Pop quiz: Which of these is NOT valid currency in the eastern DRC? (Clockwise from upper left: ten-dollar US note, 10 Congolese franc note, one dollar US note, 50 Congolese franc note)
Here's a hint: the largest denomination of Congolese currency is the 500 franc note. It's currently worth about 55 cents. US Dollars are used for larger purchases.
Give up? It's the ten dollar bill.
Still not sure what's up? This is a legitimate, non-counterfeited ten dollar bill. But that miniscule tear in the upper right-hand corner of the note (just above the "0" in "10") makes it completely useless. It would also be invalid if it were a pre-2001 series note, or if it had any other markings or tears.
Why? Your guess is as good as mine. No one involved in a transaction in the DRC will take this note in exchange for $10 worth of goods or services. This is a phenomenon that extends across most of eastern and central Africa, albeit with some variation across space (in south Sudan, for example, you need post-2006 series notes nowadays). Meanwhile, no matter how tattered, torn, and utterly filthy the Congolese francs might be, as long as the pieces are held together one way or another, they're valid.
If you ask any Congolese merchant or forex dealer why they won't take perfectly good money, the answer is generally the same: because "they" won't take it. Who is "they"? "They" is everybody. And they are correct. No one around here will take torn dollars. They're barely worth the paper on which the bills are printed, although usually the black market dealers will trade the notes at reduced and very unfavorable exchange rates.
The interesting thing is that almost everyone realizes this is absurd. Last week my driver asked me if things worked this way in the U.S. "No!" I replied, "This is crazy." He agreed, and noted his frustration with the system the way it is.
This is a serious problem for the citizens of this region. If I get stuck with a $10 bill with a miniscule tear in one corner, it's no big deal. I'll hang onto it and use it to buy a bottle of water the next time Delta strands me at Newark. But for the Congolese - especially those who don't have the means to travel beyond their hometowns - it's different. If the normal wear-and-tear that happens to currency just happen to happen while that currency is in one's possession, he or she could lose his savings, the money to pay her children's school fees, or the dollar that would have purchased that day's meal. It hinders economic development and makes the economy function poorly.
It's an interesting collective action dilemma. How do you overcome a norm that everyone knows to be ridiculous, but can do nothing about? It strikes outsiders - especially outsiders who are used to currency systems that regularly rotate out used bills - as completely irrational behavior on the part of millions of people.
Those millions include me. Every time I travel to the DRC, I have to go to the bank, explain the situation, convince them I'm not a drug dealer or human trafficker, and take out cash in unmarked, pristine condition bills in a variety of denominations. When I engage in a transaction here, I check the notes I receive very carefully before agreeing to accept them, and I hand back any that don't meet the standard.
What else can we do?