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The Dangers of Growing Urban Poverty

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A milestone was reached in 2007 – for the first year ever, more people were living in cities than in the country. Forbes magazine estimated that by 2030, around 5 billion of the world’s 8.1 billion people would live in cities. Of those 5 billion, an estimated 2 billion will live in slums in Africa and Asia.

The UN reports that slum children in Sub-Saharan Africa are more likely to suffer from respiratory and water-born illnesses than their rural peers. Additionally, women living in slums are more likely to contract HIV than women in more rural areas. Most lack at least one of the following five basic needs, with some households lacking three or more: durable walls, a secure lease or title, adequate living space, clean water, and working toilets.

Many of the people living in slums are squatters – those lacking legal title to their land and without legal and political rights. Without such rights, there is little incentive for people to invest in their homes or communities. One way to grapple with urban poverty is to promote policies that help squatters attain rights, but in order to do so, the government under which the slum exists must function well enough to enforce such policies.

The infrastructure of these ever-growing cities – roads, public transport, water systems, sanitation, and electricity – cannot keep up with the growing population. Similarly, natural or man-made disasters cannot be managed well because of a lack of emergency resources for all inhabitants.

The education of children is also a problem, as children living in slums are less likely to be enrolled in school than their rural peers. With little economic opportunity and educational opportunity, slums like these are ripe for developing criminal organizations and even militant movements.

Organizations like UN Habitat are working to combat the dangers of growing urban poverty.

City planning, infrastructure development, and participatory slum upgrading are top priority while also focusing on urban legislation, risk management, gender, and youth. Also important is building capacity for organizations and governments that are trying to make a difference.

If unaddressed, there is a danger that our world could soon be dealing with “failed cities” in the same way that it deals with failed states. Mega cities, those with more than 10 million inhabitants, are on the rise across the developing world, and will likely reach 20 million by 2020. Challenges continue to increase and, if left unaddressed, could be detrimental to the global community as a whole.

– Madisson Barnett

Sources: Forbes, UN Habitat
Photo: Wikipedia

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Jakarta as an Emerging Global City

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A.T. Kearney, a United States-based consulting firm, ranked Jakarta, Indonesia’s bustling capital, whose metropolitan area contains roughly 30 million people, as the next Southeast Asian leading city. The Javanese city boasts first among a list of 34 cities in low-income and middle-income countries that will most likely become a global leader in fields ranging from business activity to workforce health and security. The methodology used involves 26 metrics in five categories: business activity, human capital, information exchange, cultural experience and political engagement.

Certainly, Jakarta’s status as the capital of the Association of Southeast Asian Nations (ASEAN) contributes greatly to the city’s rising position. Furthermore, the emergence of the ASEAN Economic Community, a quasi-European Union style economic community minus a common currency due to take off in 2015, is also another factor that helps to make Jakarta an up-and-coming Southeast Asian city.

Jakarta, over the past few years, has invested immensely in improving its once inadequate infrastructure. However, it is the city’s improvements in other fields such as stability and security that has put it on the map. Areas involving Jakarta’s population such as income equality, stability, healthcare cost, minimum wage and security are those that have fared the best.

Jakarta’s improvements also extend to the fields of information exchange and high gross domestic product growth rate. In terms of the city’s once feeble infrastructure, today’s Jakarta has been developing its mass rapid transit system. Its groundbreaking ceremony was held in late 2013. This project will begin operating in 2017-2018 and it will help to facilitate the daily commute of the residents of the city and its surrounding areas.

Furthermore, Bangkok, Thailand, its future appearing promising in 2008, has been experiencing instability for the past few years, thus eliminating Jakarta’s regional competitor. John Kurtz, A.T. Kearney’s Asia-Pacific head, stated that the city’s growing political and economic importance is attracting both domestic and international talents and investments.

The city’s rise in importance and prosperity is certainly a stunning achievement. The city’s transformation into the region’s powerhouse is undoubtedly a testament to development as a tangible and a feasible process, not just an illusive rhetoric.

– Peewara Sapsuwan

Sources: The Jakarta Globe, Wall Street Journal
Photo: Luxury Real Estate Blog

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Internet.org

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Currently two-thirds of the world’s population, a staggering 5 billion, live without access to basic internet. A lifestyle difficult to imagine here in the U.S. and other countries that have integrated internet into virtually every aspect of our daily lives. Internet.org, a group of powerful allies, is dedicated to utilizing their combined resources to change this.

Internet.org is an innovative partnership spearheaded by Mark Zuckerberg, the founder of Facebook,who is  committed to reducing the cost of bringing internet access to the world. The plan is to provide universal access to internet by lowering the cost of serving data by tenfold and reducing the amount of data required to run basic apps by the same amount. These major cost reductions are the keys to reducing the cost of internet access 100-fold. This is the amount of cost reduction that would make it possible to for a worldwide internet providing infrastructure to exist and this group is determined that it can be achieved through technological innovation.

According to Internet.org, providing universal internet access is a fundamental step in the struggle for global resource equality. Access power is so valuable today because the internet is “the backbone of the knowledge-based economy.” This statement recognizes the global shift currently taking place since the advent of the internet that is moving society from a mainly resource-based economy to knowledge-based economy. By providing another 5 billion people across the world to the knowledge economy an unprecedented change could take place., driving the economy up, and impacting poverty worldwide.

“The internet’s impact on global growth is rising rapidly. The internet accounted for 21% of GDP growth over the last five years among developed countries… the internet is also a catalyst for job creation,” according to McKinsey & Co. While this kind of economic growth may not be immediate, the plan has potential to stimulate economies worldwide.

In order to achieve this feat, Internet.org is delving into some large-scale innovative projects to combat even larger technological and socal challenges. Some of these include high-altitude, long-endurance planes, satellite systems and even lasers.

The founding members of this group are impressive, including tech giants Ericsson, Mediatek, Opera, Samsung, Nokia and Qualcomm. Looking at this short list of big names, it is not surprising that some have immediately questioned whether there are purely capitalist motives for these companies that are being disguised behind a humanitarian agenda.

However, in Deloitte’s study on the “Value of Connectivity” they found that “expanding internet access in developing countries to levels seen today in developed economies, we could increase productivity by as much as 25 percent, generating $2.2 trillion in GDP and more than 140 million new jobs, lifting 160 million people out of poverty,” while also having the ability to “deliver critical information on nutrition, hygiene and disease prevention. Once connected, people gain access to basic tools like health information, financial services and education that can help them live fuller, better lives and join the worldwide economy.” With the promise of this kind of massive economic benefit in the developing world, many believe that the motives behind this cooperative effort are somewhat irrelevant.

The concern over hidden agendas may provide the project with the high level of visibility both from those who are critical and those who are supportive. Ultimately, time will be what tells us if this project is able to have the kind of success that will drive the change that it expects.

– Leonna Spilman

Sources: Internet.org, McKinsey & Company

Photo: La Nacion

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PEMEX Announces Record Investment Plan

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Petróleos Mexicanos (PEMEX,) Mexico’s state-owned oil company, has announced a record $28 billion of investment for the 2014 fiscal year. It is expected that the vast majority of money invested (approximately 85%) will go towards production and exploration for new oil fields.

The $28 billion figure is 10% higher than last year’s level of investment, which amounted to $25.3 billion, of which $19.3 million went to production and exploration of crude oil and gas fields. Despite this increase over last year’s investment level, PEMEX CEO Emilio Lozoya Austin claimed that in order to develop the country’s resources to their maximum potential, a further $32 billion would need to be invested.

In late 2013, Mexico’s legislature passed a bill permitting foreign companies to invest in PEMEX, a groundbreaking move that was not previously allowed since the company’s nationalization in 1938. This permission comes amidst flagging levels of oil production and Mexico hopes the move will boost its productive capacity.

While levels of PEMEX investment have increased steadily from 2008 onward, levels of oil production fell from 2.79 barrels per day to 2.54 million barrels a day in 2012, and levels of gas production fell from 7,030 cubic feet per day to 6,900 cubic feet per day over the same time period.

In 2008, PEMEX reported a production of 43.5 billion barrels per year, while in 2013 it reported 44.4 billion barrels per year. This slight increase can be attributed to the discovery of six new oil fields that added about 180,000 barrels per day at the end of 2013.

PEMEX is responsible for funding approximately one-third of Mexico’s national budget, with much of the revenue going towards social programs that improve education and infrastructure throughout the country.

Additionally, PEMEX hopes to increase exploration of deep waters in the Gulf of Mexico and improve its technological innovation in shale extraction through its newly minted partnership with the Russian oil giant Lukoil earlier this year.

– Jeff Meyer

Photo: Huffington Post
Sources: International Business Times, El Economista, Oil Price