Arusha - a city in Tanzania with a population between 600'000 and 700'00 people whose central point is a clock tower and a market operating on an unpaved park/area of the city. There is no old town, no market square and no street with cafes and restaurants. This city is the starting point for experiencing the Lion King in the real life - doing a safari to Serengeti and Ngorongoro Crater. There are no tourists on streets (at least there were none on the Christmas eve, when I was there), but the hotels are packed with mainly caucasian holiday-makers. It is also the place where Kilimanjaro climbers spend their last night with a bed and a shower before heading for a few-day trekking to the highest mountain on the African continent. The high altitude (5'985m) and walking over 10km daily should be the main challenges of climbing Kilimanjaro, but to me the main challenge was in how the trek is organised. 

The first challenge was finding the right guiding company, that has to be a local company. No company would organise a trip for less than 2000 USD per person and I could not understand where this price comes from until the end of my hike. As a visitor, you have to pay a daily+overnight fee for yourself and for all sherpas and guides that come with you. This is fine, but depending on your group size,  the number of your assisting "staff" includes at least 6 sherpas and at least one guide. The reason for that is that the sherpas carry your personal belongings, a tent for you, tents for the staff, water, food and cooking equipment for the whole trip (5-7 days), for everyone going with you. The tents are large and far from light-weight. The first morning, we were woken up by our cook, who prepared pancakes served with a selection of jams, chocolate paste, peanut butter and honey, all stored in glass jars (that's heavy!). We had a camping table and chairs from the 80s (also heavy). For dinner you get a cooked warm meal consisting of rice and meat or fish. In your lunchbox you always get boiled eggs. Eggs, please, keep that in mind because I will get back to this point. Aligning with human rights, it has been forbidden for one sherpas to carry more than 20kg of weight and there is a weight control at the entrance to the park. A major repacking happens after the first turn of the hiking path, where the "guards cannot see any more". All the gear is carried in robust plastic bags, no backpacks, no comfortable straps etc. It makes sense to pay for this hard work. However, once I did my math based on the fees posted at the entrance gate, I realised that most of the 2000 USD that a tourist pays for the trip is consumed by the park fees, with the sherpas hoping for decent tips in US dollars rather than in Tanzanian shilling. The payment for the fees is done with credit cards Visa or Mastercard to reduce corruption through the electronic documentation and book keeping.

The locals preferred payments in USD than in the local currency. This happens when the local currency and its linked economy are volatile. In that case, major currencies are means to store wealth and to conduct large value transactions. Off-the-counter exchange rates vary from the official bank exchange rates. For example, one could pay in EUR instead of in USD, but the local exchange rate EUR/USD was 1-1, while according to the official international exchange rates, EUR was worth 25% more than USD (that was in December 2019). This is an example of a situation in which a currency is more than a means of payment. It is a commodity that can have subjective value to those who want to obtain it. A person that brings that commodity becomes associated with that commodity. Before our bus reached the gate to the Kilimanjaro National Park, we breifly stopped at the gas station for a toilet break. The smell from that toilet paused my physiological needs, so I waited in front of the bus for my fellow travellers. A local man passed me and said to me "money". I felt that to this man, I - a European woman - was a personification of commodity called "money".

How do people at the bottom of Kilimanjaro make money? They work very hard. A sherpa who runs up shortcuts to deliver more food and water on demand, earns 15 USD per delivery (rate in 2019/2020). I asked our guide what the feasible business here would be. His immediate answer was "chicken production", because everybody on the mountain and on safari east eggs and chicken. A paradox of that situation is that, as a tourist and a guest, you eat what you are served, not what you ask for, and every day, you are served eggs and on the last day may eat them out of politeness. Our guide's main skills were his pjysical fitness, as he would summit Kilimanjaro every second week, and his good English skills. Other people in the staff like sherpas spoke better Swahili than English which resulted in a lower salary as they could not easily interact with tourists. A guiding licence is not required and a guide is not needed to find the way or to deal with the untechnical route. It is required by the law that climbers are assisted by a local guide. After a successful summit and departure from the national park, we were passing several coffee plantations. I asked our guide who owns these plantations because that's a big international business. His response was "Coffee? I don't know. This field belongs to some German family." I do not know whether I saw the plantations of Jacobs but to me these fields looked more like money than the eggs in my lunchbox. Apart from being a Kilimanjaro guide, he was also a childless husband in his late 20s, with a wife working as a bank clerk. As he mentioned, "she was the brain in the family". I was curious about the family situation because around Kilimanjaro National Park you see very few women, which could be explained that most jobs are physical.

A social group that made more money with much less effort (but with more capital) were Indian immigrants who operated gift shops, authentic Indian restaurants and hotels that offered showers at a hotel for about 30 USD per person. After 5-7 day of sweat, dust, rain, cold and heat, many travellers may be inclined to use the service, especially if their next stop is the airport from where they either go back home or go to another destination. Given that all sherpas, guides and cooks wait in the car, a typical climber would take maximum 1-2h hours to shower, change and repack. Coming from a modern egalitarian European society, I have notoriously found it difficult that I am expected to act as a superior entity. Keeping 9 men in car waiting for me to "make myself pretty again" felt inappropriate. At the same time the post-colonial mentality of the locals was imposing my superiority on me, independently of whether I liked it or not. However, this chapter is about economic factors, so I will not go deeper into the topic of social values and social norms. Back to business - that is organised by the Indian community. While in Tanzania, I also met two software developers from India and one of them was based in Dar-es-Salaam - the capital of Tanzania and an IT hub of Africa. Why is Tanzania attractive for Indians? According to the gentleman I encountered, salaries in Dar-es-Salaam are higher than in Bangalore, while the city life and the natural conditions are easy for an Indian person to adapt to. English being an official language in both countries makes things even easier.

What about the shoes? If you prepare for a multiday trek, shoes are crucial. For this trip, I specially bought new boots designed for mountain guiding ladies who spend long hours working in these shoes. Good mountain gear is not cheap but once you are out there using it, you realise it was worth the money. How much attention do the Kilimanjaro guides and sherpas put into their footwear? Well... not as much as I did. Most of the locals wear what tourists who climb Kilimanjaro as their once-time hiking experience leave at the exit from the park. After passing the gate, you can see a pile of boots in various sizes and the locals trying them and searching for the second one to make the pair.  Some sherpas use their boots so heavily that the toe side is wide open. Comfort is one of these utilities that are relative.

Science in practice

Subjective theory of value is an economic theory that assumes that the value of goods and services is not fixed of constant, but it fluctuates over time and that value is determined by the individuals buying it. This is somehow against the assumption of the fundamental value of an asset - an assumption that an asset has a rational value. Most of the goods that we acquire have subjective value to us, based on our past experiences, personal needs and the social bubble we live in. A social bubble is a phenomenon in which people form clusters of members that are alike in terms of their socio-economic status, social, cultural and religious values, physical features, personal interests or event the environment they live in. People within the same social bubble may aim for similar goals and value the same things in a similar fashion. Social bubbles play an important role in finance and economics, for example in financial markets. Social bubbles may not understand each other and subjective value of good differently. One person may desire owning a chicken farm, while the other person may desperately want a limited edition NFT (non-fungible token). These two people may never understand the desire of the other one due to their heterogeneity. Human heterogeneity is complex and depends on many aspects including their personality and individual traits, environment in which they have grown up and currently live, past experiences, etc. Is it necessary to understand the needs of other social bubbles to run a successful business for outside of your bubble? In other words, do the Arusha people need to understand Western foreigners who want to summit the highest mountain in Africa? Yes and no. It may be impossible to feel another person's need for challenge, exploration, experience, or other drivers of intrinsic motivation. On the other hand, making assumptions based on you own perspective and heuristics about what a potential customer would expect may be harmful. Is it really the case that all tourists want to eat eggs every day or is it what the tour operators think that their customers want? Do all these challenge-oriented climbers want to have six people carrying their spare clothes and honey in a glass jar? The best way to answer these questions would be to conduct a market research and customer satisfaction surveys. However, for this one has to allow for a different thinking, for a departure from the current standard.

Changing your thinking to the opposite of what you think mentally demanding (i.e., it requires a lot of cognitive resources). One technique of this type called "dialectical bootstrapping" is a powerful forecasting technique that also helps avoiding a cognitive bias such as "group think". In dialectical bootstrapping you simply push yourself to generate ideas or estimates 180 degrees the opposite of your initial thought. To me, the process of organising Kilimanjaro climb seemed redundant and inefficient. With tens of hundreds of tourists moving from one camp to another, it seems inefficient for touring companies to bring tents for every group, build them in the evening, pack them in the morning and carry all gear to the next camp. Why not setting permanent camps, or huts? The policy of the park does not allow for this. Every group has to take all their things with them, in principle, to prevent littering. This does not make Kilimanjaro a clean mountain. On the contrary, the toilet situation is not ideal. Also, why in the age of e-mobility are there sherpas who spend a day carrying deliveries of 20kg in a plastic bag for a fee that does not allow them to buy a decent pair of shoes? This is a system that creates easily-accessible jobs that any physically fit person can do without any training. 

Replacing the current solution for operating Kilimanjaro climbing tours with, for example, a cable car would require engaging knowledge and expertise from abroad, a substantial financial capital, governmental policy aligning with the new initiative, training engineers, construction workers and technicians and finally, reducing number of the the low-paid jobs by automatisation, increasing the number of better paid jobs and, hopefully, re-qualification of the workers not fitting to any of the categories. This is just a simple demonstration that a transition from a developing economy requires financial resources and appropriate policy-making, while the labour aligns with what it gets. On the other hand, the Indian immigrants in Tanzania showcase finding business opportunities through more creative solutions (such as renting a hotel room in a strategic location for one hour for using a shower) and indicating gaps, despite the system. Clearly, psychological and social factors play an important role developing financial resilience. Every foreigner brings expertise, perspective and skills (for example business skills and expertise) that may not be easily available locally. Additionally, an immigrant has a cognitive capacity to adapt to and strive in a new environment. 

This Kilimanjaro trip was a lesson of individual financial and psychological resilience, entrepreneurial mindset, social bubbles, and subjective value, just to name a few. Breathtaking views and unforgettable pictures were the cherry on the top.