For the full story, please visit https://www.marketplace.org/shows/marketplace-morning-report/05082019-markets-edition/
Showing posts with label informal economy. Show all posts
Showing posts with label informal economy. Show all posts
Monday, May 13, 2019
No change to spare? That’s no longer a problem for buskers.
IMTFI Director Bill Maurer, Anthropology, via
MarketPlace Morning Report, May 8, 2019 (Audio)
Bill Maurer is an anthropology
professor at UC Irvine who studies financial technology. “There’s really no
good solution for folks in the informal economy.” Good old-fashioned cash on
the other hand? “I don’t need to have a bank account to make it work, I just
need the cash in my hand and as soon as I give it to you, it’s yours.” He says
none of the payment services we have at the moment can really do that. (Segment
starts at 4:04, Bill Maurer starts at 6:08)
For the full story, please visit https://www.marketplace.org/shows/marketplace-morning-report/05082019-markets-edition/
For the full story, please visit https://www.marketplace.org/shows/marketplace-morning-report/05082019-markets-edition/
Wednesday, July 25, 2018
Remittance Channels & Regulatory Chokepoints
By Ivan Small in Limn Magazine, Issue 10: Chokepoints
The bells jingled on the door as I entered a small store tucked in a New England Vietnamese shopping center. Specializing in transactions between the United States and Vietnam, the store is representative of many small operations providing travel and financial services, including plane tickets, visas, box shipping, and remittances. Discussing her business, the owner Kelly gestured to a wall covered with children’s pictures. She explained they were extra passport photos of her customers’ kids, many of whom were now grown up and customers themselves—a testament to the store’s enduring role in facilitating transnational ties for the Vietnamese American community.
Yet when our discussion turned specifically to remittances, Kelly lamented that it was becoming more difficult for small businesses like hers to compete. In the past, she handled remittance transfers herself, via a bank account. Now, according to her, “banks don’t allow it.” As an informal remittance service provider operating in a gray area to facilitate small transfers, her company had become visible to the expanding reach of the formal financial world—most notably, as a potential “black market” operation. Kelly recently contracted financial-transfer services to an external provider but noted that, at $1.25 per transaction, “It’s hardly worth it anymore. Nonetheless, our customers need to send money and expect us to do it for them, so we continue as long as we can.”
The informal money-transfer sector has been integral to the Vietnamese community in the United States, but during the past ten years its share of the U.S.-Vietnam remittance market has fallen from one-half to one-third. Kelly’s operation was one of many affected by remittance oversight regulations put in place after the 2008 financial crisis. Specifically, regulations associated with Dodd-Frank require low-value transfers of more than $15 to comply with disclosure, consumer protection, and error-resolution rules requiring more steps and paperwork for remittance providers. Such regulations were emerging as a problematic chokepoint, disrupting and diverting the long-standing channels of her financial-transfer services. Kelly experienced this regulatory chokepoint as a slow but significant shift, pressuring her to diversify from remittances to other services. Writ large, “not being allowed to do it anymore” signaled a significant shift in the financial infrastructures linking diasporas and homelands—Vietnamese and otherwise.
Reforms of international remittance infrastructures since 2008 have impacted transnational banking, financialization, and payments. By highlighting these transitions—as well as the stories and histories of money-transfer operators like Kelly, who facilitate not only financial connections between Vietnam and the United States but also other material and bodily mobilities—we gain insight into how emerging chokepoints in the international financial system are experienced and navigated. Doing so draws attention to the practical, technical, and affective value of such services in framing and maintaining economic and social relations.
Read full original post - https://limn.it/articles/remittance-channels-regulatory-chokepoints/
The bells jingled on the door as I entered a small store tucked in a New England Vietnamese shopping center. Specializing in transactions between the United States and Vietnam, the store is representative of many small operations providing travel and financial services, including plane tickets, visas, box shipping, and remittances. Discussing her business, the owner Kelly gestured to a wall covered with children’s pictures. She explained they were extra passport photos of her customers’ kids, many of whom were now grown up and customers themselves—a testament to the store’s enduring role in facilitating transnational ties for the Vietnamese American community.
 |
| Bitcoin ATM in Ho Chi Minh City, 2017. Blockchain technologies offer a potential remittance channel that may circumnavigate regulatory checkpoints, for now. Photo credit: I. Small. |
The informal money-transfer sector has been integral to the Vietnamese community in the United States, but during the past ten years its share of the U.S.-Vietnam remittance market has fallen from one-half to one-third. Kelly’s operation was one of many affected by remittance oversight regulations put in place after the 2008 financial crisis. Specifically, regulations associated with Dodd-Frank require low-value transfers of more than $15 to comply with disclosure, consumer protection, and error-resolution rules requiring more steps and paperwork for remittance providers. Such regulations were emerging as a problematic chokepoint, disrupting and diverting the long-standing channels of her financial-transfer services. Kelly experienced this regulatory chokepoint as a slow but significant shift, pressuring her to diversify from remittances to other services. Writ large, “not being allowed to do it anymore” signaled a significant shift in the financial infrastructures linking diasporas and homelands—Vietnamese and otherwise.
Reforms of international remittance infrastructures since 2008 have impacted transnational banking, financialization, and payments. By highlighting these transitions—as well as the stories and histories of money-transfer operators like Kelly, who facilitate not only financial connections between Vietnam and the United States but also other material and bodily mobilities—we gain insight into how emerging chokepoints in the international financial system are experienced and navigated. Doing so draws attention to the practical, technical, and affective value of such services in framing and maintaining economic and social relations.
Read full original post - https://limn.it/articles/remittance-channels-regulatory-chokepoints/
Sunday, May 21, 2017
A bank heist in Paraguay’s ‘wild, wild west’ reveals the dark underbelly of free trade
by Caroline Schuster, Australian National University and previous IMTFI Fellow~
It was as brazen as it was spectacular: on April 24 2017, a commando team of bank robbers assaulted a private security company in Ciudad del Este, Paraguay, making off with US$11 million dollars.
Some dozen operatives, whom police believe were working for the Brazilian organised crime group First Capital Command, blew through the fortified offices of Prosegur, a company known for its fleet of armoured vehicles, before fleeing across the border into neighbouring Brazil.
The heist made headlines not for the relatively modest sum taken but for its dazzling Hollywood style. According to local papers, the team came armed with heavy weaponry and explosives, and 15 cars were set ablaze. The robbers escaped via speedboat, crossing lake Itaipú to reach Brazil. A private getaway plane was impounded by the authorities.
This dramatic scene fits neatly with stereotypes about Ciudad del Este, a Paraguayan commercial hub in the notorious Triple Frontera area where Argentina, Brazil and Paraguay intersect. It is one of the most active border economies of the hemisphere, and Ciudad del Este is often portrayed as its lawless capital.
At its peak in the 1990s, Ciudad del Este allegedly moved US$10 billion per year in merchandise – more than Paraguay’s entire gross domestic product.
The city even featured in the 2006 blockbuster film Miami Vice, the backdrop for scenes in which smuggled documents find their way into the hands of a network of baddies.
What it takes to build free trade
That reputation as Paraguay’s Wild West (or, better yet, East), though perhaps well earned, is also incomplete. Ciudad del Este is, above all, a laboratory for global free trade. As anthropologist Carolyn Nordstom has found, “a veritable smorgasbord of goods travel these (global) circuits.”
I spent two years (2009-2010) immersed in Ciudad del Este’s informal economy, conducting anthropological research on credit and commerce. My research shows that, far from being ungovernable, this Paraguayan free-trade zone is built on a sophisticated legal, commercial, and financial infrastructure that has made a small group of political and business elites very, very rich.
Ciudad del Este has prospered because of its unique legal and economic status as a duty-free zone (zona franca). All sorts of consumer goods, from digital cameras and sneakers to pharmaceuticals, are imported – both legally and illegally – and sold tax-free there.
Even before the city was founded in 1957, trade flowed across Paraguay’s porous land and water borders with Argentina and Brazil. The 1970 “special customs zone” legislation just gave that freewheeling frontier capitalism a legal and regulatory imprimatur.
Today, some Paraguayans work in lucrative import-export companies and own cavernous duty-free warehouses. Many more work as small-time smugglers engaged in “ant contraband” (contrabando de hormigas) – walking, cycling, trucking or floating goods across the border to Brazil.
Shopping tourists (known locally as sacoleiros, or “bag carriers”, for their large satchels of goods) come from Brazil or Argentina. And many international travellers drop in to buy affordable smartphones or imported perfume while vacationing nearby at the spectacular Iguazú Falls.
Inside, the bustling duty-free malls of Ciudad del Este, which are advertised on billboards lining the highways on all three sides of the border, look identical to those in international airports.
Read more and get to "the dark underbelly of free trade" in the full blogpost found at The Conversation here: https://theconversation.com/a-bank-heist-in-paraguays-wild-wild-west-reveals-the-dark-underbelly-of-free-trade-77125
Some dozen operatives, whom police believe were working for the Brazilian organised crime group First Capital Command, blew through the fortified offices of Prosegur, a company known for its fleet of armoured vehicles, before fleeing across the border into neighbouring Brazil.
The heist made headlines not for the relatively modest sum taken but for its dazzling Hollywood style. According to local papers, the team came armed with heavy weaponry and explosives, and 15 cars were set ablaze. The robbers escaped via speedboat, crossing lake Itaipú to reach Brazil. A private getaway plane was impounded by the authorities.
This dramatic scene fits neatly with stereotypes about Ciudad del Este, a Paraguayan commercial hub in the notorious Triple Frontera area where Argentina, Brazil and Paraguay intersect. It is one of the most active border economies of the hemisphere, and Ciudad del Este is often portrayed as its lawless capital.
At its peak in the 1990s, Ciudad del Este allegedly moved US$10 billion per year in merchandise – more than Paraguay’s entire gross domestic product.
The city even featured in the 2006 blockbuster film Miami Vice, the backdrop for scenes in which smuggled documents find their way into the hands of a network of baddies.
What it takes to build free trade
That reputation as Paraguay’s Wild West (or, better yet, East), though perhaps well earned, is also incomplete. Ciudad del Este is, above all, a laboratory for global free trade. As anthropologist Carolyn Nordstom has found, “a veritable smorgasbord of goods travel these (global) circuits.”
I spent two years (2009-2010) immersed in Ciudad del Este’s informal economy, conducting anthropological research on credit and commerce. My research shows that, far from being ungovernable, this Paraguayan free-trade zone is built on a sophisticated legal, commercial, and financial infrastructure that has made a small group of political and business elites very, very rich.
Ciudad del Este has prospered because of its unique legal and economic status as a duty-free zone (zona franca). All sorts of consumer goods, from digital cameras and sneakers to pharmaceuticals, are imported – both legally and illegally – and sold tax-free there.
Even before the city was founded in 1957, trade flowed across Paraguay’s porous land and water borders with Argentina and Brazil. The 1970 “special customs zone” legislation just gave that freewheeling frontier capitalism a legal and regulatory imprimatur.
Today, some Paraguayans work in lucrative import-export companies and own cavernous duty-free warehouses. Many more work as small-time smugglers engaged in “ant contraband” (contrabando de hormigas) – walking, cycling, trucking or floating goods across the border to Brazil.
Shopping tourists (known locally as sacoleiros, or “bag carriers”, for their large satchels of goods) come from Brazil or Argentina. And many international travellers drop in to buy affordable smartphones or imported perfume while vacationing nearby at the spectacular Iguazú Falls.
Inside, the bustling duty-free malls of Ciudad del Este, which are advertised on billboards lining the highways on all three sides of the border, look identical to those in international airports.
Read more and get to "the dark underbelly of free trade" in the full blogpost found at The Conversation here: https://theconversation.com/a-bank-heist-in-paraguays-wild-wild-west-reveals-the-dark-underbelly-of-free-trade-77125
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