A few days back, we touched on the challenges of undermining one’s enemy by counterfeiting his currency. Today we’d like to shift the focus to another tactic of fiscal warfare: issuing a new currency upon seceding from a national union. We all know the Confederacy did it back in the day, but it has become an exceedingly rare step in contemporary times. Take, for example, the Tamil Tigers, who succeeded in briefly creating a de facto government on the Jaffna peninsula, complete with its own police force and school system. But the Tigers never went so far as to issue their own currency, for several good reasons. For starters, printing counterfeit-proof currency is incredibly expensive nowadays, and a fledgling nation would certainly be more susceptible to fiscal subterfuge than an established counterpart. On top of that, it’s just bad economics to use a currency that no one outside your borders will accept—it makes trade umpteen times more difficult.
But there is an obvious symbolic power to having your own currency, and that seems to have been the lure for the secessionist government of Biafra, which existed from 1967 until 1970. The Biafran regime issued its own currency in 1968, and then printed a second series of notes a year later. This second series was notable for its use of microprinting, then an incredibly novel anti-counterfeiting device. That indicates that the notes were likely printed at an advanced facility in Switzerland, and paid for by wealthy Ibgo exiles based in London.
Unfortunately for Biafra, the currency gambit did little to aid its secessionist cause:
Although Biafra had made a concerted effort to produce the second series of higher quality bank notes, it would appear that their circulation was limited. By the time the notes were introduced in 1969, the country controlled by the Biafran forces had been reduced to a circular area approximately 85 miles across (roughly 5,000 square miles) and all consumables had long been sold. When a foreign journalist, Michael Mok of ‘Life’ magazine, asked a nun working with the Biafrans whether he could make a cash donation to help the starving children, he was told that cash would be useless, as there was nothing left to buy in Biafra. This may have been one of the reasons why so many Biafran notes remained in Europe undelivered – they were a cargo that could bring little practical purpose.
The Biafran pound has enjoyed a brief afterlife along the Togo-Benin border, where traveling Igbo traders do significant business. The going rate as of 2005 was 270 Nigerian naira to one Biafran pound.
Can anyone else think of contemporary secessionist movements that have dared to issue their own currencies? Extra credit (and free Microkhan mesh hat) if you can dig up an image.