Valuing Migrants and their Money

By IMTFI Fellow Carol Chan

Migrants are often discussed positively in terms of their economic value and labor value to countries of destination and origin. In this blog post, I draw on my research with migrant-origin villages in Central Java, Indonesia, to challenge this impulse to foreground migrants’ “economic” motivations and contributions. I do so by highlighting the important ways in which ideas about appropriate gendered behavior, familial obligations, and religious piety, shape the value of migrants and their money. These ideas about gender and morality powerfully shape the transnational flows of migration. It explains why despite highly publicized risks and costs to migrants and their families in terms of finances, health, and mortality, hundreds of thousands of Indonesians continue to migrate annually.

In Indonesia, many programs aimed at improving the welfare of migrants and their families take the form of financial education programs, funded and facilitated by state institutions and foreign-funded NGOs. These encourage migrants—often with little formal education and living in rural poor areas— to finance their journeys from banks as opposed to borrowing informally from moneylenders and relatives, as well as send remittances digitally, rather than physically carry cash home. My project looks at the limited impact of these programs, by examining why migrants and their kin continue to take on many of these financial and physical risks. To do so, I examined attitudes towards migration more broadly, because they are intimately linked to how migrant money is valued, not only in terms of an economic exchange value, but also in terms of the gendered moral values associated with the production and circulation of money. 

Transnational Migration from Indonesia

Like many other migrant-source countries, migrants’ financial remittances to Indonesia exceed foreign financial aid and investment combined. Indonesia’s six million migrant workers thus contribute significantly to the national economy, and are hailed in everyday and public discourse as “foreign exchange heroes” (pahlawan devisa). However, Indonesian state and recruitment agents promote migration not only in its economic promises and advantages, but also in terms of gendered, moral, and religious or spiritual development—such as representing migration in terms of carrying out a patriotic or familial duty. 

In speeches by state representatives to women preparing to migrate, where women are given advice about financial behavior, their vulnerability to certain vices or temptations is emphasized. For example women are told to “resist” the seduction attempts of their employers, not be “wasteful or extravagant” by spending money on cigarettes, drugs, or “sit[ting] happily in clubs.” However, spending money on drugs or cigarettes is not framed in terms of migrants’ health, but in terms of reducing “the possibility that one can send money to families in the homeland.” In 2013, former chief of the National Agency for the Placement and Protection of Migrant Workers said, “Remember, if you consume too much, you will accumulate debt, and this isn’t good for your future, and your family.” Notably, such advice is rarely, if ever, dispensed to migrant men. Framing women’s migrations in terms of their familial and national duties encourages selective public sympathy and admiration only for migrant women who appear to conform to the normative ideal of a good Muslim mother, wife, sister, and daughter (See Chan 2014). But do migrant-origin villagers share such gendered evaluations of migrants and their money? What are the consequences of such evaluations? 

Evaluating Successful Migrants 

When I visited migrant-origin villages in Cilacap and Yogyakarta, dominant narratives and definitions of migrant success appeared predictable and standard: success was typically linked to migrant money, and status-linked indicators of being modern, such as fashion, the latest motor-bicycle, car, or concrete houses. Many told me that migrants should not return or should be “ashamed” of returning to Indonesia, if they have not yet saved enough money to bring home. Migrants do physically carry back as much cash as they have or can carry, up to as much as USD 5000. Villagers thus had very high expectations for migrants to both send money home regularly and save enough to bring home. For example, Diah was a factory worker in Malaysia for two and a half years. During this time, she managed to pay back all the debt she owed her recruitment agent (the equivalent of 9 full months’ worth of pay), and her remittances paid for her father’s medical operation, and her two younger brothers’ education. Nevertheless, she saw herself as a migrant “failure,” in comparison to other “successful” migrants who managed to return to buy land, build houses, and open shops. 

Diah’s situation is the norm for Central Javanese migrants, where remittances may pay for everyday necessities, and migrants do not always return with large amounts of savings to build big houses and buy land, unless they had been working for more than five years. However, for migrant women in particular, their money was evaluated not only in terms of the houses or land it can buy, but in also in moral terms of how the money was earned or spent in socially desirable or undesirable ways. Even in cases where migrants do fulfil the checklist of what a typically successful migrant should be, they may still perceive themselves, or be evaluated by resident neighbors and peers, to be “failures” or “not yet successful.” 

This is because narratives of women’s financial success often included suspicion or doubt about the source of such wealth. Such gossip might include how some women’s remittances were “not halal” (religiously forbidden), or “hot money.” Neighbors imply or explicitly speculate that these women earned extra money from sex work or received it from rich foreign boyfriends or extra-marital lovers. While there are women who do obtain wealth from these sources, it is very uncommon. Former migrants and non-migrants may make such judgments based on the way female migrants dressed when they returned, but sometimes such gossip may have no basis other than sheer incredulity that a woman can earn so much abroad. Scandalous stories in national media, or through informal Facebook posts online, which “expose” stories of Indonesians “trafficked” into sex work, or Indonesian sex workers in Hong Kong or Macau, encourage and perpetuate such stories and stereotypes. While the sources of migrant men’s wealth was never questioned, migrant women’s financial success was often suspect and associated with immoral means, unless they managed to maintain good reputations as respectful family members in the village. 

Evaluating Migrant Failures

A common example of a migrant failure is one perceived to not send or bring enough money home, that results in clear material indicators of migrant wealth. Diah, as mentioned above, is an example. In these cases, migrant men were accused of spending too much of their money on gambling, drinking, or commercial sex overseas— activities considered by most Central Javanese Muslims as associated with male vice and sin. These activities were seldom explicitly condoned by migrant-origin villagers in Yogyakarta and Cilacap, although they might be tacitly accepted or tolerated to varying degrees. As mentioned previously, migrant women were typically accused of spending their earnings on consumer luxury items, foreign boyfriends, cafes, or nightclubs. 

In these scenarios, I sometimes offered an alternative explanation for why migrants may not be sending much money home. Migrants might be paying off their debts to recruitment agents, who may charge them exorbitant interest rates. Some employers, especially in the case of female domestic workers, might choose to illegally withhold migrants’ wages, or in the worst cases, not pay them at all. In response, people often either shrugged off my suggestions dismissively, or reluctantly agreed that this may be the case. In general, migrants’ kin and neighbors, especially for those who have never migrated or attempted to migrate overseas, tended to downplay or not consider the financial costs of migration. They often expected that these costs would be quickly and rather easily paid off by the comparatively high wages abroad. In Diah’s case, for example, a non-migrant neighbour suggested that she was not able to save much money because she had been spending money frivolously on clothes and going out. This was despite the fact that she declared spending almost all her money on paying back her migration costs, and her family’s daily expenses. 

Concluding remarks

Migrants are often labelled in mutually exclusive categories such as “economic migrants” or “refugees.” While such distinctions may be practically useful in contexts such as facilitating documented mobility, many scholars have shown that the “economic” is intimately part of social, cultural, and political contexts that give money, mobility, and other currencies their value. In different contexts of risky migration journeys, migrants’ aspirations for a better life is intimately linked to what they can gain from sending money home. Nevertheless, the very attempt to migrate with the intention to seek a better life for themselves and/or their kin is also socially valuable, where the risk of failure has significant consequences for migrants’ social position and respect. 

Financial education programs and advice by the Indonesian state are not enough to address the question of why its migrants continually embark on risky journeys, and why not all manage to send or bring home much money. Instead, financial risks confronting migrants and their kin are strongly related to the broader migration industry with highly uneven processes and regulations, where borrowing money from an ill-reputed recruitment agent or carrying cash home can be perceived as only one among many “normal” risks entailed in migration. State institutions should begin recognizing that the problems facing migrant workers are not simply reduced to a few errant or “bad” recruitment agents and employers, or whether or not migrants are being frugal with their spending. Instead, the problems are institutionalized. Besides bargaining for better laws surrounding precarious labor, state, NGO and public programs about migration’s benefits and risks should focus on practical and infrastructural aspects of migratory processes, including remittance transfers, wage payment, and work conditions abroad, rather than questioning or applauding migrants’ financial discipline and moral character.

Read Carol Chan's Final Report.
Photos by author.

The Double Gold Standard: Session One of the 2016 Conference

In director Bill Maurer's opening remarks for the annual IMTFI conference, he reviewed the history of the organization and how the interests of this unique interdisciplinary scholarly community had evolved over time in attempting to comprehend how digital or mobile payment might have "something to do with poverty alleviation."  His account began with a focus on the repayment of microfinance loans, with the assumption that ubiquitous digital tools might serve as a means to "keep track and repay" in a relatively narrow sector of the economy.  Maurer explained how the ideas about the interfaces of technology, money, and financial inclusion had "morphed" during the course of development of a scholarly community.  He also admitted that "payment is weird" and "arcane," because it requires explorations of obscure networks and "portals and rails of infrastructure," as in the case of mapping a Visa transaction.

For Maurer, "payment in relation to poverty" invites even more inquiry into complexity.  Thinking about payment platforms also may involve partnering with people from "government and industry" and addressing issues of risk and liability around access, fees, safety and security.  By supporting the "ground-level perspective" and giving attention to "voices from the field and the village," research about religion, ritual, belief, and social hierarchies has also become critical to IMTFI scholarship, since there may be occasions around payment mapping where "it matters what your elders are saying," or the existence of "people of high rank endorsing a service" may be critical.  Thus ritual specialists and oracles might be important in understanding uptake of new financial services.  He emphasized the need for scholars to "push the debate in industry and policy," which shaped the "insight and impact" theme of the conference.

As an illustration of how adopting new technologies is never easy, even in developed economies, he chuckled about the attempted rollout of EMV cards in the United States, which is now hitting its six-month anniversary.  He pointed out that at this point only about 20% of the readers needed were available, and he observed that the slow adoption at merchants' terminals could be attributed to many factors in behavior change from patterns developed over  30+ years of swiping cards.  Now that one must "put the chip in . . . and wait and wait . . . about that long," users may indulge in many forms of magical thinking, particularly since "the terminal has never spoken to you before," and conspiracy theorists might worry about invisible entities "stealing all your information" during the time lag.  Rather than seeing adoption as a friction-free switch ("just flip the lights on"), Maurer described it as "a lumpy process" and invited his fellow participants to critical thinking by urging that they "investigate those lumps."

The first panel on "The Sharing Economy? Women and Girls and their Ties and Tensions" chaired by Erin McDonald of Women's World Banking addressed what she called the "tensions that women experience" to "access resources," as they might be very broadly defined.  In many ways this panel proved to be as much about the very definitions of "success" and "value" in social as well as economic terms as much about the dynamics of gender.

Carol Chan of the University of Pittsburgh led off the discussion with her presentation on "To Send or to Carry? Gendered Evaluations of Formal and Informal Remittance Practices in Migrant-Origin Villages in Central Java, Indonesia."  By talking about "migrants and their money," Chan investigated how "meanings of migrant money" might not only be gendered but also indicative of the presence or absence of practices that mark how they use and earn their money in culturally important ways.  When grappling with such a high volume of transactions constituted by 8.55 billion dollars from 6 million temporary laborers, Chan had to develop a research methodology that addressed many types of volatility in returns, including "underpayment and nonpayment by employers" and susceptibility to "many risks and perpetrators" including customs officials.

Chan noted the moralistic tone of documents such as "99 tips" for how to be a successful migrant.  Such official messages might ignore the challenges of "the material contexts in which people live" in "culturally specific ways," because money can serve "as a religious and moral issue" and an expression of a good "Javanese-Musim" identity.  In an environment of constant social surveillance in which women might be evaluated more harshly, Chan was interested in addressing tensions.  For example, for migrants building houses, members of the community might question "who do they build it for?" and "where do they build it?" Furthermore, gendered moral ideas may be supported by many kinds of institutional discourses, including projections of piety in how they dress.  In pointing out that ideas about financial inclusion "are very gendered," even in supposedly neutral financial programs, Chan probed unexamined biases.  She emphasized that gendered and moral aspects were expressed in how women were "mainly addressed as wives and mothers who have to put their families before themselves" and challenged assumptions about families that took as a premise that women's incomes were to be seen as supplementary.

Chan described a range of forces at work, from religious ideas about Halal-permitted uses and the worldview that "money is a gift from god" to family expectations.  Often she recounted stereotypes in which male migrants were viewed as "more responsible" and "less flirtatious/rebellious." For example, despite the rigors of life for women who work in Tawain in factories, they might be viewed much more critically than male plantation workers in Malaysia.  Many transactions were formal Western Union-style transactions, but migrants might also carry large amounts of cash across great distances, from one thousand to five thousand US dollars at a time.  She found women were more harshly judged for not bringing money home, while men were pitied and excused for spending funds on seeming luxuries like cigarettes or energy drinks.  Often bias was justified by assumptions that women would be domestic laborers with free lodging and food, but men also benefited from the fact that men's wealth was taken for granted.  If women brought money home it might also be viewed suspiciously as a potential benefit from extramarital relationships or even sex work.

Investing in material goods was seen as less risky by the population she studied than saving, because land costs were rising and the currency was unstable.  With amusement she provided a survey of local attitudes about "which houses were funded by which currencies," including how houses built with money from Hong Kong, Korea, Saudi Arabia, and Singapore might be differentiated.  Even though "the houses look alike," gossips also kept track of how much individual siblings might have contributed to particular structures, as though it was a feature of the architectural design. In an environment of gossip, discussion, and judgment, "the materiality of what money can buy," as well as ideas about bad luck and divine retribution, seemed to shape the dynamics of a no-win situation for women who must fend off gossip and project hard work.  In contrast men "might be shamed but also excused."  Even good female providers faced "accusations of being bad mothers and wives," as they struggled with "fulfilling those expectations" and negotiating financial and moral risks.

"Group versus Individual Strategies: Dynamic Social Networks of Mobile Money among Unbanked Women in Western Kenya" by IMTFI veteran researcher Sibel Kusimba of American University used techniques of social network analysis and information visualization as a way to formulate research questions, present evidence, and point to new directions for inquiry.  (Readers should check out my previous blog stories about Kusimba's work here and here.)  She began with a sociogram of Edward, a man receiving remittances from children and recirculating them to other family members in his social graph such as siblings and mothers.  She showed how drawing network graphs might allow us to see central nodes.  However, she was dissatisfied with the fact that graphs did not indicate time and didn't deal adequately in economic complexity.  By using interactions with informants at regular intervals over time, which encompassed both persistent and variant transactions in dynamic social networks, she hoped to learn more about how transactions shape social ties and vice versa.

Kusimba had many reasons to invest research efforts in data from financial diaries, which would be complemented by questionnaires and observations. Such diaries allow researchers to understand cash flows and financial instruments and perceive a more diverse range of financial tools.  Thus it is more likely to see where new products could support existing needs. She cited the work of Daryl Collins of Portfolios of the Poor on how poor people manage money and manage positive value over time and compensate seasonal events and shocks.  For example, she noted how from participating in a maturity ceremony for adolescent boys (in research presented at a previous IMTFI conference), her informants managed changes in their non-cash assets, such as livestock.

Her methodology focused on 20 women in Western Kenya and represented their social roles in their  networks by mapping cash money, in-kind gifts, mobile money, and other assets.  She initiated visiting in December and visited women every two weeks.  Her subjects ranged in age from 23 to 74 and were mostly combining farming with many entrepreneurial activities including proprietorship of a "beauty saloon."  She laughed about the accident of having "captured the one percent," given the rarity of owning a car. Researchers had to have considerable discipline, because "the women are very busy; most of the time they are not home."

She showed the intricacies of the networks of Robai, a potter who was 500 meters from nearest M-PESA agent and provided a view of her home and the floorplan of household relations that demonstrated her proximity to the homes of two co-wives' houses.  Rather than use older models of kinship maps, she deployed visualizations of the independent strategies to understand "how people make decisions" and situate themselves in relationship to flows of "incoming and outgoing money." Such visualization techniques with the tools of network theory also made it possible to observe centripetal and centrifugal patterns of the flow of money, resources, and relationships.  This economy might include the secret places of a beer brewer or the uses of food plants by a woman. Wealth might be produced with her mobile phone, as well as with face-to-face interaction.

She also introduced the theme of the problems of mistranslation, carried over from nuclear family norms in the US.  In particular she argued that "seeing the household as a separate unit" was deeply problematic, at the most basic level because men might rear children at multiple domiciles. Moreover possible words for the "household" didn't always reflect the same social and economic grouping. She observed that there was actually no adequate word, because larger groupings like "Ekholo" (clan) were less slippery than "Mungo," which depended on a gendered. Because different words for family don't gloss for household, it was possible to commit communicative blunders when trying to translate words.

Furthermore, she asserted that a purely economic view of success was too limited, which charting the relationship between money and time could broaden.  Thus a woman's transactions might seem to show a pattern of negative cash flow but not be associated with impoverishment, because she had acquired considerable wealth in social capital during the process. By looking at how her economic capital might get traded into social capital, Kusimba argues we get a more capacious view.  In closing she cited the work of Ananya Roy on "bottom billion capitalism."

"Generational Tensions in the Uptake of Digital Financial Services: Adolescent Girls and Adults in Nigeria" by Jude Kenechi Onyima of Nnamdi Azikiwe University explored how financial adoption might be influenced not only be the issue of trust, which is common in elders, but also by generational conflicts.  Anemia lamented the fact that too frequently the 32 million adolescent girls in Nigeria were "lumped together with adult population.  The methods of his study focused on four communities -- half Christian and half Muslim -- with a focus on 120 randomly selected girls.  In gathering data he wanted to include informants from both northern and southern regions and from both urban slums and rural areas.  96% own feature phone, and 70% own both feature and smart phones. 78% of smart phones were bought by friends as birthday or lovers’ day gifts. "Adolescent girls use their phones basically for fun, peer-based learning, networking and occasionally for financial transactions." He reported that the average adolescent girl spends 4.5 hours daily on mobile phone.

He found adults were "not comfortable with adolescent girls using financial services short video phone and peer-based learning," because adults were annoyed with adolescent girls’ use of phones for a variety of causes, such as the  time spent with the phone, financial reasons, and the development of unauthorized relationships with unapproved males. Adults insisted on "no smart phone for early adolescent girls" and "monitoring: for late adolescents.  Adults also expressed concerns about "poor interpersonal relationship" skills, compromised status, talking more with strangers than with family relations, distraction, road accidents, secretive lifestyles, increased flirting, and the abandonment of  household chores

They identified three key areas of concern

- Social reasons: More pressure from opposite sex, can be cajoled into unwholesome behavior, poor interpersonal relationship especially with relatives, cyber bullying, cultural extinction, distractions from academic activities, spreading of gossips, road accident.

- Family reasons: abandon house chores, conflicting moral values(increases tendency to tell lies), conflict with family members, need to get money to buy data.

- Health reasons: snacking while pinging(obesity), less time for exercise, poor sleeping pattern owing to night chatting, postural disorder, vulnerable to internet use gaming disorder(aggressiveness & attention deficit).

Because teens saw their digital identities as part of their global citizenship and contemporary literacy, they resisted the strategies of control from their elders, and even learned to make their phones difficult to use.  Adults also needed to be ingenious and restricted adolescent girls to specific services and sites.  His research team also saw the nature of gifts received from opposite sex being transformed.  New gifts included airtime/data bundles, digital money, online purchases, customized gifts, videos, and electronic gadgets. Adults bemoaned increased flirting, a tendency to tell lies, and perceived materiality among girls.

He argued that it was important to resist broad generalizations, however. Christian girls might have more chances for uptake more than their Muslim counterpart, but the resulting tensions in Christian homes might also be an inhibiting factor. Tensions are also higher among urban poor than among the rural poor, where access might also be enhanced. Unfortunately the arguments/counter arguments about whether adolescent girls shall use digital innovations and norms about when to use them and how to use them were not considered in designing marketing campaigns by DFS (digital financial services) operators. Only 3% of adults were likely to encourage uptake of DFS among adolescent girls. "This represents a huge roadblock to adoption," he argues.

In discussion participants noted the importance of rapid change and how interactions are "very much in flux."  Their research on gender also encompassed different ages and education levels.  The theme of the importance of translation and the problem of lack of discussion of men and boys in panels on gender was also raised.  In closing, the value of comparison facilitated by IMTFI was lauded, as was their emphasis on a "monetary ecology" approach.

Banking with the Patron: The Case of Patron-Client Relations in Makassar, Indonesia

By IMTFI researchers Tiar Mutiara Shantiuli & Salmah Said

There is a general acceptance that the growth of rural financial institutions in Indonesia will increase the access people have to formal banking. However, the growth of these rural financial institutions is developing alongside a (long-standing) informal lending system: the patron-client relationship. We examined to what degree this informal patron-client lending system persists. We found that these patron-client relationships still exist even in the areas with intensive rural-financial institutions in Makassar, Indonesia. From the sub-regencies of Pacinongan, Panakkukang, and Panampu, we select 6 patron-client relationships in different businesses including sea cucumber fish, game centers, calfskin crackers, land plot sales, garages, and fried shallots. The sea cucumber fish business has lasted for two generations, while the others are one generation old. The game center is new and is run by students. All are similar in the informality of their labor relations (recruitment, types of duties, hours of work, and wages). In general, there is a fixed wage directly related to the main job or revenue, with some additional wages related to additional tasks (e.g. housework). As Ahimsa-Putra (2007) noted, the presence of additional transactions is observed in all of these patron-client relationships. Recruitments could be based on: kinship, the origin of the business owner, recommendation by an existing worker, neighborhood proximity, or friendship.

Daeng Munding with son, nephew, and friend’s son
working at calfskin cracking business.

The patronage relationship begins with worker recruitment. The recommendation of existing workers, family ties, and friendship enables the business owner to connect with workers. Recruitment proceeds depending on the needs of the employer. It could be more swift and direct if new workers are found via family ties and the recommendations of existing workers. Or, it could take longer and require more processing because the business owner needs to ensure that the new worker will not disrupt the existing working environment. The importance of a workforce’s harmony is attested to by one game center worker’s statement that the joyfulness of working is the most important reason why they stay.

One of the cucumber sea fish workers told us that when they make their trip from Central Sulawesi to work on Kodingareng Island in South Sulawesi, they usually bring family members with them as new recruits. With permission from the employer, those family members are recruited to work as divers. Usually, it costs the employer around 10 million Rupiah (about $818USD) to hire a new recruit, which covers their transport and the living costs of the family back in Central Sulawesi. Even though this initial money is thought of as a loan, the worker never actually pays off the debt, making it harder for the employee to leave. 

Since the workers also live with the business owner and the main activities on the job do not absorb all of the workers’ time, they must be willing to take on a variety of unspecified tasks. However, the owner does not just add to the worker's duty, but also offers in-kind rewards such as shelter, food, holidays, and paying for other unexpected expenses. This helps to develop a mutual dependency between the worker and the business owner. The garage and the fried shallot businesses are an exception to this pattern, as the workers are the neighbors and do not stay with the business owner. Still, additional duties to the main labor tasks (or “additional transactions”; Ahimsa 2007) are observed in these businesses.

Daeng So’na working at her fried shallot business 

with her neighbor. 

The inexact working hours, and the closeness of habitation, build up trust between the business owner and the worker. In addition, the closeness of their habitation and the informality of their contract make the relation less like an employee-employer relation, and more like a family one.  Even in the case of exact job descriptions, the informality still endures in the rewards/payment aspect of the relationship. Such an informal relationship between the workers and the business owner can also be observed in the case of young businesses. Even though their connections might not be as old and living as close, the kind of duties they do are not always related to the main business.

Nahar, the game center owner, said that the business does not have a fixed work schedule. It depends on who has spare time, as they are university students. There is no fixed salary, as it depends solely on the everyday rental income of games. Yet, he told us, “In spite of the uncertain income they get everyday, they do enjoy working in this game center because of their friendship and they are willing to offer any help to me whenever I need them inside or outside of the games center.”

In all of our selected cases, the business owner is a resource that helps solve the financial needs of the worker. As with the informality of the working relationship, lending and borrowing are also carried out informally. Even though the rotating savings association, local cooperatives, and banks are familiar to them, the workers prioritize the employer as the primary lender from which to borrow. It seems that the flexibility and mutual aid attached to the loan and its repayment are the key reasons for those preferences.

In the land plot selling business we were told that the basic salaries for the marketers is a weekly payment between 200.000-250.000 Rupiahs (about $16-$20USD), plus daily pocket money of either 20.000, 30.000 or 35.000 Rupiahs (about $1.60, $2.45, $2.86 USD). As a bonus, the marketer earns a fee of around 2.500.000 Rupiahs ($204.50USD), if the buyers pay in cash, and around 1.000.000 Rupiahs ($81USD) if the buyers pay in periodic installments. While the workers stay in their boss’s house, she provides for daily expenses (food, cigarettes, etc.). Doubtlessly, these workers also do housework. The informality also persists in cases where workers need extra money. Borrowing is always to the boss. It is not clear how the marketers pay her back, but we gather from our investigation that she acts almost like a mother to them.

In the fried shallot business and the game center, banks are used for saving and for transferring payment. When the game center business grows, the owners plan to use workers who have more formal contracts. Thus, when the informality and mutual aid motives fade, the likelihood of using formal banking institutions increases. 

You can read Tiar Mutiara Shantiuli & Salmah Said's full report here.

Trickling Down and Spilling Over: Social Organization, Power & Hierarchy

When I was in India this summer, the fact that I wore no jewelry save for a plain gold wedding band was perhaps the single most commented upon aspect of my appearance during my travels there. In "Silk Societies, Gold Stories: Using Gold-Based Life Stories to Study Gender, Financial Inclusion and Work Vulnerability in South Indian Sericulture," Nithya Joseph explained that -- in the case of gold -- "objects that don't appear to be necessary" may serve critical semiotic functions, particularly as a marker of class and caste.  In her study of political economy and worker vulnerability that used oral history as a method, gold objects served as significant markers of memory.  After twenty or thirty years, it was often difficult for informants to remember precise details of their financial histories, but aspects of everyday life were embedded in narratives about gold that allowed those interviewed to describe where they were in social hierarchies and how their positionality impacted their well-being. Oral histories were structured by a recounting of life cycle events, a learning/earning history, and narratives about gold-based possessions. 

In choosing to focus on the role of gold for those involved in the production cycle of silk fabric, Joseph noted the common phrase that a sari goes "through a hundred and fifty hands."  She also observed that her field site provided a rich mix of participants from Hindu agricultures, Muslim workers involved in silk reeling and twisting, and caste-specific labor for weavers.  In situating the history of the silk industry, she reminded that it was already global when it was under the control of British colonial authorities, who were interested in capitalizing on sari production, as well as managing the relocation of workers in the silk industry.  Although Gandhian values of handwork and swaraj were still in evidence, the surplus generated by liberalization that could be highly disruptive with Chinese raw silk coming into the market and import tariffs being cut for mid-level entrepreneurs was generally invested in gold.  Based on surveys and participant-observation, Joseph collected many stories.  One informant described not eating for eight days and selling the gold owned by herself and her daughter to save themselves from debt so that her "ears are empty." Others moved from the labor back to the capital sector and doubled their gold holdings in the process.  She also found women using microfinance loans to buy gold that was then pawned to send money back to her village so that she could serve as a lender.  In short, Joseph gound capitalists able to hold gold ended up in a better place, while the gold economy could keep workers in debt.

"Banking with the Patron: the Case of Patron-Client in Makassar, Indonesia" by Tiar Mutiara Shantiuli and Salmah Said describes hierarchical financial arrangements in a range of occupations, including cowhide crackers, proprietors of rental game centers, food hawkers, sea cucumber divers, and fried shallot producers.  Shantiuli focused on how patron-client reciprocity was introduced and how working arrangements were structured as well as initiated.  She noted that recruitment through kinship, neighborhood, or faculty mentorship shaped the hierarchy of patron-client relationships that generally began with borrowing in exchange for help.

Global finance, political Islam, and traditional cultural norms all played a role in "Mobilizing Religion as Value Storage: Islamic Microfinance in Bangladesh as a Model for Poverty Alleviation?" by Bridget Kustin.  Kustin presented a framework that focused on how Islam was being developed as a store of value in which particular forms of religious and economic subjectivity were inculcated, often through specific pedagogical interventions.  Her work focused on the Islami Bank Bangladesh Limited and its relationship to a complex ethics around financial participation in which Islamic microfinance existed in relationship to zakat (mandatory charitable giving), sadaqat (voluntary charity), and waqf, which was established by an individual owner of immovable property to fulfill in perpetuity any function deemed legitimate in Islamic law.  By focusing on the question "of how people self-identify as poor" and potential conflicts with how institutions make such distinctions, Kustin hoped to offer a richer picture of how people viewed their economic realities.  She also situated her work in existing scholarship about prohibitions against riba (usury/interest), especially Bill Maurer's book on Mutual Life, Limited: Islamic Banking, Alternative Currencies, Lateral Reason that noted that the term did not technically designate interest but rather "increase."  At the same time banks that promoted Islamic ideologies also had to consider the potential harms of non-engagement and the opportunity costs to investment, even as they tried to be scrupulous about avoiding gambling or trade associated with taboo behaviors designated as  haram.  She described how global Islamic finance was supposed to promote social justice, grow assets rather than money, and foster equity and the sharing risks.  She also was interested in the escatological implications of how people thought about money in relationship to time and to the future.  Among those with resources, they declared that "God will demand accounting of me," while clients without means might refer to how "God knows my suffering," and that all experiences could somehow be reconciled in a holy account book

According to her interlocutors, questions of intent were critical.  Making intentionality explicit might also play a role in the global rhetoric of Islamic finance represented by documents such as the IBBL Mission statement.  All of these factors were complicated by conflict over political Islam in the country, including contestation about war crimes tribunals dating to offenses committed during the war between Pakistan and Bangladesh in the 1970s.  To provide more nuanced analysis Kustin chose Cox's Bazaar as a diverse field site that was multireligious and also showed how a stronghold of stronghold of Jamaat-e-Islami might include many supporters who were not radicalized and may pursue low-interest Islamic financing mechanisms purely for pragmatic reasons.   She also emphasized possible conflicts between the female empowerment favored by the Grameen Bank and the family uplift paradigm favored by Islamic microfinance.

"How does Mobile Money Affect Adopters' Social Networks?" by Alfredo Burlando, Cynthia Kinnan and Silvia Prina planned to study so-called "spillover" effects with a specific mobile money product, EZY-Pesa, which was developed through a partnership with carrier Zantel.  Researchers planned to focus on consumption smoothing, investing in health and education to reduce the shocks described by earlier presenters, and starting or improving income-generation activities.  Kinnan acknowledged a significant body of literature showing the mixed results of microcredit (Cerpon 2011, Augsburg 2012, Angelucci 2013, Attanasio 2011, and Banerjee 2013).  Furthermore, she said that she would not assume that if spillovers of savings existed that they would necessarily be positive, given the fact that people might avoid kin taxes (Townsend 1994) or shield cash from members of their social networks (Ligon 2002), much as earlier presenters depicted how Somali migrants used banks outside their own migrant communities.  The researchers also noted that these effects could be magnified by mobile savings.

With EZY-Pesa, they found that 50 households sign up per area on average and were able to create an experiment with 1700 recruited individuals.  The informed consent process also explained to those enrolled that they had a 50% chance of receiving help.  Thus, as Burlando elaborated the experimental conditions, half of the customers would receive marketing visit with Tsh 200 (about $1.25) placed in an initial deposit, while the other half would receive Tsh 2000 in cash with no assistance or advice.  As they progressed with the study, questions about trust were emphasized in the data collected via PDAs.  Researchers looked for four names and tried to identify altruistic and obligatory ties.  Then they asked interviewees to speculate about what they would do if they received a surprise payment.  Subjects ranked who they would want to keep this secret windfall from, from most to least urgent.  In their initial findings, they noted that obligatory ties tend to be rated at the same level of wealth and that altruistic ties tended to be close relatives likely to be in lending relationships.

 Discussant: David Pederson, UC San Diego focused his initial questions on the assumption that "value" and "wealth" were really interchangeable and pointed out that the papers showed that this relationship was not necessarily as stable as it appeared to be in vernacular speech.

Interim Report: Landscaping Mobile Social Media and Mobile Payments in Indonesia

Tom Boellstorff, Professor of Anthropology at the University of California, Irvine, has posted the interim report of research conducted collaboratively with IMTFI and Sicap.

The interim report, entitled "Landscaping Mobile Social Media and Mobile Payments in Indonesia," is based on data collected up to July 15, 2012 by research teams in the cities of Surabaya (East Java province) and Makassar (South Sulawesi province) in Indonesia. The report considers entryways into e-commerce, the dominance of Blackberry, the mobilization of locality, the use of mobile devices for reselling, and the genres of mobile commodities reported by respondents.

Be sure to also check out Tom's first post from earlier this year.

Managing Risk in Yogyakarta

We are pleased to release our newest working paper, on income smoothing practices in Yogyakarta, Indonesa, by Catur Sugiyanto, Sri Yani Kusumastuti, and Duddy Roesmara Donna. A brief summary from the authors:

Our research examines the various practices used to achieve income and consumption smoothing amongst the poorest households in Yogyakarta, Indonesia. It looks at selected 125 households, representing 25 households in each of the five regions of the Yogyakarta area. It designated how rural financial institution and other can help them to have better smoothing strategy. We found that the behaviour varies in response to the types of profession and gender. Furthermore, the source of the income fluctuation also matters in determining households’ responses. However, the source of the consumption fluctuation did not appear to differ across professions.

Older people concentrate their wealth in their house and land, i.e. in terms of physical static assets. By contrast, younger people are certainly more conscious of rates of return on different assets and have the physical capability to engage in other economic activities, hence their greater involvement with non-farm (and generally more active) enterprise activities. It is also interesting that younger people have higher saving and borrowing ratios than older people.

While households headed by men have a greater focus on livestock, female headed households tend to focus more on non-farm enterprises. This is not surprising, given the earnings patterns in rural areas; the larger share of loans in the portfolio of women may be associated with the fact that they are more involved in non-farm enterprise activities that are more likely to attract loans than men who deal predominately with farms and livestock.
Finally, the variation in asset choice as a function of education is quite interesting as pronounced differences emerge. The more educated tend to utilize formal savings mechanisms, such as money borrowed from friends, neighbours, traders, etc. By contrast, while avoided by those with no or high levels of education, those with some education tend to prefer livestock.

Click here to read the working paper.