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Southern Drink Challenges Corporate Dominance

By David SouthDevelopment Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

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.

But the marketing power of these companies has a down side: it has pushed aside local drink brands based on traditional formulations. But in some countries, local brands are fighting back.

In India, the Cow Protection Department of the Rashtriya Swayamsevak (called RSS) based in Hardwar (www.hardwar.com), one of the four holy cities on the River Ganges, has produced a soft drink made from recycled cow urine. They call it ‘gau jal’ (Sanskrit for ‘cow water’) and it is set for a launch at the end of 2009.

The urine is highly processed to make the drink. “Don’t worry, it won’t smell like urine and will be tasty too,” Om Prakash told the Daily Mail. “Its unique selling point will be that it’s going to be very healthy. It won’t be like carbonated drinks and will be devoid of any toxins.”

The price will be less than American brands such as Coca Cola.

“We’re going to give them good competition as our drink is good for mankind,” he continued. “We may also think of exporting it.”

The drink contains not only cow urine but a blend of medicinal and ayurvedic herbs. Ayurveda is the 5,000-year-old ancient Indian health system.

The RSS was founded in 1925 and claims to have eight million members.

Cows are sacred to India’s Hindu population and killing them is illegal in many parts of India.Finding ways to make a living from cows’ waste products is common. Cow dung (manure) is already used as a fertilizer in villages. It is claimed the new soda pop will help with cancer, obesity and liver disease.

Another drink that has been consumed for its health-giving properties is Mongolian mare’s (female horse) milk. Studies by female scientists from Mongolia, South Korea and China for UNDP in the late 1990s found the milk was packed with vitamins and minerals and effective in treating liver diseases, cancer, intestine inflammations and tuberculosis.

Mongolians have used mare’s milk for centuries in their traditional diet. The drink, called airag in Mongolian, is consumed especially during traditional holidays.

There are eight times as many horses in Mongolia as the human population, which numbers 2.7 million, so the potential for this drink is enormous. The Food and Biotechnology Institute of the Mongolian University of Science and Technology (www.must.edu.mn/beta_new/) in association with the Swiss International Development Agency (www.sdc.admin.ch), has been developing technology to process mare’s milk, and make value-added products with it to create rural jobs. Under the project, eight kinds of beauty products have been manufactured so far using mare’s milk.

Published: July 2009

Resources

Just Food is a web portal packed with the latest news on the global food industry and packed with events and special briefings to fill entrepreneurs in on the difficult issues and constantly shifting market demands. Website: www.just-food.com

Brandchannel: The world’s only online exchange about branding, packed with resources, debates and contacts to help businesses intelligently build their brand. Website: www.brandchannel.com

Small businesses looking to develop their brand can find plenty of free advice and resources here. Website: www.brandingstrategyinsider.com

Growing Inclusive Markets, a new web portal from UNDP packed with case studies, heat maps and strategies on how to use markets to help the poor. Website: www.growinginclusivemarkets.org

Asia-Pacific Traditional Medicine and Herbal Technology Network: an excellent first stop for any entrepreneur, where they can find out standards and regulations and connect with education and training opportunities. Website: www.apctt-tm.net

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.

Southern Innovator’s online archive portal was launched in New York City, U.S.A. (home to the UN’s headquarters) in 2011 (southerninnovator.org).
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Woman Restaurant Entrepreneur Embraces Brand-Driven Growth

By David SouthDevelopment Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

The journey of Zhang Lan is the tale of an entrepreneur who exemplifies the story of globalization. She has gone from working many part-time jobs while studying overseas, to becoming one of China’s most successful food entrepreneurs.

Starting with a very small and humble restaurant specializing in spicy food from China’s Sichuan province, Zhang has cannily used branding innovation to grow her business and build her reputation in the food trade. Today the company she started, South Beauty Group (southbeauty.com), has 71 restaurants, most in major cities such as Beijing and Shanghai.

A series of bold moves focused on raising the profile of her restaurants and the South Beauty Group has paid off: the group was singled out by the China Hotel Association as one of the top 10 Chinese restaurant brands. By riding the country’s breakneck growth and urbanization, her restaurant group has enjoyed double-digit growth in recent years in revenue and profits.

Zhang’s mission is to revitalize the Chinese restaurant scene by introducing a more upscale and consistent dining experience.

China’s restaurant industry is booming and represents a significant opportunity: it is said it will have revenue of 3.7 trillion yuan (US $590 billion) by 2015 (China Daily).

“Most people in China don’t know how to present food. I am happy that I have given some importance to the appearance of food,” Zhang told the China Daily newspaper.

“I strike a balance between popular and high-end brands in my daily life. This also works for South Beauty Group, which aims to attract customers to a modern place to enjoy high-grade and popular Chinese cuisine.”

Her business mission is to take the group outside of China and become a global brand.

“Buoyed by the booming domestic high-end catering market, South Beauty Group is looking to be a major luxury brand in the global catering industry. It is not an easy task considering that there are different cultures and eating habits. But my past experience has taught me that opportunities often come along with challenges,” she told China Daily.

Zhang’s business story started in a journey to Canada to pursue further education. To make ends meet, at one time she took on six part-time jobs, including washing dishes and food preparation.

Anybody who has gone to another country to work and better their life knows how hard this can be: “During that period, I was so tired by the end of the day that I had to lift my legs onto the bed with my hands,” Zhang said.

But working hard in restaurants and beauty shops earned her US $20,000 in savings within two years.

She returned to Beijing in the early 1990s, a time when the country was undergoing significant market reforms. She opened a small restaurant in Beijing in 1991 serving Sichuan cuisine. Dining out was still a new experience in a country that had spent decades under austere communism. She made her restaurant different by emphasizing cleanliness and unique flavours for the food. She even used the design of the restaurant to set it apart: she gathered bamboo from Sichuan and used it to transform the restaurant into a little bamboo house.

This attention to detail paid off. By 2000, Zhang had been successful enough to give her the confidence to open her first South Beauty Restaurant in Beijing’s China World Trade Center, a high-end office building in the Central Business District. It proved to be a great way to boost her business’s profile.

“It was a bold decision, as rents were high, but I knew the returns would also be high,” she said.

By 2006, she was successful enough to make another brave move: open a luxury restaurant called the Lan Club, in Beijing. Having learned about the importance of distinguishing herself in the ever-growing restaurant marketplace in China, she invited world-famous designer Philippe Starck (http://www.starck.com/en/) to design the restaurant.

For Zhang, there was a bigger strategy at work: “I was not disheartened when some people said that I threw money away like dirt and 12 million yuan (US $1.92 million) was too much for a design draft. But I got great publicity and brand recognition with this design, far more than what is received by most companies which spend millions of yuan on television advertisements. Not everyone in China can boast of a Starck design in their restaurant.”

In 2007, the company also started cooking meals for airlines flying between China and France, the Netherlands and South Korea. In 2008, it won the bid to be food and beverage provider for the 2008 Beijing Olympics and was named official caterer to the 2010 Shanghai World Expo.

“These international events have given us great confidence in planning overseas expansion,” Zhang said.

The hallmarks of the dining experience at a South Beauty Restaurant include dramatic food presentation, upscale décor, a pleasant dining atmosphere and critically, waiting staff who are informed about the dishes they are serving.

Dramatic food preparation includes cooking food at the table for the diners and serving stir-fried shrimp on a plate with a goldfish bowl filled with live fish.

“I want to change the cheap price and bad atmosphere tag that most Westerners have about Chinese food,” Zhang told China Daily.

She has attracted investors to take a stake in the business and become the second richest female entrepreneur in China, according to the 2011 China Restaurant Rich List.

While the international economic crisis is still damaging growth in the United States and Europe, Zhang still plans to go global. She is looking to initially expand into Asia before moving into Europe and North America.

“Our mission is to promote authentic Chinese cuisine across the world. With (the) Chinese economy growing steadily and its cultural influence gaining, it will not be long before we see some big global Chinese catering companies, much like McDonald’s,” Zhang concluded. And it looks like South Beauty Group wants to lead the way.

Published: November 2012

Resources 

1) Restaurant Branding: A website dedicated to discussing restaurant branding and how to do it. Website:http://www.restaurantbranding.com/

2) How to Start a Restaurant: Tips from the Entrepreneur.com website. Website:http://www.entrepreneur.com/article/73384

3) Top tips on opening a restaurant from successful celebrity chef Gordon Ramsay. Website:http://www.channel4.com/programmes/ramsays-kitchen-nightmares/articles/gordon-ramsays-top-tips-for-starting-a-restaurant

4) Tips on how to handle the start-up costs of staring a restaurant. Website:http://www.inc.com/articles/201111/business-start-up-costs-restaurant.html

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. 

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Global South’s Rising Economies Gain Investor Spotlight

By David South, Development Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

A new book is arguing that the world’s attention should switch away from BRICS countries – Brazil, Russia, India, China and South Africa – and take another look at nations and regions elsewhere across the global South. It argues many are lodestones of future growth and prosperity in the making and will see dramatic changes over the next decade.

The story of the BRIC and BRICS countries is an impressive one. In just eight years from 2000 to 2008, the BRIC countries’ combined share of total world economic output rose from 16 to 22 per cent. This led to a 30 per cent increase in global output during the period, showing how key these countries were to global prosperity in the 2000s. BRIC countries make up nearly half the world’s population and are regional leaders. Taken together, their gross domestic products (GDPs) are not far behind the United States.

Ruchir Sharma’s Breakout Nations: In Pursuit of the Next Economic Miracles (http://www.amazon.com/Breakout-Nations-Pursuit-Economic-Miracles/dp/0393080269) argues that the BRICS are now entering a more stable growth path and thus will not see the rapid-fire expansion and quick profits investors have become used to in the past decade.

“The BRICs,” Sharma told Forbes magazine, “were last decade’s team.”

The BRIC acronym (http://en.wikipedia.org/wiki/BRIC) was coined in 2001 by Goldman Sachs managing director Jim O’Neill, in a 2001 paper titled “Building Better Global Economic BRICs” (http://www.goldmansachs.com/ourthinking/brics/building-better.html). O’Neill predicted that this handful of countries would dominate the growth and economic development story for the years 2000 to 2010. This was because they all shared a similar stage of advanced economic development.

The BRIC states first began meeting together in 2006. South Africa was added in 2010 to form the BRICS acronym.

The buzz surrounding the BRICS countries over the past decade has been justified by their impressive growth rates, declining poverty levels,modernizing economies and societies and growing middle class populations.

China alone had seen its gross domestic product grow by US $5 trillion between 2001 and 2011.

Now, Sharma argues, it is someone else’s turn.

Sharma is head of emerging markets with Morgan Stanley Investment Management in New York, and Breakout Nations looks at where the next economic surprise stories will take place.

“A breakout nation is a nation that will grow above expectations, and will grow more than nations with similar per capita income,” Sharma told Forbes. “You can’t bunch all of the emerging markets together anymore. The last decade saw these countries behaving the same economically, but I think that is behind us now. Investors today will really have to pick their spots.”

He points out that Indonesia was the best performing emerging market in 2011 and has an economy that will surpass a trillion dollars in the coming years.

He also believes Sri Lanka and Nigeria are economies to watch.

Sharma says funds flowing into emerging market stocks grew by 478 per cent from 2005 to 2010, a massive jump compared to 2000 to 2005, when they grew by 92 per cent.

As he sees it, China has now reached middle-income status and its growth rates will not be as high as they have been for the past two decades. In his research, he found that countries like Japan, South Korea and Taiwan all slowed down once their per capita income went past US $5,000.

Investors who watch the emerging markets predict the hot growth areas for the next decade will be around energy, technology, and agricultural resources.

Sharma picks out Indonesia, Turkey, the Philippines, Poland and the Czech Republic for future investment interest, but urges caution with thinking all emerging economies are on course to boom.

“You’ve got to pick your spots, rather than just assume that because you put a tag of emerging on a particular nation, it’s going to boom,” Sharma told The Globe and Mail newspaper.

To make sense of the complexity of fast-emerging economies, a flurry of new investor acronyms has popped up. One of the country clusters is called the CIVETS: Colombia, Indonesia, Vietnam, Egypt, Turkey, South Africa (http://en.wikipedia.org/wiki/CIVETS).

The MINTS (Mexico, Indonesia, Nigeria and Turkey) are also set for great growth in the next decade, many investors believe.

Then there is the N-11 or Next 11. This is the MINTS plus Bangladesh, Egypt,Iran, Pakistan, the Philippines, South Korea and Vietnam.

And after that there is VISTA (Vietnam, Indonesia, South Africa, Turkey and Argentina). While clearly the creative juices are flowing at investment houses as they come up with ever-catchier acronyms, a more serious point is being made: many countries in the global South, for the first time in history, are no longer solely dependent on the Western economic system for demand.

These countries, investors note, now have an unprecedented range of options uncoupled from the political, financial and economic legacy of Western developed nations. They say that many nations in the global South are set for a runaway investment boom because they are making changes and modernizing their economies faster than many expect.

As the BRICS economies mature and slow down and take on different priorities based around improving the quality of life of their citizens, those seeking faster profits will look elsewhere. This trend is even happening within the BRICS, as Chinese and Brazilian companies offshore work to Vietnam and Colombia.

There are many new centres of economic activity and rising prosperity across the emerging markets that often fail to gain wider attention. Few would probably know that the Northeast Asian nation of Mongolia – mired in the 1990s in the worst peacetime economic collapse in half a century (http://www.scribd.com/doc/20864541/Mongolia-Update-1998-Book) – is now the world’s fastest-growing economy (http://www.worldbank.org/en/news/2012/02/28/what-behind-mongoliaeconomic-boom) and one of the top places for mobile phone usage and penetration (http://www.businessmongolia.com/mongolia/2012/03/19/mongolia-ringing-the-changes/).

Then there is Myanmar (formerly Burma), where many are hoping recent moves toward democracy and improvements in diplomatic relations will lead to an economic boon for the region. Investors are also targeting Kazakhstan in Central Asia.

Reflecting these changing realities, Standard Bank, Africa’s largest bank, has been documenting the rising role played by the Chinese currency in international trade. A recent report forecast US $100 billion (R768 billion) in Sino-African trade would be settled in the Chinese currency, the renminbi, by 2015. This would be double the trade between China and Africa in 2010. It also found 70,000 Chinese companies are using the renminbi in international trade transactions.

Resources 

1) Beyondbrics blog: A blog by the Financial Times calling itself “The Ft’s emerging markets hub”. Website: http://blogs.ft.com/beyond-brics/

2) BRICS Summit: The Fourth BRICS Summit was hosted in New Delhi on 29 March 2012 under the overarching theme of “BRICS Partnership for Global Stability, Security and Prosperity.” The Summit has imparted further momentum to the BRICS process. Website: bricsindia.in

3) Market Oracle: A good source for updates on investor sentiment about the emerging market economies. Website: marketoracle.co.uk

4) Monocle magazine: “A briefing on global affairs, business, culture and design” often featuring trends in the emerging market countries. Website:

monocle.com

5) BRICS Information Centre, University of Toronto. Website: brics.utoronto.ca

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2014: Development Challenges, South-South Solutions

By David South, Development Challenges, South-South Solutions

New UNOSSC banner Dev Cha 2013

SOUTH-SOUTH CASE STUDY 

ISSN 2227-3905

The fifth issue of Southern Innovator has launched online and in print. Order copies now for distribution. Email: southerninnovator@yahoo.co.uk.

Issue six will be on science, technology and innovation. This issue will be different from previous issues and will be including supplements and inserts to boost the impact of the magazine. Southern Innovator is seeking sponsors to fund this and also to help us expand the print run (currently 5,000 copies for global distribution).

July

3D Home Printing Landmark: 10 Houses in a Day Development Challenges: The global South is experiencing urban growth on a scale unprecedented in human history, far outstripping the great urbanization wave that swept across Europe and North America during the 19th and 20th centuries.

Old Boats Become New Furniture in Senegal Development Challenges: Every country has its fair share of waste and the remnants of past economic activity. Old cars nobody wants, discarded tins of food, old plastic bags, spare copper wire, cast-off clothing – all can have a new life in the right hands.

Innovative Solutions Celebrated in Ashden Awards Development Challenges: The world’s population is heading towards 9.6 billion by 2050 (UN). Combined with a growing middle class and rising living standards across the global South, that means ever-greater demand on the world’s finite resources. This raises a crucial question: Where will the energy to power rising living standards come from, and how much damage will be done to the planet’s environment by pollution created generating it (https://www.un.org/en/development/desa/news/population/un-report-world-population-projected-to-reach-9-6-billion-by-2050.html)?

Innovative Ways to Collect Water from Air Development Challenges: World water resources are being depleted quickly as populations grow, urbanize and demand better living standards. Many scientists believe we are reaching peak water – the point at which fresh water is consumed faster than it is replenished.

June

Caribbean Island St. Kitts Goes Green for Tourism Development Challenges: Going green may sound like the right thing to do but it can also be associated with being a costly burden and boring. But, as one island nation is proving, being green is a great selling point for attracting tourists and investors – especially in a world where many places are grappling with pollution and resource depletion.

Big Data Can Transform the Global South’s Growing Cities Development Challenges: The coming years will see a major new force dominating development: Big Data. The term refers to the vast quantities of digital data being generated as a result of the proliferation of mobile phones, the Internet and social media across the global South – a so-called ‘data deluge’ (UN Global Pulse). It is an historically unprecedented surge in data, much of it coming from some of the poorest places on the planet and being gathered in real time.

Indian Business Model Makes Green Energy Affordable Development Challenges: The technology already exists to provide renewable energy and electricity to all the world’s poor. The trick is finding a way to pay for it and to make it sustainable. Many innovators are experimenting with business models to reach the so-called Bottom of the Pyramid (BOP) cohort, and the 1.2 billion poorest people in the world who do not have access to electricity (World Bank) (http://tinyurl.com/n9p3f5x). A further 2.8 billion have to rely on wood or other biomass materials to cook and heat their homes.

South-South Trade Helping Countries During Economic Crisis Development Challenges: Weathering the global economic crisis is testing the stability of countries across the global South. But many countries are finding South-South trade and catering to their domestic middle classes can lift incomes and maintain growth rates despite the global turmoil.

May

3D Printing Gives Boy a New Arm in Sudan Development Challenges: 3D printing is rapidly going mainstream and is now starting to make a big impact in health care. One innovative solution is using the technology to manufacture artificial arms for amputees harmed by war in Africa.

African Hotel Boom Bringing in New Investment and Creating Jobs Development Challenges: 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.

China’s Outsourced Airliner Development Model Development Challenges: Many emerging-market countries in the global South have built up substantial foreign currency reserves. Much of this has been a response to past foreign currency crises, particularly the Asian Crisis in the late 1990s (http://en.wikipedia.org/wiki/1997_Asian_financial_crisis).

Brazilian Design for New Urban, Middle-Class World Development Challenges: Countries across the global South are experiencing rapid urbanization as people move to cities for better economic opportunities — and this massive social change is creating new business opportunities. Those who recognize how fundamentally people’s lifestyles are changing will be those who will benefit from this big shift in populations.

April

Cheap Paper Microscope to Boost Fight Against Diseases Development Challenges: To tackle diseases in the developing world, the most important first step is diagnosis. Without effective diagnosis, it is difficult to go to the next steps of either treatment or cure. While much attention is given to the high costs involved in treating and curing ailments, screening for diagnosis is also expensive, especially if it involves lots of people. Anything that can reduce the cost of diagnosis will free up resources to expand the number of people who can be checked, and help eradicate contagious diseases.

Asian Factories Starting to go Green Development Challenges: Media headlines have recently highlighted the growing air pollution crisis in Asia’s expanding cities. This is caused by a mix of factors – the growing number of vehicles, coal-powered factories, people burning dirty fuels to heat their homes, and poor enforcement of standards – and has severe consequences for human health. If it’s not tackled, more and more countries will see large rises in respiratory problems, cancers and early deaths from pollution-caused illnesses (http://www.nrdc.org/air/).

Reality Television Teaches Business Skills in Sudan Development Challenges: Learning how to thrive in a market economy does not necessarily come naturally. But for young people who have grown up under a different economic system or known nothing but economic chaos, learning business skills can give them the tools to get on in life.

Popular Chinese Social Media Chase New Markets Development Challenges: China has a vast and growing market for the Internet and mobile devices. Over the past decade that market has been largely confined to China –  most businesses have had enough domestic demand and opportunities inside the country to keep them busy.

The BRCK: Kenyan-Developed Solution to Boost Internet Access Development Challenges: Using the Internet in Africa has its challenges, as anyone who has worked there knows. Issues can include weak Wi-Fi signals, slow Internet service providers, electricity outages and power surges that can damage or destroy sensitive electronic devices.

March

Women Empowered by Fair Trade Manufacturer Development Challenges: There is sometimes a great deal of negativity surrounding the issue of manufacturing in Africa. Some claim the risks of doing business are too high or that the workers are not motivated enough. But one garment manufacturer is out to prove the skeptics wrong. It pays decent wages and gives its mostly female workforce a stake in the business in a bid to drive motivation and make it worthwhile to work hard.

Global South Trade Boosted with Increasing China-Africa Trade in 2013 Development Challenges: It was announced in January 2014 that China has surpassed the United States to become the world’s number one trading nation, as measured by the total value of exports and imports. This new economic behemoth also continued to grow its trade relationships with Africa.

India 2.0: Can the Country Make the Move to the Next Level? Development Challenges: With the global economic crisis threatening to cause turmoil in the emerging markets of the global South, it is becoming clear that what worked for the past two decades may not work for the next two.

“Pocket-Friendly” Solution to Help Farmers Go Organic Development Challenges: Interest in organic food and farming is high, and organics have become a growing global industry. The worldwide market for organic food grew by more than 25 per cent between 2008 and 2011, to US $63 billion, according to pro-organic group the Soil Association. That is an impressive accomplishment given the backdrop of the global economic crisis, and evidence that people value quality food, even in tough times.

Cheap Farming Kit Hopes to Help More Become Farmers Development Challenges: Food security is key to economic growth and human development. A secure and affordable food supply means people can meet their nutrition needs and direct their resources to improving other aspects of their lives, such as housing, clothing, health services or education.

While Southern Innovator’s digital presence has been key to its success and global reach, the hard copy of the magazine was designed with special features. The magazine needed to be robust and able to stand a fair bit of abuse and hard wear. It needed to be easy to read in low light conditions. And it needed to look sharp and eye-catching to reach as wide an audience as possible.

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