3rd World Construction

Our experience with the developing world is limited, but one thing we’ve noticed in Mexico, Thailand and Morocco is an abundance of half-completed cinderblock buildings sprouting tufts of rebar. They’re always quite sad looking, and it often seems as if they’ve been abandoned by their owners.

I’ve wondered about the roots of these eyesores, and decided to ask Peter Mork, an American economist whom we met in Fez. He and his wife Emily were on the last leg of a year-long world tour. As an economist (economicswithaface.com) looking at the developing world, Peter seemed the right person to answer my half-built construction question.

As Peter explains it, these structures exist largely because, throughout much of the world, people simply do not have access to capital markets (i.e. bank loans, equity investors, etc). Morocco, like other developing nations, is a cash-based society. As such, builder-owners have to save up enough cash to construct a building, and often they run out before things are completed. Under these circumstances, buildings get put up piecemeal and take years and years to complete.

While the assumption may be that people in places like Morocco don't get loans because they don't have enough income or assets, the truth is that it has little to do with that. Instead, it has everything to do with the fact that the majority of people worldwide live and work outside the formal economy.





For people working in the cash/underground economy, without property titles, credit ratings, et cetera, this means that when they go to the bank for a loan they are only as good as their word. Unless the banker is a family member or trusting friend, they probably won't be getting a loan.

In contrast, the process in the States and other Western countries differs because things are largely above ground - we have property titles, identification, etc. As much as we curse the various credit reporting agencies in the States, which pass along bad information to FICO much faster than they correct it, the basic idea of the credit score is remarkably helpful. People and banks know they can track us down/trust us even if they don't know us personally. We can walk into a rental car company in, well, Marrakech, hand over a small piece of plastic and walk out with a car for a week. Not to mention get loans to expand a business, remodel a home, or try out botox.

Peter’s explanation makes sense, and was echoed by the few locals I asked about the Moroccan building process; all cited the time needed to earn money to continue construction.


For the Dowe-Sandes, the scary part is that we’re now drifting into our own 3rd world construction project. Because of delays with wire transfers and since wages, construction supplies and the like can only be paid for in cash, we’re undertaking a complete renovation of our house on the maximum ATM withdrawal limit, which between the two of us amounts to about $450 per day. We’ve stripped out the existing plumbing and electrical systems and are starting from scratch. We need supplies, and have a crew of 10, but if it costs more than $450 a day, we’re not doing it. So far, the crews are working along happily, but if they eventually decide they want to be paid, well, our house could soon become vacant with empty scaffolding in front of bare brick walls.



Note: Not to belabor our banking woes, but to illustrate that fiscal processes can be difficult even in the most advanced banking societies, we found, after ordering a wire transfer for funds to purchase Dar Noury, that our money was still sitting comfortably in our Los Angeles bank a week later. The wire transfer hadn't gone through after all; the woman responsible for it had been on vacation, and nobody covered for her. Though at last the transfer has been initiated, we’re still saddled with a delay of seven days. Since the money doesn’t just sail from our LA account to our Moroccan one – it sits in the Central Bank of Morocco in Rabat for an undetermined amount of time – it's now doubtful the money will arrive before our August 10th closing date. If that happens, we face the possibility that the seller could back out of the sale, take our deposit, and make us repair all of the demo work we’ve already undertaken. We're pretty sure that won't happen, but it's nerve-wracking to know the possibility exists.

PS- After noticing all these half-constructed buildings over the past two months, when we looked for a couple to photograph yesterday there were none to be found. The worksites we passed as we were out and about were most definitely under active construction.