419, Chicken and Cambodian textiles – or “Fair Trade is Hard”

Christian Science Monitor has two excellent West Africa stories today. One comes from my friend Abe McLaughlin in Nigeria, where he talks to some of the “yahoo-yahoo boys” – kids who make their living sending millions of advance fee fraud (419) scam emails. While there are several internet sites dedicated to making fun of the “stupidity” of 419 fraudsters, McLaughlin points out an uncomfortable truth: 419 continues to exist because greedy Westerners continue to fall for the pitches.

“You have no idea where Nigeria even is – you’re just greedy and want the money,” says Sonny, a former yahoo-yahoo boy who became a middle manager in a scam ring, speaking of the foreigners he targeted. He singles out Americans for special disdain. Canadians or Europeans tend to be cautious, but when Americans get e-mails promising millions, if only they’ll pay a small up-front fee, “They just say, ‘Send the money quickly,’ ” he says laughing.

McLaughlin points out that some of the people involved with the 419 “industry” see a certain poetic justice in using advance fee fraud to “punish” the US for its past role in slavery and its current role in exploiting Niger Delta oilfields. Popular songs in Nigeria – “I Go Chop Your Dollar” (Quicktime Movie) and “419 State of Mind”, make it clear that there’s a certain pride and joy in screwing foreigners out of their cash:

“Some call it 419 or advance fee fraud
I say it’s getting dough from greedy victims abroad
Without pulling the trigger, contact,
slash ’em with my sword, Lord,
Go-getters make their life better
By sending a letter…”
– Mode 9, “419 State of Mind, Part II”

(Thanks to Obie from South London of Soul on Ice – for the links.)

(Update: the webmaster of the Riverside Rugby Blog evidently has a good command of Nigerian pidgin and has a helpful translation of “I go chop your dollar” for all us Oigbos who’d otherwise miss some of the jokes.)

While these “go-getters” aren’t physically harming the vast majority of their victims, they’re causing huge harm to anyone trying to do legitimate business in Nigeria. Ask the US State Department for advice on business travel to Nigeria, and they’ll send you this handy brochure complete with warnings that the US Embassy will help you get out of a bad Nigerian business transaction in one piece, but that “To date, however, the U.S. Embassy has never been able to recover a scam victim’s money.”

According to McLaughlin, the Nigerian authorities are starting to get better at catching the scammers and paying the money back. The newly formed Economic and Financial Crimes Commission recently repaid $4.4 million to an elderly Hong Kong man and $17 million (of a total $242 million loss) to a Brazilian bank. But these anti-corruption efforts are only going to go so far in changing the public perception of a nation currently in the news for a cross-dressing, money-laundering corrupt state governor.

Three nations west of Nigeria, Ghana is nowhere near as criminally colorful as Nigeria, but it’s often held up as an example of regional financial success. But an article on Ghana’s chicken industry reveals just how fragile that success can be. While US poultry producers aren’t subsidized in the insane way our cotton and sugar producers are, subsidies help keep the cost of poultry feed low. This, combined with the efficiency of factory farms that raise tens of thousands of chickens at a time, make imported frozen chicken more affordable in Ghana than locally grown chickens.

Ghana responded to the cries of a domestic poultry association by raising tariffs on imported poultry to 40% in an attempt to protect 10,000 domestic farmers. But emergency legislation this March reversed that tariff decision – poultry farmers believe the reversal was due to pressure from the IMF and other international donors.

The hope that I, and other free trade proponents, hold is that actual free trade – the kind where developed as well as developing nations lower their tariff barriers and phase out agricultural subsidies – will help poor nations make money. But situations like the Ghanaian chicken scenario give me some pause. Even without feed subsidies, US chicken farmers are going to run vastly larger chicken farms than their Ghanaian competitors – will local chicken ever be cost-competitive in west Africa?

Driving home from Cambridge last night, I had the chance to catch up on back episodes of “This American Life”. The middle act of a show titled “David and Goliath” was a brilliant story from Rachel Louise Snyder about the Cambodian garment industry. Cambodia has risen to power as a major garment exporter by doing everything right: passing strict labor laws, giving workers liveable workplaces, annual vacations, maternity leave and paid overtime, and courting retailers concerned with corporate social responsibility.

It worked pretty well, especially before the elimination of the Multifiber Agreement, a vast package of tariffs and quotas that had the effect of keeping China’s garmnent industy in check. Now Cambodian factory owners are finding their sweatshop-free labor is very expensive in global terms, and are looking for legislative help from the US Congress in protecting an industry that brings in an enormous percentage of Cambodia’s foreign exchange earnings.

It seems to me that Cambodia needs to do some work branding their nation as a provider of fair-labor goods, getting people interested in checking the “made in” labels and choosing goods with an origin that makes them feel good. But this is probably wistful thinking on my part – despite the popularity of anti-China rhetoric in the popular press, WalMart still seems to be doing okay stocking its shelves with 70-80% of its inventory from Chinese factories.

What’s a small nation to do when a big nation doesn’t pay attention to the consequences of its actions? Do you hope that American consumers will wise up and choose to pay a small premium for goods sewn by unionized labor in Cambodia? Or should we expect more nations to give up on the straight and narrow and get more excited about finding ways to “go chop your dollar”?