SOMEONE ELSE’S MONEY

Many developed countries are well-known for the priority they give to social welfare and their fairness. While some—the USA, for example—reward self-advancement and enrichment, many others take the approach that a rising tide lifts all boats. The wealthier you are, the more you contribute.

In Vanuatu, we share that perspective, but we don’t take such a transactional approach. People who can help generally do, and those who need help are generally looked after.

We help without worrying about the cost. We do what we can, when we can. But there are limits to what we can do.

The principle of sharing works really well on an informal basis, especially in a traditional setting. You are expected to contribute food, labour and goods when required, and you get them back when your turn comes.

Mats, pigs and other important goods become involved when the costs extended beyond mere worldly concerns. They convey obligation, honour, reciprocity, alliance… countless intangibles.

The cash economy is simpler, and more limited. Cash is wealth, and wealth is accumulated—or spent. The money has to come in before it can go out.

It’s handy to have a universal currency. Imagine trying to drive a herd of pigs up to the auto dealership every time you need a new car. Imagine trying to save your taro for ten years, so you have something to eat when you grow old.

It’s silly just to think about.

But as convenient and simple as money may be, it’s much more than just an idea. It represents something real. If you take money from me, you become richer and I become poorer. You can do more, and I can do less. You can eat better, and I can’t.

Money is real. And it has to come from somewhere.

When the Vanuatu National Provident Fund announces they’re going to be increasing contributions, that may seem like a good thing. But money that we save for tomorrow is money we don’t spend today.

When we take money out of circulation, we make ourselves poorer. Now, the VNPF’s Parmod Achary argues that this is necessary. People aren’t saving enough for tomorrow. That’s a genuine and significant concern, especially for people who have lived their entire lives in Port Vila and Luganville.

If someone commits themselves to the cash economy, they should be able to benefit from it even after their productive years are over.

But a balance has to be struck. Most people would agree that it’s prudent to save, and that nearly everyone in Vanuatu needs to save more.

They would also say that we there’s not enough wealth in the economy today. Taking more money out of it now will only ensure there’s even less in the future.

If we leave money in your pocket, you will save some, possibly not enough. You will also spend some. And when you do, you will make a merchant a little wealthier. He’ll hire more staff, and they’ll have more money to spend. Some of that will come back to you. So, you’ll have more money to spend, too.

That’s economic growth in a nutshell.

It may sound trite or condescending to explain such a basic concept. But when we see more and more regressive economic measures taken, when we see public servants blithely assuming they can keep taking money out of the economy via taxes, fees and restrictions, we have to ask if they actually understand where money comes from.

The economy may be positive right now, but it’s all healthy. Most economic activity is coming from money borrowed from overseas to pay for projects that will only return the investment in tiny dribs and drabs over the next generation.

That’s all well and good, but commercial activity is dead—or desultory anyway. The banks are tightening up rather than lending more. Tax revenues are way below what they should be. People don’t have money to spend in the stores.

Tourism is better, but it’s not nearly good enough. People who brag about our record numbers fail to grasp that our major investors bet on reaching these numbers years ago. But because of Pam and the airport debacle, they’ve been on a starvation diet for years.

If we don’t see a lot of commercial growth soon, the economy might sicken even more. Just like a patient who’s starved too long, small setbacks can have oversized impacts.

And you don’t ask a starving person to save their food for tomorrow. Bread tomorrow is important, but bread today is survival. The VNPF’s proposal will just have to wait. Taking more money out of an already sick economy would be foolish.