In the arid Gobi Desert spanning the two Asian nations of China and Mongolia is a bold attempt to make wine and reduce poverty. The environment is harsh, with temperatures swinging from sub-zero winter cold to sweltering summer heat. The desert is also home to high winds and notorious dust storms that plague China’s capital Beijing every year.
China’s wine industry is booming as people have embraced the drink’s perceived health-giving qualities and are using it to celebrate new-found wealth as the economy has flourished. Current wine consumption in China is half a litre per person per year, low compared to the French average of 55 litres a year. But this is growing quickly.
One innovative winery is using this wine boom to tackle poverty and increase local wealth.
Chateau Hansen (hansenwine.com) in Inner Mongolia has been operating since the 1980s, but recent expansion and modernization have significantly increased its earning power and the number of people it employs. Located in an area with high levels of poverty, it has developed a successful wine business in the desert by tapping the plentiful water supplies from the Yellow River. The area is now considered one of the best for growing wine grapes in China.
Located near Wuhai city (http://en.wikipedia.org/wiki/Wuhai), 670 kilometres west of Beijing, Chateau Hansen has 250 hectares of Merlot, Cabernet Sauvignon and Cabernet Gernischt grapevines.
The vines are buried under the sand to protect them from the harsh weather in the winter.
“The lowest temperature gets down to is below -20 degrees C (Celsius), but in summer, it can reach 38 or 40 degrees C (102 or 104 F),” Li Aixin, Chateau Hansen’s head of viticulture, told MSNBC. “Here the four seasons are good for the growth of the grapes, but in the winter we need to bury them in the earth” to keep them from freezing. Hansen has been ambitious in its approach. It has a European-style chateau, hotel and even a French wine expert, Bruno Paumard, on site to help with the wine making. The chateau’s cellar now stores 1,000 barrels of wine.
Paumard arrived in China in 2005. He has thrown himself into Chinese culture and tasted and tested the country’s wines. Hansen has produced 400,000 bottles of wine, mostly sold in China, where red wine drinking has become a big part of the culture of celebration.
Hansen sells the majority of its wine to government organizations and regional enterprises. It has seen its profits double to 100 million yuan (US $18 million) in 2011 and hopes sales will double again in 2012.
“Eighty per cent of the market in China is really the local governments who encourage the enterprises in their cities to consume red wine, of a certain brand, at their banquets in the place of Chinese ‘baijiu’ for their incessant and never-ending toasts,” said Paumard, referring to China’s home-grown rice wine. “So it’s actually a market that’s totally unique.”
Hansen’s Cotes du Fleuve Jaune du Desert de Gobi has become one of the biggest award-winning wines in China. It received a bronze medal from the International Wine Challenge of Blaye, near Bordeaux, France.
China now stands as the world’s fifth-largest consumer of wine (International Wine and Spirit Research study) (http://www.iwsr.co.uk/). The market in China is forecast to grow by 54 per cent from 2011 to 2015, adding up to a billion bottles.
In this busy marketplace, Hansen prides itself on being organic. It also has the goal of turning the arid desert into green vineyards using irrigation from the Yellow River and groundwater. It wants to create employment and raise living standards in the region and is fitting into a national strategy to raise living standards for poor regions.
There is a training programme for the around 400 workers employed by the winery. No pesticides are used and only sheep dung is used as a fertilizer provided by 3,000 sheep on site. Trees also play a role in providing humus (http://en.wikipedia.org/wiki/Humus) for the vines. There is also accommodation in a nearby village for the employees.
There are 250 hectares of vineyards and the grapes are harvested by hand. Expansion began in 2001 when the chateau and winery were built. It is strategically located just 500 metres from an airport and the chateau has a luxury hotel. Around 20,000 people visit a year, according to Hansen’s website, bringing in further income for the winery. The winery also uses Mongolian culture and cuisine as a selling point to attract tourists.
The chief executive of Hansen is Han Jianping, who made his first fortune in real estate development.
Han believes that “the momentum of growth in the wine industry is huge.”
“With a great foundation of more than 1 billion people as we have in China, and (the industry) growing at 20 or 30 per cent a year, there is a huge potential for more growth,” he said.
Southern Art Hubs Grab Attention for Creative EconomyDevelopment Challenges: Regeneration – of poor neighbourhoods, districts, even whole countries after a conflict – is both a challenge and a key to transforming lives. One approach that has a track record is turning to artists and creative people to re-imagine a neighbourhood or country’s culture, and restore pride and vitality to places beaten down by life’s hardships.
Afropolitan: African Fashion Scene Bursting with EnergyDevelopment Challenges: In the face of Congo’s civil strife, a group of very fashionable gentlemen bring colour and style to the country while also pioneering a way to make money and improve standards of dress in the country. Members of “La sape,” or La Societe des Ambianceurs et Personnes Elegantes (http://fr.wikipedia.org/wiki/Société_des_ambianceurs_et_des_personnes_élégantes) — the society of tastemakers and elegant people — wear designer fashions either bought in Europe, or handmade in Congo.
Brewing Prosperity Creates Good JobsDevelopment Challenges: In the Democratic Republic of Congo – home to the world’s largest United Nations peacekeeping mission and decades of bloody civil war – a brewery has not only survived, it has thrived to become a popular brand throughout central Africa. By being a success, the Brasimba brewery has brought prosperity and high-quality jobs to Congo’s second largest city, Lubumbashi (http://en.wikipedia.org/wiki/Lubumbashi), and proven that a modern business can do well there despite the obstacles.
Digital Mapping to put Slums on the MapDevelopment Challenges: People are now turning to the growing penetration of digital technologies into slums and poor areas to find solutions. With mobile phones available across much of the global South, and plans underway to expand access to broadband internet even in poorly served Africa, it is becoming possible to develop a digital picture of a slum area and map its needs and population.
Innovation Villages Tackling MDGsDevelopment Challenges: The global economic crisis that began to roll across the world in September 2008 is threatening gains made against poverty and hunger all over the South. As Kevin Watkins from UNESCO’s Global Monitoring Report told the Financial Times, “With the slowdown in growth in 2009, we estimate that the average income of the 391 million Africans living on less than US $1.25 a day will take a 20 percent hit.”
New Appetite for Nutritious Traditional VegetablesDevelopment Challenges: Throughout the history of farming, around 7,000 species of plants have been domesticated. Yet everyday diets only draw on 30 percent of these plants and even this number has been going down as more people consume mass-market foods (FAO).
African Countries Re-branding for New Economic RoleDevelopment Challenges: Africa’s diverse countries have been subject to years of negative stories in the media. The effect on global audiences has left many to cast the whole continent in a bad light and to know little about the individual countries and cultures. This has damaged business confidence over the years. Just like products and people, nations need to have a strong and positive brand to do well in the global economy.
Tiny Homes to Meet Global Housing CrisisDevelopment Challenges: More than 1 billion people around the world lack decent shelter. Of these, the majority live in urban areas, usually in slums and informal settlements (UN-HABITAT). The world’s megacities – like Mumbai, India, where more than 22 million live in the metropolitan region – have to find a way to provide housing that is both affordable and does the minimum possible amount of harm to the environment.
Ending Gang Violence While Cleaning the Streets in HaitiDevelopment Challenges: The Caribbean nation of Haiti is the poorest country in the western hemisphere, with 80 percent of the population living below the poverty line (CIA World Factbook). The country had been enjoying some positive economic growth since 2005 after decades of economic and political turmoil.
Growing a Southern Brand to Global Success: The Olam StoryDevelopment Challenges: Most people haven’t heard of Olam International, but they know the brands they work for and they more than likely eat their produce. The story of Olam (www.olamonline.com) – a global food supply company in ‘agri-products’ that got its start in Nigeria – shows how a Southern brand can grow and go global, and overcome the difficulties of cross-border trade.
Making the World a Better Place for Southern ProjectsDevelopment Challenges: An exciting new initiative based in Germany, but already featuring hundreds of projects from across the South, is using the power of the internet to directly connect projects and donors.
Bamboo Becomes Transport Option for the SouthDevelopment Challenges: The sturdy bamboo plant (http://en.wikipedia.org/wiki/Bamboo) is enjoying a revival around the world as a building material. A strong, fast-growing and highly renewable woody plant, it is becoming increasingly popular as people seek out less environmentally wasteful alternatives to steel and other materials.
Kenyan Mobile Phone InnovationsDevelopment Challenges: A couple of enterprising Kenyan engineering students are showing how mobile phones are an inventor’s dream. Their two inventions – one a way to re-charge phones while bicycling, the other an aid for catching fish – show the potential for adapting this technology to the needs of the poor.
Info Ladies and Question Boxes: Reaching Out to the PoorDevelopment Challenges: Quick access to accurate and useful information is crucial for development. With the remarkable spread of information around the world via the Internet – one of the greatest achievements of the 21st century – more than 1.5 billion people now use the Web to boost their incomes and opportunities (Internet World Stats).
Avoiding Wasting Food and Human Potential with ICTsDevelopment Challenges: Creative use of information technology in the South is helping to address two very different kinds of waste – of food and of human and community potential.
Toilet Malls Make Going BetterDevelopment Challenges: Across the global South, clever entrepreneurs are transforming services that were bare-bones, grim and out-of-date into modern facilities packed with features that help to pay for their operation. In Kenya, an entrepreneur has used this approach to transform the poor quality of public toilets.
Crowdsourcing Mobile Phones to Make the Poor MoneyDevelopment Challenges The proliferation of mobile phones across the global South, reaching even the poorest places on the planet, has given birth to whole new ways of making money. A phenomenon called ‘crowdsourcing’ – in which the power of individuals is harvested to achieve a goal – is now being used to create networks of people earning extra income.
Tourist Passion for Quirky Holidays Helps SouthDevelopment Challenges:Conventional thinking holds that any country with a poor or non-existent reputation in the international media will not attract tourists. But this conventional thinking is wrong: The hottest tourist trend for 2009 is directly benefiting the South’s more out-of-the-way and under-appreciated countries. So says a travel expert who specializes in overlooked travel destinations.
Protecting Threatened Fruits and Nuts in Central AsiaDevelopment Challenges: Between 94,000 and 144,000 plant species — a quarter to a half of the world’s total — could die out in the coming years, according to an estimate by Scientific American (2002). Among them are vital food crops, threatened by a world in which climate change is causing more weather turbulence and diseases and viruses can spread rapidly and destroy crops.
Southern Drink Challenges Corporate DominanceDevelopment Challenges: Across the global South, its thirsty people have long been a target market for Northern drinks companies. The ubiquity of the American soft drink Coca Cola, or even its rival Pepsi Cola, is testimony to that. Even the most remote village on the impoverished island of Haiti can offer an ice-cold Coke.
Kenyan Eco-Village Being Built by Slum-DwellersDevelopment Challenges: A Kenyan eco-village is helping slum dwellers to start new lives and increase their wealth. The community, Kaputei, is being built by former slum residents – some of whom used to beg to survive – and is providing new homes with electricity, running water and services like schools and parks. By building their own homes, with the help of affordable mortgage loans, the residents are able to make a big upgrade to their quality of life while acquiring real wealth.
Taxis Promote African Music BeatsDevelopment Challenges: South Africa’s township music is pounding its way into the global music charts. How has music made in the impoverished townships that are a hangover from decades of apartheid – the country’s former racial separation laws, which trapped millions of black South Africans in disenfranchisement and poverty – travelled around the world? By hitching a ride with the country’s ubiquitous taxi drivers.
Successful Fuel-Efficient Cookers Show the WayDevelopment Challenges: Kenyan entrepreneur has cooked up a fuel-efficient stove and oven that uses less of a precious national resource: wood from trees. Most African households using fuel-burning stoves either cannot afford clean-burning fuels like natural gas or electric stoves, or do not have access to them. They are stuck having to burn wood or other materials like animal dung – collectively called biomass – on open fires.
A New Mobile Phone Aimed at the PoorDevelopment Challenges: A low-cost Venezuelan mobile phone aimed at the South’s poor is proving that South-South technological cooperation works. Packed with features and costing no more than US $15 – making it one of the cheapest mobile handsets in the world – the phone is aimed at the fast-growing mobile market across the global South.
African Online Supermarket Set to Boost TradeDevelopment Challenges: African Online Supermarket Set to Boost Trade Online retailing and marketing strategies are revolutionizing how people around the world buy products and services – but so far they have not benefited most of Africa’s small businesses and traders. On a continent where trading for survival is the norm, very few people are reaping the benefits of selling on the Internet.
Rebuilding After Chinese Earthquake: Beautiful Bamboo HomesDevelopment Challenges: It has been a year since the May 12, 2008 Sichuan earthquake in China that killed more than 70,000 people. Getting Sichuan back to normal is critical for not only the province’s people, but for all of China. Sichuan is China’s rice bowl, growing more food than any other province. But despite the abundance of food, Sichuan remains poor and has seen its working age population move away for work. If it is to have a viable future then its communities need to get back to normal as fast as possible – and its farming economy back to full production.
SOS Shops Keep Food Affordable for Poor, UnemployedDevelopment Challenges: As the global downturn bears down on country after country, governments around the world are introducing austerity measures to try to keep their economies going. Many countries are now facing financial crisis and the need for loans and support from the International Monetary Fund (IMF). Formerly comfortable people are going from regular employment to unemployment or erratic employment, and growing numbers of people are finding it hard even to afford basics such as food.
Cleaner Stoves To Reduce Global WarmingDevelopment Challenges: The use of polluting fuel-burning stoves by half the world’s population – including 80 percent of rural households – is a documented contributor to a host of health problems. Poor households not only have to contend with the ill health effects of dirty water and poor sanitation, the fumes from burning dung, wood, coal or crop leftovers lead to the deaths of more than 1.6 million people a year from breathing toxic indoor air (WHO).
Solar Powered Village Kick-Starts Development GoalsDevelopment Challenges: More than 1.7 billion people around the world have no domestic electricity supply, of whom more than 500 million live in sub-Saharan Africa (World Bank). Without electricity, many development goals remain dreams that will never be achieved. But in a first for India, a village is now entirely powered by solar energy, kick-starting its development and reversing the decline common to many villages.
Rainforest Gum Gets Global MarketDevelopment Challenges: Mexico is home to the second largest rainforest in the Americas after the Amazon jungle. But the country’s forests face serious threats from logging, cattle ranching and agriculture. As much as 80 percent of Mexico’s original forests have already been lost. A group of Mexican farmers is now using sophisticated product marketing to preserve their income, and the 1.3 million hectares of rainforest as well.
Disabled Congolese Musicians Become World HitDevelopment Challenges: A group of Congolese musicians is using music to overcome obstacles – both economic and social – that come with being disabled in a poor country. Called Staff Benda Bilili, they are on course to be a global sensation and are looking forward to their first European tour. A remarkable achievement for anyone from a war-torn country, let alone for musicians who live as paraplegics in the slums of the Democratic Republic of Congo’s capital, Kinshasa (http://en.wikipedia.org/wiki/Kinshasa).
Camel Ice Cream Delivering Desert Dessert Development Challenges: The global food crisis is forcing people around the world to think differently about how food is produced and what new products can boost the incomes of farmers. U.N. Secretary General Ban Ki-moon has called for food production to increase 50 percent by 2030 just to meet rising demand – and right now there are 862 million people worldwide who are undernourished (FAO). The world’s over 19.4 million camels (FAO, 2003) are now being tapped for their highly nutritious, healing and tasty milk.
Finding Fortune in Traditional MedicineDevelopment Challenges:Traditional medicines and treatments could help provide the next wave of affordable drugs and medicines for the world. But a phenomenon known as ‘bio-prospecting’ – in which global companies grab a stake in these once-free medicines – has been placing traditional medicines out of reach of Southern entrepreneurs.
Accessing Global Markets Via Design SolutionsDevelopment Challenges:The power of design to improve products and the way they are manufactured is increasingly being seen as a critical component of successful economic development.
Berber Hip Hop Helps Re-ignite Culture and EconomyDevelopment Challenges: Music is being used to revive the ancient language of the original North African desert dwellers, the Berbers (http://en.wikipedia.org/wiki/Berber_people). And in the process, it is spawning a whole new generation of entrepreneurs and generating income.
Cashing in on Music in BrazilDevelopment Challenges:Brazilian musicians have found a way to prosper and exploit the realities of music distribution in the modern age. The biggest problem for most artists – both beginners and those who are more established – is how to earn an income from their work. In the digital age, it is next to impossible to stop people freely copying your work and passing it on.
Cuba’s Hurricane Recovery SolutionDevelopment Challenges: The frequency of extreme weather in the past decade has been attributed to global warming (http://tinyurl.com/5peel). Many scientists believe the future will bring even more turbulent weather events and disasters. The devastation and hardship brought by natural disasters can eradicate development gains, and destroy livelihoods and health. It is critical countries help people to get back to their normal lives as fast as possible.
Afghanistan’s Juicy Solution to Drug TradeDevelopment Challenges:Afghanistan is the world’s largest source of the illegal drugs opium and heroin (International Narcotics Control Board), both of which are derived from the bright-red flower, the poppy (http://en.wikipedia.org/wiki/Poppy).The country produced 8,200 tons of heroin in 2007, up 34 percent from the previous year.The negative consequences of the flourishing drug trade are numerous: it is destabilizing Afghanistan’s neighbours and undermining political and legal institutions, addiction rates are soaring, and addicts are spreading HIV/AIDS.
DIY Solution Charges Mobile Phones with BatteriesDevelopment Challenges: There are now more than 3.5 billion mobile phones in use around the world. In the past five years, their use and distribution has exploded across the global South, including in once hard-to-reach places in Africa. In fact, Africa is the world’s fastest growing mobile phone market. Over the past five years the continent’s mobile phone usage has increased at an annual rate of 65 percent – twice the rate of Asia.
African Bus to Tackle African RoadsDevelopment Challenges: Roads in many parts of Africa are rough at best, and hostile to vehicles designed with smooth, flat highways in mind. Even in countries like South Africa, where modern highways are common, a quick turn off the smooth highway to visit many communities will mean tackling makeshift dirt roads. In these conditions, buses imported from Western Europe are at a disadvantage when they hit the bone-jarring reality of potholed roads.
Debt-free Homes For the PoorDevelopment Challenges:As the population around the world’s cities grows, and slums grow larger and more prevalent, the urgent need for affordable and decent housing becomes more pressing. The world’s megacities – like Buenos Aires, Argentina, where more than 13 million live in the metropolitan region – have to find a way to provide housing that is both cheap and does the minimum possible amount of harm to the environment.
Rickshaw Drivers Prosper with New ServicesDevelopment Challenges:The rickshaw is the world’s oldest form of wheeled transportation and forms a significant part of India’s transport infrastructure. In large cities across Asia, 1 million three-wheeled auto-rickshaws form an important means of daily transportation and a vital source of income for their drivers. There are 8 million cycle rickshaws on the streets of India, the government says. They perform many tasks: as taxis, as couriers, as goods movers. And the Indian government promotes cycle rickshaws as a non-polluting alternative.
Venezuela’s Currencies Promote Cooperation Not CompetitionDevelopment Challenges: The global economic crisis has spread around the world and is bringing many problems in its wake. As global currency markets gyrate wildly, and people find they can go from having wealth to being poor almost overnight, the question is being asked: “is there another way?”
Kenyan Bank Helps the Poor and Gets RichDevelopment Challenges: Good quality banking services are a basic building block to rising incomes. Yet the poor across the South are often overlooked and denied access to savings accounts and loans. Many low-income people are openly discriminated against as ‘bad risks’ by banks, and denied the sort of banking services middle and higher income people take for granted. Yet it is a myth that the poor do not have money or do not wish to save and invest for their future or for business.
Financial transactions and banking with mobile phones have been a Kenyan success story.
Now, one service, M-Shwari, has reached a significant milestone in the history of m-banking (mobile phone banking): it was able to record a billion Kenyan shillings (US $11,926,100) in savings deposits in a month after its launch in November 2012 and reached deposits of Kenyan shillings 2.8 billion (US $33 million) by February of 2013. This outstripped the Kenyan shillings 378 million (US $4 million) in loans lent by the service, reports Daily Nation.
M-Shwari is a mobile phone banking product that allows people to save and borrow money by phone and earn some interest too. The service offers small emergency loans to customers, offering a financial lifeline to people who would have been frozen out of financial services in the past.
There is no need to have any contact with a bank or bother with paperwork. And loans are instant because they are small.
Safaricom Chief Executive Officer Bob Collymore told the Daily Nation “Trends show that it has become more of a savings service than a lending service. This is what we intended since the beginning.”
As of February 1.6 million customers had used the service.
Both these developments are solid proof that innovation aimed at drawing in the poor into the mainstream economy not only works, it is profitable and exportable.
M-Shwari (http://www.safaricom.co.ke/personal/m-pesa/m-shwari/m-shwari-faqs) works like this: a customer can save as little as one Kenyan shilling to receive an interest rate of up to 5 per cent. If they want a loan, then they can borrow from 100 Kenyan shillings (US $1.19) to a maximum of 20,000 Kenyan shillings (US $238) for a processing fee of 7.5 per cent which will need to be paid back after 30 days.
By offering greater access to loans, M-Shwari s increasing competition in the banking sector and giving customers a choice.
It joins an ongoing revolution in access to credit for the poor. Powerful mobile phones enable individual depositors and businesspeople to organize their financial affairs and business needs on the phone. This is a revolutionary development in many places where people previously had to contend with poor access to financial services – or no access at all.
M-Shwari and products like it allow people to borrow, save and conduct transactions with family, friends, business partners and customers over their mobile phones.
M-Shwari is a collaboration between Kenyan telecoms company Safaricom and the Commercial Bank of Africa. It is being hailed as an example of how banks and telecommunications companies can cooperate to offer innovative financial products to the country.
For the unbanked in India, the initiative between Vodafone India (https://www.vodafone.in/pages/index.aspx) and ICICI Bank, India’s largest private bank, has started to roll out the Kenyan M-PESA mobile phone banking platform in India as of April 2013. They are hoping to open up access to banking to 700 million Indians who currently do not have bank accounts or access to banking facilities. The rollout starts in the country’s eastern regions of Kolkata and West Bengal (CNN).
It looks like access to banking services for the poor in the global South will soon undergo radical change with these large-scale initiatives.
2) iHub Nairobi: Nairobi’s Innovation Hub for the technology community is an open space for the technologists, investors, tech companies and hackers in the area. This space is a tech community facility with a focus on young entrepreneurs, web and mobile phone programmers, designers and researchers. Website: ihub.co.ke/
4) Appfrica: Founded in 2008 in Kampala, Uganda, Appfrica is an innovative global consultancy specializing in market research studies, custom technology solutions and investment in emerging markets. Website:http://appfrica.com/