networks of power and corruption: the trade of japanese used cars to mozambique

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Networks of power and corruption: the trade of Japanese used cars to MozambiqueANDREW BROOKS Department of Geography, Royal Holloway, University of London, Egham, Surrey TW20 0EX E-mail: [email protected] This paper was accepted for publication in March 2011 The trade in used commodities has received limited geographical attention. The global production network (GPN) approach offers a theoretical frame through which to explore how second-hand goods, such as used cars, are traded internationally. The structure of a trade network and the tensions within it are researched through an inductive empirical GPN method and the embeddedness of powerful actors is related to context specific discourse. This article contributes to the analysis of the links between production and consumption through investigating informal and corrupt economic networks and exploring how a trade flow is embedded in a patrimonial state.The empirical case study demonstrates how used commodities are re-produced through political and cultural processes. In Japan a strict inspection regime excludes many used cars from the domestic market, some of which are exported via South Africa for sale in Mozambique. Embedded actors, including Pakistani trading families, play key roles in the governance of this international trade network. Corrupt individuals within the Mozambican customs service exert power at the import node to extract rent from this trade network, but the official neoliberal narrative of ‘development success’ in Mozambique constrains space for critique of their actions. Discussing the example of used car imports demonstrates how there are political structures which enable actors to have agency in trade networks and this shows how studies of international commodity flows have to stretch beyond the immediate manifestation of trade networks and chains to capture the dynamics of power relations. KEY WORDS: Mozambique, Japan, global production networks, trade, corruption, used cars Introduction T he global production network (GPN) approach links production and consumption at different nodes in the global economy and explores how states, firms and individuals achieve valorisation through possessing and trading strategic assets (Hend- erson et al. 2002; Woxenius, 2006; Coe et al. 2008a; Hudson 2008). The geographies of recycling and the trade in used commodities are nascent economic pro- cesses which merit critical exploration (Bigsten and Wicks 1996; Gregson and Crewe 1997; Lane et al. 2009). GPN analysis has not been applied to the secondary trade networks of used goods, which have transnational geographies that can be opened up and investigated (Gregson et al. 2010). The disposal of things in affluent states has unexplored downstream effects in the global South (Hansen 2000; Gregson et al. 2007a). Used objects are devalued by cultural and political processes in advanced consumer societ- ies (Gregson et al. 2007b) and some of these things are re-produced as commodities that are systemati- cally traded through global networks. The import of used cars to African countries from the global North is an illustrative example of the importance of the trade in second-hand commodities (Beuving 2004 2006; Rosenfeld 2009). The import of Japanese used cars 1 (defined as cars that were first sold as new commodities in Japan, although they may have been manufactured else- where) to Maputo (Mozambique) via Durban (South Africa) is the main empirical focus of this article. Cars are imported to Maputo by Pakistani families and individual Mozambican traders. Importing cars depends on official and unofficial payments of tariffs and fees. The heterogeneity of used commodities in this network is acted upon by state officials for per- sonal gain. This study enriches the application of the GPN approach as it provides a new direction through analysing a secondary cycle of consumption and dis- cussing how corruption influences trade flows. This illuminates how rent is extracted by different embed- ded groups as trading families, individuals and state actors are able to command nodes in the trade network and both utilise and circumvent official gov- ernment regulatory regimes. The roles of powerful actors within this network are not presupposed (Sta- rosta 2010) and the embeddedness of corrupt customs The Geographical Journal, Vol. 178, No. 1, March 2012, pp. 80–92, doi: 10.1111/j.1475-4959.2011.00410.x The Geographical Journal Vol. 178 No. 1, pp. 80–92, 2012 © 2011 The Author. The Geographical Journal © 2011 Royal Geographical Society (with the Institute of British Geographers)

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Page 1: Networks of power and corruption: the trade of Japanese used cars to Mozambique

Networks of power and corruption: the trade ofJapanese used cars to Mozambiquegeoj_410 80..92

ANDREW BROOKSDepartment of Geography, Royal Holloway, University of London, Egham, Surrey TW20 0EX

E-mail: [email protected] paper was accepted for publication in March 2011

The trade in used commodities has received limited geographical attention. The global productionnetwork (GPN) approach offers a theoretical frame through which to explore how second-handgoods, such as used cars, are traded internationally. The structure of a trade network and the tensionswithin it are researched through an inductive empirical GPN method and the embeddedness ofpowerful actors is related to context specific discourse. This article contributes to the analysis of thelinks between production and consumption through investigating informal and corrupt economicnetworks and exploring how a trade flow is embedded in a patrimonial state.The empirical case studydemonstrates how used commodities are re-produced through political and cultural processes. InJapan a strict inspection regime excludes many used cars from the domestic market, some of whichare exported via South Africa for sale in Mozambique. Embedded actors, including Pakistani tradingfamilies, play key roles in the governance of this international trade network. Corrupt individualswithin the Mozambican customs service exert power at the import node to extract rent from this tradenetwork, but the official neoliberal narrative of ‘development success’ in Mozambique constrainsspace for critique of their actions. Discussing the example of used car imports demonstrates how thereare political structures which enable actors to have agency in trade networks and this shows howstudies of international commodity flows have to stretch beyond the immediate manifestation of tradenetworks and chains to capture the dynamics of power relations.

KEY WORDS: Mozambique, Japan, global production networks, trade, corruption, used cars

Introduction

The global production network (GPN) approachlinks production and consumption at differentnodes in the global economy and explores how

states, firms and individuals achieve valorisationthrough possessing and trading strategic assets (Hend-erson et al. 2002; Woxenius, 2006; Coe et al. 2008a;Hudson 2008). The geographies of recycling and thetrade in used commodities are nascent economic pro-cesses which merit critical exploration (Bigsten andWicks 1996; Gregson and Crewe 1997; Lane et al.2009). GPN analysis has not been applied to thesecondary trade networks of used goods, which havetransnational geographies that can be opened up andinvestigated (Gregson et al. 2010). The disposal ofthings in affluent states has unexplored downstreameffects in the global South (Hansen 2000; Gregsonet al. 2007a). Used objects are devalued by culturaland political processes in advanced consumer societ-ies (Gregson et al. 2007b) and some of these thingsare re-produced as commodities that are systemati-cally traded through global networks. The import ofused cars to African countries from the global North is

an illustrative example of the importance of the tradein second-hand commodities (Beuving 2004 2006;Rosenfeld 2009).

The import of Japanese used cars1 (defined as carsthat were first sold as new commodities in Japan,although they may have been manufactured else-where) to Maputo (Mozambique) via Durban (SouthAfrica) is the main empirical focus of this article. Carsare imported to Maputo by Pakistani families andindividual Mozambican traders. Importing carsdepends on official and unofficial payments of tariffsand fees. The heterogeneity of used commodities inthis network is acted upon by state officials for per-sonal gain. This study enriches the application of theGPN approach as it provides a new direction throughanalysing a secondary cycle of consumption and dis-cussing how corruption influences trade flows. Thisilluminates how rent is extracted by different embed-ded groups as trading families, individuals and stateactors are able to command nodes in the tradenetwork and both utilise and circumvent official gov-ernment regulatory regimes. The roles of powerfulactors within this network are not presupposed (Sta-rosta 2010) and the embeddedness of corrupt customs

The Geographical Journal, Vol. 178, No. 1, March 2012, pp. 80–92, doi: 10.1111/j.1475-4959.2011.00410.x

The Geographical Journal Vol. 178 No. 1, pp. 80–92, 2012 © 2011 The Author. The Geographical Journal © 2011 Royal Geographical Society(with the Institute of British Geographers)

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officials is discussed as being part of an extensivesystem of rent extraction by state elites and alliedactors (Hanlon 2002 2004; Brown and Cloke 2004;Söderbaum and Taylor 2008). In Mozambique it hasbeen argued, most notably by Joe Hanlon, that suchrent extraction is legitimised through neoliberal nar-ratives of ‘development success’ through whichdonors seek to promote the ‘positive’ outcomes of aidinterventions (Cunguara and Hanlon 2010; Hanlonand Mosse 2010; Manning and Malbrough 2010).

Global production networks of used commoditytrade

GPNs are geographically conceived constructs thatmap nodes of production, distribution and con-sumption and the trade flows which connect them(Henderson et al. 2002). The GPN approach is adevelopment of earlier ‘commodity studies’ researchincluding global commodity chains (GCCs) (Gereffiand Korzeniewicz 1994; Gereffi 1999) and globalvalue chains (GVCs) (Kaplinsky 2000). The variousdifferences, and the evolution of these approaches,have been documented by Bair (2005), Bernstein andCampling (2006) and Coe et al. (2008b). Commoditystudies methodologies are joined up responses toglobalisation linking together different geo-economicmoments along a commodities’ passage from produc-tion to consumption. Kaplinsky (2000), who favoursthe GVC approach, has argued that such analysisshould extend beyond the first user to later cycles ofconsumption and terminal disposal. In practicethough GVC research and other commodity studieshave focused on the links from production to primarypurchase and have not fully explored waste produc-tion or secondary consumption (Hudson 2008;Gregson et al. 2010).

The incorporation of ideas from actor networktheory (Coe et al. 2008b) is considered to make theGPN approach the most appropriate for both thissignal case and for second-hand commodity flows ingeneral, because of the structure of these trade net-works. Empirical research of the international trade inused commodities is limited, but examples, particu-larly of ethnographic research of the used clothing,car and shipping trades, have demonstrated that infor-mal networks which circumvent political and eco-nomic institutions predominate, rather than linearsupply chains governed by transnational corporations(Hansen 2000; Beuving 2004; Nieuwenhuis et al.2007; Dobler 2008; Gregson et al. 2010). These tradeflows are fragmented, and thus less rooted in a mod-ernist conception of production and consumption(Latour 1993). The GVC and GCC approaches arelinear models, which have focused on large organisa-tions and inter-firm transactions, whereas the GPNapproach is less concerned with describing the linearmovements within or between large organisations andattempts to encompass all the ‘interconnected nodes

and links [which] extend spatially across nationalboundaries’ (Coe et al. 2008a, 274). GPN researchmethods have been applied to explore how such eco-nomic networks extend internationally, taking advan-tage of disparate place-based social, political, legaland economic conditions in the terrain of global capi-talism (Lane and Probert 2006). In this article the GPNapproach is stretched forward beyond the initial con-sumption node to analyse the governance and rentextraction in a used commodity network.

There are commonalities between the various com-modity studies approaches and proponents such asBair (2005), Hess and Yeung (2006) and Coe et al.(2008b) maintain that GCC, GVC and GPN researchacknowledges power asymmetries between differentgeographical nodes. However, Starosta (2010) hasargued that the various commodity studies’ chain andnetwork analyses describe and presuppose the powerrelations between nodes, rather than explaining thedifferential agency of embedded groups and individu-als. Indeed the incorporation of actor network theorywithin GPN analysis does not resolve this impasse.Actor network theory has been critiqued by Kirschand Mitchell (2004) and Bakker and Bridge (2006) forfocusing on the connections within networks ratherthan the differentiation between various actors. Thenature of how and why a trade assemblage is puttogether and the tensions within it are explored in thiscase study through an inductive empirical method-ological approach framed as GPN research, yet theembeddedness of powerful actors in the Mozambicannode is related to context specific discourse on cor-ruption and state capture (Hanlon 2002 2004; Brownand Cloke 2006; Hanlon and Mosse 2010).

In order to apply the GPN approach to used com-modities flows, it must be discussed how exchangevalue is re-produced through the network. Hartwickattributes to commodities a first-order functional ‘usevalue’ and a second-order ‘symbolic value’, whereuse value is a base measure of functionality and sym-bolic value is socially formed (1998 2000). Cars, likemany objects, have use and symbolic values that aresustained and re-created beyond their first cycle ofconsumption (Hudson 2008). Second-hand carsbrought principally as a means of transport must retainuse value functionality; in contrast ‘classic cars’ pri-marily have symbolic value; they are aestheticallyappreciated rather than a practical mode of transport2.The distinction between ‘use’ and ‘symbolic’ value iselastic in its interpretation and is in a Marixan senseequivalent to the unitary ‘use value’ (Fine 2002). Thiscase of a used car GPN demonstrates that use value isnot simply a measure of an object’s material condi-tion. For example, a car’s functionality is also shapedby the external legal-political framework, such as gov-ernment regulatory controls that affect their exchangevalue by determining how cars can be used, boughtand sold (Steg 2004). At different nodes in transna-tional used commodity networks, use and symbolic

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values are formed and eroded through economic andpolitical structures and these shape the exchangevalue of objects.

Methodology

Understanding the social-economic positionality ofthose involved in used commodity trades through aGPN approach involves capturing local-scale pro-cesses as well as national and international scale pat-terns (Henderson et al. 2002). This is challengingwhen researching the international used-car trade as‘it is not always possible to quote sources of certaininformation’ which can be ‘very profitable, somewhatinformal and therefore [information is] rather jeal-ously guarded’ (Nieuwenhuis et al. 2007, 18). Import-ing used cars into Mozambique involves concealed,corrupt and illegal activities (Canal de Moçambique2010) which are difficult to research (de Sardan 1999).This article highlights the local scale unofficial trans-actions through in-depth ethnographic research.

The used car network was researched through field-work in Mozambique and South Africa between June2009 and August 2010. The overall structure of thenetwork which extends from Japan to Mozambiquewas first investigated, through preliminary interviewswith traders in Maputo and by reviewing literature.The focus of the empirical research was on the tradeprocess in Mozambique and South Africa. Used carsuppliers, importers, spare part dealers, mechanicsand customers were formally interviewed usingunstructured interviewing (in English or Portuguese) oron occasion when interviews were not practicallypossible, for example due to time constraints, obser-vations were recorded in a fieldwork diary (Gardner1999). These observations also included recordingprocesses that occurred in public spaces, such as atcustoms posts, when it would not have been appro-priate to approach people for interview; comparableobservations in Mozambique have previously beenundertaken by Sheldon (2003). Through the process ofinitial scoping, followed by repeated observation ofcore and standard processes, a detailed overview ofthe network was established and key informants in thetrade were identified (Thomas 1993).

The primary research of the local scale activityinvolved accompanying a Mozambican used-carimporter in early 2010 (the date is unspecified foranonymity) on a 2-day business trip from Maputo toDurban. He willingly consented to the researchprocess and a contribution was made to the sharedtravel expenses. The multiple transactions he under-took during this journey and the processes of import-ing three different vehicles were closely followed. Onsix subsequent days in Maputo he was accompaniedas he visited clients, agents and customs officials. Thismethod follows Beuving (2004, 516) who researchedthe used car trade in Benin, and in the model of ananthropological case study ‘seeks to illuminate prin-

ciples of social organisation by examining in detaila single social event, or case’ (Beuving’s originalemphasis). On two preceding occasions betweenOctober and November 2009 two used car partsdealers, who were also involved in the import of usedcars, were accompanied on day trips to Nelspruit(South Africa) and their associated transactions weretraced in the same manner. A Japanese used car wasalso purchased during the research period, althoughthis was done for personal use and not as a researchactivity. This transaction is not directly drawn upon inthis article, although the experience of being, first aprospective customer browsing for a car, and secondan actual client, gave supplementary knowledge ofthe used car trade.

There are known and well documented difficultiesand limitations to the subjectivity of observationalresearch (Hoggart et al. 2002; Scheyvens et al. 2003).Care has been taken in what is directly reportedthroughout this article and details of individual inter-views, trade deals and the people involved are notgiven. Anonymity for informants is important and thisextends to not specifying particular fees, payments orvehicles through which people could be identified.Illegal and corrupt activities were witnessed and thereis danger involved in both participating in andresearching the used car trade, as is demonstrated bythe murder of Orlando José, a senior customs officialwho had investigated the illegal import of cars (Savana2010), which is discussed below. Research wascarried out very cautiously. Understanding such infor-mal processes and gaining accurate insights into‘underground’ economic activity is difficult (Thomas1993, 52). Information is based on a small pool ofused car deals, precisely because gaining trust andexploring trade at the level of such individual trans-actions is difficult (Harriss 1993). The illegalities andcorruption in the used car trade are realities withwhich geographical research has to engage in order tounderstand the hidden aspects of economic globali-sation, and this case study extends GPN analysis toencompass these processes. Without compromisingthe quality of analysis, it is important to acknowledgethat there will be gaps in the information that is col-lected; understanding all the processes at differentnodes in complex GPN is inherently difficult for theindividual researcher (Coe et al. 2008a).

How value is eroded and constructed in a usedcommodity

Taking a used commodity flow as an entry point forstudy means there is not a traditional production nodein this global production network, but used commodi-ties are still politically and culturally ‘produced’. Forexample, governments in economically developednations such as Germany, Japan and the UK excludelower quality cars from the local market and this‘produces’ used cars for export. There are geographic

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imbalances in the supply and demand for used cars,created principally by asymmetric regulatory regimesthat generate a trade of used cars from high to lowerstandard countries (Nieuwenhuis et al. 2007; Clerides2008). In Japan new cars are sold with a 3-year shaken(a Japanese contraction of automobile inspection reg-istration system) certificate and after 3 years cars facea strict inspection (comparable to, although more rig-orous than, a British MOT or German TÜV test) whichcosts US$1000–2500 and must be repeated every 2years (Clerides 2008, 324; Government of Japan,2010). The high renewal costs and stringency of thetests induce owners to replace cars at an early age,frequently after the shaken expires (Clerides and Had-jiyiannis 2008). This in effect is a socio-politicallyconstructed decline in the use value of cars. The highcosts of the shaken inspections have inhibited thedevelopment of a local market in second-hand cars.Car replacement is also influenced by the erosion ofthe symbolic values of old cars when new models arelaunched and advertised. Consumers respond tosocially created needs and desires to purchase a newcar (Steg 2004), whilst getting rid of an old car thatmay retain use value. Japanese used cars are in steadysupply, as Japan is one of the world’s largest carsmarkets, and are high quality, low price and without alocal resale market.

In 2002 Japan exported an estimated $2.7 billionworth of used cars3 (Clerides and Hadjiyiannis 2008,269). Old cars are exchanged against new purchasesand are brought by export agents including Brazilians,Indians, Nigerians, Pakistanis and Russians resident inJapan. Japanese manufacturers benefit from the usedcar trade because it generates revenue and is seen asan efficient way to promote brand consciousness andopen up new markets in developing countries (Dobler2008). Within Japan there are massive car auctionhouses that hold online sales. USS (Used Car SystemSolutions) is the largest auction company in Japanwith around a third of the market share and ‘Morethan 50,000 vehicles on average are put up forauction every week [by USS]’ (USS 2010). Japanesepeople are often unaware of this process or wheretheir old cars end up. In general the disposal ofunwanted goods, upon which consumption is predi-cated, is concealed (Hawkins 2003). A Japanese UNofficial who worked in Mozambique was interviewedfor this project. He was surprised to see the preva-lence of used Japanese vehicles in Mozambique; ‘Thelocal perception of cars is very different; a car that isthree years old in Japan is seen as dated and like [a] 10year old [car] would be here in Africa.’

Commanding trading links in the import ofJapanese used cars to Durban

Africa is an important and growing market for Japa-nese used car exports (USS 2010). In the SouthernAfrica region there is demand for low-cost vehicles,

and low car regulatory standards. The main regionalentry port for both used and new car imports is thesouthwest Indian Ocean hub of Durban, althoughSouth Africa is not an export market for Japanese usedcars, as imports are restricted to protect the SouthAfrican car industry (Hall and Robbins 2006; SouthAfrican Government 2010).

Family and ethnic ties are important in command-ing interlinked nodes in the used car networks. Theused car trade is capital intensive and well resourcedPakistani families play a dominant role in the SouthernAfrican market. In the 1980s Pakistanis becameinvolved at various strategic nodes in the internationalused car trade (including Dubai and Japan) becauseimports were popular in Pakistan and the PakistaniGovernment had insisted that imported used cars hadto have been owned by Pakistanis living overseas.Pakistan subsequently banned used car imports in1994 and expatriate Pakistani car dealers developednew markets in Africa (Dobler 2008). Research par-ticipants discussed how the overwhelming majority ofJapanese used cars sold in Mozambique are firstimported via Durban through Pakistani networks.Shipping between Japan and South Africa is cheaperand Mozambicans tend to lack the capital and con-tacts in Japan to enable direct shipments. Members ofthe same hegemonic Pakistani trading families andnetworks work in Japan, Durban and at downstreammarkets, such as Maputo. In Japan they negotiate withJapanese used car merchants, purchasing, checkingand organising the outward shipping of cars. The samefamilies run import operations in Durban and haveextensive Japanese used car lots located next to thedocks. This network is schematically represented inFigure 1.

Beuving (2004) found that European and Lebanesetraders play comparable roles in the import of Euro-pean used cars to Benin to those played by Pakistanitraders in Southern Africa. Certain ethnic groups areembedded in contemporary GPNs because of theirhistoric links to nodes of consumption or production.For example, Taiwanese clothing merchants, who dealwith North American and European buyers, commanda node in the global clothing commodity flowsbecause the buyers have no experience of dealingwith second generation Asian producers such as thosein mainland China or Burma (Hassler 2003). TheAmerican and European buyers prefer to use long-standing contacts from regions which used to produceclothing; there is a social link and trust of Taiwanesemerchants and through the ownership of specialistskills and knowledge these merchants are able toundertake rent-seeking activities (Ramaswamy andGereffi 1998). This is comparable to the involvementof embedded Pakistani trading families in the interna-tional Japanese used car network; they are longstand-ing clients of Japanese car merchants who have usedtheir specialist skills and knowledge to link Japaneseexports to the African marketplace. Mozambican

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traders lacking these assets, which were formed in the1980s in reaction to Pakistani law (Dobler 2008), arenot able to ‘upgrade’ to this node (Gereffi 1999).

In Durban there is a fractured relationship betweenthe port and the city (Hall and Robbins 2006). ThePakistani used car lots, where only foreign passportholders can enter, are part of the duty free ‘interna-tional’ port landscape and are separated from SouthAfrican economic space. Transport hubs, such asthese, are key nodes in the geography of global capi-talism and mediate and re-configure commodity flows(Sidaway 2007). There are many Japanese used carspassing through this node. Cars are jammed into thelots, parked bumper to bumper (see Figure 2). Theyarrive from Japan tightly packed in shipping contain-ers. Unloading is a rough process and cars are occa-sionally bumped and dented. Single used car units arerelatively high-value commodities but their treatment

in the lots, inside enclaved port sites where space isrestricted, is indicative of how individual cars are partof a very large-scale and capital-intensive process.Time to market, turnover and the rate of transition ofcommodities through such nodes in GPNs have beendemonstrated to be influential determinants of profit-ability (Woxenius 2006).

The flow of used car commodities from Durban toMaputo

There are different modes of Japanese used car importsto Maputo from Durban (see Figure 1), including varia-tions around two main models. First, Pakistani retaildealerships in Maputo import a large number of carsfrom Durban (see Figure 3); these dealers are part of thehegemonic networks that extend to Japan. Retail pur-chasing is convenient for the final Mozambican retail

New car purchase in Japan

Disposal of car

(may be due to expiry of shaken certification or decrease in symbolic value)

Car purchased by wholesaler in Japan

e.g. USS

Car purchased by Pakistani trading family and shipped to Durban portside car lot

Car transhipped from Durban to

Maputo by Pakistani trading family

Car purchased by individual

Mozambican trader and shipped to Maputo

by South African car transporter

Import of car to Mozambique

(The negotiation of this process by

Pakistani traders was not directly

researched)

Car inspected by customs service.

Payment of official fees and bribes in

Maputo

Car sold at retail car yard in Maputo Car sold to a specific client in Maputo

Figure 1 Schematic of used car GPN which extends from Japan to Mozambique

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consumers as the cars are sold including the substantialimport costs, the negotiation of which is discussedbelow. Second, direct Mozambican purchases inDurban from the Pakistani importers; this may be bya small-scale Mozambican importer or a privateMozambican importing for her/himself.

Direct purchases are made by Mozambicans fromDurban because of choice, quality and cost. Theselection of cars in Durban is greater because of Dur-ban’s status as a hub in the broader network of usedcar imports to the larger Southern African market. Theavailable quality can also be greater; as informantsdiscussed, there is a one to five grading system linkedto the shaken certificate. Grade five cars are ‘like new’whereas grade one or two cars are ‘shit’ (quotes inoriginal English) and the retail dealerships in Maputo

generally stock a range of cars including lower qualitygrade one or two cars, whereas higher grade cars canmore easily be found in Durban. Prices are far lowerin South Africa and Mozambican traders can make aprofit importing Japanese used cars from Durban toMaputo as they are buying the vehicle at an earliernode in the network. In Mozambique the market forcars is expanding and this can be linked to the emer-gence of a narrow affluent consumer class that hasbenefited from recent GDP growth. This small grouphas gained whilst the vast majority of the populationremain in poverty (Hanlon and Smart 2008; Hanlonand Mosse 2010).

The transactions of Mozambican purchasers at theDurban node and how they negotiate the transit of thecommodity back to Maputo will now be exploredin-depth, drawing predominantly on the primary field-work tracing the activities of a Mozambican used cartrader. At the Durban car lots there is risk in transac-tions; vendors hurry clients and there is no time tocheck the cars properly. Engines are started, but thereis no opportunity for a test drive. When a suitable caris found there may be a phone call back to the clientin Maputo, or to a broker who can advise on the likelyofficial and unofficial import duties (discussed below).Speed of decision making is linked to an implicit trustof the Japanese product and the hope for repeatcustom and future good deals. Social relations areplayed out through brash friendly greetings, includingin English, Urdu and Portuguese. Mozambican strang-ers chat with each other using shared Portuguese lan-guage to mask their discussion of costs and swap tipsand advice. Purchasers from other southern African

Figure 2 Japanese used cars packed in to a Durban portside car lot

Figure 3 A Pakistani car dealership in Maputo

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countries, including Namibians and Swazis, were alsoobserved at the car yards. There is a gender division ofwork: Pakistani males are selling and negotiating outin the car lot and female family members finalisepaperwork in the office. Stacks of bills – thousands,tens of thousands of US dollars – are counted. Thisforeign exchange had to be concealed when it is(probably) unofficially taken out of Mozambique toSouth Africa through customs inspections at bordercrossings, including passing through Swaziland enroute.

There are important asymmetries of power betweenthe different groups in the network; discussing suchpower imbalances has been a feature of the GPNapproach (Hess and Yeung 2006; Coe et al. 2008b).The differential power relations and positions ofmarket participants influence their level of choice andagency as traders act to secure advantage over oneanother by developing critical assets or capacities inthe links between supply chain nodes (Hall andRobbins 2006). Socially embedded GPN actors areable to use political contacts to secure rent extractionopportunities. In the Durban–Maputo link the capac-ity to arrange for the transport of cars through SouthAfrica and Swaziland by car-carrying truck is an assetof the Pakistani dockside used car sellers and theirSouth African contacts. Mozambicans are now unableto arrange onward transport of used cars whereaspreviously they drove the cars directly to Maputo fromDurban, but this had been stopped by local authoritiesin South Africa. The different actors in this networkwere competing for the car transport activity and bothwanted to extract value from this process. The shiftingsocio-political context of intervention by the SouthAfrican authorities had excluded Mozambican tradersand they now have to pay a charge to the monopolySouth African-based car carriers, through the Pakistaniimporters, for an activity they previously undertookthemselves at low cost. There are other roles the Paki-stani families play in facilitating the transnationaltrade networks. For example a Pakistani retail dealer-ship in Maputo may accept the balance of a paymentfor a car that a Mozambican direct purchaser hadidentified and reserved at a Durban car lot, eventhough the downstream node in Maputo is notionallyin competition with Mozambican direct purchasers(see Figure 1.). The Pakistani dealers are part of thesame ethnic/family network and provide this serviceto facilitate and speed up the sale at their interlinkedDurban-based node because it is important to keepstock flowing and complete transactions in GPNs(Lane and Probert 2006).

Once a car has been purchased in Durban andtransported to Mozambique it has to have the impos-tos (import tariff) paid. Used car importers and theirclients described the formal process of calculatingimpostos in interviews. Cars are impounded at oneof two compounds in Maputo where vehicles areassessed by the Alfândega (customs service) before

they can be licensed and registered for use in Mozam-bique. This import tariff is based on four factors: thecost of the car, the transport costs, the freight insur-ance, and engine size (cc capacity). The first threefactors together are equivalent to a vehicle’s CIF (cost,insurance, freight) and a percentage of each factor istaken into consideration in the calculation of impostosalong with engine size. The car is also inspected todetermine the import tariff. There are no set costs astwo vehicles of the same make, model and age canvary widely in their condition and such heterogeneitydistinguishes these used commodities from compa-rable new goods. The calculation of fees is a verybureaucratic process, with multiple forms and docu-ments required and a daily charge is paid by theimporter whilst the car is being assessed. This is theofficial process for car importation; however in realityused car imports require further negotiation and thepayment of bribes to secure their release from thecompounds. These grey and corrupt processes werepartly witnessed through the transactions of theimporter whose deals were followed and subse-quently discussed in further interviews.

When a used car is brought to Mozambique theimporter may visit an anonymous office in downtownMaputo to make an initial payment to a broker whowill ‘desfechar’ or ‘desfraldar’ (deliver or unfurl) thecustoms. This payment is linked to the type of car anda generous sum can result in dramatically reducedimpostos. The heterogeneous nature of used cars givesan unscrupulous customs official the opportunity toalter the interpretation of what are appropriate tariffs.There are further techniques used by those who areexperienced in participating in this network, and asone trader put it: ‘working under the table’ [originalEnglish]. For example, when cars are purchased inDurban fake invoices can be obtained from thevendors that show a purchase price that is a fraction ofwhat was actually paid, so when a car is beingassessed by customs it appears to be cheaper,enabling lower impostos to be calculated. It is notknown if this is something that is embraced by corruptcustoms officials as it may enable them to more easilyrecord a reduced official tariff (for a fee) or if this is atrick that the used car importers adopt to avoid payingimpostos. It is important to note that the corrupt ser-vices of a customs official may be gratefully receivedby car importers and their clients, because the officialtariffs are so high, and otherwise the retail price wouldbe prohibitive or the trader’s profit would be dimin-ished. In this respect the corruption is ‘corporate’ andis an informal association between different actors inthe GPN utilised by both the trader and customs offi-cial to extract rent to the determinate of the Mozam-bican state. A further motivation to pay additional‘fees’ to individual alfândegas is to speed up the rateof transaction. Individual importers have their capitalinvested in cars that are impounded and are unable topursue other business deals, illustrating again how

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time to market is important in GPNs (Woxenius 2006).Furthermore this demonstrates the risks and vulner-ability experienced by individual African car traders(see also Beuving, 2004).

The typical amount of both genuine and unofficialcosts and tariffs paid by importers is difficult to judge.For example, a low-cost car with a large engine capac-ity would have a relatively high impostos, and could beanything from 50% to 100% of the purchase price ofthe vehicle in Durban. What is indisputable is that theretail value of cars in Maputo is far higher than thepurchase prices paid in Durban; over twice the priceon average would be a conservative estimate (pricescontain the relatively fixed cost of transport from Japanto Maputo, estimated by a trader at US$1300–1500).The difference will contain a combination of transportcosts, brokerage payments, actual government tariff,fees to corrupt alfândegas and seller’s profit. Informa-tion about these ratios is closely guarded by thoseinvolved in the GPN, as Nieuwenhuis et al. (2007) alsoobserved, and is likely to vary with each transaction.The information which has been presented here islinked to small-scale imports of cars directly purchasedin Durban. The Pakistani retail used car dealerships inMaputo that import on a larger scale are liable for thesame official tariffs, although what unofficial paymentsthey may or may not make and through what mecha-nisms is not known. Equally the precise scale of rentextraction that occurs at this node is impossible tocalculate. What is apparent from visiting the customsservice compounds is the relative affluence of alfânde-gas officials. Some customs officers have beenobserved driving their own private four-wheel drivevehicles worth in excess of US$20,000. This is farbeyond their salaried means, despite their salariesbeing higher than public employees in other sectors(Mosse 2007). Used car traders discussed how somealfândega are aware of negative public perceptions ofthem and conceal their luxury cars; this allegation isdeemed reliable, precisely because the used cardealers know how these valuable cars transit throughthe trade network.

Corruption in the alfândegas and neoliberal‘development success’ in Mozambique

It was not safe to research the corruption at this nodeany further because there have been instances ofextreme violence linked to the import of used cars.Corruption in general limits the legitimacy and effec-tiveness of public institutions and breeds criminality(de Sardan 1999; Brown and Cloke 2004). This isexemplified by the murder of Orlando José, Directorof Audit, Intelligence and Investigation of the alfân-degas of Mozambique. José’s responsibility hadincluded the internal investigation of customs ser-vices. He was killed on 26 April 2010, 3 h afterannouncing on television that three imported luxurycars had been impounded in Maputo for various ille-

galities. In another incident US$400,000 had beenseized near the Zimbabwean border (Savana 2010, 2).The press and the public heavily linked his death tothese announcements and ‘traições internas’ (internaldisloyalty or treason) within the alfândegas (de Car-valho [Zambeze] 2010, 2). Used car importers havealso said that the murder was linked to an investiga-tion of the used car trade. This event is a signal caseof the scale of the problems in the customs servicesand the dangers posed when investigating theseprocesses4. The killing of José also comes after themurders of investigative journalist Carlos Cardoso andSiba-Siba Macuacua, the interim chairperson of thescandal-ridden Austral Bank, in 2000 and 2001respectively. These murders were linked to investiga-tions of corruption in the Mozambican bankingsystem (Hanlon 2002; Fauvet and Mosse 2003).

The violence and alleged corruption associatedwith the customs service is – like the corruption andpatrimony in the banking sector documented byHanlon (2002) – a challenge to the legitimacy of theMozambican state. Critical discourse of the patrimo-nial Mozambican state is marginalised by an officialnarrative of ‘development success’ in Mozambique(Cunguara and Hanlon 2010; Manning and Mal-brough 2010; Sumich 2010). The alfândegas ofMozambique are framed in public discourse as amodern and respectable customs service (Hubbardet al. 1999). A large project funded by the UK Depart-ment for International Development (DFID), theWorld Bank, the International Monetary Fund andthe Mozambican government was carried out by theCrown Agents from 1997 to 2006 to reform customsservices. This model of intervention is characteristic ofneoliberal donor interventions (Simon 2006). Mosse(2007, 18) believes the reforms did, to an extent,decrease corruption but ‘[t]here are still signs andpractices of corruption’ and he continues:

Furthermore, there are very serious allegations of conflictof interest involving senior officials, who have businessinterests as both importers and as clearance agents. TheCustoms Directorate is also being criticized for favouringsome big importers with links to the Frelimo ruling Party.

The reform of the customs services is viewed andpopularised as a ‘development success’ by theMozambican state and the implementing parties: ‘Themodernisation of Alfandegas is one of the largest,boldest and most successful Customs reform pro-grammes ever undertaken, in Africa . . . ’ (CrownAgents 2006, 2) The rhetoric of an ‘immensely suc-cessful’ reform of the customs service that has signifi-cantly reduced fraud, corruption and clearance timesis not matched by the reality of the experiences of theused car importers, the car parts traders (discussedbelow) and many other people who are dependent onthe Alfândegas (Söderbaum and Taylor 2008). Thisframing of a development intervention as a ‘success’ is

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part of the neoliberal discourse of Mozambique as amodel for donor intervention (Cunguara and Hanlon2010), despite the ‘growing authoritarianism andunchecked corruption’ (Sumich 2010, 680). Hanlonhas argued that donors in Mozambique ‘are rewardingwhat they see as “good performance” by allowing andthus effectively encouraging, corruption and statecapture’ (2004, 748). As donors ‘rush to promoteMozambique as a free-market aid success, theyentered into a tacit agreements with the elite thatcorruption would be permitted so long as “marketfriendly” policies . . . were accepted’ (Hanlon andMosse 2010, 5–6).

The market for Japanese used cars in Maputo

In general, the costs of consuming commodities areaffected by the process through which these items aretraded to market (Hudson 2008), and this is equallytrue of used commodity networks. Nodes of rentseeking by corrupt officials increase the retail costs ofused Japanese cars, but despite the high price, there isa steady demand in Mozambique amongst the smallaffluent population who can often afford a second-hand but not a new car. These are the same elite classwho have benefited from Mozambique’s ‘develop-ment success’ (Hanlon and Smart 2008). The price ofJapanese used cars in Mozambique is difficult toquantify, as finding equivalent commodities in othermarkets is challenging given the variability in makes,models and vehicle conditions. As a qualitative indi-cator, expatriates from France, Germany, the Nether-lands, Portugal, South Africa, the UK and the USAfound the Japanese used cars sold in Maputo veryexpensive relative to similar used cars in their homemarkets. A conservative estimate would be twice ascostly. High import costs and tariffs also make newvehicles prohibitively expensive (there is no new carproduction in Mozambique). The transnational carcompanies that officially import new cars do not havethe same links and situated knowledges that Mozam-bican and Pakistani used car dealers have. They mayhave different formal business practices that do notenable them to easily negotiate the unofficial lowertariffs that other socially embedded actors mayarrange through customs officials. These connectionsbetween transnational commodity flows and corrup-tion are not restricted to the used car trade, as Hanlon(2004) also argues that drug trafficking in Mozam-bique is enabled through traffickers’ connections tohigh-level state actors.

There is trust in the quality of Japanese used carsamongst Mozambicans and they are considered agood purchase. Japan is viewed as a very differentaffluent modern society, where people can afford tokeep their cars well maintained and upgrade to newmodels. The relative popularity of four-wheel drivevehicles in Japan – prevalent because consumersresponded to socially created needs and desires for

the symbolic values of sport utility vehicles (Mitchell2005) rather than their use value as cars that can beused off-road – has been a benefit for the secondaryconsumers in Mozambique. These four-wheel drivecars are highly prized and useful commodities inMozambique (see Figure 4.) where there are manyrough tracks. The automatic door-locking mechanismsthat ensure the relative security of car drivers andpassengers are also features appreciated by affluentcitizens in Maputo, where spaces of security are com-moditised and fragmented (Paasche and Sidaway2010). In Maputo, minibuses still displaying thenames of Japanese schools are used as ‘chapa’ sharedtaxis. These minibuses are crammed full of adult pas-sengers, most of whom can only dream of purchasinga four-wheel drive vehicle whereas, according to aJapanese informant, they are ‘only used for kindergar-tens and small children’ in Japan. Similar practices arecommonplace in other African cities, including Dar-es-Salaam (Rizzo 2002).

Trade networks have broader scale impacts beyondthose immediately concerning the producers and con-sumers (Henderson et al. 2002). Through an environ-mental lens, used GPNs could be viewed positively asthrough a secondary cycle of consumption objects arebeing re-used rather than disposed of, potentiallyreducing demand for new production. But that is asimplistic argument and assessing the net environ-mental impact of re-producing commodities is diffi-cult. Such analysis has to go beyond the secondarycycle of consumption through to final disposal, toconsider the full life cycle (Kaplinsky 2000). In theJapanese used car GPN some cars have been regu-lated out of their domestic market because of theirimpacts on local air quality and their contribution toglobal climate change (Government of Japan 2010),negative impacts that will remain through use inMozambique. Other Japanese used cars have failedtheir shaken because of safety issues and these may beresold to Mozambican consumers by unscrupuloustraders in an under-regulated GPN.

Figure 4 A Japanese SUV driving past a spare part dealerin Maputo

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Maintaining vehicles is a constant challenge for carowners as they battle against the entropy of a vehicle’sinevitable decline, accentuated by poor qualityMozambican roads. Replacement parts are difficultand expensive to obtain and smuggling is common.Many of the makes and models of imported Japaneseused cars had never been retailed as new commodi-ties in Mozambique so do not have dealer networks orsupply chains for parts. Secondary used car consum-ers in Mozambique do not have a determining effecton what type of used car commodities are producedin Japan. Consumption choices are formed throughGPNs (Hudson 2008). The supply of car parts influ-ences Mozambican consumer preferences and usedcars that are common, such as the Toyota Corrollasand Hiaces, command a high price as the partsnetwork is more developed (see Figure 4). New com-modity trade networks require great coordination andexplicit or implicit coding of knowledge that bringsviable products to the market (Kaplinsky 2000), anddemand and price signals lead to organised produc-tion for primary consumer markets (Lane and Probert2006). This empirical study demonstrates that thereare not the same links between consumption andproduction in used commodity GPNs. Consumers in asecondary cycle of consumption respond to the avail-able used commodities rather than directly influenc-ing their specific combinations of use and symbolicvalues.

Conclusion

Geographical inquiry needs to develop the analysisof used commodity networks because these areneglected economic processes (Lane et al. 2009;Gregson et al. 2010). This article has demonstrated,through exploring the trade in Japanese used cars toMozambique, how this can be encompassed by GPNresearch (Hudson 2008). The commodities availablefor secondary markets are initially determined by theconsumption choices and disposal practices ofprimary consumers (Gregson et al. 2007b). Usedcommodities are re-produced for secondary marketsthrough cultural and political processes, such as theshaken test regime, which govern the internationalflow of certain types of used commodity (Clerides2008).

By examining used commodity trade, this casestudy has taken GPN research in a new empiricaldirection. However, the GPN approach and othercommodity studies have been criticised for notaddressing the formation and maintenance of power,which is also deemed a shortcoming of actor networktheory (see Bakker and Bridge 2006). Previousresearch has demonstrated that different actors withinnetworks monopolise control over key nodes, andthrough the possession of strategic assets, governinternational commodity flows (Henderson et al.2002). However, Starosta (2010) argues that the com-

modity chains and network approaches, through aninductive method, focus on tracking the inter-relationsbetween nodes, without thoroughly delving intopower relations. In this article, rather than presuppos-ing the power relations, the embeddedness of specificactors has been explained in relation to the geographi-cal and political context in which they operate.

The Pakistani trading families are embedded in thisnetwork through their historical accumulation of stra-tegic assets. Their ‘power’ at various nodes in thenetwork was initially externally determined by Paki-stani state policy in the 1980s, which forced them toestablish critical contacts in Japan (Dobler 2008). InSouth Africa and Mozambique they have acted toentrench their privileged position in the network andthey aim to speed the flow of commodities throughthe enclaved Durban port node to maximise valorisa-tion and monopolise the market (Woxenius 2006;Sidaway 2007). Comparable captures of trading nodeshave been explored by Ramaswamy and Gereffi(1998), Gereffi (1999) and Beuving (2004 2006). ThePakistani traders are not the main focus for discussingpower in this GPN and the locus of inquiry is appre-ciating how rent extraction is embedded in the nego-tiation of car imports between Mozambican tradersand customs officials.

Rent seeking through corruption has not beenadequately explored in empirical research because ofmethodological difficulties (Brown and Cloke 2004).At the micro scale of individual transactions, the vari-ability of used commodities means there is more elas-ticity in interoperating the rules associated with theregulation of their import. This provides opportunitiesfor corruption and rent-seeking by government offi-cials in Mozambique. But observing this is onlydescribing the immediate outer manifestation of theGPN assemblage. To understand how customs offi-cials and the allied car importers are able to have thepower to extract rent at this node in this tradenetwork, the broader context of the patrimonial statehas to be engaged with. The continuing process ofstate capture by a narrow elite through the governingFrelimo party in Mozambique is perpetuating corrup-tion (Sumich 2010). The Crown Agents customsreform project may, as Mosse (2007) discusses, havebeen partially successful in decreasing corruption, butthrough ethnographic fieldwork tracing the flow ofused cars, the persistence of corruption has beendemonstrated to be endemic (see also Söderbaum andTaylor 2008). The reform of the alfândegas is typical ofthe mode for public–private development interven-tions in the global South (Simon 2006). This donorprogramme is part of a suite of neoliberal policieswhich are positively framed as having accomplishedtheir poverty reduction goals in public discourse, andin Mozambique are part of a ‘development success’story (Cunguara and Hanlon 2010; Manning and Mal-brough 2010). Hanlon has argued that donors havetolerated corruption and violent acts as they continue

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to see ‘good performance’ (2004, 748). Whilst theMozambican state and donors maintain this doubles-peak of ‘development success’, the space for critiqueis constrained, and the narrow elite continue to gainfrom GDP growth (Hanlon and Mosse 2010) throughinvolvement in economic activities systems such asthe import of used cars.

Engaging with the specific Mozambican literatureand broader discussions of neoliberal interventions inthe global South (Brown and Cloke 2004; Simon2006; Sidaway 2007) have enabled a nuanced discus-sion of the political structures within which the actorsin this trade network operate. This case study hasdemonstrated how trade nodes are embedded in spe-cific places and political contexts. The actions of thefirms and individuals in trade flows are governed bythese external dynamics as well as their relations toother actors in the networks. Commodity studiesresearch has to stretch beyond the immediate mani-festation of trade networks and chains to capture theseprocesses.

Acknowledgements

Grateful thanks go to Yiwonda Banda, Alex Loftus,Fiona Nash, Aiden Sidebottom, David Simon and twoanonymous reviewers who gave very useful com-ments on earlier drafts of this article.

I would also like to thank all those in Mozambiqueand South Africa who participated in and facilitatedthe research; unfortunately given the illegality andviolence associated with the trade they have to remainnameless. I hold an ESRC doctoral grant.

Notes

1 ‘Cars’ includes minibuses and sports utility vehicles. Usedvehicles from other countries including South Korea, the UKand the USA are also imported to Mozambique on a smallerscale.

2 For example Leigh et al. (2006) discuss how ‘classic’ MG carsare invested with meaning and symbolically valued in theUnited Sates.

3 Clerides and Hadjiyiannis (2008, 269) calculated this as beinga rate of export that was 16 times higher for Japan than theUSA, which exported $0.7 billon of used cars despite havinga national car fleet four times the size of Japan.

4 This act of violence served to underline how important it is tocritically examine the role of government actors in trade net-works in patrimonial states and also influenced the method-ology that was being applied in the field. Research activitiesundertaken after this killing were implemented very cautiouslydue to the potential risks for both the researcher and researchparticipants.

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