In the Mongolian language, the book explores how Mongolia’s vibrant rock and pop music scene led on business innovation and entrepreneurship in the country during the transition years (post-1989). Written by an ethnomusicologist, it details the key moments and events in this story, while splicing the narrative with first-person interviews with the major players.
This is an unofficial publication of UNDP. Views presented in this document do not necessarily reflect those of UNDP. Mongolia Update is provided as a service to those who are interested in the rapid changes taking place in today’s Mongolia. A note about Mongolia Update: The Mongolia Update has proven to be one of the more popular documents produced by the UNDP Mongolia office. Since the autumn of 1997 UNDP has been able to offer two more frequently updated sources of information: the UNDP homepage and our monthly newsletter, the Blue Sky Bulletin (available from our office if you are not already receiving it). Please use the United Nations Homepage at http://www.un-mongolia.mn to keep abreast of the latest political, economic and social developments in Mongolia. Mongolia Update is an unofficial document of UNDP and is designed to periodically keep our partners outside of Ulaanbaatar apprised of issues in the country.
Africa is experiencing a boom not seen for decades. The IMF forecasts economic growth in sub-Saharan Africa of 6 per cent in 2014, compared to global growth of 3.6 per cent.
And this boom is getting an additional jolt of support from the world’s multinational hotel chains. January 2014 saw Africa’s largest hotel chain bought by global giant Marriott (marriott.com). For decades major global multinationals shied away from Africa, but today they are battling to get a place in Africa’s fast-growing economies and to serve the growing middle classes.
Marriott is leading the way by investing US $1.5 billion in 25 new hotels equalling 5,000 rooms. To boost capacity further, Marriott is taking over South Africa’s Protea group (proteahotels.com) and its 116 African hotels.
“We have 25 Marriott brand hotels under construction in seven countries in Africa that will come on stream over the next four years,” Alex Kyriakidis, the chain’s president for the Middle East and Africa, told Bloomberg (bloomberg.com).
The new hotels “are going to bring us into Benin, Gabon, Ghana, Ethiopia and Mauritius. With our existing hotels plus those in the pipeline and those Protea operates today, we will be in 16 countries in Africa by 2017.”
Bloomberg calls what Africa is experiencing the “fastest pace of hotel development in the world”. “Our mission here is to grow, grow, grow,” according to Kyriakidis.
Meanwhile, a further boost is coming from the US $5 billion Angolan sovereign wealth fund, Fundo Soberano de Angola (fundosoberano.ao/language/en/). It will be investing in hotels and commercial infrastructure in sub-Saharan Africa, according to Bloomberg. This could include 50 sub-Saharan African hotels in the next three years.
“We believe there’s a lot of investment interest in Africa,” said Chairman Jose Filomeno dos Santos. “It has a lot of mineral potential, almost a commodity hub. We believe this interest will remain there for the coming years.”
Little thought is given to the role hotels play in development, yet they are a critical development tool for any country wishing to move up the economic ladder. As the quality of hotels improves, they tend to become key gathering and meeting places. Conferences and seminars can act as catalysts for change, attracting people from around the world. When quality hotels are in place, then the top-drawer global conferences will come to town, in turn bringing new tourist income for local businesses.
Anyone who has stayed in a hotel in Africa knows that standards are variable: the pool with dirty water, the power cuts, the food hygiene standards that might not match what people are used to at home. This is what international hotel chains can change. Not only do they demand the highest standards in their own establishments, they also push up standards at local competitors, as all of them battle for the attention of visitors.
Africa has been overlooked by the large global hotel chains and brands since the end of the colonial period in the 1960s and 70s. Africa was considered too poor, too chaotic, too dangerous and too much hard work for it to be worth the effort.
But now the tune has changed. With Africa’s population over a billion, and many of the continent’s economies experiencing rapid growth while also urbanizing, conditions are fortuitous for the hotel trade.
The situation has changed in the last decade, for a variety of reasons: debt relief, a rise in commodity prices, expanding trade and investment with China and the global South, and a growing middle class — all slowing the growth of poverty. Africa is still notorious for under-investment in infrastructure and has a long way to go to catch up to the fast-moving economies of Asia. But greater optimism is leading to greater real investment. And the world’s large hotel brands are the latest to join in the rush to Africa.
Large chains including Four Seasons, Ritz-Carlton, Hyatt and Kempinski hope to open 300 new hotels in Africa over the next five years. The number of hotel beds is set to increase by 30 per cent by 2018.
Four Seasons Safari Lodge Serengeti in Tanzania (http://www.fourseasons.com/serengeti/) is the first investment in Africa by the Canadian brand. Four Seasons is known for its luxury, upmarket city hotels and has kept with this tradition by building the largest and most luxurious safari lodge ever built in Africa.
This is having a knock-on effect on African hotel operators. The surge in investment is giving these local operators the right incentives to create African brands and to raise their game.
Nairobi in Kenya has become something of a test market for high-end boutique hotels. Already a city benefiting from its status as an international development hub, home to many agencies including the UN Environment Programme’s sprawling and verdant headquarters (unep.org), it has also become a corporate headquarters for Africa and has a large U.S. presence (nairobi.usembassy.gov). This means lots of people coming to the city to do business and attend events, creating a market for better quality accommodation.
The Kenyan-owned, 156-room Sankara Nairobi Hotel (sankara.com) boasts of having the best wine list in Africa and claims to be a five-star hotel. It also capitalizes on being close to the international airport and the UN’s Nairobi headquarters.
“There’s an appetite for something local that’s different and, for the first time, there’s the confidence and funding to bankroll new developments,” said Sankara Hotel Group director Rohan Patel to Wallpaper Magazine. “Africans don’t want a theme-park African hotel, with prints of ‘the big five’ on the wall. That’s condescending. Nor do they want a New York-style hotel. They’ve probably been to New York. They want modern, connected Africa.”
Elsewhere in Nairobi, the Kenyan-owned Tribe Hotel (tribe-hotel.com) is looking to expand to meet growing market demand.
“The market for new, authentic, yet modern African hotels is growing,” manager Michael Flint, who previously ran New York’s Ritz-Carlton, told Wallpaper.
“We’ve been so successful here we are building a new 187-room hotel in Nairobi. We’ve taken over a boutique hotel called Westhouse (westhouse.co.ke). And we’re looking to expand further, with properties at the airport and on the coast. Who knows what will be next? Tribe will be a mini empire.”
In Rwanda’s capital Kigali, the Rwanda Marriott has ambitious plans. Rwanda was ripped apart by ethnic genocide in the 1990s that killed an estimated 500,000 to 1 million people (http://en.wikipedia.org/wiki/Rwandan_Genocide). Now, the country’s economy is booming and its hotels are getting an upgrade.
The Akilah Institute for Women (akilahinstitute.org) in Kigali has been helping in training women for the hotel sector. They sent trainees to Dubai and Doha to learn how to do hotel service the Marriott way.
Starwood (starwoodhotels.com), a competitor to Marriott, is hoping to grow its African hotel investment by 30 per cent as well. It will be done through the Sheraton, Aloft, Le Meridien, St Regis and Four Points brands. The first St Regis has already opened in Mauritius.
Neil George, Starwood’s head of African development, believes “Africa is the final frontier. It’s adventurous.
“I would rather arrive in Kinshasa and work out how to do a hotel there than do it in Frankfurt,” he told Wallpaper.
Kempinski also has properties in Chad and the Congo, has bought the Hotel des Mille Collines (https://www.millecollines.net/) in Kigali and aims to operate 20 hotels across sub-Saharan Africa.
British entrepreneur Richard Branson has the Mahali Mzuri in the Maasai Mara and it is seen as a stylish role model for other hotels. The local landowners and herdsmen have been included in the business, benefiting from the hotel and helping to preserve the local ecosystem.
1) Catererglobal.com: Catererglobal.com offers a unique service that provides an easy-to-use, specific recruitment website for vacancies in the world’s best hotels and cruise ships. Website: http://www.catererglobal.com/jobs/africa/hotel/
2) South African hotel jobs: HotelJobs South Africa is an industry specific job website for the hotel, hospitality and catering industry. Website: http://www.hoteljobs.co.za/
Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP’s South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South’s innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.
Sometimes it takes a bold, fresh start to speed up economic and human development goals. Taking a large-scale approach has been used around the world, either establishing new trade zones or even a new city.
Two recent examples in Nigeria and Afghanistan are attempting to speed economic development in their respective countries, with both receiving help from experienced Asian practitioners of rapid economic development.
The role models for this approach are the so-called “Asian Tigers”: they include Taiwan, Hong Kong, Singapore and South Korea. They are admired because each country rose from extreme poverty to become some of the Earth’s richest nations. Importantly, what they did stands as proof that extreme poverty can be escaped from; people can become much wealthier in just a decade or two.
The country was unable to create products and services that it could export and compete in global markets because of a lack of skills, the Government determined. Authorities employed a mix of measures to make the country attractive to foreign companies to boost skills. These included fair enforcement of local laws, tax incentives and upgraded infrastructure, much of it paid for with an infrastructure tax, rather than borrowing. With the influx of new thinking and high-quality skills, new technologies and new ways of doing things, in time, a culture of innovation became hardwired into the way things were done in Singapore.
Beginning in 1961 with the Jurong Industrial Estate (http://infopedia.nl.sg/articles/SIP_246_2004-12-16.html), the Singapore government set aside land to develop the economy by attracting international businesses and boosting its existing port facilities. It also established the Economic Development Board (EDB) in 1961 and the Singapore Tourism Promotion Board (STPB) in 1964.
By creating favorable conditions for international businesses to come in and operate, Singapore quickly developed to become one of Asia’s wealthiest trading and manufacturing centres.
This is a strategy China successfully implemented in the 1980s and 1990s and in turn generated the largest and quickest population shift out of poverty in human history, turning the country into an economic powerhouse.
The secrets to making this strategy work include understanding what modern infrastructure requirements are necessary for international businesses. These days, this means speedy and generous bandwidth for the Internet, modern airports, roads, security, and quality housing and food.
One of the biggest contemporary challenges is competition. Whereas Singapore was a pioneer in its day, now, many countries across the global South are pursuing this strategy to spur growth. An international company has many options to consider, and will more than likely gravitate towards the country that makes the best offer with the least risk.
Trade zones are places ripe with opportunity for innovators. New places tend to be seeking the latest in information and communication technologies, the latest in transportation options, modern housing and office facilities. All of these changes require innovators with fresh thinking to make them work. It is also often easier to introduce new ways of doing things to places that are not coping with legacy infrastructure and old habits and ways.
Billing itself as a “new model city,” the Lekki Free Zone Lagos, Nigeria (lekkizone.com) in West Africa is trying to bring a fresh start to the city and the region. It is a joint partnership between investors from China and Nigeria.
Its goal is to better connect regional markets to the global economy. The free trade zone hopes to remove barriers to growth and to attract international investment, becoming the top destination for inward investment in Africa. The project is being run by the Lagos State Government but funded with private capital investment.
Nigeria has been looking into Free Zones since 1982, as it sought additional ways to earn income apart from oil exports. The Export Processing Zone Act 63 was passed in 1992 and the Calabar Export Processing Zone was eventually set up in 1999 (http://www.nepza.gov.ng/index.php?option=com_content&task=view&id=18&Itemid=34). Since then, a slew of Free Zones have been set up, or are in the works.
The Lekki Free Zone is envisioned as a high-tech zone that will eventually lead to the creation of 2 million jobs. The Zone’s investors are targeting businesses working in oil and gas, petrochemicals, electronics, light and heavy equipment, machinery and automobiles, pharmaceuticals, textiles, shopping and banking and financial services.
Lagos State is home to 21 million people, and the current city of Lagos is on course to become the third-largest megacity in the world. Officials claim the area has an economic growth rate of 16.8 per cent per year.
The 16,500 hectare Lekki Free Zone, to the southeast of the city, is divided into two parts: an industrial zone and a residential zone. The residential zone will include apartments and villas, shopping malls and plazas, hospitals and clinics, schools and research and development centres and a hotel, tour and recreational centres, golf courses, gyms and water sports facilities.
Located on the southern coast of Nigeria with connections to the Atlantic Ocean and the Gulf of Guinea, the Lekki Free Zone says it will give companies access to the largest consumer market in Africa, with a potential reach of 500 million people.
The companies will also be able to draw on Nigeria’s natural resources, including oil, natural gas, timber, rubber, cocoa, Arabic gum and sesame seeds as examples.
Another new beginning is being sought in war-torn Afghanistan, which is working on building a new city close to the capital, Kabul.
Kabul New City started construction in 2013 and is planned to be a city of canals, parks and villas. It will be home to 1.5 million people, cost US $33 billion and take 15 years to complete. It is being partly funded by Japan.
It is a very ambitious scheme for a country that has been mired in conflict for decades. It is hoped the initial seed capital invested by Japan will attract other investors to fully fund the project. Japan got the project going with a commitment to contribute US $106 million between 2009 and 2015.
The site of Kabul New City is 19 kilometres from the existing Kabul, near the Bagram airbase used by NATO forces in the country.
Foreign military forces are looking to leave Afghanistan in 2014 and the new city offers a fresh start for the country after years of conflict.
Located in an area surrounded by the Marko mountains, it is in “one of the safest areas of Afghanistan,” Abdul Habib Zadran, Chief Financial Officer of the Dehsabz-Barikab City Development Authority (http://www.dcda.gov.af/), the agency in charge of the project, told The Sunday Times.
The project could be a significant leap ahead in modernization from the current conditions in Kabul, where the streets are in poor condition and buildings in disrepair. Kabul was originally built for 800,000 people, according to The Sunday Times, but now has over 4 million residents. Projections forecast the city growing to 6.5 million people by 2025. Kabul will experience extreme pressure to handle this growing population and find the resources to serve it.
The homes would receive electricity from solar panels and renewable energy sources. Kabul New City will need to tackle the problem of access to enough water to service the growing new city’s population. Plans are afoot to provide water from rivers north of the city.
The master plan for the new city has been designed by Zahra Breshna (breshna-consulting.com), an Afghan-German company which has also built the new Kabul Bank headquarters. The company calls the project “a new beginning for Kabul.”
Published: May 2013
Resources
1) Tianjin Eco-city: The Sino-Singapore Tianjin Eco-city’s vision is to be a thriving city which is socially harmonious, environmentally-friendly and resource-efficient. Website:tianjinecocity.gov.sg/
2) Songdo International Business District: Songdo International Business District (IBD) is home to the UN’s Green Climate Fund and is a smart city located in the Republic of Korea built to the highest green building standards. Website: songdo.com/
3) Singapore: An island and islets in the heart of Southeast Asia, between Malaysia and Indonesia. Website:http://app.www.sg/
4) Djibouti Free Zone: Djibouti Free Zone was created with one primary goal in mind – to bring about a sea-change in the way Africa thinks and does business. No red tape, ruthless efficiency and genuinely exhaustive services – in essence, we offer the ideal conditions for trade and commerce to flourish in. Website: djiboutifz.com/
5) Cisco Smart + Connected Cities: Cisco Smart+Connected Communities solutions use intelligent networking capabilities to bring together people, services, community assets, and information to help community leaders address these world challenges. Website:http://www.cisco.com/web/strategy/smart_connected_communities.html
6) IBM Smarter Cities: Smarter cities drive sustainable economic growth and prosperity for their citizens. Their leaders have the tools to analyze data for better decisions, anticipate problems to resolve them proactively and coordinate resources to operate effectively. Website:http://www.ibm.com/smarterplanet/us/en/smarter_cities/overview/
Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP’s South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South’s innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.
David South Consulting 
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