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April 24, 2007

What's the proper going rate, bribery and work in Morocco

Via our aggregator (which perhaps is only slightly less well-known than our book reviews section, I stumbled across this review of reaction to the Casa bombings and vaguely related commentary. An item that I particularly noted was the reaction to a US story on film production of some nonsense I haven't seen, in particular with respect to the ... ahem facilitation payments paid. (Although I am now vaguely curious to see the film in question - I am sure somewhere in es-Seef there must be a pirated DVD source.) What I found in particular irritating was the tut-tutting about various issues like pay scales and delayed work.

I found the reaction, vaguely irritating insofar as the payments to expedite things were, well what one might expect in a situation where things needed to happen on global time, and Administration people needed to be speeded up. So some 200k USD was passed along to achieve various necessary things in good time. Eh alors?

For example cited was Laila Lalami being "saddened " and quoted as writing "Honestly, I started to laugh about all this, until I got to the part where palm trees are being taken out and river improvement projects that benefit Moroccans are halted in order to accommodate films, and then I wanted to cry." Bon, ok, the trees I agree with to an extent although the tree removal happens for far stupider reasons all the time.... but pausing an improvement project, ehhhh. If the project was compensated for the delay, what's the issue?

More to the highlighting of wage rates in the quoted blog Liosliath "the most pathetic part" as the wage rates for local Moroccan technicians. For some peculiar reason, no doubt related to illiteracy in basic business sense, the fact that base technicians "earned a weekly salary of $233, the equivalent of one day’s pay for a U.S. prop worker was scandalous. Presumably the US prop worker is on an inflated union scale in urban California and/or NY (which are high cost locations for labour living there one should note), but comparing USD 233/week to prevailing wages for presumably moderately skilled labour, this is hardly bad. That's roughly USD 1000/month, or 12k USD yearly. Given purchasing power is roughly 5-10 times (depending on the consumption basket, 10 times if the person is living a more "normal" non-expat life) the nominal exchange rate value, that's actually an extremely decent wage.

For me this highlights one of the worst problems one gets when people naively compare wage rates internationally - first, they never look at comparative productivity, and having experience managing labour in Maghreb, and MENA generally, I needn't go find some abstract statistics to say with confidence that effective productivity levels in region are far lower than in the West for a variety of reasons. Better productivity, ceteris paribus, leads to better wages, the more effective worker (who of course has to depend on the wider work environment....), the easier it is to pay a high rate, since value will be generated. Second, they never look at comparative cost. On a purchasing power adjusted basis, a wage of 233 USD/week - leaving aside productivity issues - is not shabby at all.

But no, it's a scandal that they don't have some large percentage of a US market wage... (or alternatively a threat...). Why escapes me, other than a naive and superficial understanding of business issues.

Posted by The Lounsbury at April 24, 2007 12:31 PM
Filed Under: Business, Private , North Africa

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Comments

I don't see why you're so upset. Laila is just particularly stupid and that's certainly common enough on the internet.

This is just a variation of the "Nike only pays its workers in Bangladesh/Vietnam/Amarschderweltistan $3 USD a day!" This has been so thoroughly debunked that I don't believe even dewey-eyed, Prius-driving, Ipod-using anti-globalistas use it anymore.

Posted by: Anonymous at April 24, 2007 09:49 PM

Anonymous, you'd be surprised.

Posted by: Frandroid Atreides at April 24, 2007 10:29 PM

My Dear Fellow:

This has been so thoroughly debunked that I don't believe even dewey-eyed, Prius-driving, Ipod-using anti-globalistas use it anymore.

No, I am afraid not. In fact if you follow the conversations through the various links, you find otherwise.

Posted by: The Lounsbury at April 25, 2007 05:36 AM

"If the project was compensated for the delay, what's the issue?"

Perhaps I misunderstood you, but are you saying that ensuring the project organizers/architects are compensated for the delay is the only important thing to consider? Why don't the people affected by the river improvement (it doesn't specify the project, so who knows if it's negatively or positively) matter? Secondly, where does that money really go?

I suppose you're right about the difference in salaries between Moroccan and U.S. prop workers being somewhat non-comparable - I find it pathetic because it reminds me how far Morocco still lags behind.

Posted by: Liosliath at April 25, 2007 07:28 AM

Didn't the list of expenses include such items as "mayoral bribes"? I very much doubt the river project was halted through official channels. That may or may not have been important to the area (hopefully it was just postponed, not abandoned) but since you are used to operating in Morocco, I think you know very well that bribery can be quite damaging to locals even if it facilitates things for foreign firms. Of course that's not your problem, but I can certainly understand why a Moroccan might be concerned. (Of course Moroccans themselves are responsible for the culture of corruption.)

Posted by: issandr at April 25, 2007 07:40 AM

Well, step by step.

First, with respect to this question:

Perhaps I misunderstood you, but are you saying that ensuring the project organizers/architects are compensated for the delay is the only important thing to consider? Why don't the people affected by the river improvement (it doesn't specify the project, so who knows if it's negatively or positively) matter? Secondly, where does that money really go?

Projects have to be delayed because of extraneous circumstances all the time. The key question, for what was presumably not a long delay, given filming in country did not last that long, was whether the delay drove up project costs, and if it did, was the project compensated.

If that happened via formal channels or not, frankly I don't give a fuck. Formal channels in Morocco are too rigid, which helps engender work arounds - not for dishonesty alone but because of excessive rigidity and lack of creativity.

As for the "people effected" - well because mass democracy doesn't work for one, and piling on 8 million "stakeholders" into the process of delaying work for - what 4-8 weeks? - does nothing.

I suppose you're right about the difference in salaries between Moroccan and U.S. prop workers being somewhat non-comparable - I find it pathetic because it reminds me how far Morocco still lags behind.

Absolute wage differences are meaningless. What counts are relative standards of living. Comparing a wage in London to a wage in Casablanca without allowing for higher base costs merely results in ... deception. Of course it also leads lots of Moroccans to emigrate with utterly distorted ideas of what their end take-home is going to be.

As for issandr's observation:
Didn't the list of expenses include such items as "mayoral bribes"? I very much doubt the river project was halted through official channels. That may or may not have been important to the area ... but since you are used to operating in Morocco, I think you know very well that bribery can be quite damaging to locals even if it facilitates things for foreign firms. Of course that's not your problem, but I can certainly understand why a Moroccan might be concerned. (Of course Moroccans themselves are responsible for the culture of corruption.

As I note supra, bribery often exists in the system, because the system itself is poorly conceived and does not allow for perfectly reasonable accommodations. I do not doubt that payments were illegally made, but I also do not doubt there wasn't much choice insofar as mechanisms that exist elsewhere for transparent compensation to allow for such things as filming don't exist or are not usable.

It's not, in any case, a question of foreign firms, it's a question of bad administrative practise. Frankly domestic firms pay more bribes. Reduce the dead hand of the Makhzen and you remove much reason for bribery.

Posted by: The Lounsbury at April 25, 2007 11:58 AM

I am now getting all nostalgic for a conversation with the Novosibirsk sales rep at a former employer, explaining why he should leave the expense report translations to me rather than creating handwritten receipts marked “bribe for Novosibirsk Customs agent.” He quite correctly explained that if all the local firms were paying bribes, there was otherwise no way a foreign firm could compete at all.

And yeah, an average Soviet monthly salary of ~240 rubles (about $40 at the time at the official exchange rate, and about a tenth of that at the black market rate) sounds like nothing, until you take into account that a loaf of bread cost 25 – 30 kopeks, a local phone call was 2 kopeks, a trip on public transport was 5 kopeks, and dorm rent for a semester was (IIRC) something like 40 rubles.

Posted by: Eva Luna at April 25, 2007 01:21 PM

It annoys me no end when otherwise knowledgeable people in the Western cultural sphere assume that 'we' don't do that kind of thing. Bribe third world government officials, that is.

Posted by: Klaus [TypeKey Profile Page] at April 25, 2007 01:30 PM

Who assumes that?

Posted by: The Lounsbury at April 25, 2007 01:56 PM

My head physician uncle, for one. There also was a bubbler story about Carlsberg's venture into Russia some time ago. It never took off, but the meat on the story was the bribes they paid to do business there.

Posted by: Klaus [TypeKey Profile Page] at April 25, 2007 02:11 PM

"Who assumes that?"

U.S. Federal prosecutors and any corporate executive that want to stay out of prison, just to name two.

Of course bribery goes on, but as it violates the FCPA, it's a big no-no. American firms who operate in countries where bribery is necessary go through elaborate, and often comical, charades in order to be able to plead complete ignorance regarding any bribery that's taking place for their benefit. It is, therefore, not surprising that lots of otherwise knowledgable people believe that Western, especially U.S., companies don't engage in bribery.

http://usinfo.state.gov/xarchives/display.html?p=washfile-english&y=2007&m=March&x=20070326103614saikceinawz0.0892145

Posted by: Anonymous at April 25, 2007 02:13 PM

That's why one has entertainment expenses, etc.

Posted by: The Lounsbury at April 25, 2007 02:36 PM

As well as local consultants.

Posted by: Tom Scudder at April 25, 2007 06:14 PM

I think the assumption is that firms pay bribes to gain an unfair advantage. I don't think they imagine it's simply necessary to do business at all.

Granted, that attitude partly explains why corruption is low in the West. It's just the naivite I can't stand.

Posted by: Klaus [TypeKey Profile Page] at April 25, 2007 08:04 PM

"The key question, for what was presumably not a long delay, given filming in country did not last that long, was whether the delay drove up project costs, and if it did, was the project compensated."

That would certainly be a concern, but I disagree that it's the main one, particularly with a river improvement project. Whether it was to provide better access to water, or any number of other projects that might fall under that guise (building floodwalls, for example), it's silly that a stupid movie delays it. You can yammer all you want about "this is business and that's how it works" but the production could have just filmed a bit further down the road and avoided all that.

"If that happened via formal channels or not, frankly I don't give a fuck. Formal channels in Morocco are too rigid, which helps engender work arounds - not for dishonesty alone but because of excessive rigidity and lack of creativity."

Fine...but the people who are supposed to benefit by the project don't get any of that, do they? Just more ja'aba for the local bosses, inflated grotesquely by how much they think they can exaggerate their project costs.

"As for the "people effected" - well because mass democracy doesn't work for one, and piling on 8 million "stakeholders" into the process of delaying work for - what 4-8 weeks? - does nothing."

No one thinks it's a democracy, but a project _finally_ scheduled by the administration (which takes eons), about to start, and a movie crew (Western, at that) wants to delay it? Your verdict of "does nothing" might not be shared by the people AFFECTED. OK, the production's brought income into the area, but a lot of the people who don't work directly with the movie won't recognize that.

Posted by: Liosliath at April 26, 2007 09:39 AM

..... Whether it was to provide better access to water, or any number of other projects that might fall under that guise .... it's silly that a stupid movie delays it. You can yammer all you want about "this is business and that's how it works" but the production could have just filmed a bit further down the road and avoided all that.

Perhaps, perhaps not.

I hardly see this as the great sin that a project was potentially delayed a few weeks. It's fun to get up in arms, certainly, but objectively, a few weeks delay in an infrastructure project intended to have decades long effects is relatively meaningless.

"If that happened via formal channels or not, frankly I don't give a fuck. Formal channels in Morocco are too rigid, which helps engender work arounds - not for dishonesty alone but because of excessive rigidity and lack of creativity."

Fine...but the people who are supposed to benefit by the project don't get any of that, do they? Just more ja'aba for the local bosses, inflated grotesquely by how much they think they can exaggerate their project costs.

I fail to see the relationship here. My observation was that one reason such bribery occurs is that normal channels are too rigid, and that a slight delay is hardly the end of the world.

No one thinks it's a democracy, but a project _finally_ scheduled by the administration (which takes eons), about to start, and a movie crew (Western, at that) wants to delay it? Your verdict of "does nothing" might not be shared by the people AFFECTED. OK, the production's brought income into the area, but a lot of the people who don't work directly with the movie won't recognize that.

Western film crew or not, their Western-ness being immaterial, again in an infrastructure project, typically work is over many months even years. A few weeks delay is not ipso facto material. Some extra cash and work in the local economy - people spend, it's called knock-on effects - may very well be rather greater value than the cost of a short delay, even if it lacks the fuzzy warm glow of "river improvement."

Posted by: The Lounsbury at April 26, 2007 01:44 PM

One would hope it's only a few weeks delay...but one might also suspect that the bosses may conveniently decide to keep the river improvement on permanent hiatus - to be trotted out whenever a film crew came around. After all, it worked once. And that's what I meant about the compensation going nowhere...it's supposed to be for the costs of delaying the project, but I really doubt that's what will happen.

And the Western-ness of the production is immaterial to ME, but not to many Moroccans. All they'll see is interference by non-Moroccans, and be angered by it.

Posted by: Liosliath at April 26, 2007 01:59 PM

I grant all of the above. I suppose my objection was to the idea that merely delaying a project was wrong.

In practice, of course, it rather works more dirtily.

Posted by: The Lounsbury at April 26, 2007 02:14 PM

We seem to both be a bit jaded about the Moroccan way of doing business!

And I grant that I was wrong about differing pay rates...now I have to go look up some of the terms you mentioned. That's what comes of having slept through economics class. (Though I got an A.)

Posted by: Liosliath at April 26, 2007 10:52 PM

We seem to both be a bit jaded about the Moroccan way of doing business!

I've been in financing of investments in the region for a long time. Ain't no virgins....

I suppose most of my reaction was built around irritation with the Makhzen that sucks people dry (and annoys and irritates foreign investors, who pack up then for less annoying, more profitable climes). More facile, "can do" administration, rather than incompetent corrupt little semi-literate petty tyrants would do wonders.

Posted by: The Lounsbury at April 27, 2007 05:44 AM

Liosliath's blog is par for the course. This is what happens regularly when westerners insist on using their POV to determine what is "right" and "fair" for MENA. She is consistently ignorant on such topics, and Laila, well, she is useless, which is always unfortunate when you hope a native can offer something more than the western line on these sorts of things.

$233 a week isn't much less than many professionals with advanced degrees make in Morocco. With this kind of salary, you can buy a decent apartment in Casablanca. Morocco certainly has catching up to do, but it's not in the salaries of movie prop assistants.

Posted by: anon at May 17, 2007 01:07 AM

That's just bloody brilliant, anon. I'd like to know what other things I've posted that you disagree with, and I'd email you to ask you directly - but of course, you've chosen to be cowardly, so fuck off.

Posted by: Liosliath at May 23, 2007 06:11 PM

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