Tag Archives: money

Bang for the buck: U.S. aid to South Africa

Out of $4 trillion dollars in the U.S. federal budget, how much is spent on foreign aid?  While most people in a recent poll thought it was around a quarter of the annual budget, the true answer is around one percent.  In this post, I want to explain two key programs that have impacted my new home country: PEPFAR and AGOA.  The United States plays a substantial role in making the future of South Africa brighter!

PEPFAR: Curtailing the epidemic of HIV/AIDS

pepfar

During the first eight years of the millennium, I rarely had anything positive to say about the President of the United States.  President George W. Bush, though, signed into law the “U.S. Leadership Against HIV/AIDS, Tuberculosis, and Malaria Act of 2003,” which transformed medical care in southern Africa.  His name is still respected in South Africa because of this law; it yielded the President’s Emergency Plan for AIDS Relief (PEPFAR).  This program has been renewed twice by bipartisan vote, in 2008 and 2014.  In the thirteenth year of the program, PEPFAR supported anti-retroviral treatment (ART) for 11.5 million people living with the Human Immunodeficiency Virus (HIV), with that number having climbed by 50% since 2014.  Some two million babies have been born without HIV from mothers who carry the virus.  This is an amazing accomplishment, and it couldn’t have come at a more critical time.

The HIV crisis in South Africa began as it did in the United States, with AIDS appearing in the community of gay men during the early 1980s.  Cases were documented in the heterosexual community in 1987.  By 1990, the crisis had begun to grow rapidly.  It is worth noting that South Africa was coping with tremendous changes during this period as the Apartheid government was compelled to cede power; Nelson Mandela was released from prison in February of 1990.  When he became President in 1994, however, the new government was unable to do much about the growing epidemic.  1996 was a watershed year for HIV as ART was announced, and the first drugs became publicly available (though expensive).  In 1999, Thabo Mbeki was elected President, and the public thought that HIV prevention and treatment might become a priority under his leadership.  His Presidential AIDS Advisory Panel, however, was dominated by HIV denialists / “AIDS dissidents” who claimed the virus had nothing to do with AIDS.  Not only were ART drugs not made available widely, but ART was withheld from pregnant women carrying the virus.  Nelson Mandela re-entered the debate in 2000 by a powerful closing speech at a Durban international conference on AIDS.  The topic became even more personal to him when his son died of AIDS in 2005.  Against this complex historical background, the prevalence of heterosexually transmitted HIV-AIDS was surging.  “By 1994, this had risen to 7.6%, and by 2005 was 30.2%, with an estimated 5.5 million of South Africa’s 47 million people infected.  An estimated 1000 new HIV infections and 900 AIDS deaths occurred each day” [Giliomee and Mbenga, p. 418].

PEPFAR has a tremendous role to play in today’s South Africa.  The program currently estimates that 7,000,000 people in the country are living with HIV, with approximately half protected by ART.  180,000 people die of AIDS each year in South Africa. “South Africa now has the largest number of patients on anti-retroviral drugs in the world, and South African life expectancy has increased by more than a decade.” [Bekker et al.]  Just imagine the impact if PEPFAR were no longer paying for HIV treatment!

Please be aware that there have been changes in the Trump Administration that suggest this program may be in trouble.  It is no exaggeration to say that real people will die without PEPFAR.

AGOA: “Trade, not Aid!”

agoa-feature_1

Debate may never end over the best way for wealthy nations to support the growth of poor nations.  When wealthy countries give food aid to poor nations, those efforts can undermine the economic growth of agriculture in those countries.  The African Growth and Opportunity Act (AGOA) was enacted in 2000, the last year of Bill Clinton’s presidency.  You may be thinking, “gosh, another economic treaty I need to know about!”  In fact, AGOA is not a treaty.  AGOA is a unilateral decision by the United States to drop taxes and quotas on imports of particular goods from countries in sub-Saharan Africa.  The program began by including 34 countries and soon expanded to 40.  After the first fifteen-year run of the program, the U.S. Congress decided to renew AGOA for an additional ten years in 2015.  Each year, the President decides exactly which countries will be extended these benefits.

The metrics for AGOA success paint a somewhat equivocal picture.  The 2016 biennial report shows $23.5 billion in exports from Sub-Saharan Africa in the year 2000.  This number grew to $86.1 billion in the year 2008 before falling back to $18.5 billion in 2015.  This might seem an abject failure, but much of the decline reflects reduced oil exports to the United States and the worldwide recession of 2009.  Most Sub-Saharan countries, of course, would like to export to the world’s biggest economy!  America, in turn, uses this desire to requiring development toward “a market-based economy; the rule of law, political pluralism, and the right to due process; the elimination of barriers to U.S. trade and investment; economic policies to reduce poverty; a system to combat corruption and bribery; and the protection of internationally recognized worker rights” [2016 biennial report, p. 8].  Essentially, the United States waives taxes on imports from countries that behave as the United States would like to see.

South Africa has had an interesting story within the framework of AGOA.  As the continent’s most advanced and diversified economy, South Africa was a bit of a question mark for inclusion in the 2015 renewal of the law.  Did it make sense to give these trade benefits to an economy that was already moving rapidly?  South Africa made itself a less attractive trade partner by raising trade barriers against American farmers exporting meat to South Africa, which caused them to violate the “elimination of barriers to U.S. trade” rule above.  At the start of 2016, the situation had deteriorated enough that Barack Obama suspended AGOA benefits for South Africa.  This action was enough to convince the foot-dragging South African government to drop its trade barriers, and so South Africa is once again an AGOA beneficiary in good standing.

What will happen to AGOA under the Trump Administration? Although President Trump has been ambivalent on the subject of free trade, he has not signaled that he will seek to end AGOA either by unlisting all participant countries or seeking the repeal of AGOA through the Congress.  Africans do not expect great things from President Trump, though.  His Tweets about South Africa have had a generally negative tone.

In the end, South Africa is proud of its ability to take care of its own problems.  If AGOA comes to an end, the country will lose one of its best customers for fruits and vegetables, and the automobile industry growing in the Eastern Cape would suffer.  The loss of PEPFAR, on the other hand, would devastate health care in South Africa.  The economy of South Africa is not strong enough to bear the cost of supporting ART on this scale.  The country already relies on the permissive, pro-public health intellectual property laws of India to have access to generic ART.  We can all hope that the PEPFAR and AGOA relationships between South Africa and the United States continue under President Trump!

Advertisements

Taxes and Trembling

“I like to pay taxes. With them, I buy civilization.” –Oliver Wendell Holmes, Jr.

Did you realize that tax day was just a couple of weeks ago?  On November 25th, many Americans were sleeping off a tryptophan coma from eating too much turkey.  Here in South Africa, I was breathing easier because I had navigated my first time filing taxes with the South African Revenue Service, or SARS.  The 25th was the deadline for individual filing.

I have mentioned SARS once before, when I filed to acquire a taxpayer ID number shortly after starting work at my university.  Dealing with taxes is pretty similar to what I experienced in the United States.  I do not receive my gross salary each month.  Instead, I receive my payment minus the cost of benefits (such as my medical scheme) and minus tax withholding.  Those deductions, however, are pretty serious.  In a given month, I generally receive about 56% of my nominal salary.

“Death, taxes and childbirth! There’s never any convenient time for any of them.”  –Margaret Mitchell, Gone with the Wind

Filing a tax return with SARS is how I get the excess withholding back in my bank account.  Taxpayers can file paper forms, or they can eFile, or they can use a tax preparation service.  Because I have been a TurboTax user for years, I decided to try the South African equivalent, TaxTim.  Because the tax code is a bit simpler in South Africa, the number of questions I needed to answer was slightly shorter.  When I went through this process on November 10th, the software eFiled my return to SARS.  Unlike the TurboTax experience, though, I still did not know whether my answers implied that I would owe more money or receive money back!

I had my answer very quickly, though.  SARS sent me a secure message right after my filing to say that I was receiving a very generous return of taxes (I had only worked at this university for three months by the end of February, when the tax year ends).  The message included a note, though, that I would be required to submit many documents for verification.  My heart sank, because the office in Bellville was likely to be incredibly busy this close to the deadline.

The wages of sin are death, but by the time taxes are taken out, it’s just sort of a tired feeling.
–Paula Poundstone

I organized my paperwork into PDFs on a USB flash drive and got them printed at the mall over lunch (I had not yet acquired a home printer).  I parked near the SARS office and walked toward it.  Yes, the line was substantial, stretching perhaps 40 meters outside the building.  Some employees from Nedbank were trying to convince people in line that they should establish accounts (millions of people in South Africa do not make any use of formal banking).  After around 45 minutes outside, I was allowed into the building to sit in a large holding area.  As a tranche of people were allowed out of the holding area, the attendants maneuvered the next section of people into position.  After another 45 minutes, I was upstairs in a smaller holding area.  After 25 minutes sitting up there, my number was called, and I was talking to SARS!

My conversation with the SARS employee was understandably pretty brief.  She asked for the documents, and I handed them across.  She photocopied them and then stamped my original cover sheet (South African bureaucracy is a big believer in the ink stamp).  I had brought my passport in order to verify my dates of entry to the country, but I forgot to bring it out for photocopying.  Once I had my papers back, I was free to return to my car.  To have spent only two hours at the office so close to the deadline was very encouraging.  Many people have commented that SARS is one of the most efficient of government services.

“The invention of the teenager was a mistake. Once you identify a period of life in which people get to stay out late but don’t have to pay taxes– naturally, no one wants to live any other way.”
–Judith Martin

With that, I was done with the tax process.  I received my next message from SARS on December 5th.  The letter notified me that SARS had required some adjustments to my return because of the documents I had submitted for their consideration.  Instead of a very big return, I was getting a pretty big return (diminished about a sixth).  The requirement that I show my passport had vanished, happily.  The complex part was that they had registered the change as a payment I needed to make to them in order to receive the larger payment corresponding to my unamended return.  I was busy at work and so I could not act immediately.  Happily, though, SARS realized that they could simply deposit less rather than having me pay them more first.  During the week, the tax refund arrived in my bank account.  I am all clear for taxes in 2016!

The really interesting part will come next year, when I must learn how to file taxes for calendar year 2016 with the United States.  All of that income will be for a year in which I was out of the country.  At that point, the tax treaty between South Africa and the United States will come into effect.  As I understand it, the United States will not tax me further on my salary so long as I have already paid at least as much tax to the government of the country where I live.  We’ll cross that bridge when we come to it!

Should you leave the United States?

Almost three weeks have passed since the 2016 U.S. Presidential Election, and some of you are still hurting.  Some of the initial horror has passed, but the ongoing political news may be arousing fresh worries.  Perhaps you look to the January 20th, 2017 Presidential Inauguration with suspicion that four horsemen will appear in the skies.  Sure, some of you joked about it before the election, but should you seriously consider moving outside the United States?

Push and Pull

The advice of Dan Masys, my first department chair, has been endlessly useful to me: the best moves are those where the push is in the same direction as the pull.  In other words, it is less satisfying to run from something awful when one doesn’t feel drawn to something new.  For me, the decision to leave in 2015 was tied to my excitement about being able to make a difference for biotechnology education in South Africa.  Before that I had seriously considered acquiring a law degree through night classes at the Nashville School of Law, with a shift toward biotechnology law research.  If you do not have something that draws you, moving away from the United States will likely feel like a surrender rather than an advance.

For many, the desire to be of service to the world will be a strong motivator.  I feel a loyalty to humanity, wherever it can be found, and I’ve signed on as a Global Citizen.  For some, your movement may be tied to religious motivations; many of my friends who preceded me in visiting South Africa did so through their churches.  Perhaps you studied a foreign language in high school or college and want to gain real mastery in the language and the culture of a corresponding country.  My French training from high school and college has come in handy on several occasions with immigrants from Francophone Africa!  Coming to South Africa fired me with new energy for my career.  I hope that you find something in the rest of the world that renews your spirits.

What are the practicalities of moving abroad?

When I first developed the notion that I might move abroad, I really didn’t know all the challenges that would present themselves along the way.  Let’s separate this topic to a few practical realities:

Can you get permission to reside and work in another nation?
Relatively few nations welcome free immigration to their shores.  Even if you intend to volunteer your labor for room and board, you should be sure to get a visa that allows that activity.  I was a bit surprised how hard I had to work in order to acquire my temporary residence permit for South Africa; it took six months after I received my formal job offer.  Some nations, such as Australia, use a formal “points” system to determine whether a person qualifies for a visa.  People at a more advanced age will be glad to know that many countries offer a retirement visa option (this example is from Thailand).  The requirement for retirement visas normally hinges on applicants showing a suitable bank balance.
Can you afford to move to another nation?
My move was the “deluxe” option, where my new employer paid for a shipping container for my worldly goods.  I spent months selling down my inventory of furniture and electronics.  Even so, when my goods arrived, they barely fit into my three-bedroom townhouse in Cape Town.  The cost of packing a household into a shipping container, moving the container, and unloading it in a new country can easily reach $10,000.  If you are changing nations on the cheap, you can generally bring two 28″ roller bags without incurring extra charges on airlines.  Having lived out of two roller bags for two months, I know it’s possible, even for someone used to creature comforts.  On the question of affordability, I must say that the U.S. Dollar is at a high value versus the U.K. Pound, the Euro, and the Chinese Yuan, despite what the financial naysayers have been saying.  Here’s the ten-year comparison to each currency (can you spot the Brexit vote?), where a higher trace means the dollar buys more of the other currency.
currencies

All charts from Google Finance

Can you handle the trauma of an international move?
Moving abroad is emotionally taxing.  You will encounter considerable disbelief (and demands to justify yourself) from people who could never imagine leaving “home.”  You will bang your head against bureaucratic barriers, rail in vain against expensive SNAFUs, and you will assuredly ask yourself if it could ever be worth it during that torturous process.  As an academic, I had moved away from my friends every few years during my training, and I still found it hard to leave Nashville, a city that had been my home for ten years.  I sought relief from unmanageable stress through moving, and it certainly seemed ironic that I would choose a course that would bring some of the worst stresses to my door.  It can be very worth your while to work with a counselor while navigating this process.  It is not for nothing that “moving” frequently appears on lists of top stressful situations.
Can you maintain ties to loved ones in the United States?
To move abroad is to lose sync with many of the people you know.  Right now, my friends in the United States are basking in the glow of Thanksgiving with family, assembling their Christmas trees, and shivering in colder weather.  I went to work on Thursday, and the weather here has me sweating in a T-shirt in the “cool” evening hours.  My family keeps its ties together through occasional Skype calls and shared photos albums, as well as my once-a-year visit to the United States.  I knew this part of the move would be hard, and I was not wrong on that score.

Reaching the decision to “go”

You may already be feeling the tug to emigrate.  Perhaps it’s more “push” than “pull” so far.  If your concerns stem from the outcome of the election, I expect that the push will increase in magnitude over the next four years.  I would love to be wrong about that.

One way to test that feeling is to apply for an international job.  I always find that my decisions are much easier when I have enough information to know what lies on the other side of a gulf.  Knowing what my career would look like in South Africa removed one of my biggest doubts.

Another way is to invest some of your savings in stocks from that country.  Do you shudder every time the price jags up or down?  How would you feel if you were paid in that currency?  (The South African Rand took a serious tumble just after I arrived in the country.)  Though the Rand’s weakness leaves me on pins and needles much of the time, I am certainly delighted at how inexpensive items at the grocery store are.  There are compensations for weak currencies, especially for retirees who keep their retirement savings in dollars!

Depending on your financial standing, you may be able to schedule a trial visit.  I visited South Africa in November of 2014, after I did not get the job I hoped for.  Instead I delivered a tutorial workshop for the students at that university.  The visit helped me to feel comfortable with the colleagues I would find in my new division, and they worked hard to fund a position just for me!

img_3420

This November, 2014 photo features Novel Chegou and Gerhard Walzl, two of my divisional colleagues, along with Paulin Essone, now a researcher at UCT.

For many people, the answer will be “stay” rather than “go.”  I sometimes joke that I’m a bad person to ask why Americans do the things they do.  I left, therefore I am probably not representative of my countrymen and countrywomen!  Just the same, I hope that my experience can help smooth the way for other Americans who want to see the broader world.  It is a rich and beautiful place, and I know that my life will be immeasurably enriched because I chose to step out of my comfort zone!

Turtle House: signed, sealed, delivered!

As I type these words, I am gazing at a rather important piece of paper.  It is a “Deed of Transfer” from the registrar of deeds at Cape Town.  In a nutshell, this document reports that Turtle House is finally mine!  The full story, however, is much bigger than these three sheets of paper.

  • December 5, 2015: As frequent readers of my blog will know, I first placed an offer to purchase this townhouse within three weeks of arriving in South Africa.  My offer was slightly lower than the asking price, and I requested that the refrigerator remained in place.  The sellers accepted these terms on the following day.
  • WesternBeechNutHog-800pxDecember 21st, 2015: The Offer to Purchase document specified that I needed to pay just over 15% of the purchase price into the account of the “conveyancers” by this date; think of it as a down payment.  Under South African law, the interest accrued on all monies deposited in this way is credited to my name.  I decided to go whole hog.  On December 15, 2015, I had accumulated the total purchase price in my South African bank account (I’ll leave the financing stuff out of public view, if you don’t mind).  On that same day, I transferred the purchase price to the conveyancer, and I also transferred an additional sum, more than 4% of the purchase price, to cover a wide variety of costs associated with the purchase.
  • January 10th, 2016: On this date, I was at last allowed to move into my new home.  Note that I did not yet own the home, though!  The Offer to Purchase included an “Occupational Rental” section specifying that I would pay a sum equal to approximately $1000 USD for each month that I occupied the property prior to ownership.
  • January 19th, 2016: An email arrives that starts my teeth gnashing.  The conveyancers note a critical problem; the bank that had held the bond (home loan) for the sellers had lost the title.  As a result, the bank needed to begin proceedings to acquire a copy.  This would add a delay of unknown duration to the purchase (I assumed a week of added time).
  • January 27th, 2016: The ship with my belongings had left the United States long before I took flight for South Africa.  On this day, my shipping container arrived at Turtle House, and I was reunited with my beloved stuff.  On this day and the next, I made material upgrades to Turtle House by installing a Trellidoor and new custom security gates.  This sets up a problem, though; since I did not formally own Turtle House, what would happen with these investments if the contract to purchase should fall through?
  • johnny-automatic-snail-1-800pxFebruary 1st, 2016: To quote the Offer to Purchase, “Transfer shall be effected by the Seller’s conveyancers and shall be taken by the Purchaser on 1st February, 2016, or as close as possible to such date.”  The document has my real estate agent’s written addition: “Sooner the better for the purchaser.”  What, then happened on the first of February?  Nothing.  Absolutely nothing.  No information was forthcoming from the conveyancers.
  • February 12th, 2016: The conveyancers notified me that they had filed for the deed to be transferred.  Since government services were only then coming back to life (it’s quite challenging to transact city business from late December through mid January), a queue had developed.  They estimated my title transfer would be complete on February 22nd.
  • Facepalm-800pxFebruary 25th, 2016: The city deeds office rejected the title transfer.  The transfer request failed because the bank that had held the bond for the seller had improperly signed the bond cancellation document.  The conveyancers also made a mistake on the deed documentation.  The mistakes would require the conveyancers to work with the lawyers on behalf of the seller, and those lawyers would have to interact with the lawyers for the bank.  I facepalmed.  To add insult to injury, the converyancers now demanded another month of overpriced rent.  The conveyancers promised another try at the deeds office on the following Monday, February 29th.  They did not accomplish that goal, though.  They actually re-filed on March 8th, 2016.
  • March 23rd, 2016: An ominous message arrived from the conveyancers.  They wanted to speak with me personally, reporting that the deed transfer had been filed for a third time.  I was pacing along the towpath in Port Elizabeth as I spoke with the lawyer on the phone.  What he told me was horrifying.  The lawyers for the bank had foolishly filed the same paperwork for the deed transfer three times in a row, and it had been rejected each time for the same reason.  Considering that it was a one-page document, this accomplishment took some bloody-mindedness.  The conveyancer seemed convinced that the bank lawyers had finally absorbed that they had made a mistake.  Meanwhile, the conveyancer wanted me to pay more rent.  I had already told them to take it out of the interest that was accruing on all my money that was still sitting in their account.  They said the interest had run out.  I countered that this deal was only still viable because I chose to consider it so.  They said that that’s not what the Offer to Purchase said.  I asked them if they had read it recently.
  • PetrJ-snow-flake2-800pxMarch 31st, 2016: The outcome of this conversation was mixed; the conveyancer and the bank agreed to reduce certain charges, which left me with a considerably reduced sum to pay for rent.  Their letter rather frostily commented that the conveyancer was a lawyer acting on behalf of the seller.  The conveyancer announced that I had seven days to pay the reduced rent or expose myself to terrible acts by the seller.  I paid with this note: “The amount was paid this evening.  It would really have been sufficient to tell me what the revised amount was, after the discounts.”  I made a quiet note in my mind that further provocations would result in my “lawyering up.”
  • April 15th, 2016: I received word that the deed had finally been transferred into my name.  The letter noted that the seller had complained that she was paying property taxes and homeowners’ fees on Turtle House while I was living in it.  She now wanted me to reimburse those costs.  I simply replied, “Since I was paying rent, it would not have been appropriate to charge me the homeowners’ dues, of course.  My rent has already compensated the owner for her having payed the dues to the body corporate.”  I again considered whether it was time to get my own lawyer.  The seller, however, made no further mention of this unreasonable claim.
  • July 21st, 2016: I received word from the office of the conveyancer that my Deed of Transfer was available for pickup or delivery.  Rather than trust that my mail would arrive, I drove by their offices to retrieve it this afternoon.  The document has three dates on it: April 15th, 2016 for the execution, May 4th, 2016 for “Data/Capture” and May 5th for “Data/Verify.”

I can only feel relief that the trail to Turtle House has reached a successful conclusion.  Now it is my home on paper, as well as in fact!

*I want to thank everyone who has contributed to OpenClipArt, which provided the images for this post!

Death by Taxes: Dave registers with SARS

I had planned to spend my holiday week recumbent in front of the TV, but this morning I awoke with a burning sense of purpose.  Today I would register as a South African tax payer and acquire my Traffic Register Number!  As it turned out, the first task would burn much more time than I had expected.

I charted my course to downtown Bellville, just a couple of miles from my office.  I had attempted once before to register at the South African Revenue Service (SARS), on December 17th, but I was turned away because the facility held too many people already in line.  Today I was welcomed inside, passing through the metal detector and riding the escalator up to the main floor.  At the information desk, I was directed to sit in the empty waiting area for a pre-check of my documents for registration.  Thirty minutes passed before the pre-checker returned from her morning tea.  I approached the desk, and she poked through my documents (a six-page application, documents validating my permanent address, and bank account documentation).  She pushed aside many of them as unnecessary, placed a red dot sticker on the application form, and wrote “checked” on the sticker.  I returned to the information counter for my queue number and climbed the stairs to the next waiting area.

During the next forty-five minutes, I chatted with a young man from Mitchell’s Plain.  When he learned I was from the United States, he was beyond excited.  He told me he dreamed of visiting the U.S., and he hoped he would get to see the Statue of Liberty.  He idolized Wiz Khalifa and spoke warmly of the U.S. as producing the best rappers in the world.  He explained that “gangsterism” is commonplace where he grew up, and he had to back away from the gangs in his home carefully because they killed the mothers of young men who offended them.

When my number was called, I was nervous for potential reasons they might reject my application.  Would they complain because I used blue ink rather than black?  (I’ve seen this complaint with other agencies.)  Would they reject the application because it lists Turtle House as my permanent address rather than my current, temporary one?  Their inspection was quite thorough, and they ranged into the documents the pre-check had deemed unnecessary.  When they encountered the formal statement from my banker attesting to the existence of my checking account, they frowned.  Where was my bank statement?  They seemed unimpressed that no mail is arriving due to the holiday.  I volunteered to log in and print one on the spot, but that was clearly unacceptable.  No, instead I must walk the “two minutes” to the Absa bank on Voortrekker Road and acquire a statement there.  Then I could return and go through the queue once more.  They graciously waived the requirement for the document pre-check on my return.

I trudged out of SARS with my blood boiling.  I checked on my car and confirmed that I wasn’t parked in a time-limited space.  I cautiously navigated the pedestrian crossing of Voortrekker and entered the bank (I did not realize that their ATMs can produce statements).  After fifteen minutes in line, I reached the clerk.  He ran my card, and then he looked me squarely in the eye.  He told me I must not be friendly with people I encountered in this neighborhood (I had passed a few words with my neighbors in line about the boisterous minibus taxi driver outside).  “Is Bellville really that bad?” I asked.  “When you visit your bank, go to the Tyger Valley branch,” he replied.  “When someone calls after you in the street outside, just keep walking.”  With my statement in hand, I returned to SARS.

This time the wait upstairs lasted even longer.  I sat quietly for an hour, though I did exchange some words with an anaesthesiologist who had graduated from the Stellenbosch University medical school.  It seemed like an eternity, though, before I was called up to visit with the same clerk as before.  I was relieved at that development, since I wouldn’t have to start my explanation from the beginning.  She glanced over the bank statement, gave a brief nod, and began photocopying documents and typing data into electronic forms.  After a while, she called a supervisor over to validate some documents.  After about ten to fifteen minutes of clerical work, the clerk handed my original documents back to me along with a SARS registration certificate.

I have two things to celebrate from today.  First, when taxes are withheld from my paychecks, they’ll be directed to my tax bill.  Second, I now have a government-issued document certifying Turtle House as my permanent address!

Let’s get fiscal: moving money across borders

Just a few weeks ago, I sold my house and car in the United States.  Now I am going through the reverse of that process, acquiring a new home and vehicle.  Those acquisitions, though, require some cash.  Getting access to the money poses a series of problems.  The money from those sales last fall is

  1. located on the other side of the world,
  2. governed under a different set of laws and regulations, and
  3. denominated in U.S. Dollars rather than South African rand.

I wrote previously about wiring money from the United States to South Africa.  The $50 wiring fee is not such a big deal when you’re moving hundreds or thousands.  The exchange rate offered by the bank for account-to-account wires, though, is a bigger deal; if the bank doesn’t compete with others to win your business, why would it feel pressure to give you a good rate of exchange?

One solution to this problem is a foreign exchange company.  I read up on potential brokers at a site devoted to their evaluation.  I decided to work with one called “Currencies Direct,” and I’m glad that I did.  I set up an account with them before leaving the United States.  Essentially I send them dollars, we establish a contract for a particular exchange rate, and then they send the money to my new account in a different currency.

An additional problem soon emerged, though.  During my long conversations with SunTrust before my departure, the banker should have notified me that I needed a PIN number issued through Western Union to trigger international wires when I was no longer able to appear at the branch in person.  I have looked for a good URL to describe this process, but I haven’t found it.

The banker neglected to do that, and a nasty impasse developed.  During a week of increasing tensions, I discussed this situation with the international toll free clerks, the wire fraud people, the staff at my old bank branch, the secure messaging folks, and even the bank’s Twitter customer service desk.  By that time, at least twenty people in the bank knew that I was about to transfer money for a house purchase out of my account.  All of them expressed their condolences that my money was inaccessible to me, but nobody had a plan for how to accomplish it.  I have made it clear to the bank that I will remove the remainder of my funds as soon as I return to the United States; as I put it to the customer service people, “you had one job.”

01-you_had_one_job_02

http://guff.com/75-you-had-one-job-moments

 

My bank had made the wire impossible, so I used an alternate route.  Currencies Direct set up a type of account that allowed me to send a check to the company in the United States in dollars.  They would then wire the corresponding amount to my account in South Africa using rand.  I sent the check by express mail using the “bill pay” feature of the bank website.  The bank repaid my effort  by immediately slapping a freeze on the account, disabling my web access (and thus my secure messaging) and preventing the check’s delivery.  I had a very hectic 24 hours re-establishing contact with the bank (aided by a friend giving me access to Google Voice), and then they released the check and opened my web access once more.  The fee for express mailing was entirely wasted due to my bank’s efforts to “protect me.”

You should be aware that South Africa has significant laws in place to prevent money from flowing freely out of the country.  As a foreigner, you must document every transfer into the country (SWIFT messages and bank statements) to ensure that you will be allowed to transfer that money back out of the country without limitations or extra taxes.

My funds arrived at Currencies Direct last week, and I locked down my exchange rate just before the President of South Africa fired the respected finance minister, causing a terrible plunge in the rand’s value.  Some of the damage was undone when the replacement minister was sacked within four days and replaced by a new, respected finance minister.

If you are planning to spend considerable time in another country, be sure that your mechanism for transferring money is entirely in place before you leave.

From Dollars to Rand

Establishing myself in a new country will require some pretty big decisions in the weeks to come.  Today my goal was considerably more limited.  I brought some money in U.S. dollars (USD) to start a bank account, but I needed those converted to South African rand (ZAR) to be able to buy anything with them.  Sadly, starting a bank account is considerably more complicated than arriving at a branch, plunking down cash and a passport, and signing a couple of forms.  Today my bank visit was limited to changing currencies.

When I arrived at the bank, I expected to be in and out in five minutes. Immediately at the entrance, though, I realized that banking is different in this country.  Someone was entering the bank in front of me, and I had to wait until she was completely inside before the entrance door showed a green light.  I walked into a one-person airlock.  When the door behind me had closed, the one in front of me displayed a green light.  Now I could enter the lobby.

After waiting in line for about a minute, I was waved up to a teller.  His terminal wasn’t prepared for international exchanges, though, and I was passed down to the first window.  I explained that I wanted to exchange dollars for rand.  “No problem,” she replied, and she asked how much I wanted to exchange.  I decided to trade all $500 that I had brought to seed the new bank account, since the process seemed somewhat involved.  She asked for my passport and began setting up the exchange.  After two or three minutes, she noted that the exchange rate would be 13.8882 (compare that to 14.05 on-line).  In addition, the bank would charge a commission of 116.65 rand ($8.40 at the exchange rate they offered).  I agreed to the terms.

A pause developed and lengthened as she frowned at the computer.  She let me know that a hold had been placed on the transaction.  She called to a manager, who stared at the screen for a moment and then walked to the back office.  The manager called to clear the hold.  With that, the teller printed some forms and passed a page to me for my signature.

When she began counting bills out for the payment, I was a bit flabbergasted.  The largest currency bill that is in circulation in South Africa is a 200 rand note (around $15.00).  As a result, the stack of currency she handed back was rather thicker than the one with which I had arrived.  The photo accompanying this article shows four different colorful denominations of their currency.  All feature Nelson Mandela on the face, but the opposite side differs in its art.  The entire process from arrival to exit lasted approximately twenty minutes.

With money in hand, I passed to the mall food court to acquire some lunch.