When money isn't always what it seems
by Erin B. Taylor on
Money is meant to simplify our transactions. And it does–at least in our daily life. When we're at home, we pay for things without thinking about it. Handing over the cash, we barely even look at the notes and coins. We don't have to read the numbers on them because we recognize their colours, shapes, and sizes. It's automatic.
But when we travel, everything changes. Unfamiliar currencies make us confused. Not only are we unsure how much they're worth, we also struggle to recognize them quickly. Even though I have travelled to the UK many times, I always struggle with pennies and tuppence. But if I lived there, I would doubtless adapt.
What if this confusion over currencies were a fact of daily life? What if there were a country where this sense of currency familiarity never arrived?
Haiti is such a country. The existence of a real currency (the Haitian gourde) and an imaginary currency (the Haitian dollar) means that nobody–not even the locals–ever really get used to what the various coins and notes signify. They can't, because coins and notes represent both currencies simultaneously.
Consider the following exchange as I shopped for fruit one day in Port-au-Prince. I selected some apples and papaya from cloth laid on the pavement and asked the vendor for the tally. "Two dollars," she told me. I pulled a crumpled ten-gourde note from my pocket and handed it over. Deal done.
In case you missed it, something weird just happened in that transaction. She asked for two dollars; I handed over ten gourdes. In fact, two U.S. dollars are currently worth around 90 gourdes. So what happened?
The solution to the puzzle is that while Haiti's notes and coins are actually Haitian gourde, prices are normally given in imaginary Haitian dollars. In most countries, people automatically know what a note or coin is worth by its appearance. But when my fruit vendor sees my ten gourde note, she automatically thinks of it as being two dollars.
What is going on here? Is it simply a localized cultural quirk? The short answer to this question is "no." Haiti's currency situation can be traced to a long history of foreign involvement in Haiti.
Haiti was formally colonized by France in 1697 and their first currency was the Haitian livre. This currency was in use until 1813 and was equivalent to the French livre. But since the Haitian Revolution evicted the French, and Haiti declared themselves a republic in 1804, the livre was replaced by the Haitian gourde.
In 1881 the gourde was linked to the French franc at a rate of 5 francs to 1 gourde until, in 1912, it was pegged to the US dollar at the rate of 5 gourde to 1 dollar. During the 77 years that this peg lasted, five Haitian gourde was referred to as one Haitian dollar in order to save time and effort converting between the two currencies.
The Haitian gourde was floated in 1989 and the peg to to the dollar was dropped. But while the dollar disappeared from official reckoning, the habit has proved surprisingly sticky.
Today, virtually all informal trade is carried out in Haitian dollars. Prices are quoted in Haitian dollars. Money is counted as Haitian dollars. To an outsider, it may look like a Haitian money changer is counting out a stack of 25, 50, and 100 gourde notes, but to the person counting, they may appear as 5, 10, and 20 dollar notes.
Street stalls aren't the only places where money is counted in Haitian dollars. Many a mini-mart I entered in Port-au-Prince had stickers on the shelves with the goods priced in Haitian dollars. When you go to the counter, the numbers rung up on the cash register are in gourdes, but you're quoted the price in Haitian dollars.
This means that the cashier has to be constantly converting currencies. She reads the price labels in Haitian dollars, translates them into gourdes to enter into the register, then converts them back to dollars again to give you the final tally.
And if you thought that wasn't complicated enough, look closely at your receipts. Regardless of whether they list the price in Haitian dollars or gourdes, there's no telling which currency symbol will accompany them. The technology used in shops is imported from both the U.S. and France, so you may well experience a moment of shock when you glance at your receipt and momentarily think you've paid 200 euros for your snacks and drinks.
Why does this currency diversity persist in Haiti? Mostly it's because this small Caribbean nation has an economy that is largely off the books, with an estimated 90 percent of citizens depending upon informal employment. Most registered businesses are small-scale with low profit margins. They make do with whatever technology they can get their hands on.
There are a few retail businesses in Haiti that are large enough to afford technology appropriate to the official currency. They include large supermarkets, banks, and travel agents. However, these are overwhelmingly located in the major cities, meaning that most Haitians will use them rarely, if ever.
There are some businesses, however, that are making an impact on how people conceptualize money transactions — telecommunications providers.
Since Digicel entered the telecommunications market in 2007, the mobile penetration rate has increased out of sight. The near-ubiquity of mobile ownership in Haiti today has unexpected implications. Using mobile handsets doesn't just increase communications capacity, it also has the potential to change how people think about money.
When a customer buys a mobile recharge card, the price on the front is in gourdes. When a customer checks their phone balance, it appears in gourdes. When a customer uses mobile money, they transact in gourdes. People are being re-trained to think in terms of their own, national currency.
Are we viewing a fascinating piece of culture dying before our eyes, to be replaced by the homogeneity of numbers? Or will Haiti's currency pluralism live on, perhaps in another form?
One thing we need to keep in mind is that Haiti isn't alone. There are many examples of the world of currencies filling roles other than their official ones. Twenty Kenyan shillings are commonly referred to as a "pound." Kenyans don't quote prices in pounds but, as in Haiti, it is a legacy of foreign presence.
Throughout history, objects other than coins and notes have been used as hard currency, including crates of beer in Angola. And, today, we are inventing new currencies such as Bitcoin to rival state-issued ones.
The Haitian dollar may well be imaginary. But then, so is all money, if you think about it. The only reason why currency has value is because we collectively agree that it is worth something. When someone pays you using a $20 note or a handful of bitcoins, you trust that you can then use it to pay someone else.
Haiti's imaginary dollar certainly has cultural features. It also has a history tied to colonialism. But, more broadly, it represents the universal nature of money as an imaginary tool that helps us to transact.
While Haiti's notes and coins are actually Haitian gourde, prices are normally given in imaginary Haitian dollars.