When I lived in Mexico City in 1995-96, I used to say that foreigners in developing countries have one primary reason-for-being: making change.
Whenever I got paid or got money from a bank, it was inevitably in large local denomination bills, like Mexican NP$100 or NP$50. (Sometimes you’d even get the dreaded NP$200 denomination bills – those things were almost useless except in very limited circumstances. The bank might as well have given me Mickey Mouse dollars instead for all the good those did you.)
You could use a NP$100 or $50 for big-ticket items like rent or the week’s groceries. But whenever I wanted to buy something small, like a soda or tacos or a taxi ride, the vendor could almost never break anything over a NP$20. Inevitably I would end up waiting 10 or 15 minutes while he would run around the local area looking for someone with change. Sometimes this would happen even if the bill was relatively close to the amount I needed to pay, like using a NP$20 bill to pay for a NP$12 cab ride.
As a result, it became second nature to make change whenever I could. These were the decision rules I used when paying for something:
· Never pay with a small bill when a big bill will do.
· Never pay an exact amount even if you have it (except for coins).
· Always offer a bigger bill first and only go to a smaller bill if the seller asks for it.
· Always used the biggest bill you have on you when buying something in a big store that probably could make change.
I continued this habit for some time even after I returned to the States. A couple of months after I came back, for example, I was flying to California. A stewardess was serving drinks and asked if anyone had change for a $20. I did: in 20 one-dollar bills.
Now that we’ve moved to Tanzany, I have rediscovered my emerging-market raison d’etre. At first I thought Tanzania would be different because the largest denomination bill they have is a 10,000 Tanzanian Schillings (TSH), which is about US$7. Not true. My first week here I waited 15 minutes for a taxi driver to find change for a TSH10,000 note. The fare was TSH7,000. I’ve tried to buy a TSH3,000 beer with a TSH5,000 note and had to wait 20 minutes. And I’ve noticed that everyone is after my small denomination currency: TSH2,000 and 1,000 notes are worth more than their face value.
(I’ll have more to say about how difficult it is to physically pay for things here in a separate post.)
In Mexico, I thought that the change-making habit was just a quirk. Having gone to business school since, I now know however, that I am helping to give Tanzanian money it’s value. Economists say that divisibility is one of the four essential characteristics of money, along with durability, transportability and resistance to counterfeiting. I can’t do much in the other three areas, but clearly these currencies have big problems with divisibility.
So I feel better about my economic role this time around. I’m not just some unimportant mizungo foreigner trying to by a Coke with a big Tanzinian Schilling note – I’m essential. I’m what McKinsey consultants would call a “change agent.”
So bring on the big bills! I can make change all day long. I’m following David Bowie’s advice:
(Try and ask a stranger.)
Don’t want to be a richer man
(Try and ask a stranger.)
Just gonna have to find a different man.
Time may change me
But I can’t change time…