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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.

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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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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).
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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African Online Supermarket Set to Boost Trade

By David SouthDevelopment Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

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.

Not only has limited access to the Internet and the lack of high bandwidth in Africa impeded communication within the continent, it has restricted African businesses from taking advantage of the most profound change in global business for decades: e-retailing (also known as e-tailing or e-commerce).

But the African information technology pioneers of Ghana – a country that has already gained a reputation as an IT leader in West Africa (www.ghanaictawards.com) – are setting out to change this situation, and in turn to change the way people access African goods and services.

Pledging in its motto to reach “every African nook and cranny,” ShopAfrica53 is an online shopping portal similar to famous brands like Amazon or eBay, but focused entirely on giving African traders the ability to sell across the continent and to the world online.

The one-stop shopping site – taking its name from the 53 countries on the continent – can be accessed by Internet users, or better still, by the enormous number of mobile phone users not only in Africa but around the world.

The number of mobile phone subscribers in Africa surpassed 300 million in 2008 (ITU), representing a significant market in their own right. Research group Informa Telecoms and Media estimates mobile networks now cover 90 per cent of the world’s population – 40 per cent of whom are covered but not connected.

ShopAfrica53 works like this: merchants first fill out an online form on the ShopAfrica53 website. They are then contacted by ShopAfrica, and an account is set up.

People wanting to buy goods and services on the website use the African Liberty Card to ensure the transactions are safe and not at risk from hackers and fraudsters. The disposable pre-paid scratch card can be used on mobile phones and the Internet and is purchased from store outlets.

ShopAfrica handles the logistical hassles of shipping to customers around the world, facilitates payment transfers, and helps with record keeping for merchants.

ShopAfrica offers an eclectic selection of goods: apparel and accessories, books and stationery, groceries, handicraft, health and personal care, home and garden, machinery and tools, technology and entertainment. It promises to offer the “best selection of African products, anywhere, worldwide” – everything from building supplies, household items and electronics to processed foods and fabrics.

One Ghanaian merchant, Mohammed Salifu, promises to deliver in two days a “large brown cow for delivery or collection. The size, colour and weight of animal will vary. This merchant provides live goats, sheep, cattle for special occasions and festivities and can also provide a slaughtering service for clients.”

Then there is Vera Ami Kpogli, who is selling a ‘Beyonce’ Electric Blue necklace. Tse-Lee Fashions offers Batik/Tie and Dye Print Shirt in aqua and navy. And for the ‘king’ of the house, Ama Afrique Designs is selling Men’s Royal Rulers, sandals “worn many centuries ago by African kings.”

The potential of this service to boost incomes is considerable: in the United Kingdom, online sales now make up 15 percent of all retail spending, reaching £43.8 billion (US $66.12 billion) in 2008 (IMRG).

As has been seen with other countries of the Global South, trade in high quality goods boosts incomes. South-South trade grew by an average of 13 percent per year between 1995 and 2007. By 2007, South-South trade made up 20 percent of world trade. And over a third of South-South commerce is in high-skill manufacturing. Making finished goods, rather than just selling raw materials, improves workers’ skill levels and increases the return on trade.

The rapid changes to African countries – the tilt to being more urban than rural, and being home to a larger urban population than North America, with 25 of the world’s fastest growing cities (International Institute for Environment and Development) – means there is an urgent need to boost incomes and better connect traders and manufacturers to the global economy.

ShopAfrica53 could be the start of a very big thing for African trade.

Published: May 2009

Resources

  • The red dot logo stands for belonging to the best in design and business. The red dot is an internationally recognised quality label for excellent design that is aimed at all those who would like to improve their business activities with the help of design.
    Website: www.red-dot.de
  • BOP Source is a platform for companies and individuals at the BOP (bottom of the pyramid) to directly communicate, ultimately fostering close working relationships, and for NGOs and companies to dialogue and form mutually valuable public-private partnerships that serve the BOP.
    Website: http://bopsource.ning.com/
  • Business Fights Poverty: Business Fights Poverty is the free-to-join, fast-growing, international network for professionals passionate about fighting world poverty through good business.
    Website: businessfightspoverty.ning.com
  • Dutch Design in Development: As a matchmaker, DDiD puts together European clients, Dutch designers and small and medium-sized enterprises in developing countries. The designers share their knowledge of European consumer tastes, product development, design and quality standards
    Website: www.ddid.nl
  • Afriville is a Web 2.0 service and an African Caribbean social network. Afriville is a community website along the lines of the famous MySpace. Users are free to message and post profiles. The difference is that the user is able to choose how closed or open the networks are. The site features a state of the art music management system which allows African and Caribbean artists to get straight in touch with their fans.
    Website: www.afriville.com
  • Business Action for Africa: Business Action for Africa is an international network of businesses and business organisations from Africa and elsewhere, coming together in support of three objectives: to positively influence policies for growth and poverty reduction, to promote a more balanced view of Africa, and to develop and showcase good business practice in Africa
    Website: www.businessactionforafrica.org
  • Interactive Media in Retail Group (IMRG) is a membership community for the e-retail industry, whose vision is to maximise the commercial potential of online shopping
    Website: www.imrg.org

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
Archive

Trade to Benefit the Poor Up in 2006 and to Grow in 2007

By David SouthDevelopment Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

The global fair trade market – in which goods and services are traded under the Fairtrade logo, guaranteeing a minimum fair price to producers experienced unprecedented growth in 2006. In the UK alone, 2006 sales totalled £290 million – a jump of 46 percent from 2005. The Fairtrade Foundation predicts sales will reach UK £300 million in 2007.

In 2005 Fairtrade sales were € 1.1 billion in the brand’s main markets of Switzerland, the UK, New Zealand, Australia and the US. At present fair trade works with 5 million farmers in the global South, and it represents an ever-increasing opportunity for Southern entrepreneurs.

A tipping point has been reached in Western awareness of and demand for the Fairtrade brand and concept, and it is now being adopted by major supermarkets. In the UK, 62 percent of consumers know the logo and understand what it means.

The concept of fair trade began in the Netherlands in 1988, when the Max Havelaar Foundation launched the Fairtrade consumer label with coffee from Mexico. Unlike conventional businesses, where the price paid to a producer is what the market dictates, fair trade guarantees the producer a minimum price for their product. This amount is set at a level that ensures the producer can live a life with dignity and meet all the essentials. A portion of the profits is also kept in a communal fund which the producers democratically elect to spend as they wish (many choose to spend it on community projects).

Fair trade has been criticized for a number of reasons. It has been seen as too small and marginal to really make inroads on poverty, and has been accused of privileging a small number of producers while ignoring the rest. It has also been criticized for not focusing enough on innovation and increasing production to really eradicate poverty in the developing world.

For all its faults and shortcomings, it is a fact that the Fairtrade brand is a runaway success and offers a wide range of opportunities for entrepreneurs.

In the UK, fair trade now includes 2,500 products, ranging from footballs, to tea, cotton and honey – up from just 150 in 2003, an astonishing rate of growth. Where fair-trade products were once confined to co-operative and charity shops, they are now widely sold in major supermarkets.

The success of fair trade is not confined to Europe and the US. It is growing in Japan, where, says fair trade retailer Sonoko Iwasa, “the concept of using trade to equalize the world by buying goods from developing countries from Asia and Africa was a notion that had no connection with everyday lives.”

Iwasa’s Rumaba Goods store just outside Tokyo sells organic chocolates from Africa, woollen gloves and hats from Nepal, and elegant clothes from Thailand. Iwasa found that the key in the highly competitive Japanese consumer market was to focus on quality, not fairness. This, she says, has made these products fashionable.

At present, the fair trade market is worth only about US $6 to $7 million a year in Japan and includes 1,500 products. But according to Michiko Ono of Japan’s best-known fair trade label, People Tree, the trend is catching on among the country’s socially aware youth.

To start a fair trade business, entrepreneurs or producers need first to contact the international body that certifies fair trade products and ensure that production meets the ethical standards required.

Published: January 2007

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