An Immodest Proposal

When I stop to think about it, the prospect of improving communications here in Vanuatu seems an almost insurmountable problem. At the best of times, it feels like a labour of love. At other times it’s more reminiscent of wading chest deep through a vat of Jell-o.

Everything moves at an infuriatingly slow pace, a pace made worse by a general inclination to stay on the well-trodden path. Now, this desire to stick to so-called safe ground is born of bitter experience. In all aspects of our development, available resources are as tiny as the logistical problem is large. The cost of failure is disproportionately high, too. Mistakes made by headstrong or naive advisors sometimes take us years to recover from.

And yet…. And yet there are times when this risk-averse behaviour comes at a cost higher than failure. One sometimes wishes that our leaders would be just a little bolder, that they would accept that nothing in this world is certain, and that gambling on good odds is sometimes the best alternative. It’s difficult, to say the least, to find a balance between folly and commitment, especially when the political landscape can change at the drop of a hat.

It’s only with the greatest regret, therefore, that we are forced to accept that improvements in communications and access to information in Vanuatu will happen in increments. Often enough, the best we can do is work to mitigate the worst effects of incursions from the outside world.

Viewed in this light, the changes appearing on the horizon today are truly epochal. Within a very short time, we will see mobile service begin to reach far out into the islands. There’s a strong possibility that we might see nominal levels of Internet service there as well.

While it may seem piddling in the context of the revolutionary growth in communications technology in the outside world, we really do have reason to be grateful to those individuals who are behind this historic process. There is a quantum difference between no communications and any at all. Even the most basic improvement from a baseline that started at nothing is truly a vast leap.

Perhaps the most heartening aspect of this process is the knowledge that access to communications – no matter how basic – allows us to trade on the one resource we have in abundance. A knowledge economy is driven by brains. It’s driven by the wisdom, intelligence and enthusiasm that exist in every one of us.

So let’s apply a little bit of that now, and imagine what we could achieve with even these limited gains. Within the next twelve months, we’re going to see mobile service begin to roll out in areas that had little or nothing before. We’ll see pricing structures that should make it possible for those with even the most limited income to buy a mobile – or at least use one on a regular basis. And with a little creativity, we can achieve a lot with this capability.

Elsewhere in the developing world, people are using mobile phones in ways that no one could have foreseen. In Kenya, for example, a simple combination of circumstances has created an entirely new economy. The major mobile service providers there allow people to top up their credit through the mobile service itself. One calls a certain number, provides bank card and PIN numbers to an automated service, and selects the amount of credit to purchase.

If we were to do this in Vanuatu, life would become immensely easier, at least where communications are concerned. There would be no more long walks to the nearest store to purchase credit, no more saving for weeks to buy another phone card. No more living at the mercy of predatory businesses charging well over the market rate because they have the only phone in the village.

But these are just the immediate effects of a simple service change. Combined with others, a great deal more is possible. Another aspect of mobile service in Kenya is that phone credit is transferable between mobile subscribers. High crime rates make carrying cash extremely dangerous for Kenyans, so they’ve taken to using their mobile phone credit as an impromptu currency. People pay small debts, even make purchases, simply by transferring credit from one account to another.

In a small cash economy like Vanuatu’s, this could be revolutionary. Just imagine how useful it could be. Small purchases, gifts and payments that took hours or even days before could be replaced by a few moments spent tapping at the keys.

And what about the value of the credit itself? Would it be discounted or debased in any way? Experience in Kenya tells us that it probably won’t. Phone credit retains its value, so modest sums could be translated into cash with the same ease: A friend passes you a few hundred vatu, and you transfer equal credit to their account. The only additional cost is the price of a single SMS.

TVL have indicated informally that they are very interested in the possibilities that this scenario presents. Recent improvements in their service offerings give every indication that they’re not just paying lip service to the idea. In fact, some people have indicated that, with a little cooperation from the banking sector, people could transfer real cash using their mobiles using something known as SMS banking.

Taking this next step would require some effort from our national banks, because right now, virtually no one in the islands has a bank card. Few even have accounts. Indeed, stories have appeared in the newspapers concerning certain individuals who have literally millions of vatu rolled up in wads of old, rotting bills hidden about the house. While the amount of currency transacted per individual would likely remain small, even modest transaction fees would likely have a noticeable effect on the banks bottom lines.

But even if the banks decided to forego profiting directly from this new economic activity, they would still benefit immensely from the secondary economic effects. An increase in the number of cash transactions between the tens of thousands of people who are, as of now, completely missing from Vanuatu’s cash economy can only be beneficial.

And lest we forget our history, consider how smoothly this would tie into kastom economy. Existing kastom banks in Pentecost and elsewhere would have the capability to translate mats, pigs, shells and other valuables into cash, and vice versa.

The beauty of this scenario is that it works in the smallest increments. In a country where it’s not unusual for a family to have a monthly income of less than five thousand vatu, being able to transfer wealth in increments as small as twenty, fifty or a hundred vatu would be nothing less than a godsend.

There are drawbacks in this idea, to be sure. There’s always the potential that certain unscrupulous operators might choose to game the system, or that some will abuse their advantage – in this case, owning a mobile or having a bank card – by profiting from those who remain without.

It’s also possible that the cost of implementing such a system would be too high. The individual transactions must remain small in order for enough people to participate, and we might find that we just can’t slice things thin enough to operate at a scale sufficient to sustain it.

Implementation costs would certainly be small; these services already exist elsewhere, so it’s not like we’d have to build them from scratch. Nonetheless, there will be costs involved, and it’s possible that the already heavy burden of offering any service at all might prove to onerous to allow this extra weight.

But the biggest liability is fear. Fear of the unknown, the unwillingness to take on a little risk for a huge gain.

The ideas expressed in this column may not be perfect. Some may even scoff at such a preposterous proposal. But Vanuatu’s situation is unique in this world. We simply cannot operate exactly as others do. And if we don’t apply a little ingenuity to improving our lot in life, the dream of a prosperous, unified Vanuatu will be forever deferred.

P.S. For those of you who outside Vanuatu: 1 vatu is roughly equal to 1 US cent. So the 5000 vatu mentioned in the article is about USD $50 – a not-unusual monthly household income in the islands.