Wednesday, 3 July 2013

Freakonomics in Seychelles part 2

Transport in Seychelles is interesting. It costs 5 ruppees (30 pence) to travel anywhere on the bus, unfortunately the buses stop around 6.30pm. A taxi ride will cost you anywhere between 200 and 500 rupees, yet you can hire a car for a whole day for between 300-700 ruppees. If you're an unlucky tourist, you're probably going to pay at the higher end.

Image Source: Virtual Tourist.
The bus ride through consolation rivals most white knuckle themepark rides!

But what gets me is why on earth would anyone with a driving license get a taxi? The alternative to the taxi is to hitchhike, which apparently works well if you meet 2 criteria:

1) You know the person who is driving (not technically a hitchhike)
2) You're a woman

I never realised the latter criteria until my good friend JL pointed it out to me!

Pricing in general is a strange thing out here. One thing is for certain, when hiring a car you get what you pay for. Take for example the Praslin Holiday Car Hire company, they're not the cheapest on the island, but the cars are always less than 5 years old and your car is not going to get stuck going uphill over the valley. Likewise the gearbox and brakes probably work unlike the 400 ruppee pieces of scrap that get flogged at some of the less reputable car hire companies.

Ketchup and Coffee. Heinz Ketchup was once priced at over 100SCR (£6) a bottle with local sauces priced around 25SCR. All of a sudden, the sauce company "Soleil" on Mahé closed down and as a result import tax can no longer be charged on Heinz ketchup and the price is now 22SCR- in some shops it's cheaper than the local brand. 

The same import taxes apply on Nescafe coffee which can also cost £6 for a small jar! Similarly, niche products like candles are also taxed exorbitantly.

Another example of bizarre pricing policy is the sale of souvenirs in the departure lounge at Praslin airport, for some reason these are cheaper than some of the gift shops on the island. This bucks a huge trend whereby in any international airport, prices are 200% higher than shops outside the airport.

The last part of freakonomics involves the barter economy. As an IT specialist, I've been asked on many occasions to fix people's computers. But what to charge them for my time and expertise? I started out not charging friends, because hey they're friends. But then it doesn't take long before everyone considers you a friend on the island. So what to do? Well, you would be surprised the things that have been exchanged for a computer repair job! Everything from fish, scuba diving, local rum, fruit, meals, boat excursions, island getaways etc.

 I prefer this way of trading, not least because it's awkward to find a fair price but also because money and the token economy is quite meaningless here. Essentially what we are dealing in is goods and services a bit like in Medieval times. It doesn't matter what you value your skills/goods/services at, it's what the other person perceives them to be worth. Similarly, whilst an open-water dive might cost £60, this is just a number and I'd much rather trade in goods and services than paper and coin.

A friend pointed out to me that the barter economy that is so prevalent on Praslin is probably not great for national economics. Fiscally speaking, if you're trading in goods and services, this cannot be accounted for and therefore cannot be taxed. Oops!

I'll close by saying that when you live on an island and are truly an islander, perhaps the barter economy works best. Money can be saved, spent or lost but your skills, time, goods and services can be traded right up to the day before your next payday!

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