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.
Cuba, the Caribbean island nation known for its 1959 revolution and its tourism industry, is undergoing a shift in its economic strategy. The country has had heavy state control of its industries and business activities since the country adopted the official policy of state socialism and joined the Communist economic sphere headed by the Soviet Union.
When the Soviet Union fell apart in 1991, Cuba was pitched into an economic crisis as it lost access to preferential trade subsidies. This period is known as the ‘Special Period’ (http://en.wikipedia.org/wiki/Special_Period) and was marked by a severe reduction in access to fuel as supplies and subsidies from the Soviet Union disappeared. Some of the iconic images of the time include people abandoning their cars and turning to bicycles to get around, or using make-shift truck-buses packed with workers. Exports collapsed and slashed the size of the economy by a third.
Fast-forward to today, and tourism is booming. A record 2.7 million tourists went to Cuba in 2011, earning the country US $2.3 billion. And it is catering to this tourism market that probably offers the best near-term opportunities. With wages still just 50 per cent of what they were in 1989 many are taking up this new opportunity to become entrepreneurs.
To become an entrepreneur, Cubans need to apply for a pink identification card with their name and photo and the words “Autorizacion Para Ejercer el Trabajo por Cuenta Propria.” This gives authority “to work for your own account.” With the card, a person can start a business, hire staff and pay them what they like.
Cuba’s economy has been through many phases since the revolution, swinging between loosening up the ability of people to establish private businesses – and pulling back, restricting private enterprise. But since 2008, there has been a significant shift to encouraging greater private enterprise, entrepreneurship and the ownership of private property – once banned – to stimulate the economy.
“This is the most important thing to happen in Cuba since the revolution in 1959,” Juan Triana, senior fellow at the Centre for the Study of the Cuban Economy at Havana University, told The Sunday Times Magazine.
One visible sign of this change is the flourishing of what is called locally ‘paladar’ (http://en.wikipedia.org/wiki/Paladar), or privately run restaurants.
Paladares are usually located in a person’s home and staffed by family members. Their customers are a mix of tourists, expatriates living in Cuba, and Cubans with a high enough income to be able to afford restaurant meals.
The cost of a meal in these restaurants can run from US $40 to US $60 for two people.
Stocking the kitchen is not easy. Cuba experiences food shortages and there is still rationing for many. Basics like eggs can be hard to find. As for exotic, imported ingredients, many chefs rely on visitors to stock their larders.
Cuba will have to re-build its food sector to make this a lasting improvement.
The agriculture sector has declined and, where Cuba once provided a third of the world’s sugar harvest, the country now has to import half of its food supply. Measures are in the works to change this, with smallholder farmers now able to own 165 acres of land and sell their produce to private customers and hotels.
One restaurant owner, Héctor Higuera Martinez, told The New York Times:“You dream up a recipe that you’d like to make but then you can’t find the ingredients.
“One day you go out to get salt and there’s no salt. And I mean no salt,Anywhere.”
Martinez trained with a well-known Cuban chef and did a stint in Paris before returning to Havana. He has turned a 19th-century mansion into the restaurant Le Chansonnier (http://www.cubajunky. com/havana/restaurant_le_chansonnier.html) and decorated the walls with the work of local artists.
Martinez sees the paladares as a turning point in changing Cuba’s reputation for having boring food. “I believe we can play an important role in revolutionizing Cuban cuisine.”
Cuba is making the difficult shift from having an economy where 80 per cent of activity is in the state sector, to a mixed model balanced between private and public ownership.
Havana’s historic district offers tourists renovated colonial architecture mixed with shops, restaurants and bars. As a tourist strolls from the renovated district, they quickly come across the rest of Havana, which has beautiful buildings from the colonial period, 1950s American-influenced architecture with its fading retro signage, and more utilitarian Soviet-era architecture.
While charming and home to most of the city’s residents, much of it is rundown and crowded and in need of investment and renovation.
But things are changing fast. Oyaki Curbelo and Cedric Fernando use spices brought in by visitors for Bollywood, their restaurant in the Nuevo Vedado area (http://cubantripadvisor.com/destinations/havana-cityoutskirts/bollywood-paladar/). It has a small menu of Indian and Sri Lankan dishes, including shrimp curry with ginger and tamarind. The restaurant sources its curry leaves from a tree located in the Sri Lankan Embassy.
The restaurant Doña Eutimia (https://www.facebook.com/paladardona.eutimia) serves up Cuban favourites off the Cathedral Square. Specialties include a dish made of shredded beef with garlic, tomato, oregano and bay leaves.
Habana Chef in the Vedado district (http://cubantripadvisor.com/destinations/havana-city-outskirts/habana-chefpaladar/) was started by Joel Begue and chef Ivan Rodriguez. Begue gained his experience in the state restaurant sector and took the opportunity to get a licence when the government offered them in 2011. He borrowed US $25,000 to start the restaurant and has been able to pay back half so far. His current success is prompting him to look into opening a second restaurant in the capital.
An enthusiastic Andrew Macdonald, who is looking for investment opportunities for a half a billion dollar fund held by the Escencia Anglo-Cuban firm, told The Sunday Times magazine, “Cuba is the top emerging tourism market in the Caribbean by a mile, and it’s in the top five emerging markets globally.”
Published: May 2012
Resources
1) Advice on starting a restaurant and links to additional resources. Website: runarestaurant.co.uk
2) How to start a restaurant: From Entrepreneur magazine, a guide to the planning required to start a successful restaurant. Website: http://www.entrepreneur.com/article/73384
3) AlaMesa: A directory of restaurants in Cuba. Website: alamesacuba.com
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.
The onslaught of digital media in the developed countries of the world regularly brings pronouncements of the death of the traditional newspaper. But this assumption of digital triumph misses out on the reality in countries across the global South.
As incomes rise and literacy levels go up, so does the desire to consume news and information. And while many are jumping straight to online and mobile phone sources, just as many are enjoying more traditional print media offerings like magazines and newspapers.
India boasts both a fast-growing economy and the largest number of paid-for newspapers in the world. The print media industry in India has seen phenomenal growth since 2005, with the number newspaper titles increasing by 40 percent to 2,700 (World Association of Newspapers). The two factors driving this growth in newspapers are rising literacy and a booming economy
The World Association of Newspapers found China leads the world for newspaper subscribers, with 93.5 million readers a day. India is second. It is estimated the Indian newspaper industry will generate US $3.8 billion in revenues in 2010, a 13 percent growth rate over the last five years.
Estimates place growth in the newspaper industry in the next four years at 9 percent a year, to US $5.9 billion (KPMG).
Part of the reason India is defying the decline in newspaper numbers and readership seen in developed countries is poor internet penetration across the country. Because of this, only 7 percent of the population uses the web for information. And the country’s high number of illiterates (just 65 percent of the population can read) means even if many could afford a newspaper, they couldn’t use it.
According to Amar Ambani, head of research at India Infoline Group, “Unlike the West where the internet publishing and advertising has significantly hit the print media, the Internet threat to print media is still in its nascent stage in India, given the low penetration of computers and adequate bandwidth across the country.”
Newspapers are also growing in a highly competitive market exploding with new television channels on cable and satellite and other media distractions like mobile phone applications.
The newspapers (http://www.world-newspapers.com/india.html) are a strong reflection of how much the economy has changed in the past decade. They contain advertisements for property, mobile phones, cars and dating services.
Cost is also a critical element in their success: at only four rupees each (US $0.09 cents), many Indians buy several newspapers at a time for their home. The publications are able to charge so little because of the health of the advertising revenue coming in. Newspaper advertising in India increased by 30 percent between January and Match 2010 alone, the quickest jump in ads for the Asia-Pacific region (Nielsen India).
There is a hierarchy in the newspaper industry: English-language newspapers attract wealthier readers and can charge the most for advertising. But rising literacy rates combined with increasing personal wealth is fuelling growth in regional papers written in local languages. India has 22 official languages and English as an associate language. The country as a whole has about 33 different languages and over 2,000 local dialects. Hindi newspaper circulation rose from 8 million in the early 1990s to over 25 million in 2009.
The Times of India (http://timesofindia.indiatimes.com) is now the world’s largest circulation English-language newspaper, with 4 million readers. It uses this success to charge 10 times what regional papers can for advertising. At present, the regional newspapers’ bread-and-butter is mostly government-paid advertising.
But if trends continue as they are, then the tables will turn on big beasts like the Times of India. Regional papers will grow as people look for an opportunity to read in their own local language.
Flush with cash and confidence, Indian newspapers are also innovating new ways to advertise untried in other countries. Talking ads attached to the actual newspaper’s back pages caused a great stir when they were trialled in India recently (http://www.guardian.co.uk/media/greenslade/2010/sep/28/newspapers-advertising). The talking ads for a car company delivered a sales pitch but also alarmed and annoyed many people because the talking ad wouldn’t stop talking.
Ambani puts the success of the Indian newspaper industry down to five factors: the economic boom in semi-urban and rural India; growing local content; more opportunity to grow the number of readers; rising advertising spending; and rising literacy as a result of rising secondary school enrolment. He believes students aged between 10 and 15 are getting the newspaper habit and they represent huge future growth in newspaper readers.
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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