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The objective of this Blog is to facilitate access to research resources and analyses from all relevant and useful sources, mainly on African Economic Development.
This Blog will include analyses and observations of the three authors, Steven Langdon, Arch Ritter and Teddy Samy. It will also include hyper-links, abstracts, summaries, commentaries and observations relating to other research works from academic, governmental, media, non-governmental organizations and international institutions.
Commentary and discussion on any of the postings is most welcome.
The Trump administration wants the African nation to remain open to imports of clothing donated to charities in rich countries
The Economist. May 31st 2018 | KIGALI AND MANSFIELD
Original Article: A Worn-Out Trade Deal
For an additional first-hand account of the second-hand clothes market in Kenya see “Mitumba 101: The Second Hand Clothing Trade in Kenya” by Katrina Shakarian, in KIVA Stories from the Field, July 22, 2013
IN A market in Kigali, Rwanda’s capital, a cacophonous auction is under way. Sellers hold crumpled T-shirts and faded jeans aloft; traders shout and jostle for the best picks. Everything is second-hand. A Tommy Hilfiger shirt goes for 5,000 Rwandan francs ($5.82); a plain one for a tenth of that. Afterwards, a trader sorts through the purchases he will resell in his home village. The logos hint at their previous lives: Kent State University, a rotary club in Pennsylvania, Number One Dad.
These auctions were once twice as busy, says Félicité Mukarurangwa, a trader. But in 2016 Rwanda’s government hiked import duties on a kilo of used clothes from $0.20 to $2.50. Now she struggles to break even. The traders are not the only ones who are unhappy. Exporters in America claim the tariffs are costing jobs there. In March President Donald Trump warned that he would suspend Rwanda’s duty-free access to American markets for its apparel after 60 days if it did not back down. That deadline expired on May 28th without Rwanda shifting its position.
The dispute tugs at the threads of a trade that knits together charity and business, gift and profit. Globally, about $4bn of worn clothes crossed borders in 2016. The share from China and South Korea is growing, but 70% still come from Europe and North America. Most go to Asia, eastern Europe and Africa, the largest market. The trade clothes the poor and creates retail jobs. But governments worry that cast-offs undercut their fledgling industries. Imports are banned or tightly restricted in 41 countries, from South Africa to India.
A complex supply chain begins with people like Elizabeth Forsythe, stuffing a bag of old clothes into a donation bin in north London. She assumes that they will end up in a charity shop. But in most rich countries the supply of used clothing far outstrips demand. Less than half of donations are sold locally. Most of the rest are sold to exporters. In Britain a tonne of textiles from a bin fetches £170-315 ($225-420). At Savanna Rags, in Mansfield in the English Midlands, 500 tonnes of old clothes glide along conveyor belts each week. The workers, mostly eastern European immigrants, sift items into categories depending on the market, such as “childrenswear” and “Asian clothing”, transforming a jumble of fabric into plastic-wrapped bales.
In Africa, these motley bundles are a valuable commodity. Men’s clothes are pricier, since fewer arrive. American pieces are often too large and have to be resized by tailors. No matter. “A person would rather buy second-hand from America, instead of buying a new Chinese product,” says Nelson Mandela, a Ugandan trader with a suitably second-hand name. Shoppers complain that new Asian clothes damage easily and look like uniforms, without variety. Hucksters sometimes dunk Chinese imports in dirty water to pass them off as used ones from Europe.
Some suspect that high-quality, unworn clothes are smuggled into bales as a way for the rich world’s clothing industry to offload samples and unsold items. “It’s just a form of dumping,” says Belinda Edmonds, the executive director of the African Cotton and Textile Industries Federation, an industry body.
Second-hand imports now dominate African markets. Researchers at the Overseas Development Institute, a British think-tank, reckon that Tanzania imports 540m used items of clothing and 180m new ones each year, while producing fewer than 20m itself. African manufacturing is weak for many reasons, from clumsy privatisations to crumbling infrastructure. But second-hand imports are a major culprit, according to a paper in 2008 by Garth Frazer of the University of Toronto. He estimated that they accounted for half of the fall in employment making apparel in Africa between 1981 and 2000.
Loose fibres blow around the idle machines at UTEXRWA, a textiles and garment factory in Kigali. The plant operates at 40% of capacity and employs 600 workers, down from 1,100 in the 1990s. It is hard to compete, sighs Ritesh Patel, its manager, when a used T-shirt sells for the price of a bottle of water. Instead, the company specialises in uniforms for police, soldiers and security guards, which cannot be bought second-hand.
Even so, says Mr Patel, higher tariffs have not helped much. “The big challenge is not second-hand clothes or Chinese clothes,” he says. “It’s buying power.” Although the government is promoting “Made in Rwanda” products, firms like UTEXRWA cannot produce cheaply enough for most local consumers. Zips, dyes and synthetic fibres are sourced from other continents. A new garment-maker has opened in a special economic zone, cutting and sewing Chinese-made fabrics. But it mostly sells abroad. Where nascent industry shows promise, as in Ethiopia, it is often export-led.
Rwandan apparel exports currently enter America under the African Growth and Opportunity Act (AGOA), which eases market access for African countries. The threatened suspension would hurt, but not very much. Last year Rwanda sent a mere $1.5m of apparel to America. Nor, with 12m people, is it a big market. America is more concerned about Kenya, Uganda and Tanzania, which all planned to phase out second-hand imports before yielding to American pressure.
Meanwhile, exporters of used clothes in the rich world, like Savanna Rags, have other worries. Fast-fashion retailers churn out poorer-quality clothes, which do not survive long enough to be worth reselling. Sorting is moving to India, Pakistan or the United Arab Emirates, where wages are lower. Skittish consumerism and ruthless competition have long underpinned the used-clothing trade. They may now be un-ravelling it.
Africa and Climate Change: New Evidence of Damage
by Steven Langdon, Adjunct Research Professor of Economics, Carleton University
When the Intergovernmental Panel on Climate Change (IPCC) presented its most recent Assessment Report in 2014, the consensus of the thousands of scientists involved was that global warming was taking place at a rate that could cause “irreversible detrimental impacts.” More than fifty percent of this was caused by human activity, the Report indicated, especially the high rate of emissions of carbon dioxide and other Greenhouse Gases resulting from fossil fuel consumption, cement production and gas flaring.
These trends have continued since 2014 and are widely recognized by global climate observers, as illustrated in 2017 by the National Aeronautical and Space Agency (NASA) in the United States.
The IPCC Assessment Report concluded that Africa would be especially impacted by global climate change, with temperatures very likely to rise by more than the world average in West and Southern Africa, and higher chances of extreme rainfall and heat events in East Africa and elsewhere. Rising sea levels also threaten low-level coastal areas in many parts of the continent.
As discussed in the book we have just published (Langdon, Ritter and Samy, 2018, African Economic Development, Abingdon and New York: Routledge,) this demonstrates how negative environmental externalities from global carbon emissions damage African populations despite limited emissions within Africa itself. We also point out in the book the more constricted capacity for African countries to finance adaptation and mitigation measures to counter these trends. Data reported by the Economist, and already posted in this blog, show that increasing variability in temperatures is affecting Sub-Saharan Africa more than other parts of the world.
Evidence of climate change damage in Africa has been growing since the IPCC Report – ranging from drought in Southern Africa to bleaching of coral reefs in East Africa and subsequent reductions in fish stocks. The accompanying article from the New York Times (May 24, 2018) provides another example of such damaging effects, in this case associated with rising sea-coast levels in northern Senegal. It also describes adaptation efforts in the community to counter these rising levels.
“Wrath of Coastal Erosion” is Devouring a Senegal Fishing Hub
- May 23, 2018
SAINT-LOUIS, Senegal — Houses on the shore seem to have been ripped open by a giant claw. The corner of an abandoned school is gutted, leaving what looks like a gigantic bite mark. All that is left of a nearby mosque is a flattened pile of concrete blocks and twisted iron rods.
The culprit behind this destruction in Saint-Louis, on the northern edge of Senegal’s Atlantic Coast, is not some mythical sea monster, but the ocean itself.
At a rate that is increasingly worrying to residents and officials, waves are lapping at buildings on the shoreline, pulling sand away and eroding foundations until walls collapse and floors cave in.
On a recent morning, Massamba Diaw, 70, showed a jumble of ruins in the sand.
“Two months ago, we were standing here, under a roof,” he said. Like most men in his neighborhood, Mr. Diaw was a fisherman. Like many of his neighbors’, his house is now crumbling.
About 80,000 people live in the poorer neighborhoods of Saint-Louis, where coastal erosion is an immediate threat.
“We all feel really sad, and threatened,” Mr. Diaw said, pulling his grandchildren away from the edge of his first floor, which is now exposed to wind and rain. “What will these kids do in the future?”
But the impact is particularly stark in Saint-Louis, especially on the Langue de Barbarie, or Barbary Tongue, a thin, sandy peninsula that extends over a dozen miles further south and acts as a natural buffer with the ocean.
“For the past decade, people here have really started to suffer the wrath of coastal erosion,” said Latyr Fall, the city’s deputy mayor for economic issues.
Saint-Louis, a city of over 232,000 that was first settled by the French in the 17th century, was the colonial capital of French West Africa until 1902.
It is split in two by the Senegal River, which snakes down from the north, forming a natural border with Mauritania. Eastward, on the mainland, is most of modern Saint-Louis. Westward is the Langue de Barbarie, which separates the river from the ocean until the two meet.
In the middle is an island best known to tourists for its preserved 19th-century colonial architecture — low, pastel-colored houses with vivid shutters and wrought-iron balconies, some renovated and turned into elegant guesthouses, others slowly crumbling but still graceful.
The island became a Unesco World Heritage sitein 2000, and is host to cultural events like annual jazzand contemporary dancefestivals. Erosion isn’t discussed much, said Staffan Martikainen, a Finn who runs an artistic residency programthere.
“It’s surprising, in view of the fact that both the fisherman’s peninsula and the island might be gone in two generations, that real estate prices don’t go down,” he said.
But across the bridge that spans the small arm of the Senegal River, in the poorer neighborhoods on the Langue de Barbarie, coastal erosion is an immediate threat. About 80,000 people live there, on a stretch of land that is barely 600 feet wide in some places.
Crowds of children race the streets, jumping out of the way of horse-pulled carriages and sputtering minibuses. Green fishing nets lie tangled on the sidewalk while tethered goats munch on trash in sandy side alleys.
Many in these neighborhoods are from the Lebou ethnic group, traditionally a fishing community. The ocean might have destroyed their homes, but it was also a source of food, income and community.
“In Saint-Louis, if fishing thrives, everything thrives,” said Mr. Fall, the deputy mayor. “But if fishing hurts, then everything hurts.”
Fishing is now harder than ever for about 250 families that have lost their homes to erosion. Most of them — roughly 850 people — were resettled by the local authorities in a temporary camp several miles inland.
Abdou Gueye, 42, is one of them. His house was destroyed during a storm surge in August and his family was brought in October to the temporary settlement, a mix of small concrete houses and tents known as the Khar Yalla camp, in an empty field far from downtown.
It has several outdoor showers and toilets, and some outside lighting, but lacks proper access to water and to waste management, and it is prone to flooding.
Still, it is the distance to the coast that ails these fishermen the most.
“Now we have to pay for transportation to the ocean,” Mr. Gueye said, sitting under a pitched white tarp to avoid the sun. In the bustling fishing district, neighbors conveyed reports of a brewing storm, or of a good catch. “Now we are far away from all that information,” he added.
Nearby, Yaram Sène, 20, said leaving was on everybody’s mind. “There is nothing here, no police, no health facility, no school,” she said.
Mr. Gueye said each family had received about $900 from the authorities when their houses were destroyed, but nothing since. Few can afford to move elsewhere.
For those who still live on the Langue de Barbarie, Senegal is paying the French construction company Eiffage to build an embankment that shields houses from the ocean swell.
Made of giant five-ton bags of sand topped with rock-filled cages, it will run for about two miles down the coast until it reaches parts of an old colonial-era sea wall that are still standing.
But officials stress that the embankment is an emergency buffer to protect houses from immediate destruction, not a permanent fix for the erosion. Longer-term solutions have been proposed: building breakwaters or a new sea wall, resanding the beaches or clearing them to create a buffer zone.
The authorities are still waiting for results from continuing engineering studies to determine what to do. President Emmanuel Macron of France recently promisednearly $18 million to help, adding to existing funds from the World Bank.
Some, like 53-year-old Ahmet Diagne, are taking matters into their own hands.
Mr. Diagne used to live in Doun Baba Dièye, a village of fishermen, cattle breeders and farmers just south of Saint-Louis. But in 2003, scrambling to evacuate floodwaters swelling around the city, the Senegalese authorities hastily dug a channel in the Langue de Barbarie.
The breach quickly grew, bringing erosion to villages that had previously been shielded from it, and submerging Doun Baba Dièye. In 2009, residents started moving inland.
From his fishing boat, early on a recent morning, Mr. Diagne pointed to what was left of his former village: a few ruins on the shore, and a sunken tree covered with cormorants that used to be in the town square.
For the past several years, with financial help from the government and international organizations, he and his community have planted thousands of mangroves and pine trees known as filaos, to halt erosion and reclaim land then used to farm and sell cassava, cabbages, melons, sweet potatoes and other produce.
Mr. Diagne became a local expert of sorts on coastal erosion, even for those in Saint-Louis who had previously derided his warnings that they, too, would soon face his village’s fate.
“It was a bit hard for me in the beginning,” he said. “I received calls from people telling me: ‘Stop talking nonsense. You did not attend school. Who are you to talk about erosion and rising sea levels?’”
“But now,” he said, “people are calling me back.”
Follow Aurelien Breeden on Twitter @aurelienbrd.
A version of this article appears in print on May 24, 2018, on Page A8 of the New York edition with the headline: ‘Wrath of Coastal Erosion’ Devours a Fishing Hub in Senegal. Order Reprints| Today’s Paper| Subscribe
Temperatures in tropical climates will become far more variable.
Original Article: Climate Change and Africa
By THE DATA TEAM, The Economist, May 9th 2018
GLOBAL warming is often used as a synonym for climate change, and most discussions of the topic focus on the expected increase in average global temperatures. However, the frequency and severity of individual, catastrophic weather events depend heavily on the variability of temperatures as well as their mean. The larger the swings, the more often extremely hot or cold conditions can wreak havoc.
Unfortunately, according to a new study by Sebastian Bathiany of Wageningen University and three other scientists, poor countries are not only predicted to bear the brunt of the increase in average temperatures, but also to suffer from higher variation. Their paper finds that, as the planet warms, soil in areas near the equator will dry up, reducing its ability to dampen temperature swings. This problem is expected to be especially acute in the Amazon rainforest. Consequently, the authors expect the standard deviation of monthly temperatures to increase by nearly 20% in Brazil.
In contrast, countries in the northern latitudes, which are mostly rich, will not be affected nearly as much by changes in soil moisture. Far from the equator, countries will actually see smaller temperature fluctuations, because of changing atmospheric patterns. In terms of both means and variances, the countries that bear the most historical responsibility for climate change are likely to be the ones least harmed by its consequences.
BROOKINGS, Thursday, May 3, 2018; Brahima Sangafowa Coulibaly
Original Article: AFRICA’S ALTERNATIVE PATH
Recent projections indicate that several Sub-Saharan African countries will experience robust economic growth over the next five years. By 2023, around one-third of the region’s economies will have grown at an average annual rate of 5 percent or higher since 2000.
And yet, as The Economist observed last year, Africa’s development model “puzzles economists.” After all, only four of the continent’s high-growth countries are natural-resource dependent. Nor is overall performance due primarily to industrialization, as traditional development models would have predicted. What, then, explains the strong economic performance?
New research by the Brookings Institution’s Africa Growth Initiative and the United Nations University World Institute for Development Economics Research (UNU-WIDER) might hold the key to answering that question. According to the forthcoming book Industries Without Smokestacks: Industrialization in Africa Reconsidered, there is evidence to suggest that Sub-Saharan Africa is undergoing a more profound structural transformation than we think.
Africa owes this structural transformation not to traditional industries, but to new developments in tradable services and agro-industries that resemble traditional industrialization. Aside from horticulture and agro-business, these new industries include information and communication technology-based services (ICT) and tourism.
This is a departure from the historical norm. Traditionally, as Harvard University economist Dani Rodrik points out, economies that have sustained robust growth rates without relying on natural-resource booms, “typically do so through export-oriented industrialization.” But in Africa, manufacturing as a share of total economic activity has stagnated at around 10 percent, with economic activity moving from agriculture to services. And because the rate of productivity growth in services is only about half that of manufacturing, the aggregate productivity gains needed for sustained growth have fallen relatively short.
This process of premature deindustrialization is not unique to Africa. But it is more consequential for the continent, given the scale of its development challenges. Owing to its young, rapidly growing labor force, Africa now needs to create more than 11 million jobs in the formal economy every year. But as Nobel laureate economist Joseph E. Stiglitz has warned, Africa cannot replicate East Asia’s manufacturing-led model, so the question is whether it can leverage modern services to achieve economic development.
According to Foresight Africa: Top Priorities for 2018, a Brookings Institution report previewing the results of Industries Without Smokestacks, services exports from Africa grew more than six times faster than merchandise exports between 1998 and 2015. In Kenya, Rwanda, Senegal, and South Africa, the ICT sector is flourishing. In Rwanda, tourism is now the single largest export activity, accounting for about 30 percent of total exports. Ethiopia, Ghana, Kenya, and Senegal are all integrated into global horticultural value chains, and Ethiopia has become a leading player in global flower exports.
As these smokestack-less industries have grown, they have generated new patterns of structural change that are distinct from those of East Asia’s manufacturing-led transformation. But, if properly stewarded, they could play the same role in Africa’s development as manufacturing did in East Asia.
Manufacturing-led growth proved to be an effective development model in East Asia for three main reasons. First, manufacturing has higher productivity than agriculture, and it can absorb a large number of moderately skilled workers migrating out of the agriculture sector. Second, manufacturers benefit from technological transfers from abroad, so their productivity rises in line with global trends. And third, the shift to manufacturing in East Asia was oriented toward exports, which allowed production to be scaled up.
According to John Page, one of the editors of Industries Without Smokestacks, Africa’s growing service sectors share these same characteristics. In addition to being tradable, they have higher productivity and can absorb large numbers of moderately skilled workers. And like manufacturing, they also benefit from technological change and economies of scale and agglomeration.
Moreover, Africa’s smokestack-less service sectors have the added advantage of being less vulnerable to automation. Notwithstanding automation’s many benefits, it presents challenges for countries where the overriding priority is to create a sufficient number of formal-sector jobs.
While economists have been increasingly confident that Africa’s development model will be different from that of East Asia, they have been less certain about what shape it will take. An industries-without-smokestacks model offers one possible answer.
From a policy perspective, African leaders should explore more ways to support these industries’ growth, either through targeted reforms or by incorporating them into national industrialization strategies and broader development agendas. The development of industries without smokestacks can occur alongside efforts to develop those with smokestacks, thus offering a multifaceted approach for Africa to achieve structural transformation.
Original Article: NEW PAN-AFRICAN FUND
Partech Ventures, a Silicon Valley-based venture capital (VC) firm, has launched an Africa-focused fund which will look to provide early-stage funding to promising startups and founders on the continent. The fund has raised $70 million of its $100 million target, making it one of the largest Africa-focused funds.
Partech Africa is backed by French bluechip corporate partners with “a strong footprint in Africa” including Orange, Edenred, JCDecaux Holding and Bpifrance, a French investment banks as well as multilateral financiers: International Finance Corporation and the European Investment Bank.
The new fund plans to differentiate itself by not limiting operations to Kenya, Nigeria and South Africa, the continent’s leading ecosystems.”We think the impact of a local VC should also be to widen the scope and look at other markets that people know less of,”says Tidjane Dème, general partner at Partech Africa. This includes Francophone African countries Côte d’Ivoire, Senegal and Cameroon as well as Ghana, Tanzania and Uganda.
Francophone Africa in particular has been a significant under-tappedmarket for tech startup investors over the last decade. The region of over 120 million people in 24 countries across West, Central and North Africa includes some of the world’s fastest growing economies led by Côte d’Ivoire and Senegal.
And yet, between 2010 and 2016, there were 167 private equity deals in Anglophone East Africa alone (Kenya, Ethiopia, Tanzania, Rwanda and Uganda), according to AVCA data. During the same period, Francophone West Africa saw a third of that. More than 30% of that has gone to Côte d’Ivoire. Investment for tech startups is even more scarce.
Perhaps a testament to that stance, Partech Africa is headquartered in Dakar, Senegal and is looking to build permanent presence in other African cities to ensure a first-hand understanding of local markets. “We’re making sure our investment team is based in Africa and lives and works in the same context as these startups and can really understand where they’re coming from and the product they’re building,” Dème says.
More Africa-focused VC firms are raising significant funds to support local startups on the continent. Last October, CRE Venture Capital, an African VC firm, led the $40 million Series C round of Andela. The round also saw participation of TLcom’s Africa-focused fund, headed by Omobola Johnson, Nigeria’s former ICT minister. Partech’s research showed startups on the continent raised $366 million in 2016—a $90 million increase from the prior year.
Another gap Partech Africa is looking to plug is the lack of early stage funding much of which has typically been provided by incubators and accelerators on the continent. With majority of private equity investment going towards tickets above $10 million, according to Partech’s data, Dème says it’s the gap below $10 million that needs to be addressed. As such, Partech Africa will be providing funding between between $600,000 and $6 million. The big hope for Partech Africa, according to Dème, is that its smaller early-stage funding tickets “not only address existing demand but also hopefully drive demand for the lower stages as we create a call for more startups.”
Original Article: Electricity in Africa
If you have read an article about electricity in Africa before, this number is not new to you. It has become a familiar, almost totemic refrain in every op-ed, panel discussion and program launch addressing electrification on the continent. The statistic is so frequently cited that it can sometimes wash over its audience like a repeated cliché.
Several days ago, the World Bank quietly updated the statistic based on 2016 data. This update provides us with a space to appreciate, again, the heavy and urgent burden of human consequence this statistic represents. It should imbue us all with a renewed sense of urgency.
But some 600 million people still lack access to electricity in Africa, according to World Bank 2016 data. In other words, no absolute progress has been made since 2014.
Over the two years from 2014 to 2016, the off-grid population has gone down slightly. In fact, electricity has reached an impressive additional 76 million people and the electrification rate increased by 5 percentage points to 43%%. But, these 76 million new connections only slightly outpaced population growth of 54.5 million people. So the absolute number of people living without electricity has fallen by only 21 million and the headline statistic remains basically steady at a rounded 600 million people.
There are some encouraging signs. 60% of the newly connected population were in rural areas, where people are more difficult to connect. The urban electrification rate moved slightly from 72% to 74% while rural electrification increased from 16% to 23% in the same time frame. So, progress is being made in the more difficult task of rural electrification. But it’s not enough.
What does this all mean?
The electrification sector has not been standing still. Pay-as-you-go solar has attracted $750 million in investment over the past five years, mini-grids are gaining traction with hefty donor funding allocated across the continent (our estimate is over $600 million) and public sector electrification efforts by national governments are intensifying.
But, this update confirms again that universal electrification is hard and expensive. Grid connections cost anywhere between $250 and $2500+ depending on proximity to the grid. Mini-grids that offer a grid-like service still cost between $500 and $1500 to connect each household. Electrification in a continent where over 60% of the population still live in rural areas is even harder.
So our message isn’t one of discouragement. Instead, we’d propose that we use this update to look with fresh eyes at this staggering statistic; 600m people in Africa lack electricity. We must renew our appreciation for the scale of the challenge and the human consequences of failure.
Universal electrification is the seventh of the Sustainable Development Goals that the global community has committed to achieve by 2030. Even on very optimistic assumptions about the current connection trajectory, 240 million people in Africa will still lack electricity in 2030. To reach our goal, governments, donors and investors need to rally anew behind both government electrification efforts and private sector players in the utility, mini-grid and solar home system sectors
By Deborah Bräutigam
The Washington Post, April 12, 2018
Deborah Bräutigam is the Bernard L. Schwartz Professor of International Political Economy and director of the China Africa Research Initiative at Johns Hopkins School of Advanced International Studies. Her latest book is Will Africa Feed China?
In Washington, Republicans and Democrats generally look at China as a new imperial power in Africa: bad news for Africans. But is this really the case?
Just before his visit to Africa last month, former secretary of state Rex Tillerson accused China of using “predatory loan practices,” undermining growth and creating “few if any jobs” on the continent. In Ethiopia, Tillerson charged the Chinese with providing “opaque” project loans that boost debt without providing significant training. As secretary of state, Hillary Clinton sang the same tune, warning Africans to beware of this “new colonialism.” China, we are often told, is bringing in all its own workers or “grabbing” African land to grow food to send back to feed China.
But researchers who have explored China’s role in Africa suggest that many of the things our politicians believe about Chinese engagement are not actually true.
- Jobs and training
Take jobs and training. Lina Benabdallah, a political science professor at Wake Forest University, studies Chinese investments in African human resource development programs. “Africans are being invited to Chinese universities. China is offering scholarships,” she said. “When Africans are thinking about technology [and] skills, they are thinking of China as a valid option.”
Surveys of employment on Chinese projects in Africa repeatedly find that three-quarters or more of the workers are, in fact, local. This makes business sense. In China, textile workers now earn about $500 a month — far more than workers in most African countries. Chinese investors flocking to set up factories in low-cost countries like Ethiopia are not thinking about importing Chinese workers. Like U.S. and European factory owners who moved their factories to China in past decades, Chinese firms are now outsourcing their own manufacturing to cheaper countries.
- Predatory lending
Are the Chinese engaging in predatory lending? Here, researchers can also shine light on a murky subject. Scholars at Boston University and Johns Hopkins University have been painstakingly assembling databases of Chinese loans provided since 2000.
In Africa, we found that China had lent at least $95.5 billion between 2000 and 2015. That’s a lot of debt. Yet by and large, the Chinese loans in our database were performing a useful service: financing Africa’s serious infrastructure gap. On a continent where over 600 million Africans have no access to electricity, 40 percent of the Chinese loans paid for power generation and transmission. Another 30 percent went to modernizing Africa’s crumbling transport infrastructure.
Some of these were no doubt pork barrel projects and white elephants: airports with few passengers, or bridges to nowhere. African presidents, like others, love to cut ribbons and leave legacies of big buildings. Chinese companies will receive nearly all of the contracts to build this Chinese-financed infrastructure. Questions have been raisedabout its quality. Yet on the whole, power and transport are investments that boost economic growth. And we found that Chinese loans generally have comparatively low interest rates and long repayment periods.
- Land grabs
“Land grabs” — a term used for any purchase, rental or theft of relatively large amounts of land — are controversial around the world, but especially in Africa, where colonial powers like Britain and France grabbed nearly the entire continent. The stories that China was now a “land grabber” in Africa seemed to make sense. After all, China has 9 percent of the world’s arable land, 6 percent of its water and over 20 percent of its people. Africa has plentiful land and the planet’s largest expanses of underutilized land and water. And Chinese companies were clearly interested in investing in Africa; some came to inquire about land.
And so the land grab rumors began to spread. On the CBS Newswebsite, we read: “China recently purchased half the farmland under cultivation in the Congo.” German president Angela Merkel’s top African adviser told reporters that a devastating famine in the Horn of Africa several years ago was partly due to China’s “large-scale land purchases.” Even Swedish crime writer Henning Mankell recirculated a “land grab” story: “I read just the other day that China has rented land in Kenya to move some one million peasants to Africa.”
Intrigued by these stories, I did what academics do. Instead of tweeting what might have been fake news, I set up a research project.
Our team at the International Food Policy Research Institute and at Johns Hopkins University collected a database of 57 cases where Chinese firms (or the government) were alleged to have acquired or negotiated large (over 500 hectare) amounts of African farmland. If all of these media reports had been real news, this would have amounted to a very alarming 6 million hectares — 1 percent of all the farmland in Africa.
We spent three years tracking down every single case. We travelled from Madagascar to Mozambique, Zimbabwe to Zambia. We confirmed that nearly a third of these stories, including the three above, were literally false. In the remaining cases, we found real Chinese investments. But the total amount of land actually acquired by Chinese firms was only about 240,000 hectares: 4 percent of the reported amount.
The stories of large-scale land grabbing and Chinese peasants being shipped to Africa to grow food for China turned out to be mostly myths. As researchers at the Center for International Forestry Research concluded after their own rigorous research: “China is not a dominant investor in plantation agriculture in Africa, in contrast to how it is often portrayed.”
We found a story of globalization, not colonization; a story of African agency, rather than Chinese rapacity. In Mozambique, I met African investors like Zaidi Aly, who had traveled to Brazil to learn how to grow soybeans for local chicken feed. There, he met a Chinese firm buying soybeans. Aly invited them to invest in soybeans with him. Hit by a prolonged drought, their joint venture failed. The Chinese returned home. But Aly told me it was a net gain: “I learned so much from them.”
To be sure, increased Chinese engagement comes with significant and very real challenges for many Africans. Traders complain about competition from Chinese migrants. In our research on Chinese factories in Africa, we’ve interviewed African workers who now have jobs but complain about Chinese bosses who expect long hours at low pay.
Chinese demand for African ivory, abalone, rhinoceros tusk and materials from other endangered species has taken a significant toll on conservation efforts. And Chinese President Xi Jinping’s recent lifting of his own term limits is bound to embolden African leaders who are reluctant to leave their comfortable presidential posts.
China is often lambasted as a nefarious actor in its African dealings, but the evidence tells a more complicated story. Chinese loans are powering Africa, and Chinese firms are creating jobs. China’s agricultural investment is far more modest than reported and welcomed by some Africans. China may boost Africa’s economic transformation, or they may get it wrong — just as American development efforts often go awry.
African Union Building, Addis Ababa; Another Chinese Project
The ECONOMIST, Dec 22nd 2012.
Original Article: Kibera, Africa’s biggest shanty-town
“Kibera may be the most entrepreneurial place on the planet! “
MEN in patched overalls and women in freshly washed blouses walk down a narrow lane just after six in the morning. They are packed in tightly like spectators leaving a sports stadium, but this is their life, their every morning. Backs are straight; trousers and sleeves rolled up, exposing mottled yet able limbs. They crush discarded wrappers of quick-fry breakfasts under foot, corn and oil dripping from mouths. Banana skins are ground to dust by thousands of feet.
Everyone is moving in one direction, jostling and shoving, out of a maze of low-strung shacks, past shops selling shoes and phones that have already been open an hour, out into the high-rise centre of Nairobi, where factories and offices pay salaries—everyone, that is, except a limp male figure huddled in a corner strafed by the first delicate rays of the sun. He seems to wait for the crowd to pass or at least thin before he dares to swim upstream. His hair is short and shiny as if sanded down rather than cut; his shirt is in pieces. He tells your correspondent that he has just arrived from the countryside. This is not home, he says. He does not sound convinced it ever will be.
His name is Jonah Kasiri and he is 23 years old. He came to Nairobi on an overnight minibus with his worldly possessions—a battered alarm clock and an additional pair of cotton trousers—packed into a canvas bag that smells of ripe fruit. His village in Kenya’s west, as he describes it, sounds like many: a verdant clump of trees and animals where man eats what he can hunt or gather but has little chance of betterment.
For that one has to come to the city. His cousin went to Nairobi two years ago and returned for a visit last week, wearing two mobile phones in a leather pouch on the belt of a brand new pair of pleated trousers. That made an impression on Mr Kasiri. When his cousin offered to help him follow suit, he jumped at the chance.
The crowd eases and we walk into the maze of shacks. Mr Kasiri says he must relieve himself but cannot afford to. In the city nothing is free. We come to a cement floor divided into seven stalls, each with a hole. “Is it clean?” asks the customer in front of us. The proprietor, Teresia Ngusye, seated on a stool, handing out tissue paper, says she cleans every hour, pointing down the alley to similar looking shacks. “See the competition I have.” She charges us ten shillings (12 cents), which she says will go toward building a second set of toilets. Mr Kasiri nods. Everything in the city is an opportunity. He too might one day like to run such an establishment. In parting, the newly minted city boy hears a warning, “Bowel problems are expensive.”
This is Kibera. Often, and probably rightly, described as Africa’s biggest slum, it is home to perhaps a million people. Nobody knows for sure, since Kibera is left to its own devices. Government is absent: it offers the residents (regarded as squatters) no services, opens no schools, operates no hospitals, paves no roads, connects no power lines and pumps no water into homes.
To equate slums with idleness and misery is to misunderstand them
And yet Kibera, wedged in between ornate embassies and a well-tended golf course, is an integral part of Nairobi. Its residents live in a dozen villages on a piece of land half a mile wide and two miles long, draped like a bath mat on a tub across a slope falling into a man-made lake. Once the slope was wooded and each village had only a few houses. In the past 30 years they have fused to become one of the world’s most densely populated places, garnering a measure of first-world notoriety. Kibera features in the film “The Constant Gardener”, based on the eponymous John le Carré novel, as well as in a music video by Sarah McLachlan, a Canadian pop singer, representing the epitome of poverty.
Kibera’s origins are Western. A century ago British colonial rulers gave small plots of land on the edge of Nairobi to Nubian soldiers serving in the King’s African Rifles. They built mud huts below the road leading to the farm of Karen Blixen—made famous in the film “Out of Africa”, based on the Danish writer’s life. The land was later nationalised but the Nubians stayed put and rented parts of it to newcomers. Today most homes are made of ragged tin and reused timber. Walking in the warren of narrow lanes that divide them, some only shoulder-wide and all of them devoid of cars, one is reminded of a medieval European city.
At seven in the morning Cecilia Achieng leads the children in her school in prayer and song. They chirp like birds; not all have had breakfast. When lessons begin at eight, she inspects a well-thumbed ledger that records who has paid school fees. We don’t expel kids who cannot afford class,” she insists. They may be asked to rear chickens in the schoolyard and sell the eggs.
Ms Achieng has frizzy hair that forms a tall bulb and is partly dyed red. She wears large silver earrings with a baby-blue two-piece suit. The 36-year-old has given birth to four children, adopted a further two and also looks after a niece. With no public schools to send them to, she started her own four years ago. Other mothers helped her rent an empty church hall and hire teachers. She was soon inundated with children. Asking parents to pay 7,500 shillings ($87) in annual fees enabled her to move to a bigger hall. Two years later she had saved enough money to erect half a dozen primitive classrooms: cement holds in place sturdy sheets of corrugated iron known as mabati. Yellow paint gives them an uncomplicated cheerfulness.
With her charges settled in, Ms Achieng takes a mid-morning stroll. She navigates lanes that look like dry river beds. When it rains, Kibera floods. Open sewers are covered with planks worn smooth by water and constant trampling. Scavengers rake over debris before it is washed downhill. Residents burn the rest, enveloping homes in acrid smoke. Laundry on washing lines is covered in soot.
“This street was much wider a few years ago,” says Ms Achieng. Vendors line both sides, selling fresh fruit and vegetables, soap, sweets, cigarettes. They have encroached on what once was a thoroughfare, building stalls ever farther into the throng of customers. The economy is booming and incomes are rising in Kibera. “What’s playing?” Ms Achieng asks Tyson Muigai, who rents out a 600W sound system for parties, weddings and wakes, charging 5,000 shillings ($58) a day. “Happy or sad?”
We pass a shack with a sign saying, “Load music on iPods”, and another, “We do not write any local material.”. Ms Achieng explains, “They make [counterfeit] copies of Jay-Z or Beyoncé songs, but not of rappers from Kibera. We protect our own.” Around the corner John Mwangi runs a cinema with 70 plastic seats, which he fills six times a day. Ms Achieng marvels at the orange clock face on his gold watch. “I tell you, people have money,” he says.
Kibera is a thriving economic machine. Local residents provide most of the goods and services. Tailors are hunched over pedal-powered sewing machines. Accountants and lawyers share trestle tables in open-air offices. Carpenters carve frames for double beds along a railway line. Whole skinned cows hang in spotless butcher shops. “Give me 30 bob,” says a customer to a paraffin seller, who has just taken delivery of several jerry cans from a porter with a steel-frame wheelbarrow. All day long, sweaty porters cart supplies along filthy lanes, hissing to shoo people out of the way.
Life in Kibera can be harsh. Disease is rife, food is short for some, and death can come suddenly. Just after eleven o’clock an explosion thunders past the paraffin seller. Lights in the shops along the lane expire instantly, then a mob charges past, accompanied by sharp screams and a sizzling, dancing power cable that has blasted off a faulty transformer overhead. The cable eventually goes limp and the crowd disperses. Minutes later the lights come back.
The transformer, like all power in Kibera, is run by shady types who tap into the city grid. They are less than scrupulous when it comes to safety and they charge heavily. But at least Kibera has power, unlike many other parts of Africa. Soft drinks sold in shops are chilled. Rooftops are awash with TV aerials and mobile phones are as ubiquitous as in the West.
Kibera may be the most entrepreneurial place on the planet
The key to making it in Kibera is access to capital. A market of one million potential customers crowds in on entrepreneurs, but raising the money to start a business is hard. Most banks won’t lend to them because they have no collateral, perhaps not even a fixed address. Those who manage to borrow face high interest rates. Moses Mwega pays 25% a year and considers himself lucky. Over the years he has built up a cosmetics shop selling creams, wigs and shampoos. The bank recently accepted his stock, a television set and a second-hand sofa, including lace doilies, as collateral. He got 350,000 shillings ($4,000) to expand his business.
But first the 53-year-old had to join a savers club—a cross between a support group and a control organ. Late in the morning Mr Mwega sets off to attend the group’s weekly meeting, wearing black shoes as polished as his bare forehead. His skin is smooth and his hands shiny, proud testament to his choice of products, he says. He joins a dozen men and women in a dank shack to receive instructions on record-keeping. Then they inspect each other’s books—no secrets. Mr Mwega takes in 15,000 to 20,000 shillings a week and pays 7,000 shillings to the bank. He will be done in 15 months. “Then I will get a proper loan,” he says.
After the meeting we have lunch at the Katulani café, a bare room with an anaemic roof that lets in daylight and fresh air. Guests sit on wooden benches and talk over each other. Most are penniless students who call this “the campus”. Boniface Ngewa, the owner, serves chapati bread and sukuma wiki, a leafy vegetable whose name translates as “push the week”, which is how long it is said to last. He goes through 100lb of flour a day, serving 3,000 customers.
In Kibera everyone eats out, Mr Ngewa says. Home-cooking is a luxury. The poor have no capital and cannot buy food in bulk. A single portion of charcoal to cook a meal costs at least 20 shillings (23 cents). Employing cooks, on the other hand, is cheap (300 shillings a day) and café prices are low. Mr Ngewa charges 30 shillings for a meal. An hour later when we leave the café, as if to prove his point, the lane outside resembles a food court: countless stalls have fired up pots and pans; vendors fan grills laden with nyama choma (cooked meat) and throw potatoes into roiling fat.
In the afternoon, school is out and Ms Achieng turns to her second career. She is in the food business too, but as a caterer. She regularly cooks for private functions attended by 500 people, and has served as many as 1,600. “Funerals are a good business,” she says. Couples getting married are too picky. They do not want plastic plates and Ms Achieng cannot yet afford to buy her own ceramic ones. “I have bid for a few weddings but didn’t win the tender.”
Kibera may be the most entrepreneurial place on the planet. Residents have no choice but to look after themselves. If they want to escape poverty—and have the necessary drive—they will try to strike out on their own. Ms Achieng has a third career as a hairdresser. When she has a free moment she goes from door-to-door and braids, earning 250 shillings ($3) in two hours. Regular clients call on her by mobile phone. At the annual Miss Kibera beauty pageant she is the lead stylist.
Does Mr Kasiri, the new arrival, have what she has? He finally finds his cousin after wandering the dusty lanes for hours. Kibera is bigger and denser than he had imagined. Every speck is in use. Residents have started building second storeys to expand upwards. In the Nubian language, kibera means forest, but there are no trees left.
The country boy stands at an intersection and looks left and right and left again. His cousin has arranged for him to meet a man about a job. But where is he? Mr Kasiri looks tired. His luxuriant hair is covered with flakes of ash from a rubbish fire. At least he no longer waits for crowds to thin; he plunges straight in and gropes his way past wheelbarrow porters, careful to jump out of the way when their sharp-edged carts swivel around. Talking about jobs he would like to do, a note of excitement creeps into his voice. “I could repair stoves. I saw a man do that,” he says. His cousin whistles and shakes his head. “Where will you get tools? Who will pay for them?”
Around six in the evening Kibera fills up to bursting point. The tens, or perhaps hundreds, of thousands who left in the morning for faraway offices and factories are returning. To save money, prim secretaries and exhausted labourers walk back rather than take a bus. Their wages are meagre and yet in compound several million dollars walk into the slum every night.
Kibera is an African version of a Chinese boomtown, an advertisement for solid human ambition. Like Guangzhou and Xiamen, it acts as a magnet for talent from rural areas, attracting the most determined among young farmers. To equate slums with idleness and misery is to misunderstand them. Two out of three Nairobians live in one, half of them in Kibera. Officials occasionally try to evict squatter-residents but many fight back, with the help of Muungano wa Wanavijiji, their own lobby group. In “Shadow Cities”, a book that describes a tour of slums across the globe, Robert Neuwirth recalls that New York’s Upper East Side was once a shantytown and suggests that all bright shining cities start as mud. Slums are far from hopeless places; many are not where economic losers end up, but rather reservoirs of tomorrow’s winners.
The pace of commerce on Kibera’s streets picks up with the setting sun. Jane Nzembi sells cereals to mothers cooking dinner; she holds cobs of corn with both hands and twists them in opposite directions to strip off the husks. Ruth Chesi refills buckets of charcoal as soon as they are empty. Carolina Awuor’s electric maize mill—rented for 15,000 shillings ($175) a month—runs nonstop to make flour for ugali buns.
When the vendors eventually close down around eight o’clock they deliver their cash receipts to nearby mobile-phone stores. Kenyan phone companies double up as banks; they take deposits and transfer funds. After decades of being excluded from banking, slum-dwellers now move their money fast and often; they no longer keep it under a mattress.
Mr Mwega, the cosmetics man who took out a loan, closes his store at nine, having eaten already at his counter. Through a curtain he slips into his windowless living room at the back of his streetside shack. An electric Christmas tree is perched on a stereo. He removes his polished shoes and rests them on a low table. He is halfway through reading “The Last Don” by Mario Puzo but says he prefers the thrillers of James Pattinson. He keeps a thick dictionary by his side.
The room is immaculate, as are those of many neighbours. Kibera only looks like a slum from the outside. Mr Mwega’s wife fetches water from a privately run street tap, paying a few shillings to fill a 20-litre jerry can, and does the washing up. Mr Mwega says in the wealthy parts of Nairobi the residents get municipal water and pay a tenth of what it costs here. “But still I’m not moving. My friends and my business are here.”
The evening is reserved for leisure, and leisure is good business. Barber chairs are never empty more than a few seconds. Ogola Simenon, whose salon is five feet high and about as wide, calls this the rush hour. Customers keep coming through his diminutive door. “Pray, why not in daytime?” He charges about 40 shillings (46 cents) to snip, shear, crop and clip. Economists define the African middle class as people earning at least $100 a month—that is many of his customers. They have a little money left over after paying for food, rent and school fees.
All manner of paid entertainment is available in Kibera. Some residents drink changaa, a moonshine made in backyard stills. Blindness is one of the lesser side effects. One step up is busaa, a fermented maize drink made on site in bars like Mama Sarah’s. The bar uses half-litre tin cans instead of glasses to serve customers. Many are cost conscious, says a waiter, John Wasilwa. When the price of maize goes up the bar owner cuts a strip of tin from the top of each can. The punters prefer that to higher prices. And it does not seem to slow their consumption. Around ten o’clock several of them have bedded down blearily on the mud floor next to a plastic sheet filled with roasted maize. Others throw empty tin cans at waiters. Mr Wasilwa fires them back.
Better-off residents congregate at beer taverns with cement floors and cushioned seats. The aspirationally named Pentagon features a large poster of Barack Obama, celebrating his Kenyan origins. Talk is of politics and sport. This could be almost anywhere. One group of patrons is drinking draft beer and debating why busaa joints are so rowdy. Often those people have not eaten, says one. “Straight to their head,” crows a carpenter with more than a hint of superiority.
During the day, Kibera is a rough place but a safe one. Guns are rare. No tolls are charged, no protection fees paid. Most of its markets are free of cartels. The slum is so vast and diverse that no ethnic group dominates it. But what is a virtue during the day turns into a danger at night. With nobody ruling the roost, muggers and thieves have a free rein. Some residents have installed metal gates at the entrances to their alleys and lock them at midnight.
Leaving the Pentagon, your correspondent is persuaded by concerned patrons to hire a watchman as an escort. He is summoned by mobile phone and turns up in minutes, dressed in red-and-white beads and a red cloth and carrying a spear and a torch. Most watchmen in Kibera are Masai. They have a reputation for fearlessness and loyalty—for which they are paid 50 shillings (58 cents).
Walking through empty streets we hear music doodling behind thin walls. Life happens indoors now. Most people are too scared to even visit a public toilet at night. Those who need to instead use a plastic bag at home and throw it over a wall. This is known as a “flying toilet”. Anyone out walking late is advised to look up as well as down.
We bump into Edith Nyawate, a vegetable seller escorted by another Masai watchman. She sets off to the wholesale market in the city centre every night around this time to buy produce when it opens and bring it back to Kibera at daybreak. She is tired, she says, but does not want a daytime job in a factory. “Maybe they pay you 50 bob but that’s not enough for school fees.”
Slum business runs around the clock. An electrical workshop is finishing a rush order at three o’clock. A lone baker’s face is illuminated by the earthy glow of his cavernous wood-fired oven. A tithe-hunting preacher, Augustus Omiti, is holding an all-night vigil at a shack church with a sturdy gate. His congregation is locked in until morning, singing and dancing—for their own safety, he cackles. They have nowhere to sit because he has rented out the church’s plastic chairs for 1,000 shillings ($12) to a wedding that is taking place nearby. Nonetheless he has high hopes his flock will donate generously.
The Masai watchman, who alone among residents refuses to divulge his name, takes your correspondent to where many of his nightly journeys end. We knock on the door of the Stage Inn, a spot for revellers to bed down for a few hours—for 300 shillings ($3.50). A dimly lit corridor bordered by sheet-metal walls leads to two dozen rooms with sagging beds, many of them unmade and recently vacated. Who would depart at this hour? The Masai and a hotel porter exchange glances. A young woman in a light dress passes us on the way to the communal washroom.
Worried about getting home at night? Phone a Masai
Emmanuel Mukhoa, the 35-year-old porter, hears a knock on the front door and walks over to a peephole, then opens up and hands a room key tied to a black shingle to a drunk, older businessman with a girl in tow. “I know most of the guests. They come at all times,” he says, and adds wistfully, “wish I was one.”
Mr Mukhoa is a rarity, a salaried worker employed within the slum. He is paid 5,000 shillings ($60) a month. His hours are long but regular, his financial risk minimal, yet he dreams of running a business, like his guests.
The new day in the slum starts by five o’clock. Alarms echo down dark streets, drowning out what little music is left from the night. Ms Achieng rouses herself and then the brood of children that surrounds her on the floor, washes them and erects her frizzy dome of red and black hair. She can afford to feed her children but mornings are always chaotic and some of the older ones miss breakfast.
Heading to school, they join the ranks of workers walking to one of Kibera’s eight exits and on to jobs in Nairobi proper where buildings rise higher than just one or two floors. The shoving and jostling resumes. The lanes are bursting with people by six, all heading in one direction. Among them is Mr Kasiri, the new arrival. He has been promised work on a construction site and is following a foreman through a world that has yet to fully reveal itself to him.
Mr Kasiri is amazed that among the people surrounding him is not one face he recognises, not one man who would lend him a few bob. Yet nor would any of them tell on him if he spent his wage on a bottle of changaa and got drunk tonight after his shift. They do not care. There are just so many of them squeezing through the gate; they crowd in as if celebrating a festival, yet few talk to each other or even look up. They are not unhappy, at least most of them are not. They have jobs to do and things to buy. Last night he talked to a man who sells stoves and learned that broken ones are cheap and easy to repair. Soon he will try his hand. He finds the idea of going back to the village hard to imagine.
This is an interesting article on India. However, there are implications for Sub-Saharan Africa as well respect to growth, urbanization, demographic change, lack of manufacturing, education, jobs etc.
Original Article: Foreign Affairs [USA], 1 March 2018 https://www.foreignaffairs.com/reviews/review-essay/2018-03-01/indian-nightmare?cid=int-fls&pgtype=hpg
REVIEW ESSAY: IS NEW DEHLI READY FOR THE TWENTY-FIRST CENTURY?
By Milan Vaishnav
If the end of the twentieth century heralded the dramatic rise of China, many believe that it is India’s turn to claim the spotlight at the dawn of the twenty-first. In January, the World Bank loudly proclaimed that India was set to be the fastest-growing major economy in the world in 2018, overtaking its slowing Chinese rival for the top spot. The global consulting giant McKinsey has called the emerging Indian middle class a “bird of gold,” harking back to an ancient aphorism about the country’s dynamic marketplace. IBM simply refers to the coming age as the “Indian Century.”
Despite these glowing projections, India’s future is by no means assured. With the right mix of economic reforms, administrative savvy, and political leadership (not to mention sheer luck), there is no doubt that India could enjoy widespread prosperity in the coming century. Yet absent such conditions—by no means a given—it faces an unnerving dystopia: one in which the aspirations of hundreds of millions of Indians are foiled rather than fulfilled, with potentially explosive implications for the country’s social fabric. This grim scenario is the subject of Dreamers: How Young Indians Are Changing Their World, a harrowing new book by the Indian journalist Snigdha Poonam.
THE INDIAN DREAM
Predictions of a coming Indian golden age are typically based on two trends. The first is urbanization. Between 2010 and 2050, India’s urban population will grow by as much as 500 million—the largest projected urban population growth in world history. Historically, urbanization has been linked with rising literacy, the establishment of a middle class, economic dynamism, and increasing cosmopolitanism.
The second trend is what economists refer to as the “demographic dividend,” or the economic benefits that accrue to an economy when a massive influx of young people enter the labor force, triggering increases in both economic productivity and the savings rate. At a time when other major economies are graying, nearly one million Indians will join the work force every month until 2030. According to United Nations estimates, over the next few decades India is expected to account for as much as one-quarter of the projected global population growth among those between the ages of 15 and 64.
Yet in stark contrast to the boosterism surrounding a rising India, the outlines of a much darker alternative narrative are beginning to appear—one where the combined forces of urbanization and demography lead not to a rich dividend but to a social disaster. This is a future in which India’s urbanization, while creating pockets of wealth creation and prosperity, excludes many more thanks to decrepit infrastructure, poor services, and inadequate opportunity. According to this perspective, India will fall drastically short of creating enough jobs to keep up with its burgeoning labor force, spurring India’s youth to cling more, not less, fervently to identity as a means of finding their way. This resort to identity markers risks sharpening ethnic divisions and fueling the growth of sectarianism.
This is the world that Poonam explores in Dreamers. In it, Poonam—a national reporter for the Hindustan Times—sets out to understand the aspirations and anxieties of young residents of the vast north Indian Hindi heartland. Like Katherine Boo’s Behind the Beautiful Forevers, Poonam’s book turns its attention to the underbelly of Indian democracy. But this is a work less concerned with India’s megapolises than the second- and third-tier urban towns that constitute India’s flyover country, where the potential downsides of haphazard urbanization and anemic job creation are most evident. In Dreamers, readers become richly acquainted with the teeming, pockmarked lanes of Allahabad, Meerut, Patna, and Ranchi.
Poonam calls her young and restless subjects the “Dreamers” and claims that they are the “most desperate generation of Indians since Independence.” Whereas the children who came of age after India’s independence in 1947 were content with the freedom they wrested from the British Raj, the Dreamers expect their government to actually deliver on the freedoms enshrined in the constitution, such as eliminating status hierarchies in society, minimizing the unequal concentration of wealth, providing gainful employment, and guaranteeing social protection. Empowerment must come between elections, not simply during them.
Unfortunately, Poonam argues, Indian democracy shows few signs of attaining such lofty ideals. Today, the bulk of India’s youth bulge falls into at least one of three categories she calls the three “Es”: uneducated, unemployed, or unemployable. The problem with India’s education system is not schooling but learning. At the primary level, India is approaching universal enrollment. Yet over half of all students enrolled in the sixth grade cannot read a story suitable for second graders. One-tenth cannot even recognize the numbers one through nine.
These failures exist at every rung of the ladder. A recent assessment of Indians between the ages of 14 and 18 conducted by the nongovernmental organization Pratham produced a slew of depressing statistics: 40 percent cannot tell the time looking at an analog clock, 36 percent do not know the capital of India, and 62 percent cannot compute a ten percent discount on a given price. Higher education has become a lucrative business in India, leading to a surge in university enrollments. Between 2000 and 2015, according to the political scientist Devesh Kapur, India established almost six new colleges every single day. Barring a few isolated examples, however, these institutes are a classic case of quantity over quality.
The second crisis relates to the lack of jobs. The Indian economy needs to create roughly one million jobs each month just to keep up with the natural growth in the labor force. The government’s own estimates suggest that India is creating between 350,000 and 400,000 a month. Those who are not lucky enough to find employment in the formal sector join the growing hordes trying to make ends meet in the informal sector. A big part of the problem is that unlike its East Asian neighbors, India adopted a “precocious” economic model that leapfrogged manufacturing altogether and went straight into services.
The trouble with this model is that not every Indian can become a software engineer; establishing a robust manufacturing base is the only tried-and-true strategy for mass employment generation. Unfortunately for India, it is not only failing to industrialize, it is prematurely deindustrializing. Frustrated job seekers have increasingly turned to the public sector. Unfortunately for them, the number of government posts has been consistently shrinking for the last two decades. This explains the absurd sight of more than 2.3 million Indians rushing to apply for 350 government positions to serve as lowly office helpers, as happened in 2015. The most perverse twist is that despite India’s abundance of labor, industry struggles mightily to recruit qualified workers. A 2016 report studied 150,000 engineering students across the country, only to find that 80 percent of them are unemployable according to industry standards.
Not every Indian can become a software engineer.
India’s labor market pains are matched by equally grave woes when it comes to urban infrastructure, which are not only inhibiting urban growth but also deforming it. In an evocative chapter on the north Indian city of Allahabad, Poonam has this to say about her arrival in the city: “Nowhere else in India I’ve been has the conflict between the past and present of a place resulted in a more disastrous outcome. The broken jampacked roads, the half-finished buildings, the open drains and the thick haze of dust that greet you outside the station are the result of the same things that make the whole of second-tier India one giant pothole: crazy construction, overcrowding, civic collapse.”
India’s inability to generate adequate jobs and its struggle to ensure its cities are livable are, of course, symptoms of a larger issue: the spectacular failure of the state to perform its sovereign functions. As the government has proven incapable of providing basic services to its citizens, those with means have simply exited, resorting instead to private doctors, teachers, and security guards. The belief that the state is able and willing to deliver basic amenities to its people has evaporated.
The result is not simply a substitution of private provisioning for public goods but also an attitudinal shift that pushes Indians to find work-arounds that often involve illegality and cutting corners. Many Dreamers, Poonam argues, have become cheaters. The most disturbing example she marshals is the cottage industry of call center fraudsters she manages to penetrate in New Delhi. Poonam uncovers entire neighborhoods specializing in scamming young Indians by asking them for up-front payments in order to land a good-paying job that will never materialize. “In Delhi, you can’t become an important man without pulling some kind of fraud,” one wayward call center recruiter explains to Poonam with a smile.
In Poonam’s telling, even those who start on the straight and narrow succumb to the temptation of exploiting others since they have been so thoroughly exploited themselves. Take the case of aspiring actor Mohammed Azhar, who gets repeatedly ripped off by casting directors as he struggles to piece together a career. In the book, we watch the innocent, defeated Azhar slowly transform into the type of unscrupulous scamster that preyed on a younger version of himself. “I couldn’t blame him for thinking that cheating is essential to success,” Poonam writes. “He didn’t know a single person who became rich without cheating his way up.”
However disturbing Poonam’s revelations are, her stories of despair do not completely displace stories of hope. The most gripping of these is the tale of Richa Singh, a young woman who has the audacity to stand as a candidate for student union president at Allahabad University. Singh is running in order to correct a routine but illustrative practice of gender discrimination: she and her friends simply want to hang out at the teashop outside the student union, where women are forbidden. Facing both the threat and the actual use of violence by angry young men for the crime of defying social customs, Singh improbably wins the election.
Danish Siddiqui / Reuters Children celebrate the festival of Diwali in Mumbai, October 2017.
THE INDIAN CENTURY?
These heartwarming victories, however, cannot obscure the fact that something has gone seriously amiss in the Indian growth story. The failure of the state to exploit the advantages of urbanization and India’s demographic shifts, if not remedied quickly, will lead to two adverse outcomes. The first is a deepening of already worrying levels of inequality. A recent paper by the economists Lucas Chancel and Thomas Piketty found that the proportion of national income accruing to the top one percent of India’s income earners is now at its highest level since the creation of the Indian income tax in 1922.
The second outcome is the cancerous growth of sectarian rage. Poonam takes readers on a chilling tour of frustrated young men who have become foot soldiers in the service of a virulent strain of Hindu nationalism. As the author puts it, “They have enrolled themselves in the battle to protect Hindu identity, but what they are really fighting for is their shot at any identity at all.” Far from decreasing the salience of sectarian attachments, India’s demographic shifts might be increasing them. In state after state, young Indians have begun agitating for ethnic quotas that would guarantee their communities a slice of lucrative public sector jobs. The youth who have flocked to the streets to voice their dissatisfaction hail from social groups not on the bottom rungs of the ladder, but near the top. Angry about affirmative action given to traditionally disadvantaged communities, they are now demanding protections for themselves.
How the Indian state manages the dual pressures posed by urbanization and demographic change will define the nature of Indian democracy itself. Will its citizens prioritize economic growth or social justice? Will they continue a proud tradition of liberal democracy or succumb to the temptations of majoritarian democracy? It is hard to come away with a feeling of optimism after reading Poonam’s incisive account. Many of the disenchanted Dreamers, she writes, are aggrieved about the same thing: “that they have no future in this country, and it has no future in the world.”
Dreamers smashes the slick hype that has been constructed around India’s aspiring middle classes, calling our attention to the corruption, frustration, and dashed hopes bubbling beneath the surface. It may be convenient for India’s elites to whitewash these inconvenient truths. But, as Poonam shows, it would also be suicidal.
Published on November 4, 2017
Original Article here: Chinese Investment in Africa
Eric Olander 欧瑞克; Asia-based Media Executive. Content Strategist. Podcaster. Social Media Creator.
Author Irene Yuan Sun argues in her now book that Africa is poised to become the world’s next manufacturing boosted by Chinese investment and production expertise. With costs steadily rising in the PRC, more and more companies are looking to offshore production from China to more affordable countries. Africa and its abundant population of young workers, free trade access into the US market and proximity to the European Union make it an attractive investment destination for cost conscious manufacturers.
But Africa is not alone vying for the estimated 85 million jobs that will be in play as China transitions away from manufacturing to a services/consumption-based economy. African countries will have to compete vigorously against Vietnam, India and other Asian nations to lure Chinese manufacturers.
“You have to be crazy to run a factory in Africa. It’s hard work, it’s risky, and success is far from assured. In this day and age, the only sizable mass of people crazy enough to take on the job are Chinese people, fresh from working their way up in factories in China and ready to take a gamble to make their fortune. It takes crazy people to build a factory in Africa, and that’s one of the main reasons Africa’s shot at industrialization is tied up with China.” — Irene Yuan Sun
Time is also a key factor. Major international manufacturing companies like Foxconn and Pegatron, contract manufacturers that both produce hi-tech products for Apple, HP and Dell among others, are working very hard to automate their production lines using robots powered by artificial intelligence. With more companies, including once low-tech industries like apparel and furniture assembly, moving as quickly as possible to automate their production lines, African policy-makers must no doubt be concerned that with the pace and sophistication of automation steadily increasing, might encourage Chinese manufacturers to keep their operations rolling back home, albeit with fewer workers.
Sun, for her part, argues the fear of technological dislocation is overblown. “The essential point automation alarmists miss is that technological adoption happens through millions of individual decisions by companies that are constrained by the demands of their value chain, the financing capability of their balance sheets, and their own managerial know- how. Just because they could produce something in a more automated way doesn’t mean they will,” she said. Already, Sun contends, Chinese-factories in Africa are using robotics and automation with human labor still playing an essential role throughout the production process.
Sun joins Eric & Cobus to talk about her new book, “The Next Factory of the World: How Chinese Investment is Reshaping Africa.” The book is part travelogue, part business intelligence of a fascinating trend that operates largely out of sight yet has potentially massive implications for the future direction of almost every economy in Africa.