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Chinese Trade in Angola Helps Recovery

By David SouthDevelopment Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

Two-way trade between Africa and China has been an outstanding success story of the past decade. It has led to significant new investment in the continent and brought many new job opportunities. The Chinese community in Africa comprises a mix of entrepreneurs and workers. In formerly war-torn Angola, Chinese workers and investors have led an economic boom as the country recovers from decades of conflict.

The Chinese are generally young, well-educated, English-speaking, ambitious and hard-working. Estimates put the number of Chinese people in Angola at 100,000, and about 1 million across Africa.

The reason these bright young things need to come to Africa goes back to the essential reality of modern China: despite rapid economic growth, per capita incomes classify it as a poor country. While the outside world sees the glitzy, go-go progress of China’s cities, the country’s rural poor go unseen. Around 400 million of China’s 1.3 billion people have annual per-capita income equivalent to US $8,000, while the remaining 900 million have per-capita incomes as little as one-tenth that amount.

Some 6.3 million people in China will graduate this year from university, and it is still very hard for a well-educated Chinese person to get a good job right away. More than a quarter of these graduates will be unemployed, according to the Education Ministry.

There has also been disquiet in parts of Angola over China’s role, with some calling it “neo-colonialism”. But clearly, both Africa and China have much to gain by increasing cooperation.

In the southern Chinese city of Guangzhou (http://en.wikipedia.org/wiki/Guangzhou), a trading hub nicknamed “Africa Town” has emerged since 1998. There are officially 20,000 African traders and entrepreneurs in the city of 18 million, but unofficial estimates put the number at more than 100,000. This African trading hub has emerged to the benefit of both the Chinese and Africans. It is a coming together of small traders matching Africa’s strong demand for consumer goods with China’s manufacturing powerhouse.

In Angola, the mix of entrepreneurs and workers is having a big impact on the country’s development.

Betty, a 22-year-old Chinese woman who has various projects in Angola, including the local Chinese language newspaper, is a typical go-getter.

“I am doing much better here than if I had stayed in China,” she told the BBC.

Another beneficiary of the two-way trade is Deng, a construction a worker: “I earn twice as much as I would at home and I have got a better job,” he said.

For most Chinese, foreign travel is still rare and the excitement of going to Africa to work both attracts and repels because of the continent’s reputation.

“At first I found it frightening, “said Wang. “You hear lots of stories of Chinese people being robbed by the locals.” But he found “there are great opportunities here.”

Another, Jet, who runs an air conditioning business, came to Angola five years ago.

“Everything had been destroyed,” he recalled. “There were no roads, railways, shops, nothing. Some Western companies were already here selling their products but I knew I could import things cheaper from China.”

The large infrastructure projects being undertaken by major Chinese companies are also creating new opportunities. Many Chinese labourers are working on building roads, railways, hospitals and vast housing complexes.

One of the more visible symbols of Chinese investment in Angola is the restoration of the Benguela Railway (http://en.wikipedia.org/wiki/Benguela_railway), considered one of the great routes of Africa and built by British contractors. An engineering triumph, its 1,344 kilometres (835 miles) of track stretch up the Angolan coast, right into southern Congo. The railway took almost 30 years to build in the late 19th and early 20th centuries, but little remained. Until very recently all but a tiny stretch of the line was closed. Now Chinese investment is rebuilding the railway and bringing economic improvement in its wake.

“I couldn’t do this before the railway was fixed,” a woman using the train to get to the market to sell her plump red tomatoes told the BBC. “Before, I had to travel by car which was much more expensive.”

And her income has improved along with the refurbished railway. “I am not rich, but a bit richer,” she said.

And unlike the British, who used the railway to export copper without paying for the resource, the Chinese labourers are getting paid and the Angolan government is paying back the Chinese loan for the railway repairs by selling oil overseas for a market rate.

Published: October 2010

Resources

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.

Creative Commons License

This work is licensed under a
Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

ORCID iD: https://orcid.org/0000-0001-5311-1052.

© David South Consulting 2022

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Palestinian Olive Oil’s Peaceful Prosperity

By David SouthDevelopment Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

The economic devastation of the conflict between Israel and the Palestinians (http://en.wikipedia.org/wiki/Palestine) has brought much hardship to the Palestinian people. The United Nations under the UNRWA mission has been working to lesson the hardship for over 60 years (http://www.unrwa.org). But there is only so much it can do.

However, several business initiatives are creating strong Palestinian food brands to improve the reputation and awareness of Palestine around the world. In particular, Palestinian olive oil has led the way and enjoyed strong sales in countries like the United Kingdom.

Since 2004, the Palestine Fair Trade Association (PFTA) (http://www.palestinefairtrade.org) has been leading the movement of fair trade producers in Palestine, linking small Palestinian farms in fair trade collectives and cooperatives across the country.

Zatoun (http://www.zatoun.com) – or Zaytoun (http://www.zaytoun.org) as its known in the UK – are olive oil and soap brands using the Arabic word for olive. Olive oil (http://en.wikipedia.org/wiki/Olive_oil) is a popular cooking and seasoning oil and is sought after for its health benefits. Most of it is cultivated in the Mediterranean region, with Spain the largest single producer. Like wine, the quality of the olive oil varies greatly and the bouquet and viscosity of the oil play a big role in how consumers select a brand. The trend in the past 10 years has been for consumers to be more selective about the olive oil they buy and to be more informed about the choices available. This increasingly sophisticated consumer choice is what is helping the Palestinian oil succeed.

Another factor is the growing global popularity of the traditional Mediterranean diet. Research has linked it to the prevention of cancers, obesity and cardiovascular diseases, and an aid to food digestion. Olive oil and olives make up one of the six key groups of foods that are part of the Mediterranean Diet. The other elements are grains, fruits and vegetables, legumes and nuts, dairy products and fish.

The Zatoun brand of olive oil uses its profits to help olive tree farmers and their families in Palestine.

The brand is also hoping to alter public perceptions of Palestine. As its website states, “Zatoun helps to create a context based in ordinary everyday life to view and discuss the situation in Palestine-Israel. No longer is it an abstract geopolitical issue involving power elites and undefined national interest.”

The Zatoun brand is led in Canada by Robert Massoud, winner of the 2004 YMCA Peace Medallion. Zatoun is sold in Canada through peace groups and social justice and faith groups and is “intended as a tool to help promote their work and bring home the message that the struggle of Palestinians is ultimately one of human rights and social justice.”

The olive oil is certified fair trade under the Institute for Marketecology (IMO) (http://www.imo.ch/index.php?seite=imo_index_en) in Switzerland. The brand is operated as a not-for-profit with volunteer labour and the entire cost of the product goes to the farmers, customs and shipping costs, and promotion and administration. Each 750mL bottle sells from between CAD $15 (US $14) and CAD $17.50 (US $17.22) and each bar of soap is CAD $5.00 (US $4.90).

In the U.K., the Zaytoun brand was started by British women Heather Masoud and Cathi Pawson, also in 2004. The Palestinian olive oil has benefited from sales promotion during the United Kingdom’s annual Fair Trade Fortnight: a highly publicized promotion over two weeks that has consistently raised the profile of all Fair Trade products. Palestinian products were profiled during the 2009 event.

The Zaytoun brand is certified with the World Fair Trade Organization (www.wfto.com) and has been able to break through to sales in British supermarkets as a result. Having this certification is key to being accepted for display on the supermarket shelves. By being certified, the farmers are able to get guaranteed above market prices for their olives. This makes it easier to plan and invest in the farm and the community and avoid the wild fluctuations of market prices. It is common around the world for farmers to be bankrupted and impoverished when market prices crash and fall below the cost of growing and harvesting the product.

“We have been working for the Fair Trade certificate for four years,” Nasser Abufarha, chairman of the Palestinian Fair Trade Association told the Guardian newspaper. “Fair Trade will increase our sales, and bring us new markets and widen our reach.

“We have given farmers hope,” he said. “An economic exchange that recognises Palestinian farmers’ rights and respects the value of their connection to their land, after marginalization under Israeli occupation, is a major accomplishment.”

Olives are Palestine’s biggest crop, and critical to the local economy. The industry employs more than 100,000 people and its economic health affects many more. But the ongoing conflict has harmed the olive industry in many ways, from the bulldozing of orchards to make way for the Israeli security fence – over 1,100 hectares olive orchards were cut off by the fence in the West Bank village of Anin alone – to clearing fields for the building of new settlements.

For some of the farms, fair trade has meant access to outside markets they haven’t had for 40 years.

The Palestinian olive oil is in a market with fierce competition. In the UK, the oil can retail for £14.49 (US $23) a litre, while some Italian olive oils can be had for just US $9. But the Palestinian olive oil has a number of advantages in the marketplace: consumers have shown a willingness to pay the premium to support the farmers and Palestine, and most importantly in the competitive world of food sales, food connoisseurs rave about it. Food and wine writer Malcom Gluck called Zaytoun olive oil “one of the aggressive yet pungently attractive olive oils I have tasted”. He believes it easily ranks alongside the best Sicilian, Cretan and northern Spanish oils.

Another Palestinian company having success with the olive products is the Anabtawi Group (http://www.anabtawigroup.com/index.php?a=1&lid=3&lid1=24). Based in Nablus in the West Bank, it started in 2008 the Al-Ard Palestinian Agri-Products Company and sells Al-Ard extra virgin olive oil, virgin olive oil and an olive oil soap. Operating on a large scale, the group has the largest olive oil storage facility in Palestine and provides training and support to the farmers. It also undertakes marketing of the products in new markets including Latin America.

Ziad Anabtawi, the company’s president and CEO, told the Brazil-Arab News Agency “Palestinian olive oil is known worldwide for its high quality and its very striking aroma. It is ‘premium’ and organic by nature. Farmers grow the product the traditional way. They do not irrigate the olive trees, [irrigation] comes from rainwater and we do not use any chemicals.”

The Palestinian experience shows it is possible to create new economic opportunities for farmers under even the most arduous political and security conditions.

Published: October 2010

Resources

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. 

Creative Commons License

This work is licensed under a
Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

ORCID iD: https://orcid.org/0000-0001-5311-1052.

© David South Consulting 2022

Categories
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Indian Newspapers Thrive with Economy

By David SouthDevelopment Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

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.

Published: October 2010

Resources

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. 

Creative Commons License

This work is licensed under a
Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

ORCID iD: https://orcid.org/0000-0001-5311-1052.

© David South Consulting 2022