Mobile Phone Remittances Increasing in Africa with Questions Unresolved

mobile-money1New Orleans   The constant risk in reading the business press, and, yes, I’m talking about Rupert Murdock’s Wall Street Journal, is picking a path between the facts, the news, and blatant sales and promotion. That’s especially dangerous because at ACORN we eat up almost any article that pretends to talk about lowering the costs of money transfer remittances for migrant workers and immigrants as if it were an ice cream sundae. Needless to say, I scooped up an article with the headline, “Turning African Phones Into Wallets,” particularly because days ago in a Canada to France to the USA skype conference we had been all over this topic!

First the news. The World Bank, years away from the G-8 commitment to lower all costs of remittances to 5%, is now saying that they believe the cost globally is 8% and in Africa 12%. The facts continue to be that they are hedging their bets on the figures by not including all of the charges, but I’ll get to that. They do offer that remittances to sub-Saharan Africa rose by 2.2% to $32.9 billion in 2014 compared to 2013, doubling the average growth rate globally and projected to hit even higher between 2015 and 2017.

Interestingly, a lot of the transfers are now cross-border transactions between migrant workers in other African countries led by Nigeria, Senegal, and Kenya. Seeing that development elsewhere ACORN has been trying to change our strategy in Honduras and Ecuador. In Africa many of the transfers are being enabled by mobile phones, led by MFS Africa a 6 year old South Africa based company. Importantly, a smartphone is not required. 500 million users of cooperating communications companies allow access through a mobile payment account on the cell enabling transfers to the mobile phones of other enrolled customers who can essentially text something like a money order to the receiver’s phone and confirm completion with a PIN number. Pretty straightforward. MFS Africa makes its money, according to the Journal on a 30 cents per transaction charge with the average transfer being $80, which also resonates with ACORN International’s research.

There’s still a devil in Paradise though, which is where the story takes a bad turn into sales and promotion for the businesses and against the workers who are moving money home. There’s no discussion of the charges applied for currency exchange and pickup. The Journal obliquely mentions that MFS Africa gets a taste of the exchange from some communications companies, but it’s silent on how much rip-and-run is there. Same problem with the World Bank figuring.

In a conversation with an interesting startup called that thus far was only transferring money from Kenya and trying to open soon in Ethiopia to channels in the USA and Canada, their representative told me they take no front end charge but make all of their money on the exchange rate, though assuring me they took less than the 5% cap ACORN has been fighting for globally. There are huge, deep-pocketed companies trying to get a slice of migrants’ hard earned wages going home, including MasterCard and other joint ventures, so having no money for marketing makes such small efforts like Wave imperiled, but it also signals that without strong rules and regulations the exchange and after-transfer charges will likely continue to be predatory.

For a change it would be nice if the G-8, the World Bank, and countries around the world, desperate to maximize the money for development and personal investment in communities represented by remittance receivers, actually got ahead of the dark-side of this market, rather than just sitting in the stands and waiting for businesses to flash an applause sign. ACORN Canada is hopeful that it can convert a platform commitment from the Liberals to remittance reforms and caps into reality, given their recent election success, which would break new ground.

In the meantime the best we can hope is that we’re at two steps forward and only one step back, but it’s hard to be certain.

Land Grabbing, GRAIN, TIAA-CREF, Africa and Brazil

ImageGen.ashxNew Orleans    Funny how some issues, even very big ones, linger right off your radar and then seem to pop up everywhere. Recently, I’ve felt that way about “land grabbing.” Working mostly in cities and slums around the world, out of sight is too often out of mind. Meeting in France with ReAct, our international partner, and getting a better understanding of their on-the-ground organizing of rubber and palm oil farmers in Cameroon, Ivory Coast, Liberia, and Morocco to force accountability from the French-based transnational, Bollore, I had thought the issue was wages and working conditions, but the more I listened, the clearer it became that the issue was actually land grabbing.

According to Wikipedia, “land grabbing is the contentious issue of large-scale land acquisitions: the buying or leasing of large pieces of land in developing countries, by domestic and transnational companies, governments, and individuals.” Adrien Roux, the coordinator of ReAct is attending a pan-African conference in Nairobi on land grabbing now and meeting with ACORN Kenya’s organizers as an extra benefit to his short visit. We can look forward to understanding the global planning and response when we get his report upon his return to France.

Meanwhile there’s a troubling story in the Times about the US-based giant retirement fund, TIAA-CREF, including a well-documented analysis of its troubling role in land grabbing in Brazil. Their behavior is especially dodgy given the rules Brazil had put in place in 2010 to limit foreign investment in land to prevent such exploitation. TIAA-CREF seems to have tried to play button-button with the new legislation and put the lawyers and its partners to work to concoct a wink-and-nod formation that seemed to follow the letter of the law while trampling the spirit of it and then pouring in even more millions into such land deals. Were they depleting rain forests? Technically no, because they were involved in after-market transactions abetting shadowy, unscrupulous, and often rough handed wheeler dealers who grabbed the land and laundered it for purchase by TIAA-CREF and its partners later.

Having dealt with them on some business for my mother some months ago and finding them pretty reasonable in the rapacious crowd of vultures exploiting the elderly and the infirm, I was sadden to read about their shifty dealings in Brazil. On the other hand it was uplifting to read about the think-and-action tank in Barcelona, called GRAIN, an acronym originally for Genetic Resources Action International. The outfit had begun as a research think tank and took a look at its work and re-engineered itself into an organization designed to support small farmers and social movements on the ground with their research. They also reorganized as a small collective now staffed out by almost half women and eleven different nationalities. Clearly, if their work in uncovering the shenanigans of TIAA-CREF is any indication, the victims of land grabbing have found an effective ally and friend in GRAIN, and that’s good news.

Working in cities we become familiar with all of the ways that crooks steal the houses and properties of lower income families with false deeds, forged papers, and financial mayhem. It’s easy to forget that of course the same thing is operating, perhaps even on a larger scale, in stealing land from poor and indigenous farmers around the world. It’s the story of America and our history after all, but somehow we think we’re past all of that now, rather than still right in the middle of the mess. Wrong!

Keeping Politics Weird

17keepaustinweirdtshirtLondon   Going to Austin, Texas from time to time, you still see bumper stickers and window signs in this huge, boomtown that still say, “Keep Austin Weird.” At least with politics there’s no need for a bumper sticker, because these days it seems all about making sure politics is weird.

In the United Kingdom, the Conservative ruling party is claiming there is a constitutional crisis because the largely honorific, unelected House of Lords rather than being content with their sinecures and titles actually straightened their backs for the first time in 100 years and refused to go along with tax credit cuts for the working poor which would have hit millions for a loss of about $1200 per year. Lords are not just to the manor borne but include Labor lords and Liberal-Democrat lords and they teamed up for a bit of pushback getting headlines for something other than spending their expense money at massage parlors and the like. The Conservatives may modify the cuts or delay them somewhat and also may just back the House of Lords with more Lords to fatten their majority and put off another faux crisis like this for another century.

Meanwhile on the other side of the pond we have Donald Trump reduced to begging the crowd in Iowa to push his polling numbers back to the top and pretending he went to public high school with the rest of us by shouting in the Republican debate that Jeb Bush and Marco Rubio really don’t like each other. The one thing that Trump has contributed to the Republican primaries thus far is total admission that political primaries are in fact exactly the same as high school student council popularity contests. It was a surprise to find that Governor Chris Christie from New Jersey is still running for president. Same for Senator Rand Paul and Governor Bobby Jindal, but hey, let’s keep politics weird.

Meanwhile over here, I will fly out of Heathrow and leave the discussion of the splits in the Labour Party and its civil war over the election of Jeremy Corbyn, a harder left leader than many expected after a drubbing of the party’s former leader in the recent election that has left the party reeling. Somehow the former leader, Ed Milliband, turned up at a training of sorts offered by a UK community organizing group, and US-based Industrial Areas Foundation community organizer, Arnie Graf, was quoted in the New Statesman crowing about the fact that Milliband would have done better to have gone to the training before he was blown away in a curious exercise of kicking sand in his face after having claimed to help him previously. Arnie then took shots at Corbyn and his supporters, Vermont’s Senator Bernie Sanders, and progressives in general proving mainly that he was either having a very bad day and was caught by a reporter in the middle of it or has suddenly become even older and crankier than Bernie himself.

And, then to make sure Hillary is anointed by Democrats rather than loved by them and isolating progressives’ hopes for the future even more, she made it clear she was still committed capital punishment come hell or high water, just wanted a kinder and gentler path to the electric chair. Soon there will be a bumper sticker on her car saying, Keep Politics Weird, as well.

Devolution in the North of England

CGeorge Osborne’s northern powerhouse policy has given Greater Manchester a £6bn health and social care budget and powers over transport, police and housing. Photograph: Joel Goodman/PA

George Osborne. Photograph: Joel Goodman/PA

Newcastle    I had ridden by Newcastle before on the train between Edinburgh and London, and mainly looked at the wide river and noted how striking it was in contrast to the old saying that defined a waste of time and effort as being like “bringing coal to Newcastle.” Of course they don’t mine coal anywhere around Newcastle anymore, nor is their steel and other heavy industry. The city center is still grand and looming in a way that Pittsburgh and Detroit speak to immense wealth in the past that is still a work in progress in the present.

Talking to the ACORN organizers in Newcastle their attention was riveted on their first organizing drive in Heaton, low-and-moderate income area which is building momentum toward the launch of the organization in coming weeks. Invariably conversations moved to the problems of getting rental security deposits back despite rules and regulations requiring it, the escalating rent, damp and mold, and the myriad issues burdening tenants all over the United Kingdom finding little action or relief.

The north of England has been the focus of the ruling Conservative Party’s initiatives around devolution. During the Scottish election last year more than 100 city councils had made parallel demands for increased powers along the lines the Party was pledging to Scotland if they rejected independence. Now the Treasury Secretary George Osborne has made a number of proposals starting with an amalgamation in Manchester that outline what they are willing to allow. Newcastle has also made a number of steps to get in the early line for whatever might be possible from devolution.

Osborne’s outline is pretty straightforward. There would be a grand mayor of sorts and representatives from each of the city councils amalgamating into this form of larger or regional government would have a seat on the new council. The new formation would have authority over housing, transportation, planning, and public safety or policing. Roads, schools, and garbage collection would remain with the local councils. Osborne claims he’s willing to make the devolution deal with any metropolitan formation that is willing to agree to such terms and conditions. Bristol has an elected mayor so might be eligible for example.

Given the tension on housing and the general distance of the central government and its resistance to change and isolation from pressure, this has some attraction, and as argued to me in London recently by a former government official, the cities are going to get stuck with cuts and having to defend them anyway, so essentially, they might as well get something out of the deal. Obviously the one key thing they are not getting is the ability to raise more money. They would get the money from Treasury to pay the bills they are handling centrally, but austerity is austerity.

We walked past several large parks after we left the city centre and the soaring soccer stadium crouched over the skyline. Tom Scott, one of ACORN Newcastle’s organizers, made the point that the council had announced that in the next budget there would be no money for parks. He wondered what might happen to them in the future with no maintenance or attention. Pushing the buck down the line doesn’t mean that the pain won’t persist until the screaming and cries are deafening.

Progress on “Living Rent” in Scotland


Edinburgh       In the wake of the Scottish independence vote a bit more than a year ago, a coalition came together that included ACORN Scotland, EPTAG – the Edinburgh Private Tenants’ Action Group, an ACORN affiliate, the Scottish Student Union and others to form what we called the Living Rent Campaign.  The demands were not new, but the energy was high in the wake of the election with hopes that the prospects of some devolution of powers to Scotland might make long fought campaign goals around security of tenure and even rent control winnable.

It was fascinating to see how much progress had been made over the last year as I sat through the weekly Monday night planning meeting of the group with ACORN and EPTAG veteran warhorses Keir Lawson, Jon Black, Liz Ely and some other stalwarts as well as new found comrades from the student movement.   The discussions of petitions, post card campaigns, stalls, and doorknocking were part of a familiar song, but the new verses involved timelines and dates for submissions and testimony before various parliamentary committees, reports of meetings with yet more allies ready to sign up for the campaign, and briefings on meetings at the party congress of the current ruling party, the Scottish National Party (SNP).  This was heady stuff reflecting a hard and successful year of organizing.

Talking to the organizers, it was clear that for all the progress we were a long way from declaring victory and no matter the new momentum and kinder face of the government, the landlords continued to be well organized and a formidable opposition force on most of our points. The legislation was a long way from a done deal and like so many things in the legislative process, the devil was in the details.  We were focused on four main themes:  affordability, inclusivity for all tenants, flexibility in untenable situations, and security.

Security of tenure is a good case study of the push-and-shove that remains before we can say we have really won.  We believe the “no fault” language is still tenuous and under attack on evictions as well continuation of “hardship” defenses that have been in previous legislation dating back to 1988.  There are hard fights being waged on whether or not an initial six-month period would hold tenants in bad circumstances.  There is a constant tension in our “security” fight on wanting more security in terms of lease periods, but not being trapped in bad leases with recalcitrant landlords unwilling to maintain habitable apartments.

A similar fight is still at issue around rent controls.  Once again like with security “in principle” there is movement, but where our concern is affordability, landlords and some of their parliamentary allies are trying to reposition the controls as “predictability” of rent, even in these times of huge increases.  The compromise has been a discussion of limiting rent increases to the CPI, consumer price increase, plus 1% based on a factor of “N” with the “N” being a number establishing the fair market rate by local jurisdiction.  Our campaign believes that local circumstances are so varied between the red hot market in Aberdeen and even Edinburgh compared to elsewhere that local councils need to be able to set the floor, while others are pushing for a national rate which would make almost no one happy.

In a period of so-called devolution, most organizers are increasingly scoffing at the notion that much of any real power was devolved and in fact in some cases the counterattack on Scotland elsewhere in the United Kingdom may have England setting policies and forcing Scotland by default to have to adapt to them.  Ironically, a year after these concessions were made, in situations like the struggle over affordability embedded in our demands for rent controls, we are left still battling for more devolution into local jurisdictions more responsive to peoples’ needs and peoples’ organizational formations and pressure.

Living rent, like living wages, is not a fight with just one battle but a never ending war, so for ACORN we are in this for the long haul.

Banks are Building “Credit Deserts” in Birmingham and Elsewhere

182984189-465119Edinburgh   We have real deserts like Sahara, the Gobi, Mohave, or Chihuahuan in the world. We have food “deserts” in many lower income communities with little choice but mom-and-pops, corner stores, kiosks, and bodegas to serve millions. Now there’s increasing evidence that banks have been allowed to build “credit deserts” in many cities, and work in Birmingham, the second largest city in the United Kingdom, makes it clear the map of the desert is also the outline of lower income communities in the city.

It shouldn’t be a surprise. Reportedly, British banks have shut down 42% of their branches over the last 15 years, and of course a huge percentage of the closures have been in lower income areas. Fleeing from the responsibilities of community banking has long been a trend in the United States of course, but in the United Kingdom the concentration of most banking in a handful of companies exacerbates the crisis. The U.K.’s antitrust regulator, the Competition and Markets Authority, recently said that Britain’s retail banking market isn’t competitive enough, but then didn’t do much about it and made no proposals for forcing the country’s big lenders from making any radical changes to their businesses. U.K retail and business banking is dominated by four banks: Lloyds Banking Group , Royal Bank of Scotland Group , Barclays and HSBC Holdings holding approximately 70% of personal current accounts and 80% of business accounts in the U.K.

Now as data is becoming available in recent years on where small businesses, mortgage loans, and smaller consumer loans are being given by banks, the city council of Birmingham did some number crunching, and then laid out the results on a map. In general Birmingham citizens had less access to credit than virtually any other part of the UK, but more specifically when a comparison was made on where loans were NOT being made, the overlap with lower income communities was precise. There is no question that banks are discriminating against low and moderate income families as a matter of policy and as a key part of their business plan.

While the banks build a “credit desert,” the vultures that sweep in to feed on the people are of course the payday lenders and cities in the UK, just like the US and Canada are seeing a feeding frenzy. ACORN organizers not only in Birmingham but in other cities in England and Scotland were quickly able to rattle off the names and addresses of payday lenders, pawn shops, and other quick money spots in our neighborhoods.

While visiting we looked up the regulations on payday lenders in the UK. Not much hope for relief there in the credit desert. Pretty much everything goes if the interest rate on the loans was less than 100% of the loan itself. Checking the popular internet money lender, Wonga, to our shock they boldly displayed an APR or annual percentage rate for their lending rate at 1509%.

The plan seems to be to discriminate in lending and then open the door wide so that the pockets of lower income families can be picked clean.


“Payday Loan Song”by Erich Vieth