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Plastic Waste Action and Poverty in IndiaWithin the last year, more information has come out about the consumption of plastics and their mismanagement. The information has spread awareness of the dangers of single-use plastics and encouraged using paper or reusable straws along with a number of other initiatives. Few, however, have been as transformative as one undertaken in India by the NGO Sarthak Samudayik Vikas Avan Jan Kalyan Sanstha (SSVAJKS). SSVAJKS has spearheaded a streamlined process of plastic waste collection and sell to recyclers. Though SSVAJKS may be the only organization connecting plastic waste action and poverty in India, others are joining the efforts to mitigate the problem.

Large Scale Support

At least 16.5 million tons of plastics are consumed annually, 43 percent of which are single-use, packaging material. Around 80 percent of these plastics are discarded. Prime Minister Narendra Modi’s Clean India Drive promises to address pollution in India. In March 2019, India banned imports of plastic waste. By September, it banned single-use and disposable plastic products. Headlined by Modi’s speech on August 15 calling for the elimination of such items by October 2, the Indian government aims to reduce disposable plastics to zero by 2022.

In alignment with this initiative, Amazon India and Walmart’s Flipkart announced actions to remove single-use plastics from their packaging. They will instead opt for entirely paper cushions and recycled plastic consumption by March 2021. In June 2018, PepsiCo India vowed to replace its plastic Lays and Kurkure bag with “100 percent compostable, plant-based” ones. This was countered by Coca-Cola’s goal to recycle one can or bottle for every one sold by 2030.

Sarthak Samudayik Vikas Avan Jan Kalyan Sanstha

While governments and corporations have addressed the future of plastic consumption, they neglect the areas where SSVAJKS helps the most. SSVAKLS is dealing with the existing plastic that has already been produced. SSVAKLS has the support of the Global Environment Facility’s Small Grants Program under the advisement and jurisdiction of the United Nations Development Program (UNDP). These efforts have connected the campaigns against plastic overconsumption and mismanagement with SSVAJKS’ recycling initiative.

The NGO began linking plastic waste action and poverty in India in the city of Bhopal in 2008. It developed a sustainable integrated waste management system for the city’s five wards, a model that expanded to the state level in 2011. Replicated across India in all of its states, this model relies on ‘ragpickers’ to sift through the waste and pick out plastics returned to municipal collection centers. These collectors come from highly vulnerable, socially marginalized castes and are predominantly poor, illiterate women.

Since partaking in this initiative, the incomes of the ‘ragpickers’ have vastly improved, doubling in many cases. The plastic they collect and submit to the collection centers is recycled into roads and co-processing in cement kilns, benefitting upwards of two million people. The overwhelming success of the NGO led to another SGP grant that enlisted “2,000 unorganized waste pickers” across the Bhopal Municipal Corporation’s 70 wards.

The Endgame

SGP hopes to build a sustainable plastic waste management system and ensure the co-processing of plastic waste. It will also increase the standards of living for 2,000 ragpicker families. New initiatives are introducing vermicomposting along with paper bag and cotton making units. The results are phenomenal. Ragpickers have collected 4,200 megatons of plastic, saving plastic from burning and emitting 12,000 megatons of carbon. Additionally, the ragpickers themselves are able to open bank accounts to accumulate their savings, lifting them slowly but surely out of abject poverty. The success of the SSVAJKS in combining efforts to address plastic waste action and poverty in India demonstrates the NGO’s capacity to tackle multiple issues at once and incentivize the solving of one through the other.

Alex Myers
Photo: Flickr

Ecommerce in India
With Walmart’s recently announced acquisition of Flipkart, India’s largest online retailer, the U.S. retail multinational has placed a substantial bet on the future of ecommerce in India and the country’s economic potential.

Confirmed in recent weeks, Walmart’s purchase of almost 80 percent ownership of Flipkart represents the largest single foreign direct investment transaction in the country’s history. Although ecommerce represents a small portion of total retail sales in India, companies like Walmart are betting that a burgeoning middle class and greater access to technology offer the potential for a sizable market.

Indeed, the more bullish analysts predict an ecommerce boom in the country. U.S. investment bank Morgan Stanley estimates that online retail sales in India could grow by more than 1,200 percent, from $15 billion in 2016 to $200 billion in 2026. These numbers would trail the world leaders in online retail sales such as China ($1.1 trillion in 2017) and the U.S. ($453 billion) but would already put India among the largest ecommerce markets in the world and unmatched in the rest of the world in terms of potential size.

Forecasts include burgeoning internet usage and lower data access costs in the country, which will broaden the accessibility of online retailers. Optimism also stems from size and growth of the Indian economy: its population is 1.3 billion, the second-highest behind China, with a young demographic profile and GDP growth of 7.2 percent in 2017. This represented the fastest rate among all major economies. It is also hoped that Prime Minister Narendra Modi will be successful in implementing economic reforms to ease the cost of doing business, including for foreign investors, in the coming years.

Walmart is not alone in betting on the potential of ecommerce in India. Amazon entered the market in 2013 in an attempt to challenge Flipkart’s success and has steadily gained ground. Alibaba, the Chinese ecommerce giant, first made inroads into the space in 2015 by investing in Paytm, a financial technology startup, and has since continued to expand its investment into other ecommerce groups.

Some observers are more tepid about India’s potential. GDP per capita remains low compared to other major economies; at approximately $1,700 in 2016, it is roughly one-fourth that of China. Moreover, the wealth of 80 percent of the population falls below that number, reflecting the country’s problem with income inequality, with the richest segment of the population holding an outsized share of the wealth.

In fact, despite proclamations heralding the arrival of India’s massive middle class, a 2015 Pew survey found that the country’s progress in poverty alleviation has largely moved its population from poor to low-income earners. This leaves them dangerously close to re-entering poverty with such limited disposable income.

Outlooks vary, but the commitments to the country by some of the world’s major online retailers represent their belief in its likely transformation and growing earning potential. As some experts have noted, the acquisition by Walmart and its competitors represents a long-term bet that India could be on the cusp of the consumption explosion China saw earlier this century. If their bets on ecommerce in India pay off, it will likely be because it coincides with rising prosperity and economic security for Indians as a whole.

– Mark Fitzpatrick
Photo: Flickr

Flipkart

The king of e-commerce in India is not Amazon but rather a locally formed competitor: Flipkart. Like Amazon, Flipkart began as an online bookstore in 2007. Today, it has more than 75 million and accounts for almost 50 percent of online purchases. Along with another homegrown company, Snapdeal, Flipkart has created thousands of jobs and access to higher quality goods at lower prices—a win-win situation for struggling communities in India.

The popularity of online shopping can be attributed to the increasing availability of smartphones. Within just six months, the usage of smartphones among total mobile phones grew from one in five to one in every four mobile phones. Thus, analysts believe that internet usage will grow by 27 percent in just five years and contribute to the doubling of income per person from $1,570 to roughly $3,000 a year by 2025.

The growth of the cell phone industry and e-commerce in India indicates a positive spike in the quality of life. In its analysis of poverty levels in 2011, the World Bank reported that about 21 percent of India’s population lived on less than $1.90 a day. In 2015, that figure dropped to 12.4 percent, meaning 97 million people have officially emerged from extreme poverty. Since Flipkart and its competitors expect a bright future, it is believed that these numbers will only improve.

With more people on the internet, Indian firms like Flipkart and Snapdeal plan to increase their sales seven times over by 2020. This growth is good not only for those in the e-commerce market but also for local businesses and low-skilled labor.

According to The Economist, one of the primary areas of job creation is delivery services. Although these services were already widely used, such as transporting groceries from local corner markets or delivering lunch, the explosion of online shopping has made the demand for deliveries even stronger. Delivery men can now make up to $200 a month—well above what is average for low-skilled labor.

Overall employment is predicted to rise by as much as 30 percent in the next three years. Other estimates claim that as many as two million jobs were created in 2015 by Flipkart alone.

Physical stores are also making progress through e-commerce. The Indian division of Amazon, along with other online distributors, has made it much easier for new businesses to reach a wider selection of consumers, thereby expanding their sales and revenues. As it goes, India is in the middle of an economic upward spiral that is both energizing and hopeful.

Emiliano Perez

Photo: Flickr