Reflections on Money
by Kianga Daverington
September 1, 2020
This essay, written by Kianga Daverington of Daverington PLLC , was originally published in January 2020. The piece as been condensed for clarity.
Money is not a physical object like a coin, a bar of gold or a dollar bill. Money is at its core, a technology. It is a human invention designed to solve a specific set of human problems. Consider money, perhaps, in a new way. Think of money as a system for capturing time.
Time is the one thing we each have that is absolutely finite. We are born, we die, and the dash in between is all the time we have.
Think of production. We can usually produce more of some good by adding people to a task (also known as “WORK”). But we are still constrained by time. Whatever we produce is still limited by the amount of humans that can be organized to go into that production. Each of us possesses a limited amount of time available to us individually, so we need to convince or coerce others to add their time to ours if we want to achieve more than we can alone.
Out of this imperative, nations are born.
The most important quality of any particular form of money is how well it preserves the value of time over time. Can you buy the same amount of stuff or more in the future than you can buy today? If yes, congratulations - your money is accumulating time for you and future generations while you relax on the beach. If it takes more and more of a unit of money to buy the same amount of time in the future, well then I’m sorry, but that unit of money is getting weaker and weaker. It’s losing value or said another way – it’s losing purchasing power. The longer you hold it, the less it buys.
In a way, by purchasing goods and services, you are purchasing time. Every product and every service requires time to make and time to deliver - your time and/or someone else’s. The price therefore reflects the collective value of all the time put in. Money is a way we exchange time and move it around from where it is valued less to where it is valued more.
This is where prosperity comes from. It comes out of how well a society, collectively and each person, spends its time. How much time is spent creating and making? How much time is spent consuming? If we make more than we consume, we have something left over called wealth. If we consume more than we make, we are left with debt. You can’t consume what you don’t have, unless someone extends credit. Where does this “credit” come from? Basically –it’s made up.
Too much credit or debt eventually collapses and everyone is mixed up in the collapse.
If we understand that a unit of money represents a unit of time, and we understand time is limited, then a unit in a system of money with unlimited supply cannot have any value. This is the problem we are facing today with the world’s money supply. The supply of money in the world is increasing exponentially as central banks create money by giving loans to national governments, which is where our money comes from.
Our entire world financial system is a powder keg of debt.
National currencies today are known as fiat money, a currency without intrinsic value that has been given its power to be used as money by a government that says it is money by regulation. Wikipedia says, “Fiat money does not have use value, and has value only because a government maintains its value, or because parties engaging in exchange agree on its value.” Well said, Wiki.
A government’s job of maintaining the value of its national money boils down to a confidence game. On what basis do the people who use that government’s money believe it has value?
What happens to the money and those who hold it when the foundation of that belief begins to crumble?
Setting an Example
by Asha Jyothi, Conor P. McGuire, Clarissa Rossetti and Jacqueline Zhen-Li Woo
June 26, 2019
This article has been distilled from a research paper authored by Asha Jyothi, Conor P. McGuire, Clarissa Rossetti and Jacqueline Zhen-Li Woo, at Columbia University’s School of International and Public Affairs.
Human mobility occupies center stage in the political and socio-economic discourse of our time. While much commentary and scholarship has focused on the dire conditions of refugees and other migrants in the US and Europe, media coverage of responses to migration in the global South has been less prominent. This is unfortunate given the critical mass of human migration that the global South witnesses. Uganda’s refugee policies and implementation are especially worthy of attention in this context since they are an example that the rest of the international community can follow.
Taken together, the 1951 Convention Relating to the Status of Refugees and its corollary 1967 Protocol are the key international treaties that regulate and afford special rights to refugees. 148 states are parties to one or both of these instruments. https://www.unhcr.org/en-us/protection/basic/3b73b0d63/states-parties-1951-convention-its-1967-protocol.html While some countries have independent policies of settling refugee claims, these international treaties provide critical comparative and normative bases for respecting human rights and dignity, which are the core of sound refugee policy. In this respect, Uganda is a notch above the rest, hailed by the United Nations (UN) as a model nation under principles set out in its Comprehensive Refugee Response Framework (CRRF). http://www.globalcrrf.org/crrf_country/uga/ Uganda’s integration of refugee issues into its national development plans, provision of property, employment, and equal access to services, as well as its work to ensure that host communities benefit from refugees, establish it as a model for other countries.
Past and Present
Since its independence in 1962, Uganda has hosted an average of 161,000 refugees per year, primarily from South Sudan, the Democratic Republic of Congo, Burundi, Somalia, and Rwanda. http://documents.worldbank.org/curated/en/259711469593058429/pdf/107235-WP-PUBLIC.pdf Apart from being the only country in the Horn of Africa to respect all the provisions of the 1951 Convention, http://pubdocs.worldbank.org/en/892801436371029880/forced-displacement-horn-of-africa-Report.pdf Uganda also has two pertinent domestic laws, the 2006 Refugees Act and the 2010 Refugees Regulations, which further enshrine property rights, employment rights, and equal access to services for refugees. The country has worked with multilateral bodies like the UN High Commissioner for Refugees (UNHCR) and the World Bank to successively institute national policies like the Self-Reliance Strategy in 1999, the Development Assistance for Refugee-Hosting Areas in 2003, and the Settlement Transformative Agenda in 2015, which demonstrate Uganda’s approach to refugees is one of integrated socio-economic development, as opposed to short-term emergency response. These laws and policies, including various bilateral agreements signed with country donors ranging from Japan to Sweden, have enabled refugees to be productive members of Uganda’s economy. Since the government allocates arable land of 2500 square meters to refugees in Uganda, it enables them to grow crops and trade them with host communities, https://openknowledge.worldbank.org/bitstream/handle/10986/24736/An0assessment00o0refugee0management.pdf?sequence=1&isAllowed=y a phenomenon observed and confirmed by researchers in Nakivale and Kyangwali settlements.
Such increased productivity and improved livelihoods would be impossible in the camp-style corralling that refugees face in many other countries.
Aligning Policy with Practice
Uganda is not a strong economy by any measure. The average Ugandan earned the equivalent of $1,820 in 2017.https://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&met_y=ny_gnp_pcap_pp_cd&idim=country:UGA:RWA:TZA&hl=en&dl=en
Only 22% of Ugandans have access to electricity at the national level, and this figure drops to 10% in rural areas, which is one of the lowest rates in Africa. Uganda faces several macroeconomic constraints in terms of investment in agriculture, technology, and infrastructure. https://www.economy.com/uganda/indicators It also largely depends on international aid to support both its economy and its refugee programs. This pool of international funding is fast depleting as many countries in the global North undertake austerity measures owing to populist pressures and economic challenges of their own. Uganda therefore needs to refocus its efforts on sustainable economic development by undertaking strategic investments in roads, water, and energy, and in key sectors, such as agriculture, trade, and manufacturing.https://openknowledge.worldbank.org/bitstream/handle/10986/24736/An0assessment00o0refugee0management.pdf?sequence=1&isAllowed=y While refugees have specific humanitarian needs, there is consensus on the need to develop the economy as a whole in order to sustain Uganda’s progressive approach to refugee management.
Uganda’s refugee management system is helmed by its Office of the Prime Minister (OPM) along with UNHCR. According to some officials of international or national non-profits with whom we spoke, local governments are often out of step with many centralized plans and can benefit from capacity building initiatives.Key informant interviews A recent report by the UN Office of Internal Oversight Services (UNOIOS) also confirmed negligence and wastefulness on the part of the OPM and UNHCR in awarding service delivery contracts for provisioning of water and other services in Uganda. https://oios.un.org/page/download/id/894 Such highly-publicized instances of mismanagement could significantly impact future funding and sustainability for refugee programs both in Uganda and around the world if donors are not assured of rigorous accountability and transparency protocols in the management of their funds.
Potential for conflict between host communities and refugees is another critical issue in Uganda. While most Ugandans live peaceably with refugees and view them as an intrinsic part of the country’s extensive history of cross-border migratory flows, increased resource competition has resulted in sporadic violence between refugees and permanent residents, despite the fact that the government earmarks 30% of all humanitarian aid for service delivery to host communities. Conflict management between warring refugee factions is also a challenge, as witnessed between the Dinka and Nuer tribes from South Sudan who reside in close proximity in Uganda without undergoing reconciliation or counselling. Key informant interviews
A Way Forward
As Uganda grapples with some of these challenges in implementation, its refugee laws and policies offer a concrete and realistic model for many refugee-hosting countries that struggle to balance humanitarian responsibility with their own development needs. In addition, Uganda’s status as a model country under the UN’s Comprehensive Refugee Response Framework and the accompanying global attention that this has attracted, could motivate its government to address some of the gaps and challenges noted above. As the policy continues to be implemented and evaluated, other countries should look to Uganda to identify best practices that can be adapted to their own unique contexts while upholding fundamental human rights.