I am going to do my best to keep it as succinct as possible. But please, bear with me, here.
Here is what I DON’T want to do. I don’t want to tell you we have it all figured out. And don’t want to in any way insinuate that we are doing things better than anyone else. What I DO wan’t to do is start a conversation about this issue.
While I was in Uganda for the first time, there was something that struck me about the “stuff” there. It was such an interesting picture, to be in Uganda, a million miles from home and see young kiddos running around wearing what looked like to be clothes I might find in my closet circa 1995. At first it was amusing. You’d seeing a boda boda driver wearing an Backstreet Boys t-shirt. Or a little boy wearing a top with Barbie plastered to the front. I even saw a kid wearing a Mizzou Tigers (my alma mater!) shirt.
I was pretty surprised by the lack of traditional dress and distinctly African fashion. Of course, it existed, but western clothes and fashion is far more prevalent. I would walk down to the Owino market in the middle of the city and literally wander for HOURS through a maze of used clothing. I mean, we are talking twisty miles of 12 foot mini-mountains of t-shirts, jackets, swim suits, business suits and shoes and shoes galore. And all it, clearly came from the West.
I knew there was not a thriving fashion, garment, textile or footwear industry in Uganda. But what I didn’t know was why. I guess I just assumed it was the typical African culprits. You know, poor government policies, high transactions costs, poor infrastructure, etc. etc. But the more I thought about it, that didn’t totally make sense. Because those are the things that plagued many of the countries that started in the garment manufacturing industry and are now experiencing some of the fastest economic growth in the world. And it hasn’t always been that way. Perhaps there is another factor, unique to Africa methinks?
When I started asking the question, the answer I got surprised me.
It is really hard to compete with free.
Did you know that the global trade of second-hand clothing industry is a multi-billion dollar a year business?
I know this is getting long. But follow me for a few more minutes. Let’s think about how that Mizzou T-shirt got to Uganda. And then think for a second about the implications that t-shirt has.
Ted drops off said t-shirt at his local Salvation Army along with all the other homecoming and fraternity shirts he has managed to collect over his college years.
There is a likelihood (and high probability) that Salvation Army doesn’t even unpack that donation before they sell a large majority of their second hand clothing donations to a dealer for a pretty nominal price per pound. Those dealers then export to developing countries and sell these donations to second hand clothing dealers in these countries for a 300-400% mark up.
Those dealers then sell the second hand clothing in the markets, typically making just enough profit to buy another bale of clothing and do it all over again. (Bloemen, T-Shirt Travels.)
Are you still with me? Now, let’s just for a second talk about what happens when a local market is flooded with lower-than-cost-of-production (aka free or donated) goods.
This isn’t complicate economics I am asking you to consider. You set up a lemonade stand and sell reasonably priced tasty treats. And someone sets up next you. Only they are giving their lemonade away practically for free…
Here are some things to consider:
The second-hand clothing industry has been steadily growing over the past two decades. That means, people have been giving (and selling) clothes to developing economies more than ever.
Meanwhile…here is how that increase in donated goods has actually affected some African economies:
In the 1990s there were approximately 41 textile and clothing industries in the West African region. By 2004, only six companies were operating at full capacity. And only three of these companies had satisfactory levels of performance and output.
In Nigeria, one of the largest producers of textiles in Africa, upwards of 80,000 jobs have been lost in the textile and clothing industry in the past ten years. (Barber, 37.)
In the early 1990s, in Zambia, there were 85 clothing manufacturers. In 1991 imports of second-hand clothing become legal and within a decade every single one those manufactures goes out of business and over 10,000 jobs are lost.
Overall, there are estimates that used-clothing imports are estimated to be responsible for roughly 40% of the decline in apparel production and roughly 50% of the decline in apparel employment in an average African country over the period 1981 to 2000. (Frazer, 21.)
And do remember this little tidbit: clothing, garment and textile manufacturing has historically provided the first rung on the industrial ladder for developing countries. It is a relatively low-skill, but labor intensive industry that involves relatively low technology, capital and access to natural resources. As a country begins to profit on this lowest rung of the manufacturing ladder, they accrue physical and human capital and can begin to move into more skill and capital-intensive industries.
And therefore, log A = g ( U ) + β X + h ( bν ) + η.
Just kidding! In case you felt like you were in class, I thought I would see if you are still awake. (But seriously, that is an equation I came across while researching this very issue. Uh, I skipped that chapter. Numbers and letters smooshed together like that give me the heeby-jeebies.)
I am going to cut myself off here. I think you people are pretty smart and that I probably don’t need to spell out other lasting consequences and implications of these facts.
Does this make you rethink the way we “give” (or “drop” or “dump”) product on Africa and other developing economies?
Is our “giving” (in the specific area of non-durable goods) having the effect that we’d hope?
Seriously, what do you think? Am I way off here? I want to be someone who is constantly learning and growing and changing. And given the information I have, this is where I find myself sitting. But if you think I am off my rocker, I’d seriously love to know that too. And tell me why. I like learning. Even if that means I feel dumb for a couple minutes.
What if instead of “dropping” clothes and shoes in developing economies, we invested in businesses that are creating these products? Instead of “giving” a pair of shoes, we chose to pay a little more or wait a little longer for products that were made by the members of these communities?
What if instead of giving our hand-me-downs (or new clothes/shoes for that matter), we gave self-sustaining economic opportunity? What if instead of giving “stuff” we gave our business or invested in businesses, which in turn provides sustainable salaries that send little kiddos to school and put mosquito nets over their beds…
…and eventually sustainable (and profitable!) industries that give entire nations the ability to end the cycle of poverty?
Just a thought.
Seriously. I’d love to hear yours. If you are still there, that is.
**Click here for some resources I referenced from people smarter than me**