time as new financial, technological, and economic opportunities enter the ecology. We focus upon the range of economic activities connected to production and consumption, including the multiple impacts of the two states, residents’ use of financial products, local entrepreneurial activities, and employer-patron relations. We problematize notions of inclusion and exclusion through demonstrating the contingent nature of the power relations embedded within the economic and social relations formed across the living fence.

State Construction of the Living Fence between Haiti and the Dominican Republic

In the southwestern corner of the Dominican Republic lies the region of Pedernales. Despite being replete with natural wonders, pristine tropical beaches, and national parks, few tourists ever travel there because of its distance from the country’s major cities and the relative lack of transportation infrastructure. With a population of approximately 31,000, the region is the poorest in the country. Economic activities primarily consist of agriculture, fishing, imports, and domestic commerce. The town of Pedernales is home to half of the region’s total population. It is hardly a booming economy, but is it not desperately poor either. It boasts all the features one would expect in a small regional capital, including schools, a hospital, restaurants, hotels, and NGOs. It even has its own virtually constant electricity supply—a rarity in the Dominican Republic, where rolling blackouts are common. The relative affluence of Pedernales is due to its economic diversification. Apart from being a major center for agricultural trade, Pedernales houses one of the region’s ports, a cement factory, and a factory that sorts secondhand clothing. Its location on the border with Haiti affords it a special economic function as a major hub on a trade route that connects Santo Domingo with Port-au-Prince via the island’s southern towns: Barahona and Pedernales on the Dominican side; Anse-à-Pitres, Marigot, and Jacmel on the Haitian side.

Haitians living in Pedernales and Anse-à-Pitres depend upon access to Dominican markets to undertake economic activities as producers, distributors, and consumers, since Anse-à-Pitres lacks the diverse economic activities and large enterprises of Pedernales. Residents of Anse-à-Pitres walk to Pedernales daily to work, sell, shop, or use services that are not available on the Haitian side of the border. These include accessing some health and education services as well as the internet, bill paying, sending or receiving remittances, buying phone credit, and traveling further afield. These are not merely conveniences: residents suffer economic and social hardship when it is not possible to cross the border. Unless there are exceptional circumstances, the border crossing is open every day from eight o’clock in the morning until five o’clock in the afternoon. No identification is necessary: crossing is simply a matter of walking over the footbridge spanning the river between the two countries. As a result of this porosity, life is administratively, economically, and socially intertwined across the border, and it has been so for at least a century. In fact, from an economic pe...

Table of contents

• Cover
• Title Page
• Copyright Page
• Contents
• List of Illustrations
• Acknowledgments
• Introduction. Money and Finance at the Margins
• Part I. In/Exclusion
• Part II. Value and Wealth
• Part III. Technology and Social Relations
• Part IV. Design and Practice
• Index