Counting on Change: What Currency Can Tell Us about Inequality in Haiti

Friday, 3 July 2015: 2:15 PM-3:45 PM
TW2.2.03 (Tower Two)
Erin B. Taylor, ICS-UL, Lisbon, Portugal
It is well recognised that economic and demographic changes affect the flow and distribution of money. Less discussed is how these same changes can affect how people count money. In Haiti, an imaginary currency (the Haitian dollar) is more commonly used in vernacular communication than the official currency (the Haitian gourde).

In recent years, however, changes such as urbanization, economic formalization, and the increased distribution of key consumer goods are affecting this lexicon. But the rate and distribution of these changes is uneven, reflecting inequalities across Haiti as well as its situation as one of the poorest countries in the world. These inequalities and changes are “domesticized” in the form of Haiti's two systems of counting currency.

The terms “Haitian dollar” and “Haitian gourde” both refer to the same physical (or electronic) coins and notes, but they use different counting systems. The Haitian dollar is fixed to the Haitian gourde at a rate of 1:5. A consumer may be quoted prices in either currency, but in either case they will complete the transaction by paying in Haitian gourdes, either using notes and coins or, less commonly, electronically.

The Haitian dollar stems from the period 1912-1989 when the gourde was pegged to the US dollar at a rate of 5:1 (today, 1 US dollar is worth around 46 Haitian gourde). Since Haitians in all parts of the country were used to making daily conversions between dollars and gourdes, they continued to refer to their own currency in dollar terms once the peg was dropped. With most exchanges taking place in informal local markets, where the lexicon was well understood, there was little incentive to drop the Haitian dollar.

In recent years, however, Haiti's demography and economy have changed significantly,increasing Haitians' exposure to forms of transaction in which the gourde is made explicit (identified verbally, by Arabic numerals, the symbol “G”, or the ISO code HTG). Urbanization increased from 26.1% in 1985 to 44.8% in 2015 (UN Habitat), meaning that more Haitians reside near the formal institutions that are largely found in cities. Formal institutions and businesses are required by law to use the gourde, so Haitians who engage with these institutions as consumers or employees are incorporated to a greater degree into the formal monetary system. Indeed, foreign workers and Haitian returnees, who often hold key positions in large organisations, may have little familiarity with the intricacies of the Haitian dollar.

In terms of consumer goods, it could be argued that mobile phones are one of the major means to institute a centralized currency lexicon, cutting across all geographic areas and age groups. Since 2006, mobile phone ownership has become near-universal. In contrast to cash, which people “read” as dollars by glancing at the material appearance of notes and coins, mobile phone balances (in gourdes) are electronic and enable no such short-cut. In order to read their balance, people must either accept the gourde denomination or make the currency conversion themselves.

Yet the distinction between the formal and informal sectors is not absolute. Data indicate that use of the Haitian dollar in transactions is not universal throughout the informal sector, and patterns of use suggest that dollars are more often used to denominate small amounts of under 100 or 200 gourdes, whereas gourdes are used to discuss larger amounts.

Conversely, in the formal sector the shift to gourdes has not been comprehensive. Many formal businesses, such as mini-marts, label goods with prices in Haitian dollars. Cashiers ring up the prices in gourdes, but quote the price in dollars. To make matters more complex, the receipt will state the price in gourdes, but currency symbol preceding the price may be a dollar sign or a Euro sign. Most registered businesses are small-scale with low profit margins and cannot afford technology appropriate to the official currency. Instead, they use financial technology imported from the USA and France.

This incomplete transition show the various ways that Haitians are unevenly incorporated into both its own state and the global economy. A hallmark of a “modern” state is the envelopment of its citizens into a system of centralized governance, including money and taxation. Haitians have used a state currency since 1697, but the flow of notes and coins has been overwhelmingly in one direction. With the informal economy still hovering at around 70%, very little money makes it back to the government by way of taxation. And given that around 10-15% of Haitians have bank accounts, the money does not go back into the banking system either. Most of the informal, unbanked population is located outside of the cities. In 2010 mobile money was launched in Haiti. It was touted as a way to bring financial services to the poor, but for many it represented hopes that mobile money would increase centralization and liquidity.

Globally, the changing uses of gourdes and dollars in Haiti is indicative of its slow incorporation into international flows of trade, travel, and finance. Once a popular tourist destination, Haiti experienced a slump in the 1980s that did not recover until the 2010 earthquake brought an influx of NGO workers to Haiti. Until recently, few international corporations have operated there; most other international players were NGOs, which tended to distribute goods or services rather than opportunities for consumption or employment. The largest foreign influence in the past two decades has been in the form of remittances sent by Haitian expats to their families back home. If anything, the influx of US dollars has served to pluralize, rather than centralize, the currency lexicon.

These contrasts and changes are “domesticized” in Haiti's currency lexion and objectified in the notes, coins, and electronic money that circulate around the country. As only some sectors of Haitian society benefit from international influence and domestic economic formalization, inequality increases and is split between the country and the urban slums on the one hand, and the on the other hand wealthier urban classes with transnational connections. Differences in communication about money are therefore a signifier of growing socio-economic disparity.