Mercantilism Reduced Urban Poverty in SSA Perception of Boom, Bust, and the China–Africa Trade in L

Ó2009ElsevierLtd.Allrightsreserved

0305-750X/$-seefrontmatter

www.elsevier.com/locate/worlddev

doi:10.1016/j.worlddev.2009.11.009

HasMercantilismReducedUrbanPovertyinSSA?Perception

´andBamakoofBoom,Bust,andtheChina–AfricaTradeinLome

MICHALLYONS

LondonSouthBankUniversity,London,UK

and

ALISONBROWN*UniversityofCardiff,UK

Summary.—ThispaperaddressestheimmediateimpactsoftheChina–AfricatradeonAfrica’sinformaltradersanditslongertermimpactonurbanpoverty,basedonacomparisonofthemajorcitiesoftwoWestAfricancountriesanddrawingonsemi-structuredinter-viewswithtradersandonschedule-basedinterviewswithkeyinformantsingovernment,businessandtheinformaltradesector.ThefindingsarethattheincreaseinimportsfromChinainitiallybroadenedaccesstotradingforthepoor,creatingshort-termimprovementsinlivelihoods,butcompetitionisdrivingdownprofitmargins,andrestrictingthetradetoasurvivalmechanismformanytoday.Thusithasprovidedlimitedlong-termpotentialasaneconomicplatformfornationaldevelopmentandpovertyreduction.ThefindingsarediscussedintermsofstructurationtheoryandintermsofalternativeconceptualizationsofinformaltradeinAfrica.Ó2009ElsevierLtd.Allrightsreserved.

Keywords—sub-SaharanAfrica,togo,mali,informaleconomy,China–Africa

1.INTRODUCTION

Trade,globalization,andadjustmentpolicieshavepro-foundimpactsontheAfricanurbanpoorworkingintheinformaleconomy(Carr&Chen,2002;Cohen,2004).Thedeclineinformalemploymentinadministrationandmanu-facturing,whichfollowedtheoilpriceshocksofthe1970sandstructuraladjustmentinthe1980s,hasresultedinasig-nificantincreaseininformalwork(Bryceson&Potts,2006,p.44).GiventhehistoricalimportanceoftradeinmanyAfricancommunities,amajorfocusforthisgrowthhasbeenincommerce,withstreettradenoweconomicallysignificant,andakeysourceofnewjobsfortheurbanpoor(Chen&Carr,2004;Simone,2004,p.25;Skinner,2008,pp.7–9),althoughpoliticallymotivatedevictionsremainaconstantthreat(Hansen,2004,p.77).Asstreettradehasincreasedinscale,itscharacterhaschanged.Streettradersarelongerpredominantlyanoutletforlocalproduce.Instead,manytradersarelinkedtoglobalsupplynetworks.ParticularlyevidenthasbeentheincreasedsaleofChinese-manufacturedimportsinurbanmarketsoverthelast5–10years(Lyons,Brown,&Li,2008).

ThispaperaddressestheimmediateimpactsoftheChina–AfricatradeonAfrica’sinformaltradersanditslongertermimpactonurbanpoverty,basedonacomparisonofthemajor

´,wheretradeiscitiesoftwoWestAfricancountries:Lome

heavilyinfluencedbyTogo’sfreeport,andBamakoinland-lockedMali.

Thispapersetsoutatheoreticalframeworkfortheresearchdrawnfromstructurationtheory,exploringideasofperverseoutcomesofaggregatedactions.ItthenbrieflydiscussestherecentrapidexpansionoftheChina–Africatradeandexplores

´andBamako.Finally,itexaminesthecontextoftradeinLome

thedifferentstrategiesadoptedbytraders,andtheiroutcomesforpoverty.

771

2.THEORETICALFRAMEWORK

Giddensfamouslyarguedthatthesocialinstitutionscon-straininghumanactionaremodifiedthroughtheaggregateinfluenceoftheexerciseoflimitedchoicebyamultitudeofpeople(1984).Giddensacknowledgedthatsuchstructuralchangecanbe‘‘perverse’’or‘‘suboptimal’’indifferentways.Thiscanarisebecausetheactioncreatesanintendedeffectinisolationbutperverseeffectsifeveryonefollowsbutactorsareunawareofthispotentialcomplication(Elster,1978inGiddens,1984,p.311).Asecondinterpretationdrawsfromgametheory,arguingthatactors,thoughawareoftheconse-quencesoftheiraction,chooseasuboptimalstrategytoachievepersonalbenefitsinrelationtootherpeople.Anexam-pleisthatofacartel,whichwouldbenefitmembers,butcre-atesaprofitableoptionforsomeonewhofloutsthecartel,thusnoonejoins(Olsen,1963inGiddens,1984,p.312).TheseargumentsledGiddenstoformulatetheconceptof“structuralcontradiction”,inwhichthe“conditionsofsystemreproductiondependonstructuralproperties”whichnegatetheprinciplesonwhichtheyarebased(1984,p.314),forexamplethecapitaliststatewhich“dependsonaprocessofaccumulationwhichisbeyonditspowertoorganize”(1984,p.315).Thispaperexploresthe“unintendedconsequences”ofindividualactionsofurbaninformaltraders.

Someapproachestopovertyreductionstressthepotentialofindividual(orhousehold-level)strategiesandoutcomes.Forexample,proponentsofthesustainablelivelihoodsframe-work(Scoones,1998)areinterestedinpossibleofroutesoutofchronicpovertyandintheabilityoflargenumbersofthepoortosustaintheirlivelihoodsandsurviveinthefaceofadversetrendsandshocks.Theyarguethatbyexchangingoneform

*Finalrevisionaccepted:October21,2009.

772WORLDDEVELOPMENT

ofassetforanotherandbydevelopingalternativeassets,thepoorcouldexercisesufficientagencytomaintainstability,orpossiblyimprovetheireconomicstatus.

Inrelationtostreettrade,researchhasshownthatsocialcapital––akeycomponentofthelivelihoodsframework––isimportantinenablinginformalindividualtradersadaptandsustaintheirlivelihoods(Kumar&Matsusaka,2004),andthatcollectivesocialcapitaloftraderscansometimesbemobilizedtomitigatetherepressivebehaviorofurbanauthoritiestowardtheiruseofpublicspace(Brown,2006,pp.183–185).Thesebodiesofworkoverlap,buthavedistinctemphases;thefirstsuggeststhatindividualscandevelopmoreeffectiveeconomicstrategiesbydrawingonthepowerofagroup,whilethesec-ondemphasizesthepotentialofgroupstoprotectaspaceforaction––physicalorpolitical––inthecity.Bothargumentsconcludethatsomeindividualsandgroupsareabletofunc-tionbetterthanotherswithinagiveneconomicandpoliticalframework.

However,someworkoninformaltraderssuggeststhatindi-vidualactivitiesmayhavesignificantaggregateeffects(Lyons&Snoxell,2005a,2005b).Forexample,Fafchamps,Gabre-Madhin,andMinten(2004)havearguedthattheaggregateoutcomeofmodifiedsocialcapitallinkshasbeentoimprovetheefficiencyofmarketingagriculturalproduce,findingsex-pandedandreinforcedbyLyonandPorter,Lyons,andPotls(2007).However,theworkoninformaltradehasnotgenerallyarguedthataggregateoutcomesofindividuallivelihooddeci-sionscanbeperverse,assuggestedbyresearchinotherliveli-hoodareas(Maclure,2006;Rodgers,2005).

Theadoptionofmarketinnovationsbyalargenumberoftradersisoneformofaggregateaction.Thishasbeendis-cussedfromastructurationperspectiveasthecreationofopportunity,inturnattractingentry,intimeresultingingrow-ingcompetition,reductioninprofitmarginsandeventualmar-ketsaturation(Bhowmick,2007;Poole,Clarke,&Clarke,2006).Thestructurationmodelalsoenablesentrepreneurialactivitiestobeinterpretedwithinmulti-layeredcontextswheretradingresponsesareseenasanegotiationbetweenbroaderandimmediateenvironments(Morawska,2004).

Ofparticularnoteistheobservationthattradersoperatingininternationalmarketsmayoftenlacksophisticationinunderstandingnewmarketsortheabilitytocopewithnewchallenges(Alexander,1997).IntheSouth,structurationanal-ysisofretailmarketshaslargelyfocusedontheintroductionofICT,inwhichsectormarketsaturationisadistantprospect(Walsham&Sahay,2006).However,thispaperisconcernedwiththeintroductionofinnovationswhichbothcompetewithlocalmanufactureandsaturatethemarket,andaskswhattheirpovertyimpacthasbeen,andwhy.

3.THECHINA–AFRICATRADE

TheincreaseofChinese-manufacturedimportstoAfricaisonefacetofChina’swideninghorizonsandburgeoningecon-omy.TheexpansionoftheChineseeconomy,almost10%perannumsince1990,owesmuchtoexports.FollowingChina’saccessiontotheWTOin2001itslabor-intensivemanufactur-inggrew.StrengthenedpoliticaltieswithdevelopingcountrieswerepromotedbyChina,bothtochallengeestablishedglobalpowerrelationsandtodevelopnewsourcesofrawmaterials(FOCAC,2008).

TherecentgrowthinChinesetradehascometorepresentacriticalgrowthareaforAfricaneconomies.During1991–2000,Africa–Chinabilateraltradegrewmorethan700%,startingfromaverysmallbase.FollowingthefirstChina–AfricaFor-

700060005000Guinea4000KenyaMali3000Tanzania2000TogoUganda1000Ghana0-100078901234567999000000009990000000011122222222Source: Direction of Trade Statistics, IMF, extracted by the authors Figure1.Balanceoftrade(importslessexports)1997–2007(US$million).uminBeijingin2000,bilateraltradegrewtomorethan$20bnoverthefouryearstotheendof2004,andhasexpandedyearonyeareversince.Africanmanufacturinghasnotincreaseditsshareofexportsduringtheperiod(Kaplinsky,McCormick,&Morris,2006).Astradehasincreased,importshaveincreas-inglyoutstrippedimportsasshownforselectedcountries(Figure1).

FortheChineseeconomy,exportstoAfricaremainrela-tivelyinsignificant––only2%ofChina’s2004exportsweretoAfrica––butforthemuchsmallerdevelopingAfricanecono-miestherapidcumulativeincreasefaroutstripsgrowthinGDP(e.g.,theselectedcountriesinFigure2).Some80%ofimportsareprocessed/manufactured,light-industrialcon-sumergoods(Goldstein,Pinaud,Reisen,&Chen,2006).Themarketsunderstudyherecanbroadlybedividedintothreecategories:shoes,clothing,andpersonalitems(suchasbags,hairextensions,andjewelry);householdgoods;mobilephonesandphoneaccessories,andelectricalitemsfromcalcu-latorstoTVs.

TheimportanddistributionofChinese-manufacturedgoodsinAfricahavebeenlargelyattributedtoexpatriateChi-nesetraders.AgrowingliteratureanalyzesthestrategiesofChinesediasporasinAfrica,forexampleinNamibiaandAn-golawhereChinesefunctionlargelyaswholesalers(Dobler,2005);CapeVerdewhereincreasingandcontinuedcompeti-tionwithintheChinesetradingcommunityhaserodedprofitsandresultedinitsvirtualcollapse(Haugen&Carling,2005);andSenegalwheresuccessinstrugglesoverspaceandmunici-palsupporthavebeencentraltothecommercialestablishmentofChinesewholesalers(Scheld,2007).Incontrast,Africanstreettradeiswidelyseenasfocusedonthedistributionoflo-calproduce,goods,andservices.

Increasingly,however,AfricansareplayinganimportantroleintheChina–Africatrade.Thus,inparallelwiththerapidgrowthofstreettrade(UNDP,2008,p.37),thestreetecon-omyhasbecomemorecommercialandinternationalinchar-acter,withmanyAfricantradersactingasbuyers,shippers,andwholesalersinrelativelysmall-scaleyetcomplexinterna-tionalsupplychains(Lyonsetal.,2008).

Theaimofthispaperisthustoexplorethecharacteristicsof

theurbaninformaltradingcommunityinLome

´andBamako,andtheimpactoftheChina–Africatradeonthecommunity,usingthelensofstructurationtheoryasananalyticalframe-workandseenfromtheperspectiveofmarkettraders’them-selves.Thehypothesisisthatthelarge-scaletakeupoftradinginChinese-manufacturedconsumergoodsbyurban

HASMERCANTILISMREDUCEDURBANPOVERTYINSSA?

773

403530Ghana25Kenya20Tanzania15MaliTogo105020002001200220032004200520062007Source: Extracted by the authors from IMF Direction of Trade Statistics Figure2.Balanceoftrade(importslessexports)as%ofGDP.informaltradersiserodingthemarketopportunitieswhichtheyseektoexploit.Theresearchobjectivesarethusto:

explorethecharacteristicsoftheurbanmarkettrading

communityinLome

´andBamako;exploretraders’perceptionsoftheimportanceoftheimportsectorforsmalltraders

analyzethechangingopportunitiesandconstraintsfortraders,and

analyzethecumulativeandunintendedconsequencesofcollectiveinvolvementintheChina–Africatrade.

TheresearchwasfundedbytheBritish-Academy,andtheteamhasalsoundertakenresearchonAfricanimportersbasedinGuangzhouinsouthernChina,whichisnotreportedhere.Thefocushasbeenontheperspectivesofactorsdirectlyin-volvedintheexpandingimporttradeand,astheresearchwasasmallproject,theteamhasnotyetsituatedthefindingsinawideranalysisofnationalandregionaltradepolicyandinternationalrelationswithChina.

4.CONTEXT

BothTogoandMalihavethesignificantinformalecono-miestypicalofsub-SaharanAfrica(SSA).In2007,Togo’sGNIpercapitawasestimatedatUS$360andMali’satUS$500;inMalitheinequalityrateasexpressedbytheGinicoefficientwas0.4in2001,highbyinternationalstandards(NBnoequivalentdataforTogo);and,inboth,thereisahighproportionofbelow-povertylinepopulation––60%(WB,2008).In2004theirshadoweconomieswereestimatedat40%ofofficialGDPforTogoand45%forMali,comparedtoanaverageof43%forsomefortySAAcountries;theanal-ysisusedamultiple-indicatorseconometricapproachtoesti-mateatnationalscaleunreportedincomefromtheproductionoflegalgoodsandservices(Schneider,2004).Takentogether,thesedatasuggestastrongincentiveineachcountryforthepoortoestablishsmall-scale,informalenter-prises,requiringlowstart-upcapitalandsomelivelihoodandmobilityopportunities.Theincreasingdominanceofcom-merceintheireconomies,andthereinforcementofbilaterallinkswithChinaoverthepastdecade,haveensuredrapidgrowthofChinese-manufacturedimportsasapercentageofGDP(Figure1)andalsoresultedinrelativeeasingofvisarestrictionsincomparisonwithEurope(althoughsincetherun-uptotheBeijingOlympicsinthesummerof2008visarestrictionsonAfricanvisitorstoChinahavebecome––andremain––verysevere).

Recentimportandexportfiguresdemonstratetheimpor-tanceofcommerce,indicatingashiftfrommanufacturing

andartisanalindustriestocommerce.InTogotheshifthasbeenmorerapidthaninMali.DataontradewithChinadem-onstratethatMalicapitalcitiesLome

´andTogo,andtheirmaincommercialand

andBamako,playdifferentrolesintheex-portchain.In2005Togo’stradewithChinacameto$570M,wellbelowsuchoilexportinggiantsasNigeria($2830M)butsimilartolargetradingeconomiessuchasGhana,Tanzania,andKenya;whileMali’scameto$145M.Togo’slocationonthecoastanditsfreeport,haveensuredthatimportsarefarhigherinrelationtoitseconomy(inrelationtoGDP)thaninmostoftheregion.Incontrast,Mali’sland-lockedpositionhascontributedtoitspositioningfurtheralongthedistribu-tionchain(Figure2).

Togohasbeendescribedasa‘‘failed’’state,followingitsmilitarycoupin1967andclosetofortyyearsofuninterrupteddictatorship.However,followingthedeathofPresidentGnas-sinbeEyademain2005,ithasprogressivelyadopteddemo-craticprocessesundertheleadershipofPresidentFaureGnassinbe.AbandonedbyEuropeandonorsin1993,andbytheWorldBankin2003,butinearly2008whenthefieldworktookplacethecountrywasintalkswithUNDP,theWorldBank,andotherdonors,andwasintheprocessofdevelopingaPRSP(KIinterviews).Thecountryhastakenalaissez-faire

attitudetotradethroughtheportandLome

´,andtomigra-tion.Ethnicallythecountryismixed.ThirtysevenAfricantribesarerepresentedin99%ofthepopulation(withonly1%whiteEuropeansorothers).Thepopulationisgrowingat2.8%perannum(WB,2008).

MuchoftheethnicvarietyisevidentinLome

´,withlargecommunitiesofChristians,animists,andMuslims.Neverthe-less,thepopulationofLome

´ispredominantlyEwelikesouth-ernGhanaandBenin,andthecoloniallyimposedbordersare

porous,withethnicitymoreimportantthannationality.Lome

´sitsonthemainrouteconnectingLagoswithAbidjanandservesasadistributionpointforgoodsthroughouttheWestAfricancoast.Thecityhasapopulationofaround1millionpeople,ofwhom80%arethoughttoworkintheinformaleconomy(KIinterview)althoughreliablestatisticsarerare––atthetimeoffieldworkthelastcensushadbeentaken

in1981.ThefreeportinLome

´isanimportantgatewayforim-ports,particularlytoNigeria,Niger,BurkinaFaso,Ghana,andMali,reportedlymoreattractivethanCotonouinBenin,orTemainGhana.Officialstatisticsindicatethatin2005,72%oftotaltradeatthefreeportwasimportswithof10%Lome

´ofgoods(PortAutonomedeLome

´anincrease

,2009).hasaspatialhierarchyofmarkets.Therearetwomainmarketsinwhichconsumergoodsaresold.Grand

Marche

´,aregionalcenterofthewaxedclothpredominanceofwomentraders;andHe

`trade,withadzranawe´,northeastofthecity,createdabout12yearsagowhentradersinsecond-handclotheswererelocatedfromthecitycenterenmassetoanewsitenearertheairport,whichincludestradingcommunitiesfromBenin,Nigeria,Niger,Mali,Chad,etc.Neighborhoodmarketssellfoodandsmallhouseholditems.Thereisalsoawell-establishedcommunityofsome4,000Chineseresidents,manyofwhomaretraders,reflectingbilat-eralpoliticallinksofover20yearswithAfricanseducatedinChina,andChineseconstructionfirmsbuildinggovernmentbuildings.

Maliembraceddemocracywithindependenceandhasmain-tainedfreeelectionsthroughout,butdevelopedmoreslowlyeconomicallyandisheavilydependentonworldcottonprices.Sociallyandculturallyithasremainedmorehomogenous––andconservative––thanTogo.Atthesametime,itislesswellplacedtocapitalizeonliberalizingreforms,beinglandlockedandremotefrommajortrans-shipmentpoints.

774WORLDDEVELOPMENT

Populationgrowthwasapproximately2.7%perannumin2008.Rural–urbanmigrationhasbeenamajordriverofurbangrowthinBamako,althoughmanymigrantsretainacircularmigrationpatternwhichsupplementsseasonalworkinagriculture.Inthecountryasawhole,thepopulationispredominantlycomposedofthethreelargestMendetribes(50%),particularlyBambara,withthebalancemadeupbysomefiveothertribes(WB,2008).Muslimscomprise99%ofthepopulation.LiteracylevelsaresignificantlylowerthaninTogo(46%comparedwith60%(WB,2008)).Therearevirtu-allynoforeigncommunitiesand,reportedly,itisdifficulttoestablishbusinessesinMalievenforotherWestAfricannationals(KIinterviews).

SituatedonthebanksoftheNigerRiver,Bamakohaslongbeenanimportantcenterforinlandtrade.AsMali’sadminis-trativecapital,andlargestcity,withapopulationestimatedtobe1.3min2001,nownearer1.6m,duringthelate1990sitsgrowthratewasestimatedtonearly6%––oneofthefastestur-bangrowthratesinAfrica(BNETD,2001).Povertyindicatorsweresignificant,withanestimatedonethirdofthepopulationbelownationalpovertyline,thenumbersofpeoplewithaccesstopipedwaterbeing20%andtopublicsewerage1.5%,andlit-eracyratesat18%.Anestimated64%ofpeoplewereworkinginformally(BNETD,2001).

Inbothcountries,urbanpolicytowardtradersisguidednationally.InTogo,inFebruary2007,thegovernment’smin-istryforsmall-scaleenterprisespromotedaNationalForumontheInformalSector,buttheministrywasingthe2007election(KIinterviewLome

´downgradedfollow-)andhasbeeneffec-tivelydormantsince.InMali,thedirectorategeneralofcommercehasaprojecttosupportpettytraders,althoughtheapproachfocusesonformalizationandlicensing(KIinter-viewBamako),butthishasnottranslatedintomoretolerantpolicing,whilethenationallyrecognizednegotiatingforumex-cludeshawkers.

5.METHODS

Theresearchdrewmainlyonkeyinformantinterviewswithgovernmentofficials,multilateralagencies,andcommunityleaders,andonin-depthsemi-structuredinterviewswithtrad-ersthemselves.Traderswereclassifiedintothreemaingroups:wholesalers/largerretailers;markettraderswithestablishedtradingsitesorstalls;carriedoutinLome

´andmobilehawkers.Interviewswere

inJanuary2008andinBamakoinMarch2008.Some175interviewswereheldintotal,withthenumbersofinterviewsineachlocationdetailedinTable1.Theresearchandinterviewsfocusedontradeinthegarment,householdgoods,andsmallelectronicssectors,whereimportsfrom

Table1.Interviewsummary

Lome

´,TogoBamako,Mali

TotalKey-informant

111021Wholesaler/largerretailer9

11

20

(establishedshopinformalspacesellinginlargequantities)

Markettraders(kioskor523183smallshopinmarketarea)Hawker(tradingillegallyin30

21

51

publicspace,stationaryormobile)Total

10273175

Chinaareincreasinglyreplacinglocalmanufactureorotherimportsources,notablyEuropeandtheMiddleEast.

Thekeyinformantinterviewsexploredissuesoftrademan-agement,thechangingscaleandcharacterofstreettrade,theroleofstreet-tradeinurbanandnationaleconomicpolicy,andtradepolicy.

Forthepurposeofsampling,tradersweregroupedtoreflecttrade-careertrajectoriesoutofpoverty,fromhawkertowholesaler(Lyons&Snoxell,2005b).Interviewswithwhole-salers/largerretailersusedaninterviewscheduletofocusoncurrentbusinessandmarkets,employmenthistory,percep-tionsofmarkettrends,limitsandopportunities,andgenerallylastedforaboutanhour.Interviewswithmarkettradersusedadetailedsemi-structuredquestionnairetopermitin-depthinvestigationofrespondents’socio-economicstatus;businesscharacteristics;incomeandturnover;spatialcharacteristics;registrationandformality;supplyanddistributionnetworks;trading-relevantsocialcapitalsuchassavingsandloansgroups,andvulnerabilities.Theseinterviewsgenerallylastedforaboutoneandahalfhourswithtraderscontinuingtotradeduringtheinterview.Interviewswithhawkerscoveredsimilartopicsbutwerenecessarilybriefer,lastingforabouthalfanhour,andusinganinterviewschedule.

Ineachcity,interviewswerecarriedoutintwomarketareaswherethesaleofChinese-manufacturedconsumergoodswas

mostevident.InLome

´thesurveyareaswereGrandMarche´(themainmarketbuildingat´andthesurroundingdistrict),andHe`dzranawe´Assigame

,andinBamakothecentralbuildingsMe

´andareasurroundingMarche

´market

Roseandtheoutlyingdinemarket.Respondentswereselectedfromtheclothing/textileareas,householdgoodsandconsumerelectronics,includingmobilephones.Traderswererandomlyselectedwithinidentifiedareasinthemarketswithinterviewerscount-ingoffeachfiftheligiblestallintheselectedareasandmovingononeincaseofrefusal.InBamakotheinterviewperiodwithmarkettradersandhawkershadtobecurtailedbecausethemairieannouncedastreetclearanceduringthefieldwork,althoughthisdidnoteventuallytakeplacewhenscheduledfollowingpublicdebate.

6.FINDINGS

(a)UrbanmarkettradingcommunitiesandtrendsinLome

´andBamakoThereiswidespreadconsensusinbothcitiesthattherehasbeenarapidincreaseinthescaleofurbaninformaltradein

thelast5–10yearsbutnoreliabledata(KIinterviewsLome

´andBamako).InLome

´tradeistraditionallyimportant,withwomenformingthelargemajorityofurbanmarkettraders,particularlyinthesaleofcloth,newclothing,food,andhouse-holdgoods,althoughmaletraderspredominateinthesaleofelectricalgoodsandsecond-handclothes.InMali,menformamajorityoftraders,andinformaltradehasincreasedrapidlysince1995,whenthecountryagreedtoabolishfixedpricingandabandonnationalcontroloftradinganddistribution.

Forexample,GrandMarche

´inBamakohoused7,950formaltenantsin2000,butby2008,thenumberhadrisento10,000,anincreaseofover20%(KIinterviewsBamako).Aselse-where,inbothcitieshawkingisoftenthefirstentrypointtocommerceforthepoor.

Inbothcitiesthenatureoftradeisalsochanging,withanincreasedominanceofimportsamongthegoodsforsale.Thedifferentpaceofchangeineachcityreflects––andisre-flectedin––thedifferentcharacterofthetradingcommunities.

HASMERCANTILISMREDUCEDURBANPOVERTYINSSA?775

´,transittradetoinlandTogoandtheregionisimpor-InLome

tant,partlybecauseoftheinfluenceofthefreeport.ChineseimportsarewidelyavailableandthereisanestablishedChi-nesetradingcommunitysomeofwhomhavelivedinTogofor15ormoreyearsalthoughwithmanyrecentarrivals(KI

´).TheonwardtradeandTogo’sreportedlyinterviewsLome

openbordershavedrawnmigrantcommunitiesfromacrosstheregion,includingNigeria,Niger,Mali,BurkinaFaso,Be-nin,andGhana.Overhalfthemarkettradersinterviewedin

´wereinternationalmigrants,sometimeswithahistoryLome

ofmigration,havinglivinginthreeorfourcountriesenroute.

´alsoAlargemajorityofthehawkersinterviewedinLome

camefromabroad(19ofthe30interviewees),andtheothers,fromvariouspartsofTogo.InBamakotheChinesecommu-nityismuchsmaller,andChinesetradershavedifficultyinmanagingtheFrenchlanguage(KIinterviewBamako).Amongstbothmarkettradersandhawkers,themigrantswerefromsmallercitiesorruralareastoBamako.EverymarkettraderinterviewedinBamakowasMalian,andonlyoneofthe21hawkershadcomefromabroad(BurkinaFaso).

Thethreebroadcategoriesoftradersinterviewed––whole-salers,markettraders,andhawkers––representdifferentlevelsofbusinesssizeintermsofcapitalbaseandturnover.Theselevelsarealsoreflected,ingeneralterms,intheextenttowhichsuchbusinessescanbedescribedasinformal(or‘‘extra-le-gal’’).Manyformalbusinesseswerelicensed,andalmostallthoseinterviewedpaidtaxesordailyfees,inBamakotothe

´toEPAM,aprivatecom-mairie(municipality)andinLome

panythatmanagesthecity’smainmarkets.Togoretainsapeddlinglicense,andsomehawkersarelicensedtotrade.Allotherhawkersinterviewedpaiddailyhawkingfees.Incon-trast,inBamakonopeddlinglicenseexistsbuthawkersstillpaydailyfees,toofficials,‘‘gatekeepers’’,orboth.Neitherli-censesnorpaymentoffeesprovideimmunityfromeviction.AsTable2shows,thelargebulkofmarkettradersinter-viewedinbothcitieshadatleastsomeformaleducation(69of83responses),andthepercentagewasverysimilarinthetwocities.However,themarkettradersinterviewedinBama-koweregenerallybettereducated(44%,or11of25respon-dentshadcompletedmorethan10yearsofschoolingcomparedwith12%,or5of52inTogo).Thelowlevelsof

´areparticularlyliteracyamongstmarkettradersinLome

strikinggiventhenationallylowerliteracylevelsinMali(seeabove).Amonghawkers,meaneducationalattainmentswerelowerinBamako(4.9and3.6yearsofschoolcompletedby

´andBamakohawkers,respectively).Lome

Amuchhigherproportionofwomenwereobservedtrading

´inLome´thanininalltheselectedsectorsinGrandMarche

`dzranawe´marketofHe´,orthemarketseithertheouterLome

inBamako,asreflectedintheinterviewsample.Nochildmar-´orBamako.However,kettraderswerefoundineitherLome

´weresignificantlyyoungermarkettradersinterviewedinLome

with64%under35(32of50)comparedwith44%inBamako

´andthreeinBamakowereun-(13of31).OnehawkerinLomeder17.

ThepicturesummarizedinTable2isoftwocontrasting

´,ahighlydynamic,mobile,andtradingcommunities:Lome

opportunisticsociety,andBamako,farmoretraditionalandconservative.Reinforcingthiscontrast,thereisevidenceofamorestableandfamily-basedstructuresurvivinginBamako,withfarhigherratesofmarriageamongmarkettraders;ahigherproportionoftraderswithchildrenoftheirown;andlowerratesofbachelorhood(8of31,or26%,against21of51,or41%).Thereisalsoevidenceofstrongersupporttofam-ilybytradersinBamako,withamuchhigherproportionsup-portingchildreninschool(Table2).Interestingly,tradersinBamakowerealsosupportingtheeducationofchildrenbe-yondtheirimmediatefamily(97%supportingchildreninedu-cation,whileonly77%havechildrenoftheirown),probablyreflectingthestrongextendedfamilytiesstillsurvivinginMali.Inaddition,whiletradersinbothcitiesaremorelikelythannottomakeremittancestofamilymembers,therateamongstintervieweeswashigherinMali(42%against32%).Themeanworkingweekformarkettradersis68hours,comprisingaworkingdayof6–14h,sevendaysaweek,52weeksayear,indicatingthattradingistheirmainoccupation.Physicalworkingconditionsaredifficult,withaninadequatecleaningofmarketsandtradingplaces,poor(orno)sanitaryfacilities,andoftennoregularaccesstowaterorelectricity.Hoursforhawkersaresimilaror,often,longer,asformalmar-ketsaresubjecttoregulatedopeningtimes.However,ingen-´aresomewhatshorterthaneral,workinghoursinLome

workinghoursinBamakoatalltradinglevels.

InallSSAcities,theincomefrommarkettradingisasignif-icantsourceoflocallyraisedrevenues.Mostmarkettradersandallwholesalersinterviewedworkinacceptedtradingareas,whichmaybepublicorprivatefacilities,andalmost

´,28ofthe36mar-allwerepayingatleastsometaxes.InLome

´paidakettradersinterviewedinandaroundGrandMarche

licenseofbetweenCFA12,000–80,000amonth,andonly

`dzranawe´wasnotpayingali-oneofthe16intervieweesinHe

censefee.InBamako13ofthe31intervieweeswerenotpayinglicensefees.AllbutoneoftheunlicensedtraderspaiddailyfeesofCFA100–500aday.

Formarkettraders,negotiatingaccesstolegitimateandse-curespaceisamajorproblem:

Wecanneverforgetallthetroublesinwhichwegetinbeforehavingthe

´areunderlicensetosellhere.Itwasverydifficult....AllmarketsinLome

EPAM.EPAMkeepsorderintheirmarketsandmaintainthem.ThosewhoneedspaceapplytoEPAM,abutmanyindividualspaybribestogettradingspace.EPAMcollectsrentfromeveryonewhosellsinapublicspace,butthecustomersderivelittlebenefitfromthetaxes/ratesthey

´,Lome´).pay.(Markettrader,shoes,Assigame

Table2.Summaryoftradercharacteristics(83respondents)

Percentoftraderswhoare:

n

Internationalmigrants

Withsomeformaleducation

Withmorethan10yearsformaleducationMarriedBachelors

Withdependentchildren

SupportchildrenineducationMakeremittancestorelatives

02611228233010

Bamako

%084445126779732

n294352621302321

´Lome

%5583127141594642

n2969164829535331

All

%3583245635656538

n8183668182818181

Total

%100100100100100100100100

776WORLDDEVELOPMENT

Istartedsellingwithafriendinthemarket,weweresellingsecond-handgoods(jeans,shirts,coats)IlearnthowtotradeandImademanyfriends.AsIraisedsomemoney,Istartedmyownbusinesswith20jeans.ItwasdifficultformeandIhadtostopbecauseIcouldnotpayfeestoEPAM.Istayedathomeforfourmonths.Oneofmycustomerswhowasmyfriend,helpedmeandIstartedagainmybusiness.Dubaiproductsare

affectingsecond-handtrade(Markettrader,secondhandjeans,He

`dzra-nawe

´,Lome´).InBamako,increasedcrowdinginthestreetshasreducedmu-nicipaltoleranceforstreettradeandresultedinrepeatedevic-tions(KIinterviews,localandcentralgovernment).

Municipalityagentsseizedmymerchandiseonthepretextthatitwasspreadoutontheroad,whichwasfalse.Ipaidsothattheyreturnedittome.TheyalsoclosedmystoreunderpretextthatIwassixmonthsinrentarrears,whereasitwasonlyonemonth(Markettrader,radios

andcalculators,Marche

´Rose,Bamako).Themunicipalityserveduswithnoticeofaweektoquitourplaces.WewenttotheChamberofCommercewhoadvisedustoconsultalawyer,whoobtainedadelayofoneyearintheevictionnotice.Nevertheless,threedayslateratnight,municipalityagentsdemolishedourstalls.Westilldon’tknowthereasonfortheevictionsandnootheractivityhasbeen

allowedthere(Markettrader,smallitems,Me

´dine,Bamako).Forhawkers,thesituationismorecomplex.Althoughunli-censedhawkersinbothcitiespaydailytollstooccupytheir

space,inbothcitiestherearefrequentcrack-downsonhawk-ingasaresultofpoliticaldecisions,sometimestopresentabetterimagetovisitingdignitariesorasresponsetopressurefromformaltraders.

Thepoliceharassusateverymoment.Often,theyriflemygoods.Twiceaday.IhavelostgoodstothevalueofperhapsCFA100,000.Also,wepayfines.IsellproductsfromChinaandDubai.Thisiswhatsellsquickly.ForChinait’stheprice;ForDubai,thequality.Therearemoreproductsforthecheapgoods(andthereforetheChinese)(Hawker,trou-sersandT-shirts,GrandMarche

´,Bamako).WhenIwasahawker,municipalityagentsconfiscatedmygoods

althoughIhadnotinfringedthemarketrulesofMe

´dine.Ihadtopaymoneytogetthegoodsback(Markettrader,telephoneaccessories,Me

´dine,Bamako).Theywantustostop.Theydon’twantustocirculateinthemarkets,butwecan’tstopinafixedposition,becausetheychaseusawaywhenwe

stop(Hawker,ladies’shoes,Lome

´).Manybusinesseswererelativelynew.Some62%ofmarket

traders(50of81)hadtradedforlessthansixyears,and55%(28of51)ofthehawkersinterviewedhadtradedforlessthanfouryears.Incontrasthowever,tradersinandaroundAssigame

´severaloftheTogolese

wereworkinginbusinessessetupbytheirmothersorgrandmothers,illustratingthelongtradinghistoryintheregion.

Mygrandmotherstartedsellingpills,initially,butwasarrested,sochan-gedtotextiles.Lateronshedecidedtogointohouseholdgoods.Mymotherhasbeentradingforaround30yearsnow,mysisterisalsowork-ing.Theyhavealsosoldriceandbabyclothesinthepast(Markettrader,

cookeryitems,Assigame

´,Lome´).Commerceinbothcitiesisarelativelymobilesector,withpeo-plemovinginandoutofstreettrade.Ofthefortyonemarket

tradersinthisstudywhoreportedtheirjobhistory,48%(19)hadenteredcommerceafterworkinginservices(restaurateur,teacher,secretary,anddriver),manufacturing,orconstruc-tioninthe1990s.Ofthehawkerswhorespondedwelloverhalf(68%)hadworkedinothersectors,generally,agriculture.ParticularlyinBamako,manyreturntoaruralhomeeachyearfortheharvestseason,thuscombiningurbanandrurallivelihoods.

Onceincommerce,tradersprovideacruciallinkinthelive-lihoodschain.AsTable2shows,mostmarkettradersinbothcitiesmakeremittancestorelatives.Thepercentageofhawkers

whoreportedsendingremittanceswasalsoveryhigh(57%,or

17of30interviewsinLome

´,and71%,or151of21interviewsinBamako––notshown).AlthoughtherateofsupporttotendedfamiliesismuchhigherinBamakothaninLome

´ex-,itisinterestingthateveninthedynamicenvironmentofLome

´,thepracticeissocommon.Indeed,therateinMalimaybeunusu-allyhighforsub-SaharanAfrica––forexamplerecentfindingsinlarge-scalestudyinTanzania,foundthat55%ofrural-ur-banmigrantscontinuingtomakeremittancesafter5yearsinthecity(Lyons&Msoka,2008).Farfewerofthehawkers

interviewedinbothLome

´andBamakoarealsoreceivingoccasionalremittancesorhelpwithstartingabusinessfromfamilyoverseas(30%and27%,respectively).

(b)PerceptionsofimportanceoftheChineseimporttradeVariousauthorshaveexploredtheprofoundimpactsofChi-nese-manufacturedimportsonmanufacturinginofSSA(Kaplinsky,Morris,&Readman,2002;Goldsteinetal.,2006;Kaplinskyetal.,2006),butimpactsoncommercehavebeenmuchlessfullyaddressed.

WhilethegrowthinimportsfromChinaoverthelastfewyearshasbeenverysignificant,acrossallsectorsofmanufac-turedgoods,theresearchindicatesthatChinese-manufacturedgoodsaresubstitutingothersourcesofequivalentgoods,undercuttingbothlocalmanufactureandotherimports.Themajorityofwholesalersandmarkettradersinterviewedinbothcitiesreportedthattheirmainproductwasimported(95%and93%inTogoandMali,respectively).Amongthosesellingclothes,textiles,shoes,andaccessoriestheprevalenceofimportswasevenhigher(100%and95%).

SometradersconsideredthattheimportofChinesegoodsismakingnewmarketsaccessibletoAfricanconsumers.

IappreciatetheChinesetradingpolicies.First,theChinesetakeintoac-countthelivingconditionsofAfricanswhenmanufacturinggoodsforAfrica.ChinesegoodsarecheaperthanEuropeangoods.Second,theysettledtheirbusinessinAfrica,especiallyinTogotobeclosetocustom-ers.theyarewholesalers,importersatthesametime(Markettrader,

electricalgoods,Assivito-GrandMarche

´,Lome´).OthersareconcernedthatChinesetradeisundermining

establishedlocalmanufactureandcommerce––thelasttextilefactoryinTogoclosedsomeyearsago(KIinterview).Therehasbeenconsiderableimpactonthecloth,akeyproduceinGrandMarche

´saleofDutch´waxed

inLome,developedinthe19thcenturyasatradingcommodity,andlatterlyim-ported,andalsoonthesaleofimportedatHe

`second-handclothes

dzranawe´,TheChinesearecopyingthedesignsofthecloth,producingmorecheaply,andsellingcheaper.Theyareundercuttingthemarket.Alawwaspassedlastyeartorestrictpeoplewhoarewholesalersinwaxedclothfromalsoretailing;aDecreehasbeenissuedbutithasnotyetbeen

implemented(Wholesaler,waxedcloth,Lome

´).Themajorproblemforusedclothessellersisthatthereisnomoneyinthecountryandpeoplecannotaffordqualitygoods.Africansarepoor,sothe

Chinesegoodssuitthem(Markettrader,secondhandbags,He

`dzra-nawe

´,Lome´).However,competitionisrapidlyerodingpricesandprofits.Pricesvarywiththeprecisetechnologyandqualityusedbut,inthegarmentsectorlow-gradeChinese-madeclothesaresoldforaslittleas10–15%ofwesternsecond-handgoods;simi-larly,imitationwaxprintssellforabout20%ofthecostofthetraditionalDutchimportsandlocalmanufacture;andplasticutensilsundercutlocalmetal,pottery,andotherhouse-hold-goodscrafts.Wholesalersandimportersofsecond-handclothes,African-madetextiles,andwestern-madeelectronicshaveseenstocksstagnateandprices––andincomes––fall.

HASMERCANTILISMREDUCEDURBANPOVERTYINSSA?777

ManyhavenowexpandedtoincludeChineseimportsInter-viewswithwholesalersofconsumerelectronicsconfirmedthatthecostofastandardTVhashalvedinfiveyears.

Businessisfallingbecausecheapimportsareundercuttingthetraditionalmarket.CostdifferencebetweenDutchgoods(55,000Fforafullpiece––12yards)andChinese(11,000F)isenormous(Wholesaler,highquality

waxcloth,Lome

´).Furtheralongthedistributionchain,thesamepatternisre-flected.Somehawkersarenotawareofthemanufacturingori-ginoftheirgoods––theybuywhateverthewholesalersupplies.

However,anexaminationoftheproductssuggestedthatover70%,or36ofthe51hawkersinterviewedsoldChinesegoodsastheirprimaryproduct.Ofthese,theoverwhelmingmajorityexplainedthattheirchoiceresultedfromeitherimprovedeaseofentryintotrade,orhigherprofitability.

(c)Opportunitiesandconstraintsofthetrade

Thequalitativedatainresponsetotheopenquestion‘‘HowhaveChineseimportsaffectedthemarket-place?’’pro-viderichinsightsintotheopportunitiesandchallengesinthetrade.Interestingly,althoughpricecompetitionistheprimaryfactor,botheconomicandpolitical/culturalthemesemerge.

(i)Economicthemes

Thefirstandmostimportantdriverofchangeissimplyprice.Mosttradersseeaningpower(pouvoird’acha

ˆ‘‘economiccrisis’’orfallinpurchas-t)asthemaindriverofdemandforChinesegoods.Amarkettraderinsecond-handclothes(fripp-erie)representsawidespreadviewamongtradersinboth

Lome

´andBamakothemassoftheircustomersarepoor––toopoortodrivegrowthinthemarketplacethroughthecon-sumptionofrelativelyexpensivegoods.Thestagnationofreg-ularemploymentforexampleingovernmentserviceshasleftavacuumindemandforhigh-endgoods,suchasimportedsec-ond-handjeansfromtheUSA,Europe,orAustralia,obligingsellerstobroadentheirrangetoincludethelower-quality,butcheaperChinesegoods(Dubaiproduct––socalledbecausetheyareboughtnotdirectlyfromChinabutfromintermediarywholesalersinDubai).

Secondistheconsequentwidespreadavailabilityofnewconsumergoods,importantforstyle.Onesecond-handclothesseller,echoinganumberofsimilarcomments,wasoftheviewthat:

CustomersliketheChinesegoodsbecauseoftheircleannessandsharp-ness,buttheproblemisthatChinesegoods,especiallyclothes,don’tlast.Sopeoplewholikewearingqualitythingsprefersecondhandclothes

(Markettrader,second-handclothes,He

`dzranawe´,Lome´).Otherscitedtheimportanceofkeepingupwitheconomicpro-gress––accordingtoatraderinBamako,

Withthedevelopmentoftelecomsandglobalisationithasbecomecom-pulsoryforalltousetelephones,sothereisabigneedandwearethesup-pliers.IsellChineseproductslikeSiemens,Novo”(Markettrader,

mobilephones,Me

´dine,Bamako).(ii)Politicalthemes

ThethirdargumentputforwardforswitchingtoChinesegoodsexpressesabroaderreadinesstoengagewithChinainpreferencetoEurope.Asmallnumberofmarkettradersmen-tionculturalandpoliticalargumentsintheirexplanation,includingliberationfromex-colonialEuropeandasensethatthenew,Chinesetradingpartnershipisthefuture,andbetter

attunedtoAfrica.Severalmarkettradersexpressedadmira-tionforChina’sAfrica-tailoredexportpolicy:

“Forme,ChinahascometotherescueofAfrica.Threequartersofour

populationispoorandtheycannotbuyprimarynecessitieslikesoap,milk,sugar,coffeebecauseitisproducedinEuropeanditisexpensive.Ifwewerein1990,IcouldnothavesoldglassesbecauseIamnotrichenough.ThisisnowtheopportunityformetotradewithChina.Whole-salersarecomplainingbecausewethepoorcanalsobuythesameprod-uctandatthesametimepriceintheChineseshops–-thisisjustcompetitionanditwillboosttradeinTogo(Hakwer,wineglasses,Assi-game

´,Lome´).”AnumberofrespondentsstatedinformallythattheChinese

respectAfricansmorethantheirEuropeancounterparts,andthispredisposedtheAfricantraderstodealwiththem.ThissupportsfindingsfrominterviewswithAfricantradersfromacrossEastandWestAfricainGuangzhou(Lyonsetal.,2008).

(d)Cumulativeandunintendedconsequences

Initially,theintroductionofnewconsumergoodsintoamarketleadstradersatalllevelstoreporthighlevelsofprof-itability.Therelativelyrecentexpansionoftelecommunica-tionsintheregionprovidessuchanicheatthemomentforsometradersatalllevels.

Mobilephones’tradeisanewbusinessthatmakesyourichifyouareanimporter.Withthedevelopmentoftelecomsandglobalisationithasbe-comecompulsoryforalltousetelephones,sothereisabigneedandwe

arethesupplier”(Markettrader,Assigame

´––GrandMarche´,Lome´).Manytradershavemadegoodprofitsfromthetrade.Forexample,a29-yearoldtraderfromLome

´,sellingChinesejew-elrybypostacrosstheCFA-regionhadbuiltthreehousesasadirectresultofbusinesssuccess:

Ilikethis[Chinese]trade...wearemakingprofitswiththem.Chineseproductsarenotexpensive,andwedon’tneedtotraveltoChina.Iknowthatpeoplearecomplaining,butIcan’tcomplain(Markettrader,jew-elry,GrandMarche

´,Lome´).AnothertraderinAssigame

´sellingsyntheticleatherhandbags,said

WhenIstartedsellingwithmyauntIwassurprisedbythehighprofitlev-els.SoIdecidedtosavemoneytogointotrade.WhenItoldmymotherthatIhadearnedenoughtostartmyownbusiness(CFA700,000in5years)shecouldn’tbelieveit,andgavemeCFA300,000soIstartedwith

CFA100,0000!(Markettrader,bags,Assigame

´––GrandMarche´,Lome

´).However,themarketforconsumergoodsineverysectorhasattractedincreasingnumbersoftradersateverylevel.Asami-granttradefromNigerinLome

´’sGrandMarche´said:‘‘Chi-nesegoodsareaboontoallwhohopetoentertradebutdon’thavemuchcapital’’.Thus,longerterm,thecompetitionforsaleofChinese-manufacturedgoodsisintense,withrespondentsatalllevelsreportingcontinuingpressureonprices,fallingprofitmargins,andfallingprofits(althoughsomehawkersstillamasssufficientcapitalforupwardmobility).Informingthecommentsofallbuttwoofthe52markettradersinterviewed

inLome

´,forexample,isastrongperceptionthatthecon-sumer-goodsmarketasawhole,haspeaked.Twomainstagesareidentifiableinthisdecline.

First,thereisthepressureonthepriceoflocalproducts,orofproductsfrompreviouslyestablishedimportsources,fromthelowpricesofnewlyimportedChinesegoods.Thismeansthattradersinsuchgoodsmustselltheirstocksatwellbelowtheirexpectedsalepriceandoftenatwellbelowthe

778WORLDDEVELOPMENT

purchasingprice,orwatchtheircustomersdriftaway,whilecompetitorsflourish.

In1995ImadeaprofitofCFA180,000,butChineseimportsarenothelpingus.WhatwesellbeforeatCFA1,200nowtheChinesesellatCFA300...PriortoarrivalofChineseIhadimportedalotofgoodsfromChina.However...theChinese...havebroughtinthesamegoodsmorecheaply,andIhavenotbeenabletosellmygoods.Thisisabiglossofcapital.ConsequentlyIhavedevelopedahealthproblemofnotbeingabletosleepatnightuntilItakedrugs(Wholesaler/largeretailer,new

clothes,Lome

´).Tradewasflourishinghereinthe1990swhenIcame,butnowithasbe-comeverydifficult(Markettrader,clothes,Koke

´time´-GrandMarche´,Lome

´).WhenIstartedthebusinessin2003,itwasmoreprofitable,butnow[it]

ispoor(Markettrader,smallelectricalitems,Lome

´).Iwouldliketoremindyouthatsalesweregoodherein2000whenIstartedhere,butnowitisverydifficultandweareverysorryforthat.Chineseimportsareaffectingus(Markettrader,second-handshirts,He

`dzranawe´,Lome´).Wearenotselling.Ourexpensesarehigherthanthedailyincome.Peo-pleprefernowbrandnewTVandradio.TheypreferChineseproductsbecauseitischeaperandnew.(Markettrader,second-handelectricalgoods,MarcheRose,Bamako).

Second,competitionamongtraderssellingChinese-manufac-turedgoodsdeveloped,andChineseandlocaltraderscompeteforlocalcustom.Chinesetradersinterviewedwerereticentandsomeemphasizedtheirgoodrelationswithlocaltraders.How-everlocaltradersseethemselvesasdisadvantagedbecauseoftheirdependenceonChinesetradersforaccesstoimportedgoods,becausetheChinesetraderscanimportdirectlyfromfactoriesandsuppliers––manyareprovidingsalesforfamily-runfirms,whereasAfricantradershavetobuyfromwholesal-ersortraveltoChinatoimport.

IntheolddayswesoldDutchWax,butnowourproductsaremadeinChina(orVietnamorHK).OncetheChinesehadbegunimitatingtheDutchWax,wecouldnotselltheoriginal,sotheDutchWaxlostitsva-lue.(Wholesaler,Dutchwaxcloth,GrandMarche

´,Lome´).IhavebeensellingChinesegoodslongtermbeforethenewwaveofChi-nesegoodsinAfricanmarkets.MyAlbumsareChinesemadeproduct.Before2000therewerefewalbumsellersandthoughChineseproductsarelessdesiredbecauseoftheirlowerquality,Imadeaprofit.Todayitisnolongerpossiblebecausetheproductsareavailableineverycornerofthestreetsandthepriceisreduced(Haker,photoalbums,Sakomi,

GrandMarche

´,Lome´).ItisnoteworthythatinthefaceofcompetitionfromChinese

traders,competitorsfromallovertheCFAregionandbe-yond,inNigeriaandGhana,areacceptedas‘‘local’’.MaliansareviewedaspreferringtodobusinesswithotherMaliansyet,

eveninLome

´,theChineseminorityisoftenidentifiedand‘‘othered’’:

TheChinesegoodsarecheapandtheChinesearealsosellingthesameproducts,thustakingawayourcustomersandreducingourprofits––wecannotpriceourgoodslowerthanthem.TheChinesesettledtheirshopsinthemarketandcompetewiththelocaltraders.Theirpricesarevery

goodsocustomerspreferthem(Markettrader,householdgoods,Marche

´Rose,Bamako)

ToobtainaccurateinformationaboutChinainAfricaishard.WehavetotalktotheChinesewholesalers,whohavetheirshopsinthemarket

(Markettrader,schoolbooksandstationery,Assigame

´,Lome´)ThestudyinLome

´andBamakoconfirmedthecomplexandconflictingrelationshipsamongChinesetraders,reportedelsewhere.Forexample,mutualmistrustintheChinesetrad-ingcommunityhasbeenwelldescribedinNamibiabyDobler(2005),whileinCapeVerdeHaugenandCarling(2005)de-scribedagradualdeclineoftheChinesetradingcommunity,asaprogressivepricecompetitionamongitsmembers,vyingwitheachothertosellhouseholdgoodsforlocalconsump-

tion,drovedownprofitmarginsanderodedtraders’capitalbase.

TheChinesewholesalersinterviewedinthisstudy,inLome

´bothandBamako,reporteddownwardpressureonpricesandprofitmarginfromcompetitionwithotherChineseimporters.TheintensecompetitionamongChinesetradersisassociatedwithmutualdistrust,andthereisverylittlesocial-izingwithintheChinese‘‘community’’(KIinterviewwiththepresidentofBamako’snewlyformedChineseChamberofCommerce).

TherearetrustrelationsbetweenChineseimportersandlocalwholesal-ers.AllwholesalersweregivenXmaspresents(Markettrader,clothfor

muslimprayerrobes,Assivito-GrandMarche

´,Lome´).TheChinesebusinessmenallliveinChinatown,buttheydonotsocialise[witheachother].ManyChinesebusinessmenheredonotjointhenewChamberofCommerce.Somearetoopoor.Somewanttoremainprivate(KIinterview,Chinesecommunityleader,Bamako).

(e)Emergentstrategies

TheopeningupoftheChina–Africatradehasoccurredinparallelwithotherstructuralchanges,whichhavedrivengrowthintheinformaleconomy.Theincreasedstreet-tradingandcompetitionbetweeninformalandformaltradershavecreatedpoliticalpressurestoreducemunicipaltoleranceforstreettradeandresultedinawaveofenforcementmeasuresacrossSSA(Lyons&Msoka,2008).Withtheexceptionofthemobilephonesector,tradersinconsumergoodsarefacedwithfallingprofitabilityandincreasedcompetition.Opportu-nitiesinhomecountriesanddistrictsandinotheremploymentsectorsareseenasextremelylimited,buttherewasalsothehopementionedbymanyhawkersthattheywouldbeamongthesmallnumberstoachievesuccess.Facedwithsuchdown-wardpressuresonprofitability,howdotradersacttobettertheirpositioninthemarket-place?

Figure3presentsinadiagrammaticformthevaluechainsforthelargebulkofChinese-manufacturedgoodsreaching

consumersinLome

´andBamako.ThispicturehasbeenbuiltupfromresearchbytheauthorsinbothChina(Lyonsetal.,2008),andEastandWestAfrica(Brown,2006;Lyons&Mso-ka,2008;Lyons&Snoxell,2005a,2005b).Acrossthetopofthediagram,boxesidentifythemainbodiesofregulationwhichgovernactivitiesateachstage,whileacrossthebottom;themainspatialnodesonthejourneyfromfactorytocon-sumerareidentified.

Theactorsnumbered30–50inthediagramarethesubjectof

thispaperanddescribethetradingsituationinLome

´.ThemarketsofbothcitiesincludeChinesewholesalers(31)and

indigenouswholesalers(33).Lome

´alsohasasignificantpop-ulationofregionalmigrants(32).Thearrowsidentifytypical

pathsfortheflow´itals,fromLome

´ofgoodsfromLome

tootherregionalcap-toTogoleseprovinces,andwithinLome´it-self(NGnotallpathsidentifiedinthetextbelowareexplicitlyshowninthediagram).

Sinceeverytransaction(ellipse)representsapointatwhichvalueisaddedtoaproduct,eachtradermustaimtominimizethenumberoftransactionsbetweenhim/herandthefactory,ontheonehand;andbetweenhim/herandtheconsumer,ontheotherhand.Atthesametime,theinternationalnatureofthetrade,thedifferentlegal,cultural,andlinguisticbarrierstomovingpeople,money,andgoodsbetweennodes,createawiderangeoftransactioncosts,andthereisanincentivetominimizethese.Beingabletoparticipateinthecompetitiononpriceinsellingtotheconsumer,requirestraderstooperateinawaywhichreducesthesecosts,inotherwords,toreducethenumberofnodesonthechaininwhichtheyareoperating.

HASMERCANTILISMREDUCEDURBANPOVERTYINSSA?779

Figure3.MultiplevaluechainsforChinese-manufacturedgoods.

´andBamakohaveseveralTheChinesetradersinLome

advantagesintrade.TheyareabletoexportdirectlyfromthewholesalerorthefactoryinChina,reducingtheintermedi-atetransactions,andtheyareabletocommunicateeffectivelywithChinesesuppliersandregulatorsatthatend,reducingtheirtransactioncosts(although,particularlyinBamako,theyfacetransactioncostsinSSA).Theyarealsoabletoundercutlocalwholesalersandcreatedirectlinkstomarkettradersandhawkers(31–42–52;butalso,31–52(notshown)).Whethertrueornot,theperceptionofsomeintervieweeswasthatChi-nesetradersreceivedfavorabletreatmentinrelationtoimportregulationsandcustoms,aswellassecuringmorefavorabletermswhendealingwithChinesemanufacturers.

Figure3showsthat‘‘traditional’’distributionsnetworks,drawingonethnicity-basedsocialcapital,stillfunctioninthismarket.LinkscanbedrawnbackwardsfromChinesewhole-´tomanufacturersanddistributorsinGuang-salersinLome

dong;andfromAfricanwholesalerstocompatriotexporters,oftenfamilymembers,inGuangzhou.Equally,linkscanbe

´toco-ethnicretailersdrawnforwardfromwholesalersinLome

andhawkersinthecity(e.g.,33–42–52or32–42–53),intheprovinces(33–42–41),andinabroad(32–44–54).Thus,many

´,havingmigratedfromNigeria(orNigerianstradinginLome

Niger,Coted’Ivoire,Benin,Cameroon,andotherwestAfri-cancountries),oftensource(thoughnotexclusively)from

´.AncountrymeninChinaandsellontocountrymenLome

importantelementofsuchstrategiesistrust(Brown,Lyons,&Dankoco,inpress).TheflowofarrowsinFigure3clearlyshowsthatgoodsflowalongnational(andethnic)links,andthatthisisrepresentedinthedistributionnetworksestab-lished.

However,thepressureontraderstoreducethenumberofnodesthroughwhichtheirsupplychainspasshascreatedstrongincentivestoby-passthesetraditionalroutes.Hawkers,traditionallyreliantongoodsoncreditfromtrusted(andtrusting)wholesalersfromtheirbrotherhoodandethnicnetworks(Lyons&Snoxell,2005b,Porter,Lyons,&Potts,2007)havebeenenabledbythelowcapitalrequirementsofChinese-manufacturedgoodstobuymorecheaplydirectlyfromChinesewholesalers(31–52).Similarly,retailersregularlybypassco-ethnicwholesalers(31–42),althoughalltradersinterviewed,bothChineseandAfrican,insistedthatChinesewholesalersneverextendcredit.Someretailersandhawkerssucceedinshorteningsupplychainsstillfurther,bymakingmoredirectlinkswithChina(0–(11)–22–42).Atthesametime,tradersstrivetoreducetheirdependenceonintermediariesfordistribution,withwholesalerssellingtohawkersandindividu-als,aswellasretailers;Retailerssellingtohawkers(andthroughhawkers)aswellasdirecttocustomers.

Asecondstrategyadoptedbytradersisthedevelopmentofmultipledistributionchainsalthoughopportunitytodosovariesconsiderablywithtraders’positioninthevaluechain.Hawkershavelittlefreedomtomaneuver,exceptinchangingtherangeofgoodsinwhichtheytrade.Retailers,wholesalers,andimportersusevariousstrategiestobuildsupplychainstomorethanonemarket(forexample33or23mightlinkdi-rectlyto41,42,43,44––aswellasby-passingsomeofthesetodealdirectlywithtradersfurtherdownthechain.

780WORLDDEVELOPMENT

However,opportunityisalsoconstrainedbytheconditionsofparticularbusinesses.Itmighthavebeenexpectedthat,con-strainedastheyare,hawkerswouldbelessoptimisticabout

theirprospectsthanothers.Nevertheless,inbothLome

´andBamakohawkersremainedmostoptimistic,andalargemajority(70%,or36ofthe51hawkersinterviewed)reportedthattheirbusinesswasgrowing.Theoptimismamongsthawk-ersinbothcountriesmaybebecausehawkingisusedasashort-termsteppingstonetoamoreestablishedtradingposi-tion,althoughveryfewreportedbeingabletosave.

Incontrast,manymarkettradersseethemselvesastrappedbylowprofitsandwithlittleroomformaneuver.Someareex-tremelyreluctanttoventureintonewareasorchangethebal-anceoftheirgoods.

Thisiswhatwedoandwhatweknowhowtodo.IfGodwantsustosuc-ceed,wewill(Markettrader,mobilephones,GrandMarche

´,Bamako).Wholesalersfallintotwogroups.Thefirstarewellestablished

intheChinesetrade,andmaybeabletoimprovetheirprofitmarginsrelativetoothers,particularlyiftheyhavedirectlinkswithChina.Forexample,aNigerianshopowneroutside

Lome

´cathedralsaidthathismainconcernnowistofindstrat-egieswhichcanconvincehiscustomerstobuyhisgoods,‘‘whilesearchingforotheropportunities’’.Heissavingtotraveloverseastotrade.Another,atextilewholesalerinBamakohassenthisyoungerbrothertoChinaseveraltimesayeartobuyfabricssince2000.Othersareestablishingadditionaloutletsincountriesthroughouttheregion,sometimesinvolatileareas

seenaspotentialgrowthareas,suchasCo

ˆted’IvoireandDRCongo,andseeingrapidgrowth.However,theseoptimis-tictraderswereaminority.

Incontrast,manyrespondents’commentswerepervadedbyresignation:

Chinesegoodsbusinessisprofitable,butifyouaresellerandyouareknownasclothesseller,youcannotconvertyourselfintoChinesegoodsseller,becauseyouwillloseyourcustomers.SothosewhowereusedclothessellershavesomeChinesegoodsintheirstocksmusttellthetruthtotheirregularcustomers!(Markettrader,second-handclothes,He

`dzranawe´,Lome´).Chinesebecomeourmajorcompetitors.Theychallengeus,butwedon’thaveenoughmoneytostand.So,mostofourbrothertradersareleaving

TogoforCdI.(Markettrader,shoes,Hollando-GrandMarche

´,Lome´).Thus,theadoptionofthesestrategiesisunevenandtraders’

attitudesrangefrombuoyantoptimismtoprofounddespair.

7.DISCUSSION

Thisresearchexaminedthehypothesisthat,fromthetrad-ers’perspectives,therapidinfluxoftraderstothemarketforChinese-manufacturedconsumergoodswasundermin-ingmarketopportunities.Findingsarethat,whiletradersexperiencedinitialgrowthfollowingfromtheincreaseineffec-tivedemandforrelativelylow-pricesChinese-manufacturedconsumergoods,subsequentgrowthinsupplyhasnotbeenmatchedbygrowthindemand.

Withindifferentstrandsofthevaluechain,certaintypesoftraderbenefitattheexpenseofothers,yetinnogroupisthegrowthsufficienttoaccommodatethemassiveinfluxofen-trants.Moreover,traders’analysisoftheexistingeconomictrendsdoesnotsuggestthatdemandwillsignificantlygrowinthefuture,astheyseenoprospectofgrowingpurchasingpowerinthewiderpopulationstheyserve.

Thus,despitethedifferentpositionsofLome

´andBamakointhedistributionchainanddifferencesinthetwotradingsoci-eties,describedabove,thefindingssuggestthatmostactors

inthemarket––wholesalers,markettraders,orhawkers,Afri-cansorChinese––sharetheviewthattheprospectsforlong-termgrowtharelimited.Theinferencefromtraderstoriesisthatthemarketaffordedshort-termopportunitiesforrealpov-ertyreduction,butthatthishasbecomealargelysurvivalistsector,withlowprofitmarginsdependentoncostcuttingratherthangrowth.

Givenfallingprofitmargins,growingcompetition,andre-peatedstreetclearancesofhawkers,whyisthenumberoftrad-ersincreasing;andtowhatextentaretradersawareoftheunintended,cumulativeconsequencesoftheiractions?

Thestoriestoldbyhawkersclearlypointtoalackofviablelivelihoodalternativesineitheragricultureorformalwork.Theircapitalinvestmentisminimalandoverheadsarekeptlow,oftenbybuyingtinyamountsofstockperday,ortakinggoodsoncredit.Theyaregenerallyabletosubsistandsome-timestoincreasetheircapital.Forexample,oneyoungNige-rianstartedhawking,andoveraperiodof18yearsmovedintothewholesaletradeinsecond-handclothes.WhenviewedhehadjustopenedonestallinGrandMarche

´inter-sellingnewChineseclothing,andwashopingtoopenasecondstall.Markettradersarecontinuingalong-standingtraditionof

tradeinWestAfrica.Togohasbeenanentrepo

ˆtformanyyears,andoldermarkettradingbusinesses,particularlythosetradinginwaxedcloth,areofteninheritedbysecondorthirdgenerationentrepreneurs––theemergingChina–Africatradethuscontinuesalong-standingtradition.InMalitradingisof-tenpartofacomplexlivelihoodstrategycombiningseasonalagriculturalworkwithoff-seasonurbantrade.Thestrategiesforgrowthrelyonethnicsocialcapitalforobtaininggoodsoncredit,butalsoonthesubsequentshoppingaroundforgoodsfromanincreasinglyopengroupofsuppliers––retailersandwholesalers,Chineseandlocal.However,strategiesopentothemarelimitedbythefallingvalueoftheirstock,fixedas-sets,andsocialcapital.

Wholesalersandlargeretailerscanemployabroadrangeofstrategieswhichincludewideningtheirclientelelocallybysell-ingdirectlytohawkersaswellastomarkettraders,andattemptingtofindclientsinmoredifficult,oremergingecon-omies.Crucialinthisarecross-borderethnicnetworksevi-dencedinboththeoriginsoftradersandtheircomplexpatternsofremittancesand,particularlyinBamako,collectivefamilystrategies.Nevertheless,manywholesalersdonotseeopportunitiesforgrowthandareresignedtoaperiodofde-cline.

Inessence,theseeminglyinexorablefloodofnewentrantstothesemarkets,andtheresistanceofestablishedtraderstoleave,reflectaperceptionthatthealternativesarelimitedand,generally,worse.

Whileovercrowdingofmarketsisnotunusualineconomicterms,thecriticalfactorhereisthatthelocalurbaneconomiesarerelativelysmall,andthetradehasbecomesowidespreadthatitissqueezingoutestablishedmanufactureandcom-merce,potentiallyleavingthewholeurbaneconomyvulnera-bletochange.Forthesectorasawhole,theoutcomescanbeconsideredperverse,underminingthemarketforlocalman-ufacturedproducts,andfurtherrestrictingalternativeinvest-mentandlivelihoodpossibilities.

FollowingtherecentreviewofurbaninformaleconomiesinSSA(Skinner,2008),itisusefultoreflectonhowthefindingspresentedaboveareabletoenrichthatdebate.First,assum-marizedinFigure3,findingsindicatethatthecomplexweboflinksbetweenformalandinformalactorsintheSSAurbaneconomyidentifiedbyMoser(1978)andCarrandChen(2002)havesurvivedthedeclineofthemanufacturingsector,thetransferoffocusofAfricaneconomiestocommerce,and

HASMERCANTILISMREDUCEDURBANPOVERTYINSSA?781

thedevelopmentbyamultitudeofactorsofcomplextrans-borderlinks––andcontinuestobereinvented,changeandadapt.

Second,despitethesechanges,thediscussionoftradeprac-ticesandtrader–supplierlinksmentionedabovealsosuggeststhecontinuumofformalityidentifiedbyanumberofauthors(Potts,2007).Mosttraders––wholesalers,markettradersorhawkerspayfortheirtradingspace,evenifnotlicensedandthushavesomedegreeoflegitimacy,butstreettraderslacksecurityfromharassmentandevictions.Evictionswerecom-monplaceinMali,whereasinTogotheprivatizationofmar-ketmanagementledtomorestability,butgettingspacewasdifficult.However,thefindingsfromthisresearchsuggestthatforthelargemajorityofactorstheimportsectorisunlikelytobemorethanasurvivalstrategy.

Finally,returningtostructurationtheory,thetheoreticalframeworkofthispaper,twotypesofcauseareposedinthatdebateforthedevelopmentofperverseaggregateoutcomes:actorignoranceandactorselfishness.

First,perverseaggregateoutcomescanresultfromindivid-uallybeneficialdecisions.Thus,hawkersaremakinganopti-malmoveasindividuals,butbecauseoflimitedeffectivedemand,theycontributetothedeclineofthemarket.Asshownabove,marketentryissometimesundertakeninhope-fulignorance.However,underlyingthedeterminationofindi-vidualsinarangeofmarketpositionstoremainincommerceisnotignoranceaboutcumulativeoutcomesandmarkettrends,assuggestedbyGiddens,butacombinationofhopeagainsthopeandknowledgeofhowlimitedopportunityisinothereconomicspheres.

Second,someaspectsofperverseaggregateoutcomescanarisefromfailuretoactcollectively,ortorespectthecollectivewill.Theresearchwasdesignedtoevaluatetheactionsoftrad-ersasindividualsinalargemarket-place.Yetthefindingsshowmanytobeactingcollectively,aspartofafamily,ortobedrawingonethnicandcommunityties.Thisinfluencessupplychains,accesstocreditanddistributionnetwork.Un-

likecartels,identifiedasaclassicstrategybyGiddens,inthiscompetitiveenvironmentcollectivismcanhaveanimpactontraders’costs.Thustheentrytothemarketofmoretradersisfacilitatedinaggregate,anddownwardpressureonthemar-ketismaintained.

Itismoredifficulttofindinstructurationtheoryanexplana-tionfortheinitiativeswhichtradersdonottake.Whiletraderscompeteonpriceandinitiatechangestotheirsupplychain,theydonotcompeteoninnovationintheirgoods.Furtherre-searchisneededtoinvestigatethelinksbetweenindividualstrategyandconformity.

Thefindingspresentedheresuggestdynamicbutverydiffer-´andentmarketsintheurbantradingcommunitiesofLome

Bamako,withdifferentrolesinthecomplexvaluechainsintheimportofChinese-manufacturedconsumergoods.Indica-tionsarethatalthoughforsomethetradeismakingcheapconsumergoodsaccessible,withhighpovertylevelsintheur-baneconomiesstudied,themainimpactofcheapimportsissubstitution(ratherthananoverallincreaseindemand)whichthusundermineslocalmanufactureandestablishedtrade.Thetradersinvolvedinthisprocessarefarfromsecure,notfullyrecognizedbygovernmentsaslegitimateeconomicactors,althoughalmostallpayalicensefeeordailytollindicatingsomedegreeofformalitywithrespecttotradingspaceandreg-istration.Theresearchwasundertaken,butperhapspresaged,therecentglobaldeclineintrade;itcanbeanticipatedvulner-abilityhasincreasedsignificantlysinceourfieldworkwascom-pleted.

Thetradeisephemeral,andunlikelytoleadtolong-termpovertyreductionwithoutnationalstrategiestoprotectindig-enousproductsandmarkets.ThefindingssuggestthatitisimportantforAfricanurbaneconomiesthattheearlyprofitsfromthegrowthintradeareinvestedinother,labor-intensiveandhighvalue-addedsectors.Withoutsuchgrowth,effectivedemandcannotrise,andnewentrantstothelabormarketwillcontinuetobeforcedintotrading.

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