South Asians in East Africa (1880-1920) with a Particular Focus on Zanzibar: Toward a Historical Explanation of Economic Success of a Middlemen Minority



South Asians in East Africa outplayed most of their economic rivals, like European (colonial) companies, Arab traders and Swahili businessmen. This economic success is usually attributed to their ‘entrepreneurial attitude and skills’. This includes their ability to work hard, to live modest and sober and to re-invest their profits in new commercial ventures. In addition, they use their ethnic resources for capital accumulation and knowledge of (international) markets. The combination of ‘attitude’ and using ‘ethnic resources’  form  the key explanation of the success of the middlemen minority theory.  Therefore, the case of South Asians in East Africa is usually portrayed as perfect match with the middlemen minority theory. I will argue, however, that the seeds of the economic success of this business community lie within three interrelated non-economic grounds: (1) the use of India as safetynet for those who did not make in East Africa; (2) their generally profitable relation with the various rulers (pre-colonial, colonial and –to a lesser extent- postcolonial period), and; (3) their ability to educate their offspring according to economic demands.  My main argument is that South Asians more than Swahilis, accustomed with a money economy and the concept of interest. In addition, they knew how to read, write and produce account books. Finally, they had access to the rulers, and were able to negotiate profitable terms of trade. Nevertheless, many were not successful at all and went bankrupt. Therefore, the success of South Asians in East Africa may be explained as the outcome of a ‘trial and error’ process. The successful remained in East Africa, whereas others left. India remained a safety net for those who did not make as well as source for new recruitment of traders, shopkeepers and clerks.
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