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E-Commerce Connecting Afghan Women Entrepreneurs to the Global MarketIn 2020, 47.3% of Afghanistan’s population lived below the national poverty line. Poverty in the country increased sharply over the last decade due to a stalled economy and the rise of Taliban insurgency. It left almost 90% of Afghans struggling to live and unable to support their families with their current income. This combined effect of stagnating economic growth and deteriorating security resulted in poverty hitting record-breaking heights. The high poverty rate is especially dire for Afghan women. However, e-commerce is providing Afghan women entrepreneurs the opportunity to join the global market and push their communities out of poverty.

History of Female Entrepreneurs in Afghanistan

Women suffered deeply during Afghanistan’s almost 40-year war. They ferociously and tirelessly fought for gender equality. During the Taliban regime from 1906 to 2001, women were denied access to basic rights such as education, employment, freedom of movement and healthcare. Essentially, women were either invisible in public life or subjected to continuous violence. After 2001, female activists achieved significant legislative progress. However, the patriarchal structures, religious fundamentalism, the Taliban’s remaining rhetoric and the all-prevailing insecurity of the nation still shape the country and hinder the progress toward equality.

The Successes of Online Commerce

Despite poverty, corruption and political instability, Afghan women all over the country found a way to break away from their conservative society through digital advancements. One of the ways women entered into the world of business was through the Afghan e-commerce site Click.af. Founded in 2016 by Masiullah Stanikzai, Click.af provides Afghans access to a domestic online market. The site started shipping globally last year. The main reason behind the expansion was to connect local designers and artisans to a larger base of consumers around the world. It also promoted Afghan-made products. When sellers register on Click.af, they can find technology, tools and infrastructure to help them grow and succeed. The elements include customer management, marketing and sales tools to manage consumers while showing their presence online and boost sales.

Real Stories of Female-run Businesses

Click.af inspires young women to be entrepreneurs. Currently, the e-commerce platform has enabled 45 Afghan women entrepreneurs to launch their own small businesses. One of these women is 25-year-old Maryam Yousufi, who launched the fashion line called Machum. Yousufi’s brand focuses on designing clothes that fuse Western style with traditional Afghan designs. Yousufi’s dream was to see her products reach global markets. She believes online platforms can give others a chance to try entrepreneurship and overcome conservative attitudes toward women. Through Click.af she was able to receive a credit to start a business.

Women entrepreneurs, especially those in the sector of social entrepreneurship, often disrupt patterns of gender inequality. They reshape dominant expectations, norms and stigmas. According to the World Economic Forum, Yousufi couldn’t even dare to believe that one day she would be able to sew clothes. Yousufi is now designing and selling clothes. According to Yousufi, the opportunity she found through e-commerce allowed her to make decisions in a country where others usually made decisions for her. Click.af is about selling and connecting, but it also shows Afghan women entrepreneurs that they have the right to choose a path for themselves.

Advances for Women Entrepreneurs

E-commerce is a powerful tool that is capable of bringing great benefits to female entrepreneurs. It challenges the old barriers of geographic isolation and restricted access to information and financing. Thanks to the expansion of e-commerce, people in Afghanistan today can shop with full information. They now have the knowledge of the pros and cons of the products instead of relying on word-to-mouth. E-commerce platforms, including Click.af, have also made it possible for shops to open 24/7. This resulted in a meaningful increase in sales for local sellers. More importantly, e-commerce is a necessity in Afghanistan since COVID-19 reached the country and mobility was consequently limited. During the lockdown, while most physical stores and public companies closed, online retailers were able to operate without violating social distance regulations.

Looking Forward

Although e-commerce ventures in Afghanistan still struggle to flourish due to issues such as security issues, capital investments and online payments, there is no doubt that online shopping will exponentially increase its presence in the next few years. Platforms similar to Click.af provide an important opportunity for Afghanistan’s war-torn economy, and more specifically, it demonstrates how empowering female social entrepreneurs is key for the country’s economic recovery. Click.af has been able to reframe the definition of success in a more inclusive manner, which includes and celebrates Afghan women who, against all odds, are taking a chance and jumping into entrepreneurship.

– Alejandra del Carmen Jimeno

Photo: Flickr 

U.S. Food Policy
The U.S. produces around 38.7 percent of all corn grown globally and around 35 percent of all soybeans. With such a large stake in global markets, it is not surprising that when U.S. food policy changes occur, many and often poorer places feel their effects throughout the globe.

Over 1 billion people work in world agriculture, and in poorer regions, a majority of the workforce population works in agriculture. In Sub-Saharan Africa, for example, over 60 percent of the workforce is involved in agriculture. With such a dependence on agriculture, changes in global markets and farming policies can severely affect these poorer populations. U.S. food policy may impact foreign farmers negatively in four principal ways: restricting imports in which developing countries have a comparative advantage; stimulating an overproduction of commodities in the U.S., that when the U.S. exports lowers the international price of goods from which low-income country farmers derive their income; distorting food markets in developing countries by the provision of in-kind food aid; and reducing official development assistance for agricultural and rural development.

Subsidies

Subsidies are a long-standing agricultural policy in the United States. Originating during the Great Depression, farming subsidies are payments and other support that the U.S. federal government gives to certain farmers. Today, the U.S. distributes around $20 billion to farming businesses annually. In 1930, when the stock market crashed, around 25 percent of Americans lived on farms and ranches and the government intended subsidies to help support these smaller family-run farms. Today, the largest 15 percent of farm businesses receive 85 percent of government subsidies that protect them from price fluctuations and unexpected decreased crop production.

Because of the U.S. subsidy system, it is cheaper for U.S. farmers to produce certain crops and thus it is cheaper for many poor nations to import crops such as wheat, barley and corn, instead of buying and growing locally. As one of the world’s largest cotton producers, subsidies can cause severe global price depression. In 2004, Brazil challenged the U.S. cotton subsidies with the support of the World Trade Organization (WTO). The WTO found that U.S. cotton subsidies were responsible for distorted international markets. In winning the dispute, Brazil could impose $830 million in product sanctions and the U.S. paid $300 million to the Brazil Cotton Institute as reparations.

Subsidies are also the main cause of more market distortion for corn, one of the U.S.’s most lucrative crops. Under the North American Free Trade Agreement (NAFTA), the U.S. exports highly subsidized crops that compete with Mexican products. The exported corn contributed to a 413 percent increase in U.S. exports and a 66 percent decline in Mexican producer prices from the 1990s to 2005.

Cargo Preference

Cargo preference is another policy interfering in international relations between the U.S. and its beneficiaries. The Cargo Preference Act of 1954 ensures that ships operated by U.S.-based companies must transport at least 50 percent of overseas-bound food aid. Because of this regulation, 35-40 cents of each dollar spent on food aid goes toward transportation rather than the food itself.

The United States established Cargo Preference to protect U.S.-flag maritime companies and unions from competing for foreign cargo ships. These companies may increase or decrease the cost of transportation. The disparity between foreign-flag and U.S.-flag ships is very costly to the food aid effort. U.S.-flag ships can cost around $100-135 per metric ton while foreign-flag ships cost around $65 per metric ton. By matching foreign pricing, the country could use the $23.8 million that the country that it would have spent on shipping towards feeding the poor.

If the U.S. were to eradicate cargo preference, there would be an additional $300 million to feed another 9.5 million people each year.

Biofuel Mandates

The Renewable Fuel Standard (RFS) emerged with the Energy Policy Act of 2005. This federal policy requires transportation fuel to contain a minimum volume of renewable fuel, namely ethanol from corn or soybeans. This policy was to help American farmers and decrease dependency on foreign oil.

The policy has, however, had a negative effect on global food prices. According to the Resources for the Future, estimates determine that the RFS in the U.S. and the E.U.’s own biofuel mandate will increase global food prices by 15 percent by 2022. Because the RFS demands more corn for ethanol production and because the U.S. produces 40 percent of the world’s corn crops, the policy has had a critical impact on global corn markets. An Iowa State University study estimates that the RFS has diverted a third of U.S. corn crops (10.8 percent of the global corn market) towards production of ethanol and biofuel and has caused an increase in global corn prices from 8-34 percent.

Proactive Policy

The U.S. government has taken major steps toward improving the food security of poor nations. While many food policies focus on farmers and exporting goods, the Global Food Security Reauthorization Act (GSRA) targets farmers in developing countries. Signed into law in 2018, the GSRA ensures funding and support for the Feed the Future initiative. Feed the Future works with local agriculture sectors in developing countries to help build up strong farming techniques and give them the tools to ensure their food security. Thanks to Feed the Future, estimates state that 23.4 million people now live above the poverty line and that farmers have generated $12 billion in new agricultural sales from 2011 to 2017.

Due to the size and volume of exported crops and resources, the U.S. food policy has a strong pull on global markets. Developing and poor nations can feel the effects of rising and falling global food prices most keenly. Therefore, it is important for U.S. policymakers to assess the impact of these policies and others like them. Luckily, initiatives like Feed the Future are working hard to help build stable agricultural communities in developing countries. With such size and resources, the U.S. has the power to create positive change in global markets.

– Maya Watanabe
Photo: Flickr

E-Commerce Markets in Africa
Africa holds less than 2 percent of the global e-commerce market, but an increase in participation could benefit the continent on a massive economic scale.

In fact, it has been shown that e-commerce allows consumers to connect to businesses as well as to other consumers in order to exchange goods via the Internet. E-commerce benefits global markets by improving efficiency in distribution channels and creating a more prominent market presence for individuals or businesses trying to sell products. For developing countries in Africa, one of the main obstacles in gaining access to e-commerce markets is limited access to banks.

Mobile Money

Globally, roughly 1.7 billion adults remain without access to a financial institution.

In order to alleviate this problem, mobile banking services focus on the high percentage of adults who have mobile phones in Africa. In South Africa, about 90 percent of the adult population owns a mobile device; whereas, Tanzania has the lowest with only about 75 percent of the adult population owning a mobile device.

The integration of mobile banking companies has increased dramatically over the past decade with 135 live mobile monetary services available in 2017. In fact, the number of subscribers in sub-Saharan Africa hit 44 percent in 2017. Mobile banking is attractive to people who do not physically have access to a bank or who do not have a permanent home address. It allows them to set up an account and protect their money electronically while giving them the freedom to interact financially on a global scale through e-commerce.

The Problem of Rural Communities

A smaller density of people lives in rural areas so there is a lower prospective income for operators who wish to set up mobile services in these regions. Roughly 20 percent of the population of sub-Saharan Africa is spread over 70 percent of the land. Consequently, operators in rural communities only secure a revenue of about one-tenth compared to those who work in urban areas.

Since many individuals rely on mobile banking to engage in the global market, reducing this barrier is essential to the continued development of e-commerce markets in Africa. As a result, in 2018, Uganda’s Communications Commission decided to pair with satellite firms Intelsat and Gilat in order to help increase access for those living in two rural communities.

The Prospective Value of E-Commerce Markets in Africa

A study by the McKinsey Global Institute estimates 3.7 trillion dollars (6 percent of GDP) could be added to the developing world’s collective GDP by 2025 due to a growing digital finance sector. It is 80 to 90 percent less expensive for financial institutions to provide mobile banking services than it is to create new physical branches. This method allows financial institutions to penetrate more of the population in developing and rural areas.

The e-commerce market has the potential to grow enormously over the next five years. Although access to financial institutions is an obstacle that many less privileged individuals face, an increase in mobile money services is helping to create parity. Financial inclusion means an upward trend in the global market participation, and through the development of internet-based trade, the global economy will experience more consumers, products and efficient distribution.

Tera Hofmann
Photo: Flickr

coca_cola
Coca-Cola products reach every corner of the world while essential medicines do not. ColaLife, a UK charity, noticed this and decided to make a change. ColaLife uses Coca-Cola to open up the private sector supply chain to deliver affordable and effective medicines.

ColaLife produced the Kit Yamoyo, an anti-diarrhea kit. Diarrheal diseases cause life-threatening dehydration, which is the second leading cause of death in children under the age of 5 in developing nations. Each year, it takes the lives of 760,000 children, even though it’s curable.

The problem is that these children do not have access to the cure, which is what ColaLife sought to solve. The Kit Yamoyo contains Oral Rehydration Salts (ORS), soap, and zinc, which act as a cure. The package itself acts as a measuring device for water needed to mix up the ORS and zinc, and can also be used as a storage device as well as a cup.

The Kit Yamoyo has a v-shaped cup to easily fit into the Coca-Cola delivery crates. As a compact, low-cost product, the Kit Yamoyo piggybacks Coca-Cola’s supply chain to reach remote areas. It is a symbiotic relationship: Coca-Cola products continue to reach and get sold in remote areas, while the consumers gain access to more medicines than ever before.

The kits themselves are sold with Coca-Cola products. As the kits make their way out to the remote areas, the demand for them becomes greater. It’s a positive situation for everyone involved: Coca-Cola products are sold, the retailer makes a profit, and the consumer gets the medicine they need to help their children.

With enough funding, the Kit Yamoyo will have a big impact. It will widen vaccine coverage in remote areas and reduce death rates caused by dehydration and malnutrition. It will also encourage an increased investment in training and help health workers reduce child mortality rates. ColaLife has proven that the supply chain is just as important as the medicine itself.

Hannah Resnick

Sources: ColaLife, University of Delaware, WHO, Zambia Daily Mail
Photo: Just Giving

artisans
Etsy
is an online marketplace for consumers to purchase art and handmade crafts from global artisans. It is also a Certified B Corporation, meaning that the company operates as more than a profit-seeking business; it is a company that uses its power to solve social and environmental problems.

Etsy is not the only company focused on improving the lives of global artists. GlobeIn launched in 2013 to help connect local artisans to the global economy. Many artists featured on GlobeIn’s online marketplace may not even be familiar with the idea of the Internet, but they now have a way to expand sales of their crafts.

GlobeIn focuses its efforts in nine countries with regional managers, who oversee shipping and money transfers to the artisans. The website presents the story of the artists along with their products. The artisans decide the price of the items and they receive the full amount. GlobeIn’s local infrastructures are managed by regional directors, who help artists get their product listed on the online marketplace.

In contrast, Etsy users rely on the online marketplace to sell their crafts. Etsy was established in 2005 and continues to grow. The website hosts 875,000 sellers from all over the world, and the company is working on creating more international websites that operate in more languages to reflect the 147 countries of the sellers.

GlobeIn is a newer company—it was established in 2013—and caters to those who may not be able to use Etsy because of language barriers or lack of access to the Internet. Both companies are fighting global poverty by giving access to those who otherwise would not have access to the global online marketplace.

Both companies share a mission to connect local artists to the global community through an online marketplace. By giving these artists a platform on which to sell their crafts and goods, Etsy and GlobeIn help bring income to the artists and to make their stories known.

– Haley Sklut

Sources: Etsy, GlobeIn, Mashable, Venture Beat

Photo: WordPress

5 Things You Should Know About The Africa Competitiveness Report 2013
The World Economic Forum released The Africa Competitiveness Report 2013 last week, a body of data analysis that examines where Africa’s nations stand in economic competitiveness. Results show that when ranked against the rest of the world, the majority of African nations are among the least competitive. Furthermore, even on the African continent vast differences emerge between countries, leaving African countries with great room for improvement. Here are a few key lessons to take from the ACR 2013.

1. Africa needs economic policies to take advantage of its “youth bulge.” Africa’s economies have enjoyed high rates of growth, but a key question the ACR 2013 poses is whether this growth has been accompanied by investments and policies that make it sustainable. The “youth bulge,” a common phenomenon in developing countries where a significant percentage of the population consists of youths, can either cripple or fuel an economy solely based on whether jobs exist to utilize a massive workforce of young people.

2. African countries need to diversify what they sell and buy — and avoid reliance on natural resource industries. Dependence on a single production industry hinges the entire country’s economy on a single commodity price; natural disasters, resource depletion, social-political instability, or unexpected competitors may cripple this economy. In fact, many suggest that dependence on natural resources for national economies alone can hurt, rather than help, the plight of those in developing countries.

3. Infrastructure, infrastructure, infrastructure. What those in the developed world take for granted — paved roads, electricity, local or regional government — many countries in Africa lack. Even while mobile telephone services are on the rise, progress has been slow — “even negative,” the ACR says — in development of infrastructure. Without well-maintained transportation routes, goods cannot even get to the border.

4. Once goods are at the border, import-export procedures need to be simplified. Regional fragmentation is a significant problem for Africa’s continental economy. When bordering countries have goods they could sell each other but don’t for whatever reason, their economies will suffer. Reducing both material and time costs for inter-state trade can yield greater regional integration in the long run, while providing rapid economic gains short-term.

5. Africa needs “growth poles.” John Speakman and Marjo Koivisto from the World Bank write in the ACR that growth poles are “simultaneous, coordinated investments in many sectors to support self-sustaining industrialization in a country.” These growth poles make use of public and private investments by industries that need a specific resource. A vast amount of planning and coordination must go into the development of these growth poles, but what can result is improvement in quality of life through steady employment, entrepreneurial opportunities, and economic diversity.

– Naomi Doraisamy
 Sources: Africa Competitiveness Report 2013, Irish Times
Photo: World Economic Forum Facebook 

“The fashion industry in the past several years has redefined how to market, how to brand, how to raise awareness, and how to inspire others,” said Ray Chambers, with United Nations special envoy for malaria. “I think the fashion industry will lead the emergence of so many of the developing economies.”

There are consistently more and more global campaigns supporting social and economic growth, assisting in development and lifting people out of poverty through ethical fashion. Even the United Nations has two initiatives specifically focused on employment through apparel production and trade. One is Fashion 4 Development  (F4D),  supported by the UN Educational, Scientific and Cultural Organization  (UNESCO), providing economic opportunities for women and men around the world to help lift them out of poverty.

F4D partners with organizations such as Advanced Development of AfricaFashion Designers Without BordersWomensphere, and with first ladies around the world to raise awareness and money to build more sustainable futures—the core principles of F4D. First founded in 1996, and then later re-launched in 2011 by former supermodel Bibi Russell, who works “to preserve the heritage of my country, foster creativity, provide employment, empower women, and contribute towards the eradication of poverty.” F4D has helped more than 100,000 people in Russell’s home country of Bangladesh through a local textile business, and has ongoing initiatives in Ghana, Nigeria and Botswana with a specific focus on promoting African designers and producers in the global market.

Another UN project, jointly run with the World Trade Organization (WTO) through the International Trade Center (ITC), is the Ethical Fashion Initiative.  First conceived of by an Italian shoemaker, Simone Cipriani, who saw no reason why Italy’s model of fashion production could not be recreated in Kenya.

Mr Cipriani sought out unemployed and underemployed women with experience in basic beadwork and tailoring, and with training he has turned his small idea into a profitable company. Ethical Fashion had sales of $900,000 in 2012, and employs 1,200 women full time. Their wages have gone from about $2 a day to nearly $8 and this income then circulates back into the community and further expands economic growth. Many other fashion houses have since started projects with the Ethical Fashion Initiative as well.

Regionally, many designers have started programs in the same vain. Tete (Maria Teresa) Leal, an Ashoka Fellow, started her mission in the ’80s to help women use high fashion to tackle poverty in Rio de Janeiro, Brazil. Her cooperative, COOPA-ROCA, was started in Rio’s most populated slum, first training women in manufacturing and business skills. She then started receiving high-quality fabric donations and was then able to create a full collection, eventually selling it all over the world. In America designer Tory Burch, the second youngest self-made, female billionaire, has started a program with Accion providing microloans to small, fashion business hopefuls. She provides capital as well as mentoring and training. “It’s about investing in people who might otherwise not have the chance to pursue their goals. It’s also incredibly important to the economic recovery of our country,” Burch said. To date, the program has distributed almost 100 loans, each worth an average of $7,000.

– Mary Purcell

Source: Forbes, The Economist
Video: You Tube