Informal Economy – Globalization for the People

By Eddie Koch

JOHANNESBURG

The contortions that international investment cause in the lives of citizens of poor countries is epitomised in Arundathi Roy's compelling description of Indian workers labouring in the dead of night to lay cables for a multinational electricity corporation by the light of a candle.

Roy's polemic against the illusion that globalisation brings progress -- best summarised in her brilliant essay, The Cost of Living - is likely to power much of the debate that will take place at the Summit on Sustainable Development.

Credit: Liz Gilbert, Courtesy of the David and Lucile Packard Foundation

But, paradoxically, the sheer power and precision of her prose, a damning critique of infamous alliances between governments and transnationals in the developing world, may also have an unintended effect. It may also overshadow the way in which thousands of people across southern Africa have, against the odds, managed to make the global economy work for rather than against them.

About 6,000 people in the far north of Zambia, keep their families alive, and protect some of the most pristine forests on the continent, by farming with wild bees to make some of the purest honey in the world for Sainbury's, Waltrose and the Body Shop.

In Mozambique, among the poorest countries in the world, people living in a remote forest called Djabula - the Forest of Joy - are trying to protect the sacred groves where their ancestors are buried from an army of demobilised soldiers called ninjas.

The ninjas come at night to cut 300-year-old trees for the country's insatiable charcoal industry.

Peasants are inspired by a young crafter from Maputo, the capital of Mozambique, who encourages the residents of forests like Djabula to collect dead sandalwood, instead of cutting live trees, which he sculpts into artefacts that feature in Elle Decor and at the New York International Gift Fair.

On the other side of the subcontinent, in the desert of Namibia, a group of young tour guides have inserted one of Africa's most ancient treasures into the global economy: a collection of 3000-year-old rock paintings that have been described as the richest in the world.

They bring foreign and domestic tourists to these sites and, in the process, provide for hundreds of families who were abandoned by a tin mine that shut down 30 years ago.

And in the Okavango Delta of Botswana, small communities of impoverished rural people are able to make up to 300 U.S. dollars per capita each year - more than they would make in the formal economy - by leasing their land to the developers of 'Big Five' safari game lodges.

Examples like these, scattered across the continent in which the World Summit takes place, provide a classic example of what Peru’s informal-economy ideologist Hernando de Soto calls, in his book -- the Mystery of Capital.

And the IUCN-World Conservation Union is highlighting such enterprises in Johannesburg as part of the big conservation organisation's drive to fuel a debate that aims to reform, as well as oppose, the way the global economy works.

''The words international poverty too easily bring to mind images of destitute beggars sleeping on the curbs of Calcutta and hungry African children starving in the sand.. I resent the characterisation of such heroic entrepreneurs as contributors to the problem of global poverty,'' says De Soto.

''They are not the problem. They are the solution . in the midst of their own poorest neighbourhoods and shantytowns there are - if not acres of diamonds - trillions of dollars, all ready to be put to use if only we can unravel the mystery of how assets are transformed into live capital.''

The South African branch of the IUCN-World Conservation Union is running a major campaign at the summit to highlight the way in which innovative entrepreneurs are able to compete in a global system by using their traditional skills and natural surroundings in ingenious, and sometimes gentle, ways.

''Entrepreneurs the world over - excluded from the mainstream for historical, geographic, cultural or economic reasons - have taken it upon themselves to create their own livelihoods. On a global scale, this 'other way' may be less well known. But it works,'' says a booklet published by the IUCN and the WK Kellog Foundation in time for the World summit in Johannesburg.

While the incisive work of Roy, perhaps the most famous and persuasive of the anti-globalisation campaigners, focuses on the deals between corrupt governments and unscrupulous multinationals, the IUCN projects demonstrate resilience of ordinary people and the possibility of working within the system to oppose it, to benefit the poor.

''The global economy in which these enterprises are expected to flourish is characterised by distortions and inequities that are a threat to their global trading potential in spite of the opportunities that a global economy purports to offer,'' says Lutske Newton in a communique issued by the IUCN.

While opposing the global economy and the current trade regime is important, the IUCN also believes it is vital to nourish and support indigenous enterprises like those that are already working within international markets to debunk images of Africa as a destitute and unproductive basket case.

There are many ways to do this, says Newton. But the summit will make a massive contribution to the efforts of ''heroic entrepreneurs'', like those showcased by the IUCN, if it resolves that ''further trade liberalization should contribute to sustainable development, lead to better access for (people in) developing countries to world markets and reduction or elimination of trade distorting subsidies''.