Super App in AfricaSuper apps, platforms that provide customers with an array of services from a single app, have become more popular in the last decade. These platforms allow an individual to book everything online by encompassing all activities one wants to accomplish, such as ordering dinner, booking tickets, shopping and even hailing a car. Apart from simplifying life, these super apps also contribute to economic growth in countries by tapping into new markets, all while creating jobs to help lift people out of poverty. The Gozem super app hopes to be the biggest super app in Africa.

Gojek Super App

The super app Gojek, for example, launched in Indonesia in 2010 and has grown to rank among Fortune’s Top 20 companies, now offering services to several Southeast Asian countries. The super app includes transportation products (goride, gocar and gosend) and shopping functions (gofood, gomart and goshop) that customers can enjoy without having to switch between apps. After seeing the success of Gojek and other super apps in Southeast Asia, one company, Gozem, hopes to turn its platform into the most popular super app in Africa.

Who is Gozem?

Based in Singapore, one Nigerian and two Swiss entrepreneurs co-founded Gozem after appreciating West Africa’s potential as a lucrative business market. Raphael Dana, one of Gozem’s co-founders, visited Togo and Benin on a business trip in 2017. After seeing individuals ride motorcycle taxis throughout both countries, Dana knew he could replicate the success of Gojek in West Africa — especially since it seemed as though no other entrepreneurs “saw [vehicle-hailing] as a business” like Dana did.

In 2018, Gozem launched in Togo as a motorcycle-hailing app, but eventually, the company expanded to include “food and grocery delivery, vehicle financing and a digital wallet.” Gozem has since spread its operations to Benin and Gabon and plans to serve other West African and Central African countries in the future. When asked about Gozem’s premise, Dana explains to CNN that since everyone uses transportation, makes payments and eats dinner, he put “all those key verticals that we all use in our daily life” into one app.

Plans in Motion

The Gozem team does not want to limit its business to only a few countries. By the end of December 2021, Gozem hopes to offer services in Cameroon, and by the end of 2022, Gozem aims to launch in Burkina Faso, Ivory Coast and Senegal. On Gozem’s website, residents of the countries Gozem wishes to service can already provide their name, contact number and email to join Gozem’s communication list.

New York University professor, Anindya Ghose, tells CNN that some communities’ lack of high-speed internet and the potential difficulties of monetizing services are obstacles that Gozem must conquer to become a successful super app in Africa. However, Gozem plans to make money through vehicle financing commissions, “rides and deliveries” and “transaction fees on payments.” Additionally, the fact that consulting firm McKinsey & Company projects super apps to earn “$500 billion in revenues by 2025” makes Gozem optimistic for the future of the company in Western and Central Africa.

Why Africa?

According to Dana, one of the reasons he wanted to launch Gozem in Western Africa is because the region’s “emerging markets” provide less competition for each individual service. In other words, while in developed markets such as the United States, there are too many companies to compete with for an app that can profit in several sectors, Dana believes that the “(African) Francophone market is completely untapped.”

Companies like Gozem understand that the future of business lies in Africa. As technology booms throughout the continent and more individuals become consumers of smartphone services, entrepreneurs should follow Gozem’s example and invest in one of the biggest business markets.

Gozem also prioritizes education with a graduate program to train its potential “managers of tomorrow.” The new jobs created by Gozem allow individuals to earn an income, improving standards of living in African countries plagued by poverty.

– Madeline Murphy
Photo: Wikipedia Commons

Local dairy farming in NigeriaNigeria’s dairy industry has many problems. Inefficiency, “lack of technical knowledge” and outdated practices plague local dairy farming in Nigeria. Thus, Nigeria does not meet its potential for establishing a thriving dairy industry. Even though Nigeria has enough cows, in 2020, it still spent $2.5 billion importing milk from multiple countries. Farmers in Nigeria lack access to infrastructure, veterinarians and technologies to improve milk collection. Fortunately, NGOs have begun operations to help local dairy farming in Nigeria meet its potential. Sahel Consulting, an agricultural consultancy firm in Nigeria, has launched the Advancing Local Dairy Development in Nigeria (ALDDN) program to try to reshape dairy farming in Northern Nigeria. With support from the Bill and Melinda Gates Foundation, this program focuses on local dairy farming in Nigeria.

An Overview of Nigerian Dairy Farming

Most dairy farmers in Nigeria work on small, pastoral farms. Many of these farms focus on meat, with milk as a byproduct rather than the main focus. Additionally, cows in Nigeria underperform in comparison with cows worldwide. While Nigerian cows produce “less than one liter of milk” per day, cows worldwide produce dozens, with some countries reaching 100 liters of milk per day. While this situation currently hurts local dairy farming in Nigeria, it also provides an opportunity. As a pastoral sector, the economic benefits of increased efficiency can bring these individual farmers out of poverty, lifting their communities up with them.

The Goals of ALDDN

ALDDN is taking a six-pronged approach to improving local dairy farming in Nigeria. The program focuses on farmers’ organizations, rural infrastructure, productivity, promotion of financial inclusion, education and public advocacy. By focusing on productivity improvements, ALDDN looks to increase milk volumes to international levels, increasing farmers’ revenues tenfold. The program also looks to build rural infrastructure to allow these farmers to sell their milk on the market. Much of the program focuses specifically on female dairy farmers who face financial exclusion. ALDDN aims to reach 210,000 beneficiaries, with 120,000 trained in modern dairy farming practices. The program also looks to train 50 veterinarians to help ensure the health of milk cows.

The Impact of ALDDN

ALDDN has already made an impact on Nigerian dairy farming. Arla Foods, a Danish dairy company with operations worldwide, has started constructing a dairy farm in rural Northern Nigeria in partnership with the ALDDN program. The facility aims to help 1,000 local dairy farmers, with space for 400 cows and 25 live-in workers.

Since the project began, much attention has fallen on the Nigerian dairy industry. Government-sponsored studies have recently shown the extent of inefficiencies in local dairy farming in Nigeria. Now, solutions championed by ALDDN have appeared in local magazines, with efforts across the dairy industry to modernize. Some focus on using technology to more efficiently milk cows while others focus on selectively-bred cows to produce more milk.

Efforts From Others

Other NGOs and governments have pitched in to help the Nigerian dairy industry. The United States recently donated pregnant Jersey cows to help boost milk production, hoping that in a few generations, these cows can help provide increased milk production. Additionally, FrieslandCampina WAMCO is working with communities to increase milk production. By introducing cross-breeding, the company saw a hundredfold increase in production in its Oyo milk facility, which is open to smallscale artisan farmers.

With all of the improvements and focus on local dairy farming in Nigeria, the future looks bright for this industry. More efficient cows, better rural infrastructure and better agricultural practices can help lift farming communities out of poverty, giving opportunities to those in rural communities who are commonly left behind.

– Justin Morgan
Photo: Flickr

Slow fashion and traditional Guatemalan textile production
Global interest in slow fashion and Guatemalan textile production often leads to exploitation of the designs and the profits. The weavers themselves often do not receive a fair wage for their work, which is incredibly time and labor-consuming. Fortunately, recent efforts are pushing for collaborations to protect these traditions and the indigenous weavers while still sharing their extraordinary work with the world.

The Guatemalan Textile Production Tradition

Mayan mothers and grandmothers teach women in Guatemala how to work with cotton from a very young age. They learn to use a loom and to create traditional natural dyes from ingredients such as avocado, banana, lemon and cochineal, a local insect. The hand-spun cotton and loom that the indigenous women use represents the very essence of their cultural practices. The result of this process is beautiful and colorful garments, bags and accessories that tourists have long purchased as souvenirs. People often purchase the goods and mark them up for resale, leaving the artisan behind.

An awareness of concerns about exploitation and cultural appropriation, along with movements of slow fashion has led to efforts to protect, preserve and appropriately collaborate and share traditional Guatemalan textile weaving.

Slow Fashion and Traditional Guatemalan Textile Production

A short documentary called “Artisans Guatemaya” sheds light on the complexities of the relationship between the 1 million Guatemalan artisans who need to have their opportunities and rights protected as well as the perspective of fashion industry leaders.  Mutual goals may include a vision of sustainability, collaboration, preservation of culture, knowledge-sharing and a mutually profitable model of cultural tourism which makes tradition and history economically viable today.  In addressing the ethics of this dynamic, it is important to move away from cultural appropriation toward cultural appreciation. The women face poverty and need to make a living. Therefore, people should place attention on these women’s economic and social development.

Small collectives of indigenous women join forces to protect their rights. Pablo Martinez of Etnica Travel Eco Tours says there are occasions when outsiders offer the women help that is inappropriate and therefore not useful. He emphasizes the necessity of listening carefully to the needs and wishes of local, artisan women and including them in the outcome of the exchanges. Through co-creation efforts, one should not lose sight of the artistry of the women.

A New Protected Artisanal Market in Guatemala

Slow fashion and traditional Guatemalan textile production also led to a specialized and protected artisanal market in Guatemala. Ethical Fashion Guatemala protects the rights of artisans and prevents high markup resale of goods purchased and then resold. James Dillon and Kara Goebel, both from the U.S., founded Ethical Fashion Guatemala. They bring the technology platform to provide a global market to local artisans. The pair also led the battle against 64,000 Etsy sellers for copyright infringement of Guatemalan patterns. This legal action was highly effective in curbing the blatant stealing of designs.

Ethical Fashion Guatemala claims transparency. It states that Guatemalan artisans receive 80 percent of the money that people spend on textile goods on its site and that all other sites that make such claims are imitations. Customers can purchase traditionally woven goods and can also arrange to have a tourism experience and connect with the local weavers. Many local artisans create very high-quality and high-fashion handmade goods. People especially know them for purses and bags.

The Consequences of Fast Fashion in Guatemala

One side effect of fast fashion that threatens traditional practices is the occurrence of pacas. Pacas are small, second-hand clothing shops that some indigenous women run as a small business. Indigenous women chose to run these as opposed to weaving as a matter of convenience. Weaving traditional textiles is time and labor-intensive, often with a small payout. It can take weeks or a full month to weave a traditional garment.  Resale of used clothes arriving from the U.S., on the other hand, is quick and easy. There is a concern that this model could be a threat to traditional practices as fewer women will pass on the ways of dying and weaving to their daughters. Pacas are one of the primary reasons that indigenous women have stopped wearing their traditional clothing. Guatemalan factories still churn mass-produced textiles (fast fashion), known as maquilas. This type of industry is highly competitive with China and continues to boom, despite a movement for more sustainable products. Ten to 20 years ago, the spotlight revealed the labor violations in these maquilas. There are still some labor violations, but paople have been paying much less attention to these factories in recent years.

In summary of slow fashion and traditional Guatemalan textile production issues, artisans can protect their heritage and legacy, and craft in collaboration with each other and with concerned and interested outside partners. There will always remain the vulnerability of exploitation, but awareness, legal action and strong relationships can minimize these challenges.

Susan Niz
Photo: Flickr

Growing Markets in Lagos
Nigeria is often associated with a stagnant economy riddled with corruption; however, Lagos, the country’s largest city, hosts business opportunities that are continually growing, making it one of Africa’s largest rising economies. Lagos is currently Africa’s seventh largest economy, and its rapid rise in GDP and population have the city projected to become the continent’s second largest market by 2035. The growing markets in Lagos have boosted Nigeria’s economy and have set an example in a continent full of market opportunities.

Economy and Population in Lagos

The GDP and population growth of Lagos, Nigeria are the most indicative factors of the rapidly growing market opportunities in the city. Economic growth first began in Lagos after the government moved the capital to Abuja in 1991, and then continued on after the government invested money in the growing oil industry in the area.

In addition to the oil industry, Lagos has also economically benefitted from Nigerian policy reforms that improve privatization of businesses. Many newly privatized companies are centralized in the Yaba district of Lagos, which has been financially supported by the state government, and infrastructure projects are constantly underway to reflect the rapid growth of the city.

This economic growth has led to a state output of $136 billion in 2017, comprising more than a third of Nigeria’s GDP. The strong economy of Lagos is projected to continue growing with a 4.5 percent GDP growth per year in 2035, a figure that rests significantly above the current global average of 2.9 percent.

Lagos’s growing economy and infrastructure largely work to support a rapidly increasing population. By 2035, the population is expected to reach 28.5 million people ­­– significantly higher than the 2012 census population of just over 8 million people. Governor Akinwunmi Ambode claims that the population is a significant factor of the growing markets in Lagos, adding that the city has “the population and rise of an emerging class” and is “a new market, a new frontier to consider.”

New Businesses in Lagos

New business opportunities have shown off the increasingly prosperous markets in Lagos, and many successful Nigerian startups now have their offices in the city. Finance/technology, consulting, retail companies and startups like PayLater and Yellow Brick Road have historically dominated the economic environment of Lagos, and continue to host numerous companies that have caught investors’ attention.

Investment opportunities in Lagos are also important to the city’s markets and are some of the largest in all of Africa. According to the World Bank, an estimated $93 billion in investments in Africa is required annually, and Lagos requires at least a quarter of these investments.

Continued Expansion

Market opportunities in Africa continue to expand with economic growth, and these opportunities are only emphasized in Lagos, Nigeria. The city has become a thriving music, fashion and film hub throughout Africa, and growing markets in Lagos develop along with GDP and population.

Africa has immense economic potential, and Lagos is only one of several cities on the continent that showcases these realized business opportunities. With continued attention and proper investment, both the city and the nation should see a bright fiscal future.

Matthew Cline
Photo: Flickr

Saudi Vision 2030 Saudi Arabian Reform Opens Markets
With the recent rise to prominence of the Crown Prince Mohammad bin Salman, the Kingdom of Saudi Arabia has committed to a vast economic and social reform plan. The Kingdom’s strategy is in its initial stages, but early signs indicate how the promise of socioeconomic Saudi Arabian reform opens markets for American business.

Saudi Vision 2030

The ambitiously conceived Saudi Vision 2030 is a reform plan for diversifying the Kingdom away from its traditional dependence on oil revenues. The plan’s goals are varied, with objectives ranging from enhancing the competitiveness of non-oil sectors, such as leisure and tourism, to increasing women’s participation in the workforce from 22 to 30 percent.

Although it is in its early stages, the plan has made some progress toward its social liberalization goals, providing an ongoing illustration of how Saudi Arabian reform opens markets. After the Saudi Ministry of Culture ended a 35-year ban on movie theaters late in 2017, the Chinese-owned, American-operated AMC Theaters obtained a license to open 30 movie theaters over the next 5 years as part of a joint operation with the Saudi government.

Film and Tourism

This expansion isn’t limited to AMC: one Saudi official estimates the cinema market to reach $21.3 billion over the next 10 years, and companies such as the U.K.-based Vue International and Imax of Canada plan to open 30 and 20 theaters in the Kingdom in the coming years, respectively.

Beyond theatrical entertainment, the emphasis on promoting tourism in the reform plan is opening up investment opportunities for international hospitality companies and employment opportunities for local women. Marriott International’s managing director for the Middle East and Africa has said that the demand for new hotels in the country has been steady, with the company scheduled to more than double its hotels in Saudi Arabia from 23 to 52 by 2022.

Steps Towards Gender Equality

And an increasingly greater shares of the jobs created in this industry are being filled by women. Saudi women appear to be more amenable to working in the hospitality sector than their male counterparts, the latter tending to seek roles in traditional public or energy sector jobs. In fact, a 2017 working paper by the Saudi Arabian Monetary Research cites researchers’ belief that women will an essential role in the tourism sector.

The social progress made by Saudi Vision 2030 is incremental and should not be overstated. The merits of the highly publicized repeal of a ban on women being granted a driver’s license are countervailed by the country’s continued human rights violations, such as this month’s arrest for dissent of women activists who had fought in previous years to overturn that very ban.

A Decade For Progress

However, as the name of the reform plan suggests, the timeline for Saudi Vision 2030 completion is over a decade.

A final judgment of its success will take time, but incremental progress to date shows how, if implemented, social and economic Saudi Arabian reform opens markets and could enhance opportunity for international businesses. The plan could also liberate opportunities for both male and female residents of the Kingdom in the coming years.

 – Mark Fitzpatrick
Photo: Flickr

31 bits
Currently, 80 percent of the world population lives on less than $10 a day. Needless to say, this is a time where the global poverty rate, although at the lowest it has ever been, is still in desperate need of improvement. The estimated unemployment rate as of 2017 was 7.9 percent, a 0.4 percent increase from 2016.

Fortunately, there are organizations and companies such as 31 Bits that are striving to combat the current unemployment dilemma that is actively contributing to global poverty. Starting its journey selling jewelry at local school events and craft fairs, nearly a decade later, 31 Bits is a thriving company composed of strong women whose success has been driven by their desire to help struggling and poor artisans in providing them with dignified job opportunities all throughout the world.

How 31 Bits Came to Be

The young women who started 31 Bits were college students by day while learning about marketing and international development at night. They had no background in business whatsoever; however, they did not allow this obstacle to hinder them. After returning from a life-changing trip to Uganda in college, International Director and Founder Kallie Dovel met many women, most who were single moms without jobs or an education that were the same age as herself.

Although they lacked an education, Kallie was instantly drawn to their exceptional skills and resourcefulness; they were making jewelry out of old posters. Bringing a box of jewelry back home, she was able to sell all that she had to her friends with ease.

Kallie was hit with the realization that with the skills that these women possessed, they needed a market – this is how 31 Bits has come to flourish. Producing products that are thoughtfully designed and ethically made, the mission statement of 31 Bits is, “We use fashion and design to drive positive change in the world by providing artisans with dignified opportunities and inspiring customers to live meaningful lives.”

How 31 Bits is Carrying Out its Mission

Actively defying cruel sweatshops where the worker is not paid fairly and is treated poorly, 31 Bits puts the treatment of its artisans at the forefront. The workshops contain quality materials and the necessary protective supplies, and the organization’s goal is to ensure that each artisan is able to make a sustainable monthly salary so that they are able to provide for their families.

31 Bits sells jewelry, bags, home décor, ceramics, textiles and more. Its brass jewelry is crafted by hand in Bali and its beads are also handmade in Uganda. Its website explains the religious reasoning behind the name 31 Bits, saying, “We called the company 31 Bits because Proverbs 31 describes a diligent woman providing and caring for her family using her gifts and talents. Oh, and the ‘bits’ comes from our original and bestselling jewelry that uses beads made out of ‘bits’ of paper!”

Combating Poverty and Assisting Artists

Because 31 Bits recognizes that there are many countries that suffer from corruption and a poor infrastructure which, as a result, limits many from access to the global market, it works to actively decrease the poverty rate for these countries while sustaining a family atmosphere and preserving tradition. “We’ve been able to take age-old practices and give them a modern twist,” the company explains. “Through 31 Bits, [artisans] now have a place to sell their meaningful work and tell stories of their heritage.”

Artisans who work with 31 Bits also receive health care and treatment, counseling, financial education and more. 31 Bits is not only combating the vast amount of global poverty that millions are attempting to grapple with, it is also promoting and encouraging these artisans to pursue their dreams.

– Angelina Gillispie
Photo: Flickr

aid creates markets
As public sector debt in developed countries continues to rise, foreign aid has become a target for activists and policymakers seeking to cut spending. The aid budget of the United Kingdom is no exception, with critics claiming that spending on foreigners is wasteful and contrary to national interest.

The country’s Department for International Development (DFID), responsible for administering overseas aid, has rejected calls for cuts in spending by emphasizing that aid creates markets that will ultimately consume British goods and provide higher returns for British investment.

National Debate Over Aid Spending

As one of six countries to reach the United Nations target for international aid spending of 0.7 percent of gross national income, the U.K. is a major contributor to worldwide aid spending. The leadership role the country plays in international aid was bolstered by the passing of a 2015 bill that enshrined the spending target into law, committing the country to sustaining current levels of spending as a share of the economy’s size.

However, in a political environment where nationalist sentiment is rising, exemplified by the 2016 Brexit referendum, prominent U.K. politicians have called for a reduction in foreign aid spending. Jacob Rees-Mogg, a Member of Parliament of the Conservative Party and potential future party leader, has said that with the government budget running a deficit, aid levels are an insane and a costly mistake.

Facing this criticism, Penny Mordaunt, the recently appointed head of DFID, has pushed back, contending that the aid is a moral obligation that also serves British interests. In an April 12 speech laying out her vision for U.K. aid, Mordaunt said that improving global health, security and income is linked to British prosperity and that promoting these goals abroad provides lasting benefits for the U.K.

Notably, Mordaunt emphasized that aid creates markets through the development of economies and human capital, citing DFID’s work in sub-Saharan Africa as having created jobs and growth, benefiting recipient countries but also benefiting British companies by creating new consumers.

Private Sector Partnerships a Key Way That Aid Creates Markets

Mordaunt’s speech also explained how aid creates markets in conjunction with the private sector. Aid will be directed to help African companies to acquire loans through British financial markets, encouraging British investors to direct more capital to the region and spurring economic development. By proposing an aid plan in which British investors could achieve higher returns, DFID is hoping to illustrate another channel through which an aid budget is mutually beneficial to both the donor and recipient countries.

Critics have cautioned of the dangers of conflating national and foreign interests in aid work. In response to Mordaunt’s speech, Tamsyn Barton, chief executive of an international development network representing NGOs called Bond, told Devex that aid programs focused on serving national interests are inherently less effective than those focused on the primary goal of improving conditions in affected countries.

Mordaunt does clarify that aid will not be conditional, stating in her speech that tied aid is bad for U.K. competitiveness and for the recipient nations, but observers such as Barton have warned that this distinction should be made explicit.

Even a country such as the United Kingdom, which has enshrined its commitment to foreign aid in law, faces pressure from domestic critics to redirect this funding home. In highlighting how aid creates markets that benefit the home country, Mordaunt and the DFID are seeking to show that the decision between spending at home and spending abroad is a false dilemma.

– Mark Fitzpatrick

Photo: Flickr

Poverty in Moldova

If ever there were a time capsule left in the world, it would be Moldova. Pictures of Moldovans in traditional clothes, locals driving horse-drawn carriages and a country dedicated to agriculture and the production of wine are among the first photos that come up in an image search. Though online photographs of Moldova are charming, poverty in Moldova has been a definitive characteristic of the nation since its independence from the Soviet Union in 1991. What was once a wealthy state became the poorest country in Europe after Soviet liberation.

The Statistics
According to The World Bank, Moldova has experienced economic growth and a significant poverty reduction since the start of the millennium.

Poverty in Moldova has dropped from 30 percent in 2006 to 9.6 percent in 2015. The percentage of those living on less than $1.90 a day has dropped from 39.1 percent in 1999 to zero. At its peak, the poverty rate for those living on $5 a day was at 90.4 percent in the year 2000. It has since dropped to 16.3 percent.

Remittance and pensions are responsible for lifting 51.6 percent of families out of poverty, and pensions are sustaining the aging population.

These two factors are acknowledged as the main drivers of economic growth. In fact, the Republic of Moldova is one of the few European countries that recognizes remittances as a main influencer of the economy, accounting for 26 percent of gross domestic product in 2014.

Challenges Halting Further Progress
Unfortunately, exporting labor leads to the issue of weak labor markets. Labor and demand are some of the challenges that plague Moldova and inhibit its economic progress, keeping poverty a constant.

Dependence on remittance weakens the industrial market and keeps the Moldovan economy in a cycle that increases the trade deficit and proves remittance to be untenable.

Despite an increase in those attaining higher education, younger generations are having a difficult time finding specialized occupations that are not farm-based. Post-secondary education is not a guarantee of a better job, as the business industry is not creating long-lasting positions and many firms do not typically subsist themselves.

Moving Forward
Improving the industrial state of affairs in the nation will continue to decrease poverty in Moldova.

Alex Kremer, the Country Manager for Moldova, told the World Bank that “urbanization, connectivity and off-farm jobs are the best escape routes from poverty”.

The United Nations Development Programme has innovative business development in place for local sustainable economic growth. This project is designed to facilitative innovative business development for new and existing businesses to generate internal economic development and growth in the job market.

So far, the program has already granted 83 private sector companies innovation awards and produced a campaign focused on the employability of Moldovan youth.

The initiative is scheduled to end in 2017, but with movements like this, the future of poverty in Moldova will surely improve.

Sloan Bousselaire

Photo: Flickr

Democracy and Economic Performance
A nation’s political structure is one of the biggest predictors of its success in a number of areas, including governance, security, peace and economics. According to a recent analysis by the Brookings Institute, democracy might be the best government form to optimize the economic performance of emerging powers.

The relationship between democracy and economic performance can be determined after considering democratic ideals. These include civil liberties, free elections, minority protection and government accountability to the public, among others.

A move towards democratization signals more freedom for people, markets and trading policies. Unlike non-democratic governments, more liberal governance relies on institutions and policies to lay the framework for society. These policies are often beneficial for the private industry and therefore stimulate growth. Further, democracy in conjunction with free market allows for healthy competition between markets and people, compounding growth.

Five emerging economies in particular — India, Brazil, South Africa, Turkey and Indonesia — have made strides in creating a more liberal political climate and practicing democratic ideals. As a result of this transition towards greater transparency, each has seen economic growth and a consistently narrowing gap between inequality among their populations.

From an international perspective, liberalization leads to more open trade and immigration laws across transnational borders. One example of this phenomenon is South Africa, where democratization has reduced the time required to import and export goods. The movement toward free trade facilitates faster transaction execution for neighboring countries and helps make South Africa a more attractive trading partner.

One benefit of this growth is governments having more funds to increase welfare and entitlement spending. This investment in human capital through increased spending on education and healthcare is made evident in increased literacy and decreased mortality rates across the board. In India, for example, literacy rates have increased by 54% since 1991.

Other democratic ideals such as intellectual property rights increase the incentive to innovate because it is less likely for novel products to be infringed upon, making it a safer investment by reducing this risk. As a result, countries as a whole make greater strides in technological advancement which leads to stronger economic performance in the long run.

Overall, the links are striking between democracy and economic performance, as power moves away from government authorities and into the hands of the general public. However, there is no exact equation for economic growth. As Winston Churchill famously said, “Democracy is the worst form of government, except for all those other forms that have been tried from time to time.” This viewpoint is also relevant in terms of the relationship between democracy and economic performance. While there is no direct causation, liberal regimes have shown great success in economic development.

Sarah Coiro

Photo: Flickr

Global Agricultural Market
In July 2017, the United Nations and the Organization for Economic Cooperation and Development (OECD) published the 2017-2026 OECD-FAO Agricultural Outlook. The report predicted many positive developments in the global agricultural market for the next decade. Most important among these were lower food prices, increased productivity and reduced malnutrition.

According to the report, recent government initiatives and market changes are likely to create higher availability of nutritious food; stable food prices; high production rates of maize, meat and dairy; and lower demand for food. This high level of production can be achieved through significantly higher crop yields, using only slightly more land. As demand in developed countries lowers and crop yields increase, developing countries will be able to attain higher-calorie, nutritious diets.

While these predictions suggest a decade of stability for the global agricultural market, they can only be achieved with constant government upkeep and a continued focus on developing nations and environmental impact. According to the UN Food and Agriculture Organization, about one in nine people globally were suffering from chronic undernourishment from 2014 to 2016. Additionally, many of the production techniques in developing countries are beginning to deplete natural resources. Consequently, creative and sustainable production and trade practices need more attention in order to improve food access and alleviate pressure on natural resources.

Although the Agricultural Outlook report focuses on the global agricultural market, the end of the report looks particularly at sustainability issues in Southeast Asia. The region had a significant amount of economic growth in the past few years, primarily due to the booming agriculture and fish sectors. This growth helped address undernourishment in the area.

However, such immense growth in these sectors put a significant amount of strain on the environment. Because of this, the next decade will require a scaling-back of the fishing and palm-oil exports from the region. According to the report, “improved resource management and increased [research and development] will be needed to achieve sustainable productivity growth.” For example, the report suggests expanding the rice industry to promote diversification.

Essentially, the report states that while the global agricultural market is looking towards a period of stability and low cost, maintaining this requires a watchful eye. OECD Secretary-General Angel Gurría stated, “unexpected events can easily take markets away from these central trends, so it is essential that governments continue joint efforts to provide stability to world food markets.”

Julia Morrison

Photo: Flickr