Maldives’ Freakonomics: Lesson One - ‘Hakuru’ Business

After I wrote a blog post on how to make loads of money in the Maldives, someone asked me if the ‘hakuru’ pushers really do make that kind of money and how and why are people lured into the business.

Well, the IRR of over 7000% and NPV of Rf44million was no joke. And a gross annual income of Rf8million isn’t unrealistic if you start with a seed capital of, say, Rf100,000. Just think about this - for someone to have Rf5 million cash on him at any given point in time his annual income has to be, even by the most modest reckoning, at least Rf50million. So, my estimates were in fact very prudent. The numbers were worked out based on very prudent and realistic assumptions.

Now, for the question – do all of them make that kind of money? Well, ‘Hakuru’ business is no different from any other capitalist enterprise. So, to make really big bucks from it you have to be at the top of the pyramid. The average foot soldier ‘partey’ probably makes very little money - perhaps just enough for his daily fix.
Then, why are so many people in the business? That’s because our country offers a very conducive environment for ‘Hakuru’ businesses to thrive. To many young people ‘hakuru’ offers not only an escape but a shortcut to great wealth and power with relatively little risk.

Ok, they are not making money. So, what’s their motivation?

Here’s a profile of two ‘partey’ kids I know. Makmoor and Maumoor, both in their late teens, are two out of eight siblings. Their mother, father, 8 siblings and a few other relatives lived all their life in two match box sized slum-like rooms located right in the heart of ‘Bah’lha’ territory in Male. The family, forced to live mostly on the generosity of their distant relatives ever since their father died of heart failure a few years ago, have been trying to eke out their existence any way they could. Both kids dropped out of school before they reached grade 8. So, the best job they thought they had access to was provided by highly visible, incredibly lucrative neighbourhood ‘Bah’lha gang’. The kids grew up marvelling at the glory and power of Bah’lha gang’s boss ‘Addey’ and his Lexus sports car. Addey has everything they could ever dream of – he’s cool; he has money, power, sex and glory! He is their role model. They know all too well that if they are to make it to the top someday money, power, sex and glory will all be theirs too. Risks? No worries. Being convicted 7 times in Maldives does absolutely no harm to the glory and power of a ‘boss’.

The ‘partey’ kids aren’t very different from the rest of the kids on the streets of Male. The typical twenty-something GRO at Sonevafushi would probably be dreaming of becoming a Sonu Shivdesani one day or making it all the way to the top. Likewise, Makmoor and Maumoor, having grown up in abject poverty and being denuded of whatever little moral values engrained in them – thanks to their preadolescent exposure to ‘hakuru’ fuelled highs - are only trying to climb their way to the top of the capitalist enterprise they know.