62 Middle East & Africa The Economist October 30th 2021
TheUnitedNationsExpatonomics
A
specialeconomyemergesaroundany
big unoffice in the developing world.
Other international bodies cluster around
it. Expatriates move into the safe, pleasant
neighbourhood where it is located. Local
suppliers vie for contracts to sell fresh pro
duce, stationery and other staples to all
these organisations. Unskilled workers get
jobs as cleaners, gardeners and security
guards. And small businesses, such as
posh cafés and dry cleaners, thrive serving
the expats and wellpaid local staff.
The reason there is so much economic
activity around unhubs is simple: the un
has a lot of staff with a lot of money to
spend. The unSecretariat has a $3.2bn
budget this year, with additional pots for
peacekeeping and other agencies. A fair bit
of that goes into salaries. Socalled “profes
sional staff”, who move around the globe,
earn a base salary ranging from $46,000 a
year for a fledgling policy wonk to
$205,000 for an undersecretarygeneral
(usually the head of a unbody such as the
World Food Programme).
That would be more than enough to live
on comfortably in any African capital. But
there are additional allowances for expats
with a family in tow. And jobs in cities like
Nairobi and Addis Ababa come with extra
pay because they count as “hardship” post
ings. (This is debatable. Street crime may
be common in Nairobi, but the weather,
bars, sports clubs and barbecued beef are
extremely pleasant.)
An influx of wellpaid workers providesan economic boost for any city. When the
unwas established in 1945, American cit
ies competed to host its headquarters.
Since then places such as Copenhagen and
Geneva have wooed unagencies with shi
ny new buildings and tax incentives. Cal
culations from the mayor’s office in New
York City, which hosts the un’s headquar
ters, suggest that it adds almost $3.7bn to
the city’s annual output. The un, its agen
cies and affiliates are together its 22ndbig
gest employer, with 10,900 staff.
The benefits of hosting the un are
much greater in places that are not already
brimming with Wall Street bankers, fash
ion glitterati and other big spenders. Mem
ber states have chosen Nairobi, Dakar and
Addis Ababa as hubs in Africa. There are
only a handful of cities on the continent
that are safe and wellconnected enough to
host legions of foreign workers and their
families. But it is crucial, says Stéphane
Dujarric, the spokesperson for the secre
tarygeneral, to have teams on the ground.
“If you’re working on development policy,
doing it from New York or doing it from
Nairobi and Dakar gives you a different
perspective,” he says.
The economic impact is apparent in Gi
giri, a leafy corner of Nairobi where the or
ganisation’s African headquarters are
based. Street signs hint at how important
the 5,000 unstaff who work there are to
the local economy: United Nations Cres
cent leads to United Nations Avenue. The
neighbourhood is filled with fancy restaurants, cafés and hotels that are unafford
able to most Kenyans. At Village Auto Ba
zaar, a car wash and service centre, Joshua
Muhanji reckons that about 70% of his
business comes from unworkers.
Yet there are costs to being a unhub,
too. New York spends about $54m on
things like security for staff and public
schools for their children. It forgoes al
most $100m in tax thanks to exemptions
for unbuildings and its diplomats. “The
city makes quite an investment in hosting
the un,but it’s worth it,” says Penny Abey
wardena, New York City's commissioner
for international affairs.
There are other downsides in emerging
markets. Cities can become dependent on
unspending. Businesses in Gigiri strug
gled during covid 19lockdowns, as offices
emptied out and expat staff fled. In Dakar,
there are plans to relocate various unoffic
es from the seaside district of Les Almadies
to a new city 30km outside the capital. That
worries businesses in Les Almadies, from
highend coffee shops to informal car
washes and the American Food Store.
A large unpresence can also distort the
local job market. The organisation’s Flem
ming Principle dictates that the pay of local
hires, who are employed on different
terms and paid in the national currency,
should be “among the best in the locality,
without being the absolute best”. The un
conducts regular surveys on what private
companies, governments and nonprofit
organisations pay in any given location.
And it uses that information to set its al
phabetsoup salary scales. In Nairobi, for
example, a driver might make the equiva
lent of $9,00014,000 a year, while a more
skilled assistant could make $32,000
50,000. That is far less than expat staff. But
in a country with an annual gdpper person
of just $1,800, it is a princely sum. Joe Mu
turi, the head of Slum Dwellers Interna
tional, a network of ngos, puts it bluntly:
“everyone wants to work for the un.”
Martyn Davies, the managing director
for emerging markets and Africa at De
loitte, a consulting firm, says that big inter
national organisations reinforce a twotier
economy. unemployees mix in fancy bars
and restaurants that most locals can’t af
ford, and price middleclass families out of
pleasant neighbourhoods. “It’s monetary
apartheid,” says Mr Davies.
That sort of inequality could spark re
sentment, but many locals are pragmatic.
At Alkimia, a restaurant in Les Almadies
serving $88 steaks and $45 seafood plat
ters, Dimitri Vasnier, the chef, sees the iro
ny in antipoverty and environmental ad
visers arriving in fourwheel drives and
leaving untouched plates piled high at buf
fets. But unstaff in the area are an impor
tant clientele for the restaurant. “There is
so much waste,” he says.“Butthat is what
gets the economy ticking.”nN AIROBI AND DAKAR
How unstaff are reshaping African cities