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21. September 2018 - 12:10
Digitalisation offers opportunities, but also goes along with huge risks in India

The parking lot at Delhi airport gives you an idea of what the digital future may look like in India. For the barrier to open, you must scan your parking ticket. In most other countries, you would do that yourself. In Delhi, however, you hand over your ticket to someone who will do it for you.

The parking lot uses up-to-date technology, but staff members who are not really needed anymore are still employed. The general assumption is that technology boosts productivity by allowing employers to make workers redundant. It does not seem to apply in Delhi.

This may actually be a good sign, given that some 1 million Indians are estimated to join the labour market every month. Job-killing automation could cause a lot of harm. Foregoing automation, on the other hand, could hamper long-term development. Keeping staff to handle automated processes may seem counter-intuitive to most management consultants, but it makes sense in socio-political terms.

This issue is at the heart of how the future of work and artificial intelligence (AI) are currently being debated in India. At first glance, India seems to be doing pretty well in terms of growth and investment. The economy is expected to grow by around 7.4 %. That is one of the best rates internationally. In 2017, the country improved its World Bank’s Ease of Doing Business ranking by 30 places and rose to the 100th rank.

At second glance, things look more challenging. Growth is mostly driven by government spending (almost 11 % of GDP), not by private consumption or investment. Even more disturbingly, the current growth rate is insufficient for generating the millions of new jobs that India needs. Indeed, India’s unemployment rate is rising.

According to the Centre for Monitoring Indian Economy, around 31 million Indians are currently unemployed (seven percent). This figure, however, can be somewhat misleading because it does not include 270 million Indians living in poverty, many of whom depend on informal employment.

Compounding the employment problems, half of India’s population is still engaged in agriculture, but environmental stress – not least due to climate change – is reducing productivity significantly. If digitalisation is done well, it might have beneficial impacts (see box by Aditi Roy Ghatak). On the other hand, many poor people are still hardly literate – and that may prove an obstacle to rural modernisation.

There can be no doubt, however, that the future of work is critically linked to the future of employment. This is the context in which technology can make a difference – for the worse or the better. As is true of globalisation, digitalisation and technological progress will create winners and losers. In this regard, India does not differ from other countries. Due to its sheer size, however, it may well become the central battleground for “decent digitalisation” in emerging markets. The challenge is two-fold:

  • In the global race for technological leadership, India can build upon its existing and quite reputable IT sector if it adapts to innovation fast. To do so, massive investments in research and development (R&D) and human skills are necessary.
  • India must create high-quality employment that caters to the needs of the young and aspirational generation, in terms of both jobs and livelihoods.

Prashant K. Nanda of the business website estimates that out of the one million new job seekers per month, half lack employable skills. According to a similar essay by Dilip Chenoy in the Hindustan Times, nearly 400 million people in India are unskilled.

India’s Industrial Training Institutes used to have a good reputation, but they have lost track of modern industrial production. New centres for skills training are mushrooming, but they seem to be chasing government subsidies and specialising in rent seeking. Most of them do not teach up-to-date vocational skills. Given that they are not rising to today’s challenges, one should not expect them to rise to tomorrow’s challenges. On the other hand, nobody – whether in India, Europe or elsewhere – really knows exactly what skills will be in labour-market demand in the future.

What impact digital technology will have, differs from sector to sector, of course. The Friedrich-Ebert-Stiftung, a foundation linked to Germany’s Social Democrats, recently held a workshop on the matter in the Delhi agglomeration. Leading business experts agreed that the sectors least likely to be affected by digitalisation are construction, domestic and/or care work as well as hospitality.

Business leaders at the FES event expected lay-offs to concern mostly workers with some, but not very sophisticated skills. Repetitive tasks in manufacturing are the easiest targets for automation. This is a common pattern, and it explains why growth often remains jobless.

Mumbai beats Hamburg

Logistics is among the front runners in technological innovation. When talking to trade union members in logistics, one gets a feeling for the enormous challenge ahead. For example, the Jawaharlal Nehru Port in Mumbai is now one of the world’s most digitally controlled ports. It is the largest container port in India and among the global top 25. Currently, it handles 10 million containers annually with a mere 1,700 permanent employees. The comparative figures for the Hamburg Port Authority are 8.8 million containers and 1,800 staff. To judge by these numbers, Mumbai’s port is more digitally advanced than Hamburg’s. In both cities, however, the docks used to be crowded with workers. Now they are empty and digitally managed. The trend is good for business, but bad for employment.

India is famous for its strong ICT sector. Corporations involved in information and communications technology have been making international headlines for about two decades. Nonetheless, even their jobs are not safe. It surprised many when the sector drastically cut jobs last year. The leading corporations – including Infosys, Wipro, Tech Mahindra and HCL – laid off more than 50.000 employees. International competitiveness had suffered due to a lack of investments and innovations, so managers had to adjust.

The ICT sector is supposed to be the future. Its staff members belong to the middle classes and include many women. Job losses in this sector are therefore especially painful. And more bad news seem likely because artificial intelligence is expected to be a game changer. The work done in call centres and comparatively simple computer programme writing may soon be taken over by advanced computer programmes.

Tandem Research and FES are therefore convening a series of six workshops with diverse stakeholders in India – including the government, civil society and private sector. The goal is to collectively evaluate and identify the narratives, social frameworks and key players for shaping AI in India.

The country faces opportunities and challenges. Advances in AI-based technologies could improve the quality, accessibility and affordability of health care and education for under-served populations, for example. On the other hand, unguided AI may cause serious problems in terms of job displacement, data privacy or the transparency of accountability of decision-making by algorithm. Moreover, the gains of progress need to be shared fairly. Broad-based debate is needed to ensure that #AIforALL does not become empty rhetoric.

India must shape new technologies to bring jobs and opportunities to the bottom of the pyramid and to solve persistent development challenges of providing health care, education and a clean environment. In the short term, it is indeed smart to adopt automation technology and keep unskilled staff to operate it – as is the case at Delhi airport’s parking lot.

Patrick Ruether is the representative of Friedrich-Ebert-Stiftung (FES) in India. FES is a non-profit foundation with close ties to Germany’s Social Democrats.

Vikrom Mathur is a co-founder and director of Tandem Research, a Goa-based, multi-disciplinary research collective which specialises in policy advice on technology, society and sustainability.

Urvashi Aneja is a co-founder and director of Tandem Research.

Kategorien: english

Four important tech trends

18. September 2018 - 15:30
The meanings of artificial intelligence, automation, big data and

Artificial intelligence means that computer programmes perform cognitive and intellectual tasks that only humans were capable of previously. Speech recognition is an example. Typically, algorithms analyse databases of human behaviour to pick the correct choices. Depending on what job needs to be done, the databases vary. Highly sophisticated programmes are designed to support medical doctors’ diagnoses, and they will be based on the decisions of physicians who specialise in the relevant fields. Algorithms of online retailers that show you items that people liked who bought the same items that you bought are obviously much simpler.

Big data refers to huge databases. Systematically analysed, they can reveal trends that would otherwise not be obvious. At the same time, the scrutiny of an individual person’s data trail can disclose private information concerning his or her health status or political preferences, for example. Big data is systematically generated by consumers who use the internet, smartphones or other appliances. The records of insurance companies and utility companies can amount to big data too. Moreover, satellite imagery is sometimes considered big data.

Blockchain technology serves to create files that cannot be manipulated after being transferred from one computer to another. The reason is that the files automatically contain encrypted documentation of all previous transactions. The best known application of blockchain technology is Bitcoin, the crypto currency. Proponents argue that it is a safe kind of money because it cannot be manipulated by government institutions. Recent experience, however, showed that the value of Bitcoin can be quite volatile due to speculation.

Automation means that machines perform tasks without being directly operated by a human being. Computer programmes steer the machines which require elaborate sensor systems and are able to use tools. Robots have been very important in the car industry since the 1990s. Increasingly, AI’s systems are used to operate automated machines. Self-driving cars are expected to be viable in the future.

Hans Dembowski

Kategorien: english

Generating broad-based wealth

18. September 2018 - 15:22
UNDP innovation expert assesses pros and cons of new digital technology

Robots are designed to replace human workers, and they are becoming ever more effective. Is advancing information technology making the established development pattern obsolete, according to which a poor country starts to industrialise on the basis of cheap labour and then gradually catches up with the world market in other fields?
I would argue that some robots are designed to replace human labour, others to augment it or to offer entirely new services. Projections on the impact of automation in developing countries range from a loss of employment up to 55 % in Uzbekistan or 85 % in Ethiopia. In the US, for example, a number of companies are currently investing heavily in robotics with the aim to bring back significant parts of the sewing industry. There are, however, two ways to look at it. The first is to bemoan that a development trajectory that we have become used to is becoming unviable. The other is to look for better development trajectories. Low-paid labour is evidently a comparative advantage of developing countries and used to hold the promise of economic productivity gains and employing low-skilled labour. This is likely to change. In addition to striving for environmental sustainability, reducing inequalities and ensuring fair wages, developing countries will have to work on trajectories that are not build on the historic advantage of low-paid labour. A herculean task. To tackle it, most policy recommendations focus on capabilities and connectedness, so education and trade based on comparative niche advantages.

Can digital technology be useful for that purpose?
Yes, there are opportunities to redefine development trajectories through digital leapfrogging, but it will only be possible if it goes along with many other investments. Basic infrastructure, human capital, business environments, redistribution and social safety nets must all improve. To compete with currently available IT applications, people increasingly require a tertiary education, which is still rare throughout the developing world. There is thus a need to act at several levels. We need public discourse on redistribution and how a society defines the creation of value.

In any case, we must prepare for human labour being made redundant?
We are facing serious problems, no doubt. Policymakers are well advised to ponder what may happen in the future. Historical experience inspires some slight optimism: since the start of the Industrial Revolution in Britain in the 18th century, people have kept worrying about machines replacing workers. Indeed, technological progress can affect lower and middle classes negatively. On the other hand, new technological options have historically created more jobs than they made obsolete. The nature of work is changing – in parts fundamentally. We need to understand whether the negative impacts on labour are of a transitory nature and can be dealt with through re-skilling, or whether there are some mechanisms at play that should make us worry about excessive automation. Projections show widening disparities and decreasing opportunities for low-skilled labour. In view of these trends, governments and development agencies have a role to play in shaping narratives. It makes sense to collectively rethink what kind of work should be automated and how different kinds of labour are valued and remunerated. It is necessary to appreciate manual labour and reward it fairly. Innovative policies are needed, and concepts such as a universal basic income will become increasingly important. After all, “Leave no one behind” is a guiding principle of the Sustainable Development Goals.

Does digital technology offer opportunities to people with higher education in developing countries?
Yes, we see creative work being decentralised internationally. Tech hubs have emerged in places like Bangalore, Nairobi and elsewhere. Opportunities for digital workers are opening up across the world. Moreover, new technologies offer opportunities to protect the environment. Satellite images and machine learning can contribute to better understand the implications of current policies on biodiversity, for example, and crowdfunding can make investments in renewable power generation affordable, to name only a few examples.

Let’s discuss the upsides and downsides of important technological trends. If unemployment is the risk that is posed by automation, what advantages can developing countries expect?
First of all, let me highlight persistent barriers to technology access. Today, over a billion people still lack electricity, and three billion lack access to clean and safe cooking technology. Illiteracy is still a serious problem in many places. Less than half of the world population uses the internet. That said, the potential benefits of emerging technologies are considerable. Bear in mind that the cell phone has been and continues to be a game changer for financial inclusion. Drone delivery of pharmaceuticals and vaccines to remote rural areas is a more recent example of technology-driven progress. Drones make it easier to provide hard-to-reach communities with health care. Another example is self-driving cars. They hold the promise to massively reduce congestion and pollution in megacities like New Delhi, Nairobi or Lima with potentially immense positive effects on economic productivity too.

Apart from automation, there are two other decisive trends as far as I can tell: big data and artificial intelligence. Am I missing something important?
Well, there are many important trends, and they tend to be interrelated. I think policymakers should focus on the trends you mentioned plus blockchain and bioethics. Humans are generally bad in predicting the future, especially if scenarios look threatening. It is important to plan for unexpected scenarios.

Let’s take a look at big data. Do you have examples of tangible advantages?
Yes, I do, but let me state first that big data alone often does not suffice. The data generated by consumers who use mobile phones, social media, online search engines usually needs to be backed up with other data such as household surveys, national censuses et cetera. Otherwise, we may get distorted pictures. For example, we know that more men than women use digital devices, so the data trails tell us more about men’s preferences than women’s. We can address the sexist gender gap, but to do so, big data usually needs to be complemented with the thick data of statistics generated by conventional means and additional qualitative research to gain insights about those who are most marginalised. Done properly, big data analysis will provide relevant insights into the lives of people, including at the base of the pyramid. In recent years, UNDP has been investing in the matter, often in collaboration with UN Global Pulse and national governments. The results are interesting.

  • In Sudan, for example, UNDP is working with partners including German academic institutions on real-time insights on poverty. Official poverty statistics are being complemented by big data from night-time lights, mobile phones and electricity consumption. Policymakers thus get a more complete picture of where poor people live. The approach has made data collection much more efficient.
  • In Indonesia, big data is helping to improve flood preparedness as well as responses to flooding. Twitter is very popular in Indonesia, so the analysis of Twitter conversations is useful, generating insights and enabling various partners from civil society and the government to act. This method helps to verify reports and reach out to flood victims in real time, for example.

And what are the risks of big data?
There are serious issues of privacy. If you assess a person’s browsing preferences, for example, you can gain multiple insights, concerning the person’s sexual orientation, political views or health status. Such information can be misused. A significant part of the data that consumers generate is in the hand of a few powerful private-sector companies, including online retailers, telecom companies, social media platforms or search engines. To the extent that governments get access to such data, they may use it to stifle opposition and block civil disobedience. Such negative impacts will haunt us if we do not establish data protocols and accountability systems. More generally speaking, we need to invest in supporting individuals to develop an emancipatory and yet protective relationship with their own data.

Let’s consider artificial intelligence (AI). What potential do you see?
There is scope for important efficiency gains. AI can widen policymakers’ horizons for example. Algorithmic scrutiny of big data can literally open their eyes on issues such as the effects of current paces of deforestation. In Central America, for example, AI can show what impacts current policies for pineapple production have on biodiversity. All too often, the people who take decisions are not aware of implications for the larger system. Another area in which artificial intelligence may prove useful is criminal justice. Judicial systems are over-burdened in many countries and people’s trust in them is decreasing. Algorithms can contribute to managing judicial affairs better and speed up procedures.

But couldn’t AI just as likely compound existing problems? To my knowledge, AI is generally based on big samples of human action, with computer programmes being designed to replicate the decisions made by most of the human beings who are considered to be relevant in a specific context. If a country’s legal system is biased against a certain minority, the decisions of relevant people will reflect that bias, so won’t AI reinforce it as well?
Yes, that has already happened. In some countries, algorithmic decisions were indeed biased against minorities – due to biases in the data that was provided to train the algorithm. But it would also be possible to design the programmes in ways to avoid biases. This is a prime example of technological progress offering opportunities and posing risks at the same time. It is possible to improve – rather than merely replicate – performance. For this to happen, we need transparent scrutiny for data sets that are provided to algorithms and diversity among those who write the programmes. That would happen if more young women and more members of minorities graduated in STEM – science, technology, engineering and mathematics. Governments should promote them. At the same time, private-sector companies must ensure diversity among their staff. We need multi-sectoral fora that discuss AI progress, principles and accountability systems.

My suspicion is that artificial intelligence isn’t actually very intelligent. If it is basically designed to replicate the average behaviour of relevant human beings, performance will by definition be mediocre. That is preferable to bad performance, of course, but worse than excellent performance. We are increasingly being admonished to “think outside the box”, but can AI do that at all?
Well, the standard uses of AI so far are not thinking outside the box, but technology is advancing. We are now seeing creative AI, with programmes writing poems or composing music. We are discussing the emergence of Artificial Super Intelligence – AI that would be able to make creative choices better than humans do, generally surpass human cognitive capabilities and be able to undertake reasoning. That is the kind of AI some technology enthusiasts like Tesla founder Elon Musk warn us about. One of my favourite quotes is from the Italian politician and philosopher Antonio Gramsci. He said: “I am a pessimist by intellect, and an optimist by will.” To guide technological future on a trajectory that benefits human fulfilment and freedom, this seems to be a good paradigm.

Benjamin Kumpf leads the UNDP Innovation Facility in New York.

In its recently published annual report, the UNDP Innovation Facility shares case studies from over 25 countries:

Kategorien: english

Progress may not be sustained

18. September 2018 - 14:53
Life expectancy has improved in Benin, but poverty remains a serious challenge

In Benin, the average life expectancy has increased from 37 years in 1960 to more than 60 years today. However, there are still big discrepancies between urban and rural areas. In the big urban agglomerations of Cotonou and in smaller towns like Porto Novo, Ouidah or Parakou basic social-service infrastructure exists, including hospitals, laboratories for clinical tests or pharmacies. During immunisation campaigns, many people are vaccinated free of charge. Maternity clinics ensure that babies are also provided with free immunisation.

People living in villages are disadvantaged, however, especially in the remote areas of the north. They are generally denied access to the most basic health services. Women there often give birth at home, which increases the risks of death for both mother and baby.

In 2015, 405 women died per 100,000 live births, according to UN data. In comparison, the maternal death rate was 576 in 1990. Of 1,000 babies, 65 died in 2015. The figure for 1990 was 107. On average, women still have 4.6 children, two fewer than in 1990, World Bank statistics show.

According to UN, about three quarters of the people had access to safe drinking water from an improved source in 2008, but only 12 % had access to improved sanitation. This is worrisome since safe drinking-water supply cannot be guaranteed in the long run if sanitation stays poor.

Making matters worse, only very few medical doctors are prepared to serve in villages that lack electric power and safe water supply. Moreover, non-communicable diseases such as cancer, diabetes or and hypertension are hard to diagnose in places that lack modern technology and specialists. In rural areas, antibiotics and other life-sustaining drugs are not always available. In the cities, poor people may be unable to afford them.

On the other hand, some trends have been promising in past decades. Yellow fever has almost been eradicated. Meningitis has become rare. The prevalence of two tropical diseases, sleeping sickness and yaws, has been reduced considerably. Mobile health clinics have been making a difference even in rural areas.

Statistics in Africa are not always reliable however. They may not reflect the whole picture. It is bewildering that the number of graveyards seems to be multiplying, and masses of caskets are on sale by the roadside. Sometimes it looks like most urban people in Cotonou, Porto Novo and other towns spend their weekends burying their dead. This impression may be a consequence of population growth. Benin has more than 11 million people today – almost twice as many as in 1995. The cities have grown in particular, so more deaths need not be a sign of worsening living conditions.

On the other hand, poverty has recently been becoming worse, and that may have an impact on life expectancy. Many people lack sufficient resources to adequately feed themselves and access appropriate health-care services.

According to a UN Development Programme report of 2014, monetary poverty has increased in Benin, and progress in health-care delivery and education was not enough to sustain higher life expectancy in the long run. In other words, the progress made did not look good enough in the eyes of the UNDP.

The World Bank paints a similar picture of Benin. It reports that poverty is on the rise in spite of moderate annual GDP growth rates of four to five percent over the past two decades. The national poverty rate, according to its data, was 35 % in 2009 and 40 % in 2015.

Part of the problem is that the informal sector makes up about two thirds of the economy, employing more than 90 % of the work force, according to the World Bank (also see my essay in D+C/E+Z e-Paper 2017/11, p. 16). “Benin’s economy relies heavily on its informal re-export and transit trade to Nigeria, which makes up roughly 20 %,” the Bank states. To fight poverty in a sustainable way, Benin’s economy must modernise.

Karim Okanla is a media scholar and free-lance writer from Benin.

Kategorien: english

The digitalisation of world trade

17. September 2018 - 15:11
Digitally-enabled trade on the agenda of G20 summit in Buenos Aires in late November

The expert report first assesses the challenges G20 members are facing. Multilateral regulations for digital trade are only evolving very slowly. Since the implications for global development in the world economy may turn out to be serious, the scholars argue that WTO efforts in this area deserve support. They also insist that the risks of the digital divide widening further must be controlled.

The global trade order is not currently designed for advanced technological applications. To close the gaps, the expert group calls for more and more effective international coordination. In its view, national governments must promote this cause. One danger they identify is tax avoidance as profits are shifted from country to country. Clear rules are needed concerning issues like this, they insist.

The experts propose that the G20 presi­dency convene the ministers in charge of trade. They should be given the assignment to negotiate a Memorandum for Cooperation on Digitally Enabled Trade. That could happen at the summit in Buenos Aires in late November.

The experts also propose to use the term “digitally-enabled trade” because terms like “e-commerce” or “digital trade” can be confusing. “Digitally-enabled trade” is more precise because it includes all trade related applications of digital technology. The authors explicitly refer to block chain technology, which facilitates transactions that cannot be manipulated ex post, and to distributed ledger technology, which allows for falsification-proof cooperation with several partners working all over the world.

The report emphasises that the Memorandum should tackle numerous feedback loops because digital technology and trade are becoming ever more intricately intertwined. Moreover, it points out that the digital divide between highly-developed and less-developed countries deserves attention. The expert group’s vision is a comprehensive deal on trade and investments. It would give market participants great scope for action, ensure legal certainty and improve digital infrastructures. Public-private partnerships could contribute to ensuring worldwide access. Moreover, the expert team calls for aid for trade and other forms of support to low-income countries.

The team wants the G20 to confirm the leading role of the WTO on digitally-enabled trade. In their eyes, the WTO needs an expert office to facilitate international cooperation and coordination on the matter. The authors stress that all parties must assign experienced staff to deal with related tasks.

The report explicitly tackles taxes. The international community is said to need a coherent system, but obstacles include the lack of consensus on how to deal with digitalisation. The expert group suggests the G20 should establish an Intergovernmental Panel on Taxation in the Digital Economy. This panel could then advise policymakers and draft expert reports.

Meléndez-Ortiz, R., et al., 2018: New industrial revolution: upgrading trade and investment frameworks for digitalization.

Kategorien: english

175 years of praising free enterprise

17. September 2018 - 11:06
Monday, September 17, 2018 - 11:00Hans DembowskiWhat The Economist gets wrong about liberalismOn its current cover, the London-based magazine The Economist celebrates its 175th birthday. The issue includes a long essay on the merits of liberalism, the worldview which The Economist wholeheartedly endorses. Unfortunately, the essay shies away from dealing with the crucial inherent contradiction of liberalism: does it emphasize free markets or equal opportunity? What is more important: the private interests of the “bourgeois” or the public good demanded by the “citoyen”?

The essay ( is meant to rally liberals around the world in defence of values such as democracy, entrepreneurship free, civil rights, rule of law and peaceful dispute settlement. It praises the multilateral world order and expresses criticism of nationalist populism. These are worthy causes. The problem I have with this appeal, however, is that liberals are not a coherent political force.

In North America, liberalism stands for social protection, civil rights and government intervention in markets. In Australia or Germany, however, liberal parties habitually argue that the market beats the state and keep on demanding lower taxes.

Whoever wrote the essay in The Economist is aware of this tension. After all, he or she admits that the term liberalism stands for left-wing faith in big government in the USA, but for free-market fundamentalism in France. If this tension is not resolved, liberalism can plainly not serve as a coherent policy agenda.

Liberal philosophy was born in the 19th century. It was an ideology that attacked the aristocracy, denying the nobility its privileges and insisting on a merit-based order. Its proponents argued that individuals should be free to pursue their interests, define those interests themselves and not be restricted by governments. Free enterprise was at the heart of the budding ideology, which reflected the growing economic and political power of industrial entrepreneurs. Liberalism is a child of the Industrial Revolution.

As we know today, the aristocracy lost that big class struggle of the 19th century. All western societies have become capitalist democracies. Some countries, like Britain or Denmark, still are nominal monarchies, but political power rests with elected parliaments, with all adult citizens - whether male or female - being entitled to vote.

Liberalism is no longer an ideology that promotes the interests of insurgent bourgeoisie against an entrenched nobility. When it served that purpose, the interests of the bourgeois, the property owning and capital investing individual, were aligned with those of the citoyen, the citizen who, in the words of the French Revolution, demands liberty, equality and brotherhood.

As private-sector companies became ever more important and evermore influential, political conflicts increasingly revolved around their power. State institutions were gradually made more democratic. Eventually, they served the public interest rather than those of the noblemen. They also serve to regulate markets and corporations, when and where that was necessary to protect the public good. Social inclusion depends on social protection systems. Experience shows that market dynamics neither prevent mass poverty nor do they prevent environmental damage. Indeed, unregulated markets tend to result in both.

Over the past 175 years, two very different strains of liberalism emerged. Today, one variety of liberals emphasises free markets whereas the other emphasises equal opportunity. They are incompatible since private schools tend to offer the best opportunities, but cannot be afforded by all people. Free markets inherently mean that the better off are privileged. If not regulated prudently, they are not ruled by competition, but by oligarchs.

Tony Abbott, Australia's former right-wing prime minister, is an example of a market-first liberal, Barack Obama, the former US president, is of the civil-rights variety. They have very little in common. In international affairs, they did not consider one another allies. And indeed, they were mostly opponents. Both liberal traditions are firmly rooted in history and, in principle, legitimate. Abbott, however, denies climate change, and putting economic interests above a healthy planet for future generations is not legitimate.

To put it crudely, centre-left parties in advanced economies have been liberals in the “citoyen” sense for at least three decades, while the centre-right parties were liberals the “bourgeois” sense of the word. But they oppose one another, and have been doing so for a long time. That is why Germany's “grand coalition” of Christian Democrats and Social Democrats often feels more awkward than grand - even though both are actually moderates, not radical.

I have been reading The Economist for almost 30 years now. Most of the time, this magazine was a standard-bearer of market-driven globalisation. In recent years, it has slightly modified it stance. It has begun to worry about excessive inequality. It is now showing interest in modernising the welfare state, but it still has a tendency towards cutting public spending. Old habits die hard. Articles in The Economist are still likely to prefer a “small state” to a “big state” or accuse Democrats like Obama of “hating” business.

The essay in The Economist tries to build bridges between the two kinds of liberalism. Its arguments for appropriate taxation and adequate social protection makes sense. To really promote the cause of a coherent liberal agenda, however, The Economist needs to do two things:

- it has to spell out much clearer what the roles of the state and the market are, and

- stick to that line in its coverage, week by week.

The Economist essay does take notice of some of the most rabid market-fundamentalists siding with US President Donald Trump. They are called libertarians. Senator Rand Paul is one of them. In general, he wants to dismantle the state to the extent possible. People like him appreciate Trump's deregulation efforts. They are not really interested in the rule of the people, they want freedom for oligarchs. In a perverse way, their idea of fighting corruption is to abolish the laws that limit what rich people are allowed to buy with their money. Of course, many of them would want to buy personal favours from the government (no matter how small they manage to make it). People like Rand claim to hate government deficits and love lower taxes. As we have recently seen, he was happy to expand the deficit by lowering taxes. The idea is that the rising deficit will make it easier to further reduce the size of the state.                 

If it really wants to build bulwarks against right-wing populist agitation, The Economist needs to draw a clear line between liberalism and libertarianism. So far, it has not done that.





Democracy and the rule of law
Kategorien: english

Burundi bans plastic bags

12. September 2018 - 12:28
Boom of biodegradable materials expected in Burundi after plastic is banned

Burundi published a respective presidential decree in August. It sets a transitional period of 18 months to empty the stocks and change products.

The presidential decree came into force immediately. It has three objectives:

  • to control the use of plastic bags and other plastic packaging,
  • to promote the use of materials that do not harm the environment and
  • to prevent any form of pollution caused by plastic.

For certain plastic parts there is an exemption however. It applies to products used in health care and pharmaceutical services, to industrial packaging and components used in construction. Sewage pipes are regarded as essential to be made from plastic, and so is laboratory equipment as well as teaching materials.

The environmental organisation APBEE (Association pour le Bien Etre de l’Environnement) praised the decree as helpful for the protection of the environment. APBEE produces bags of biodegradable plastic and expects sales to increase. The company Paper Converter Burundi (PACOBU) is another producer of biodegradable products, made from paper. Jean Claude Manirambona, its general director, demands his enterprise to be supplied with electricity around the clock to be able to satisfy demand. To facilitate business, he also wants laxer rules for the import of certain materials and banks to give out foreign currencies.

Shopkeepers, however, seem to fear that there simply may not be enough bio-degradable packaging material. Immediately after the decree’s release, the prices for plastic bags went up all over the entire country. They became twice as expensive, and then even three times as expensive as before the ban was declared. Jean Marie Niyokindi, the minister of commerce, industry and tourism, harshly denounced the price hikes. He warned all merchants who dared to raise the prices and imposed sanctions including fines and the confiscation of stocks of plastic bags.

Mireille Kanyange is a journalist and works for Radio Isanganiro in Burundi.

Kategorien: english

Digital disruption

12. September 2018 - 11:46
The digital revolution may make low-wage industrialisation less likely

For many years, the underlying forces of industrial production and competitive integration of world markets have remained unchanged. Past decades were marked by a steady increase in the globalisation of economic activities. This trend was only temporarily dented by the global financial crisis after 2008. Currently, the trend of competitive global integration even seems to withstand growing protectionist pressures.  

Yet the relative importance of countries has changed. The share of developing countries and emerging markets in global production and exports has increased with China’s fast and uniquely successful rise making the biggest difference.

If business continues as usual, we could expect an on going trend towards an ever more interconnected global economy, with international value chains becoming ever more important. However, some things may change dramatically in the years to come. While the speed and magnitude of technological change remain unpredictable, patterns of international specialisation are likely to be redrawn.

Technological innovations – ranging from robotics to additive manufacturing, big data and the internet of things (OECD 2017) – will have significant impacts on the prospects of developing countries making efforts to industrialise. Some observers even suggest that the conventional manufacturing-driven pathway to prosperity may gradually be closed (Hallward-Driemeier/Nayyar 2018).

For many decades, we have observed the so-called “flying geese” dynamics. Industrialisation typically took off on the basis of low wages. The countries concerned became increasingly competitive, kept upgrading their capabilities and eventually opened up space for other newcomers. Other emerging markets would industrialise according to the same pattern, with wages increasing in line with enhanced skills. Today, some observers consider the impact of new digital technologies to be so dramatic that the next goose may no longer fly behind the previous birds. Industrialisation, specifically manufacturing, may not be a viable path to economic development anymore.

Compounding this challenge, the boundaries between manufacturing and services are becoming increasingly blurred. Ever more services are contained in manufactured goods (“embodied services”) or sold in packages with manufactured goods (“embedded services”).

So, does this spell the end of latecomer industrialisation as a viable development path? Dani Rodrik (2015) speaks of a trend towards “premature deindustrialisation”, claiming that developing countries are becoming service economies before reaping the full benefits of industrialisation. Digital technology might reinforce such at trend.

Things may also turn out quite differently, however. A sober assessment must acknowledge the following points:  

  • So far, we do not have conclusive evidence on the correlation of digitalisation-induced job losses and per-capita income levels. It is therefore unclear to what extent low-income countries will be affected.  
  • We have far more evidence concerning what is technologically feasible than what is economically viable. It may take a long time before digital technology really affects labour-intensive production in developing countries. Furthermore, the process will differ from sector to sector. Digital automation and robotics are rapidly changing the electronics and automotive industries, but are being introduced in the garments and footwear sector more slowly.
  • The alleged trend of industrial production being “backshored” (i.e. moved back to advanced economies after an earlier offshoring) is more hype than reality. The few systematic studies available (in particular De Backer et al. 2018) suggest that the scope and speed of offshoring to developing countries is being gradually reduced by robotics, but there is only anecdotal evidence of genuine backshoring.

Digitalisation does not happen overnight. Low-income countries at incipient stages of industrialisation are likely to enjoy some breathing space. Hence, in the medium term building up low-skill, labour-intensive industries should remain a viable option. Recent research differs widely on the magnitude and timing of technology-induced job losses, but it should take digitalisation two to three decades to fully permeate the world economy. Speed will depend on various factors including labour markets (wage and skill levels), regulatory environments and societal acceptance.

That said, the impact of new technologies can prove fast and wide ranging at the micro level of individual factories. For example, Vietnam’s leading manufacturer of ceramics and porcelain reduced the number of workers through automation from 400 to just 20 without any loss in quality. In the same country, a food producer has fully automated egg processing with machinery imported from the Netherlands. Such innovations are not only brought about by foreign investors. Domestic companies producing for their home markets are involved as well.

As I argued in a study prepared for the German Development Institute (Lütkenhorst, 2018) developing countries should prepare now for the impact of digitalisation. Generally speaking, they should adopt a forward-looking industrial policy and actively promote their potential competitive advantages (also see D+C/E+Z e-Paper 2018/01, page 16). This involves rallying all relevant stakeholders behind a shared vision. More specifically, it is important to build digital infrastructure and to foster digital skills. Low and middle-income countries need to build up digital platforms for communication, finance, consumption and production. Internet access must become universal and affordable.

Moreover, the requisite skills must be developed and up-graded. Vocational training and the general education system must rise to the challenge of fostering:

  • genuine ICT skills (programming, handling of complex databases et cetera),
  • complementary ICT skills required for working in digital environments (for instance  planning digital work processes),
  • basic skills (literacy and numeracy) as well as
  • a set of soft competencies.

Indeed, creativity, emotional intelligence and social competence are of crucial relevance. In a way, they represent the ultimate line of resistance to digital automation. They will grow in importance in increasingly complex manufacturing-service systems. Ways to promote such skills include:

  • gearing schools to the needs of vocational and technical training,
  • involving the private sector in educational partnerships aimed at designing innovative training programmes,
  • encouraging on-the-job training and internships, and
  • providing financial incentives for training efforts.

Especially small and medium-sized enterprises (SMEs) will need support. SMEs often do not have the resources to implement their own skills upgrading. At the same time, existing training programmes often do not meet their specific needs.

Positive good-practice examples are subsidised training consortia in South Korea or the Skillnets facility in Ireland. The latter is state-funded yet enterprise-led. Development cooperation programmes could play an important role in disseminating key lessons learned in such successful digital training schemes.

Low-income developing countries may benefit from future employment opportunities arising from innovative IT-enabled services. This is illustrated by various IT-service clusters in Kenya and Rwanda, for example. Moreover, the digitalisation of a range of services from online purchase transactions to online banking can drive productivity.

Inevitably, some of the above reflections remain speculative. We find ourselves on the cusp of radical change, and we are only beginning to understand the longer-term implications. Discussing digitalisation, Michael Spence, the economics Nobel laureate, remarked a couple of years ago:  "No one knows fully how all of this will play out”. That is still true.

Wilfried Lütkenhorst is a GDI associate fellow and previously was a managing director at the United Nations Industrial Development Organisation (UNIDO).


De Backer, K. et al., 2018: Industrial robotics and the global organisation of production, Paris: OECD.

Hallward-Driemeier, M., Nayyar, G., 2018: Trouble in the making? Washington, DC: World Bank.

Lütkenhorst, W., 2018: Creating wealth without labour? Bonn: German Development Institute.

OECD, 2017: The next production revolution: Implications for governments and business, Paris: OECD.

Rodrik, D., 2015: Premature deindustrialization, Cambridge, Mass.: Harvard University.

Kategorien: english

70 years of human rights policy

11. September 2018 - 15:52
How human rights gained traction in the past 25 years

The declaration contains a global consensus on what human dignity consists of. It encompasses civil and political rights as well as economic, social and cultural rights. It emphasises that, in order to guarantee the dignity of every human being, all of these rights must be respected, protected and guaranteed.   

The nascent Cold War quickly led to an instrumentalisation of human rights, however. The west concentrated on civil and political human rights, criticising their corresponding abuses in the east, whereas the east called attention to the west’s failure to fully implement economic, social and cultural human rights.

The conflict prevented the development of a single human rights agreement. Instead, human rights were codified into binding international law in two separate two agreements: a treaty on economic, social and cultural human rights and a treaty on civil and political rights. Both were adopted by the UN General Assembly in 1966 and have been in force since 1976. Due to the Cold War, the impact was small however.

Things changed after the fall of the Berlin Wall. The competition between the USA and the Soviet Union had ended and the UN became a forum in which international consensus on various topics was formulated. All dimensions of human rights gained in importance.enerally speaking, all constitutions that have been adopted since the end of the Cold War contain a comprehensive catalogue of basic rights. One example is the South African constitution from 1994, which includes economic, social and cultural human rights in its list of basic rights. Moreover, the two central human rights agreements are on track to achieve nearly universal ratification. For example, 110 countries now have a national institute for human rights that cooperates within the Global Alliance for National Human Rights Institutions. The institutes provide monitoring for their own countries, as well as observe international trends. That is what the 1993 Vienna Conference on Human Rights called for. Of course, the national institutes cooperate with human rights defenders in civil society. The advantages of this dense network include the generation of more reliable data and faster exchange of information. 

In addition, there have been significant socio-political changes in many countries towards a broader acceptance of human rights in civil society. This trend can be seen, for instance, in the fact that discrimination and violence against women are being increasingly criticised worldwide. Furthermore, there are now greater protections for children and minorities and more recognition of the importance of human rights defenders. Each of these expansions is of course always also the result of social conflicts and processes of change. 

However, it is also clear that the pendulum is now swinging the other way. The international citizens’ rights organisation CIVICUS (2017) reports that in over 70 countries in recent years, new laws have been passed to restrict the opportunities and scope of political action of civil society organisations. CIVICUS is a particularly reliable observer of abidance by democratic rights.

The Bertelsmann Transformation Index has identified the same trend. The index appears every two years. The edition of 2016 bemoaned the dwindling scope of action for civil society actors. The  edition of 2018 observes that, in order to shore up their power, governments of democracies that were deficient to begin with are now increasingly curtailing or even suppressing the rule of law.  

Michael Windfuhr is the deputy director of the German Institute for Human Rights.


Bertelsmann Stiftung, ed.: Transformation Index BTI 2018: Governance in international comparison, Gütersloh, 2018

CIVICUS, ed., 2017: People power under attack: findings from the CIVICUS monitor, Johannesburg

Deutsches Institut für Menschenrechte

Kategorien: english

A worrisome trend reversal

11. September 2018 - 14:13
In order to resist the trend towards authoritarian populism, it is important to un-derstand what is driving it

After the end of the Cold War, the World Conference on Human Rights was held in Vienna in 1993. It delivered  a new and powerful acknowledgement of the fact that all human rights are interrelated, indivisible and universally applicable (see box, p. 20). The canon of human rights has since become more specific and was even expanded to include new topics (such as racism, torture, migrant workers and forced disappearance) and groups (such as women, children and the disabled). In many instances, relevant principles have trickled down into national legislation, new constitutions and jurisprudence.

The 1990s were a decade of change. Democracy seemed to be taking hold worldwide. The UN organised a series of world conferences, which fed the hope that the key challenges of the future would be solved in multilateral settings. Examples include the Earth Summit in Rio in 1992, the World Conference on Women in Beijing in 1995, the World Summit for Social Development in Copenhagen in 1995 and the World Food Summit in Rome in 1996.

These conferences did not only establish guidelines for national and international policymaking, they also drove the growth of a global civil society. That trend too shaped many countries. The number of civil-society organisations rose quickly.  Simultaneously, important framework agreements on economic globalisation were created. The World Trade Organisation (WTO) and the North American Free Trade Agreement (NAFTA) both emerged in 1994 and the European Single Market came into being in 1992. 

Today, the basic mood is very different. The number of countries in which authoritarian tendencies can be observed is increasing. New laws are restricting people’s freedoms in many places. A new, authoritarian nationalism is casting doubt on multilateral cooperation.   

Of course, the question of whether we are experiencing a fundamental trend reversal is up for debate. Development progress of the type that Hans Rosling and Steven Pinker impressively document in their books should not be overlooked (see e-Paper 2018/9, p. 39 and 2018/7, p. 16). It was good that both the Paris Climate Agreement and the Sustainable Development Goals (SDGs) were adopted in 2015. Currently, 56.5 % of all people live in countries that are categorised as democratic. Elections are widely recognised as the basis for legitimate governance, although voting is now being manipulated in many countries. Political scientists like to point out that the talk of democracy being in crisis is as old as democracy itself.

Nevertheless, the observation is fully justified that a trend reversal is taking place. It makes sense to use this term in order to assess current events. Resistance to the present form of global multilateralism is growing, acceptance of democratic institutions is declining, and civil-society organisations’ scope for action is becoming ever more limited. President Donald Trump is living proof of the fact that even in the U.S. respect for an independent judiciary and a free press can no longer be taken for granted.

But democracy and human rights remain essential prerequisites for rising to global challenges, as the SDG agenda has clearly spelled out. If we want to resist the authoritarian-populist trend, we have to understand why the optimism of the 1990s has turned to pessimism in so many cases.

Six problematic developments

Six, to some-extent interrelated trends have changed the atmosphere:

1. Economic globalisation was driven by radical market-orthodoxy and has progressed fast. It has substantially weakened state power. After privatisations, deregulations and the cutting taxes and tariffs, even the governments of rich countries struggle to fund infrastructure and social-protection systems. At the same time, wealth is increasingly concentrated in the hands of the very few, whose financial power allows them to wield enormous political influence.  At the same time, democratically elected governments are able to achieve less and less. Many people no longer trust their government to take appropriate action in order to address the current serious challenges. The financial crisis, which began ten years ago with the bankruptcy of the Wall Street investment bank Lehman Brothers, made these issues quite obvious to the general public.

2. The decline in statehood was accompanied by a minimalist understanding of democracy, according to which elections in particular form the core of the democratic model. This stance disregards the fact that free and fair general elections are only effective ways to democratically steer societies if citizens’ rights are preserved, the separation of powers is upheld and social justice is pursued. We are now seeing that minimalist democracies – for instance in Africa or Eastern Europe – tend to be weak democracies.  In some cases, elections can actually make conflicts worse, for instance if party-political divides reflect ethnic ones.

3. In contrast to the wave of opening up in the 1990s, many governments are now becoming more repressive. They ward off demands for accountability, transparency and an end to corruption. Particularly in places, where economic power is highly concentrated among the few, governments find such demands unpleasant. In recent years  new laws have been passed to restrict the opportunities and scope of political action of civil society organisations in around 70 countries, according to CIVICUS, the international citizens’ rights organisation. The trend towards limiting civic space and increasing control is evident even in supposedly stable democracies, as new laws to control civil society show in countries like India or Israel.

4. Doubt in the capabilities of the democratic nation state is growing in many contexts. It is not always clear if this uncertainty is based on actual problems, or rather on the fear of potential problems. Links between the fear of downward mobility and growing populism is empirically evident. In rich industrialised countries, average income have stagnated and purchasing power has often dropped. In the eyes of Oliver Nachtwey, a sociologist, even Germany, which has a comparatively strong economy, has become a ”society of downward mobility” (see D+C/E+Z e-Paper 2017/02, page 26 or print version 2017/03-04, page 42). However, anti-democratic rhetoric does not necessarily resonate with the poor or the especially disadvantaged. More typically, fears of personal decline are manipulated to agitate against marginalised groups. Any government action that benefits people other than oneself is opposed, and demands for the preferential treatment of one’s own group are becoming louder. Such sentiments can be, and often are, ethnically or religiously charged.

5. It is clear that neither national nor multilateral policies are responding appropriately to environmental dangers so far. If the current trends continue, the Earth will warm by more than three degrees – even though the Paris agreement sets a limit of two degrees at most and, if possible, as little as 1.5 degrees. To achieve that, a global economic transformation would be necessary, but there is no sign of global consensus on the matter. On the contrary, populists are receiving support in part because they deny the problem and reject the obvious implications. Instead of accepting that life styles must change, they promise unlimited growth. Often they are financially supported by special interests that would be hurt by ecological transformation – as the example of Trump, whose campaign benefitted inter alia from oil and coal money, shows.

6. After the attacks on 11 September 2001, the west, in particular the USA, contributed to calling into questions its own fundamental values. In reaction to organised terrorism, war was waged in Iraq, and lies served to legitimise the invasion. The human rights violations committed by western actors were particularly damaging. Torture in military prisons sent a disastrous signal to other governments that are known to abuse human rights. It was naïve, moreover, to hope that primarily elections would be sufficient for long-term regime change. There was a lack of detailed and substantive discussions on how to build stable institutions in countries like Afghanistan, Iraq and Libya. As argued above, minimalist democratisation does not lead to real democracy.

The change in attitudes described here happened remarkably fast. We are at risk of entering an era of nationalism, majoritarian tyranny, repression of anyone who is ”different”, as well as of  old and new forms of discrimination. If that happens, international development successes will be undone, and global problems will only intensify. The fight for democracy and human rights is as essential as ever, forming the core of any effort to achieve the transformation we need. Civil-society actors have to wage this fight at the national and international level. It goes without saying that the government agencies of democratic countries have to do their part too.

However, it is also clear that democratic governments must offer solutions to pressing problems ranging from social welfare to environmental protection. Experience has shown that free markets and minimalist democracy alone are not enough. 

Michael Windfuhr is the deputy director of the German Institute for Human Rights.

Kategorien: english

In the USA, even conservative media pundits consider Trump dangerous

10. September 2018 - 11:49
Monday, September 10, 2018 - 11:45Hans DembowskiThe USA is in constitutional crisisThe USA will hold elections in two months. If President Donald Trump's Republican Party keeps control of both houses of Congress, the country's constitutional crisis will deepen. If you don't trust my word on this matter, check out what leading North American media pundits are saying.

Some of the columnists and commentators I am referring to have, of course, always endorsed the Democratic Party, but others are conservative authors who consistently criticised Trump's predecessor Barack Obama.

The situation is certainly serious. Paul Krugman, the economics Nobel laureate who also works as a New York Times columnist, states very clearly that nothing less than the future democracy is at stake in the midterm elections. Krugman summarises various actions taken by Republicans to perpetuate their grip on power regardless of what the citizens want. One trick is to making sure that people who are more likely to vote for Democrats and Republicans find it hard to register as voters. Another is to design constituencies in a way that there are a few with huge Democratic majorities and many others with smaller but equally safe Republican majorities. The result is many Republican legislators but only few Democratic ones even when the vote is evenly split.

Another way to stifle the opposition long term is to make sure the courts are biased in one’s favour. Indeed, Republicans are reshaping the federal judiciary by appointing judges who share their ideology. The most prominent example at the moment is the attempt to rush through the appointment of Brett Kavanaugh to the Supreme Court. Jill Filipovich spelled out the many things that fly in the face of the standard norms of judicial appointments in a comment in The Guardian.

The process has been hasty and opaque. Obviously, Republican senators want to rush it through before potentially losing their slim majority on which their ability to confirm judges depends on. They have already abolished the old rule according to which Supreme Court justices needed a supermajority of 60 Senate votes, rather than merely a majority of 51.

Kavanaugh, by the way, was one of the prosecutors who, led by Kenneth Starr, investigated President Bill Clinton in the 1990s. They considered all sorts of crimes, including murder. All they could find was extramarital sex between Clinton and a consenting adult. Clinton’s behavior was morally appalling, but his only crime was to lie about it.  

Kavanaugh has since declared that a president should be left in peace to do his job. Trump, of course, would like nothing better than prosecutors to leave him in peace. In view of his many scandals, he would certainly like the Supreme Court to think that way too. As Filipovich makes clear: “This president is now in a position where he is selecting one of the judges who may eventually judge him – a clear conflict of interest if there ever was one.” This is definitely not how separation of powers looks like.

Bill Clinton's misbehavior never put national security at risk. In the case of Trump, however, there is reason to believe that his campaign colluded with the Russian government. That is what the current investigations are about. The investigators obviously must consider related issues such as campaign-finance, because evidence might lead to proof of collusion.

Trump's former campaign manager has recently been found guilty of tax fraud and his former personal lawyer has confessed to campaign-finance crimes, declaring that he paid hush money to a porn star on behalf of Trump, so their affair would not become known during the election campaign. According to US law, any spending related to an election campaign must be declared. The hush money was kept secret.

In the eyes of Max Boot, a Washington Post columnist, Trump has therefore lost his legitimacy.

Boot's point is that it is now evident that Trump broke the law to win the elections. Boot, by the way, is not a left-leaning writer. On the contrary, he always supported Republicans before Trump became the presidential candidate. His next book will elaborate why he no longer is a Republican but now considers himself an independent.

Jennifer Rubin is another conservative Trump critic. She is an incredibly prolific writer who blogs for the Washington Post and used to lambast the Obama administration on an almost daily basis. Yesterday, by contrast, she posted a comment in which she fully endorsed the former president’s campaign to mobilise voters for Democrats in in the midterms: "That’s a message independents and persuadable Republicans need to hear over and over again. (…) No president has attacked our institutions in the way President Trump has; no Congress has abdicated its role as a co-equal branch to the extent this Congress has. Because Republicans refuse to shoulder their constitutional obligations, voters concerned about fortifying our democracy must deprive the GOP of majorities in one or both houses. It’s the only way to get oversight, to hold Trump accountable and to begin the process of restoring democratic norms."

These days, Rubin keeps reiterating that she is disappointed in Republicans and that she believes they deserve to lose elections because they no longer stand for democratic and republican value. Sometimes she proposes starting a new conservative party for the USA, and sometimes she invites people to vote for Democrats. She leaves no doubt whatsoever that she sees the USA in a deep constitutional crisis.

According to opinion polls, the Democrats are likely to regain the House of Representatives and may even win the Senate. To get a majority in the House, however, they will need at least 55% of the vote, according to experts. The reason is that the way constituencies are cut in the United States benefits Republicans. They've been working on rigging the system for quite some time at the level of individual states. There power grabs will only intensify if they keep their majorities in both Houses of Congress.

If Democrats gain a majority in one chamber, the dynamics will change considerably. So far, the Republican-led Congress has shied away from its duties of oversight. If Democrats get the say in either the House or the Senate, they will start checking all the issues that Republicans show no interest in, including most prominently how Trump's businesses are benefiting from his presidency, and what foreign money has been flowing into their coffers. Since the USA is by far the most powerful and influential country, what happens in terms of governance there sets an important global example.

P.S.: The Washington Post and the New York Times's websites have pay walls, and perhaps you have already exceeded your monthly limit of pages. I have therefore used links to other media outlets that also publish contributions by the syndicated columnists referred to here.







Civil society and local governmentDemocracy and the rule of law
Kategorien: english

The west is not adhering to its values

10. September 2018 - 11:28
Europe should take a leading role in dealing with refugees worldwide

In the USA, government officials separated hundreds of migrant children from Latin America from their parents when they entered US territory. They failed to thoroughly document the proceedings and are now unable to reunite all families, although a court judgement obliges them to do so. Some parents have been deported and apparently cannot be reached. On both sides of the Atlantic, administrative harassment, precarious housing and questionable deportations are all too common.

There is a huge gap between ambition and reality. On the international stage, the west upholds its values and – rightfully – insists on human rights being universal. It is part of the west’s self-perception, moreover,  to act not only legally, but also morally. Both implies adherence to human rights, including the Geneva Convention on Refugees, and humanitarian principles. Simply spoken, it means helping people in need. US President Donald Trump’s “zero-tolerance” policy is pretty much the opposite.

His attitude is prevalent in parts of Europe too. It is supposed to protect citizens. But although many people fear that refugees are dangerous, that is not so from an objective point of view. One million people per year that come to the EU, which has more than 500 million inhabitants, do not threaten Europe’s foundations. They will not ruin us financially, nor will they overburden our infrastructures or social systems. Their languages, traditions and religious faiths will not displace ours. Migrants do not steal jobs – on the contrary, additional workers would be quite helpful in ageing societies. Finally, statistical data from North America and Europe prove that, on average, migrants commit fewer crimes than a nation’s citizens. Xenophobic fears are irrational – but powerful. Some politicians take advantage of them. It is not the refugees who divide Europe, but nationalist and populist leaders, some of whom hold governmental positions.

Compared with other world regions, Europe’s problems are small. Millions of Syrians have fled to Jordan, Lebanon and Turkey, where they are provided only with the absolute essentials. More than 700,000 Rohingya are stranded under dreadful conditions in Bangladesh. In Latin America, 2,3 million Venezuelans have fled to neighbouring countries. According to the UN, there are 250 million refugees worldwide.

All of them concern all of us. Indeed, the international community recently agreed a global compact for migration. It is set to be adopted in December. While it is not legally binding, it does spell out important guidelines to protect migrants. All UN members are part of it – except the USA. This world power is shying away from its responsibility, just as it did when pulling out of the Paris climate accord. In response, the rest of the world must take the compact seriously. The EU could – and should – assume a leading role instead of further disgracing itself.

Katja Dombrowski is a member of D+C/E+Z’s editorial team.

Kategorien: english

Low standard, wrong content

7. September 2018 - 10:39
Why the MENA region lacks domestically trained ICT experts

The MENA region has the highest graduate unemployment rate in the world. In 2016, around 42% of those leaving higher education in Egypt, for instance, failed to find employment. There is a yawning gap between supply and demand in the labour market. School-leavers choose learning paths in further and higher education on the basis of the prestige associated with them and not the job prospects they offer.

As a result, universities year after year produce a host of humanities and social science scholars who do not have the slightest chance of getting a job. The number of students who opt for scientific and engineering disciplines is significantly smaller.  Curricula, however, are generally not geared to practical purposes. Whether they have studied social or natural sciences – graduates normally have not developed skills that an up-to-date knowledge economy needs. They are neither computer savvy nor have they developed their capacity to solve problems creatively. Instead, they have been taught to give the correct answers to pre-defined questions. Independent thinking and a willingness to get involved in messy real-world problems would help graduates to prove their worth in the private sector. Such attitudes, however, are largely discouraged in the universities’ ivory towers.

Skilled industrial workers are in particularly short supply and vocational training capacities are limited. Most MENA countries in recent years have redoubled their efforts to upscale vocational training but many have had little success, as evidenced by a number of country-wide evaluations.

Jordan failed to reach the targets it set, for example, because the training offered lacked practical relevance and the private sector was not sufficiently involved. Companies themselves are hardly proactive. The number of firms offering formal training in the MENA region is lower than anywhere else in the world.

The situation is made worse by the fact that the quality of teaching at all levels is generally low. According to comparative international studies, nearly all MENA countries achieve below‑average results. Education and vocational training are still geared to public service. This is partly because of a history of state-controlled economic development and partly because for a long time the state employed a large proportion of the workforce. The ultimate outcome: lower productivity and efficiency in both the private sector and public administration. 

To escape this trap, most countries in the MENA region have adopted plans to promoted digital compentencies. There starting points are quite different however. The oil-rich Gulf monarchies have been making headway in terms of building broad-band infrastructure, and the vast majority of the people there use the internet. The aspiration is to become global hubs for high technology. They are investing massively in updating vocational training to achieve that goal. So far, however, they must still rely on experts from foreign countries. Countries in North Africa and the Levante, by contrast, do not have the resources their richer neighbours have. Moreover, political instability and problematic governance make it hard them to adapt to digital change.

Nassir Djafari is an economist and freelance writer.

Kategorien: english

Bundled measures needed

7. September 2018 - 10:16
The MENA region needs economic growth and targeted interventions to get to grips with youth unemployment

The countries of the Middle East and North Africa are wasting their most important resource:  youth. In a recent survey of 16 to 30-year-olds in eight countries across the region, 43% of respondents said they did not have job and were neither attending school nor university. Many had never had a job. Only one in five was gainfully employed (Gertel and Hexel, 2017).

Among young women, the share of the non-employed is particularly high. Nowhere in the world is female participation in the labour force as low as in the Middle East and North Africa.

In the past, the state apparatus used to serve as an overflow basin for the annual flood of young people newly entering the labour market. In view of reduced tax revenues and nascent structural reforms, the public sector is increasingly unable to play that role.  

Educational curricula mostly do not meet the requirements of the economy, especially those of private-sector industries. So it is unsurprising that recruiting companies pay more attention to work experience than to formal qualifications.

To give young people any chance of a job at all, governmental labour-market programmes have been arranging internships in companies. This has been done in Tunisia, for instance, where the internships generally last twelve months. Apart from going to work, the participants attend training courses. State-funded wage supplements top up their income. The government's aim is to offer a mixture of financial incentives and sanctions in order to  motivate employers to provide long-term jobs for young people. The programme targets young women and men are equally targeted.

Similar programmes are in operation in other countries of the Middle East and North Africa. Unfortunately, they do not make much difference to youth unemployment. Employers readily accept the state-subsidised interns, but they do not necessarily create more jobs. Who gets an internship is another critical issue. Young unemployed academics and graduates of higher education institutions enjoy priority, while the majority of young people with lower educational qualifications are ignored.

But regardless of conceptual shortcomings, the main problem is that these measures’ impact is limited from the outset. The reason is that the companies concerned do not grow fast enough to be able to offer interns a prospect of long-term employment.

Start-up assistance and support for small businesses

Initiatives that help jobless young people become self-employed or start up micro‑businesses are arguably more effective than government-sponsored internships. A number of governments in the MENA region has adopted programmes to promote this cause. Participants receive free training and advice to prepare them for business and are eligible for grants that facilitate transitional funding. There are also a number of international support programmes offering micro, small and medium enterprises (MSMEs) access to loans. Such initiatives take account of the fact that around 80% of people in gainful employment work for MSMEs or their own small business.  

Lack of finance is a major obstacle to growth for many small businesses.  Shortage of qualified labour and managerial skills is another. This bottleneck affects start-ups that receive special state support in many MENA countries. Sales, business development and business leadership skills are particularly weak, so MSME support programmes that combine better access to credit with training opportunities generally promise to deliver the best results.

One reason small and mid-sized enterprises are not tapping their full potential ist hat they hardly use the internet. In Egypt, for example, a mere seven percent o MSMEs are online. Companies with stronger digital networks could increase exports and expand employment. Research in Turkey has revealed that the annual growth rates of MSMEs which use the exceed those of their more conservative peers by a factor of seven. Programmes that aim to support young business should therefore emphasise digital skills and providing for funding in information and coummunication technology (ICT).

However, educational reform, labour market programmes and MSME support alone do not significantly help to reduce youth unemployment unless progress is made on eliminating structural development constraints. Because of the low level of growth in most MENA countries, new jobs are not created fast enough to meet the needs of a growing population.

This is due not only to the political instability of the countries concerned. Another serious challenge is international competitiveness.  The productivity of businesses in Tunisia and Egypt, for instance, virtually did not increase over a 35-year assessment period. By contrast, firms in India, Mexico and Turkey doubled or trebled their productivity in the same time-frame. One reason, of course, that the digital economy is less developed than it is in other emerging markets. People with ICT skills are rare, and the digital infrastructure still has huge gaps.

Low economic diversification is another challenge. Except in the oil-rich Gulf monarchies, an average of one in three economically active people work in agriculture, but this sector accounts for only 12% of gross domestic product (GDP) today.

The manufacturing sector's contribution to GDP in the MENA countries – at an average of only around 10% - is low and has been flat-lining or even declining for years. This is due partly to the failure of the state-controlled industrialisation model launched in the 1960s and partly to the free trade agreement with the European Union, which has resulted in the loss of many jobs, especially in labour-intensive sectors (see my article in E+Z/D+C e-Paper 2018/05, page 11).

The majority of people in gainful employment work in services today – in jobs that require comparatively simple skills. Most workers have only low value-adding jobs, often in the informal sector.


Without broad-based economic growth, youth unemployment cannot be sustainably reduced. So, support for employment-intensive sectors such as MSME is vitally important. But it is not enough just to create more jobs; they also need to be better jobs. Otherwise, it will be impossible for a self-sustaining economic process to gain momentum. It is striking that the region is largely unprepared to make use of digital technologies. This world region is at risk of falling even further behind in terms of international competitiveness, and that would exacerbate unemployment.

It is thus imperative that the education system should deliver more practical training geared to the needs of the economy, especially the private sector. Above all, an intermediate level of technical qualifications needs to be created. This will also require a change in thinking on the part of young people, so that non-academic training programmes lose their stigma. To act responsibly, public institutions and private-sector companies must investment in the digital fluency and ICT skills of employees as well as job seekers.

The integration of women in the labour market, which has already been initiated, is not just a matter of fairness. It is essential if the MENA countries are to realise their full economic potential.

Educational reform and labour market programmes can have only a limited impact, however, unless they are accompanied by structural reforms aimed at removing obstacles to private-sector development and competition and paving the way for economic diversification.

Nassir Djafari is an economist and freelance writer.


Jörg Gertel and Ralf Hexel, 2017: Zwischen Ungewissheit und Zuversicht – Jugend im Nahen Osten und in Nordafrika, Dietz Verlag.

Kategorien: english

The exaggerated threat of robots

6. September 2018 - 16:26
International competition is a bigger threat to Africa's industrialisation than the automation of labour

All industrialised countries used low-cost labour to build industries and manufacture mass-produced goods. Today, labour is relatively inexpensive in Africa, and a similar industrialisation process might take off accordingly. Some worry that industrial robots will block this development path. The reason is that robots are most useful when doing routine tasks – precisely the kind of work that is typical of labour-intensive mass production.

At the moment, however, robots are much too expensive to replace thousands upon thousands of workers in labour-intensive industries, most of which are in the very early stages of the industrialisation process. Robots are currently best used in technologically more demanding fields like the automobile or electronics industry.

Difficult digital environment

Even a rapid drop in robot prices would not lead to the replacement of workers by robots in the short term in Africa where countries lag far behind in terms of fast internet and other information and communications technologies. They also lack well-trained IT experts. Other problems include an unreliable power supply, high energy costs and high financing costs for new technologies. For these reasons, it would be difficult and expensive to integrate robots and other digital technologies into African production lines.

Correspondingly, there is still ample opportunity for labour-intensive industrialisation. African countries probably will not leapfrog multiple stages of technological development. It is far more likely that their business environment will steadily improve as it did elsewhere. Basic infrastructure – including reliable power supply, roads, ports, finance and also the building of human resources and funding – must be established first. On that foundation, companies can build up job-intensive industries.  

Once the digital environment becomes good enough, it will make sense to use robots that will eliminate some jobs. But at the same time, the countries in question will be in a position to use new technologies to manufacture new products, which will in turn create new jobs.

International competition

There is a different threat, however. It concerns international competition. Industrial robots are allowing countries like Germany, the US, Japan and China to produce even more competitively than they did before. In these countries, robots are cheaper than well-paid industrial workers. Robot-using companies in these countries may out-compete African companies, the main competitive advantage of which is low wages.   

This threat is not really new, however. Technologically advanced and innovative producers have always pushed other companies out of the market and made it difficult for companies from less innovative countries to catch up. How governments respond to this danger is what really matters.

China put in place policies to promote technologically demanding industries like automobile and electronics manufacturing. For example, foreign car companies were required to form joint ventures with Chinese firms in order to produce in the People’s Republic. That strategy gave Chinese partners access to foreign corporations’ technologies.

According to the UN Conference on Trade and Development (UNCTAD), the automation of production through robots and the corresponding cost savings could lead, in the medium-term, to companies shifting production away from developing countries and emerging markets back to industrialised countries. That would harm the growth of African industries that are involved in global value chains.

At the moment, however, the production capacities set up by western companies abroad exceed those that are brought back home by a factor of three. A discussion paper by the German Development Institute reports that the Chinese government expects 85 million jobs to migrate away from the country’s low-wage industries – of which a share might go to Africa.

It remains to be seen whether the trend will last or may eventually reverse itself. Relocating jobs back to a company’s home country only makes sense when automated production at home becomes cheaper than low-wage production in Africa.

Calestous Juma, the former professor at the Harvard Kennedy School of Harvard University who passed away in 2017, emphasised: "Jobs are not created or lost because of a single technology, but because of the business models designed to leverage the power of the technology". As was the case with previous automation processes, African states are finding it difficult to reap the benefits of this new technology because of their limited ability to compete and their digital shortcomings.

Africa needs trade and industrial policies that give it leeway to develop its industries. Digital infrastructure, well-trained employees and affordable financing opportunities must become features of the business environment. Otherwise, it is impossible to make profitable use of robots in production processes. If, on the other hand, African capacities for innovation improve, that would also help to ameliorate the negative impacts of automation. Technology-driven modernisation should thus prove benign both in terms of innovative products and job creation.

Nico Beckert is a freelance journalist and is involved in awareness raising for commodities and commodity related-policies at the educational institution Haus Wasserburg in Vallendar.


UN Conference on Trade and Development (UNCTAD), 2017: Industrial robots and inclusive growth.

Deutsches Institut für Entwicklungspolitik, 2017: Arbeitsplatzoffensive für Afrika. (Only in German.)

Calestous Juma: Jobs and robots. Bracing for technological disruptions to come. In: The Conversation, 12.11.2017.


Kategorien: english

Forum on China-Africa Cooperation

5. September 2018 - 16:48
Wednesday, September 5, 2018 - 16:30Hans DembowskiChina’s aid lending is neither entirely good nor totally badEarlier this week, China’s President Xi Jinping pledged $60 billion in support of African development in the next three years. The Forum on China-Africa Cooperation in Beijing has thus rekindled the debate on the merits of aid efforts made by the People’s Republic. I’d like to weigh in with a few thoughts.

The Chinese government wants to extend its international influence. One way of doing so is to help other nations build infrastructure. In view of the dramatic need to build such infrastructure, Chinese funding is welcome in principle. Most of it comes in the form of loans, some of which include concessional elements such as low interest rates. This sense it does not differ substantially from the official development assistance (ODA) provided by established donor nations.

While it makes sense to finance infrastructure with loans, debt can cause huge problems. That happens when the debt burden becomes excessive. Western powers and many developing countries learn this lesson the hard way in the 1980s and 1990s. Poor countries became over indebted, couldn't service their loans, were granted fresh credit in return for austere macroeconomic policies, still couldn't service their debts, so eventually after a painful downward spiral and deepening poverty debt relief became necessary. Our recent focus on the lessons of structural adjustment dealt with this depressing chapter of recent global history.

At the time, the People's Republic had begun to set up special economic zones, was inserting itself in the global economy and beginning to rise to world power. It was neither involved in the debt problems of the 1980s and 1990s, nor was it affected much. Accordingly, China has little experience in debt issues. Problems are likely to arise again, and Chinese lending is likely to contribute to those problems. To handle debt crises, multilateral cooperation will be essential. Whether such global cooperation comes about, will not depend on China alone. In contrast to the Trump administration in the USA, one cannot blame the regime in Beijing of hostility towards coordinating policies in multilateral settings. Western governments would certainly be well advised to keep nudging Beijing towards multilateralism.

The Chinese government is fond of claiming that it does not tie its lending to political conditions. It pretends that this approach is more generous in the one of western governments who tend to consider governance issues important. Such rhetoric is misleading. It neglects experiences made. The point is that development credits are more likely to be used well and then repaid in places where governments act responsibly and enjoy legitimacy in the eyes of their people.

It is true of course that democracy does not per se guarantee stability, but authoritarian rule is inherently unstable and illegitimate. This is especially so in Africa where one party regimes and military dictatorships failed to bring about development.

In East Asia and South East Asia the picture is not quite as obvious because strongmen regimes did start industrialisation and initiated modernisation in several countries. Indeed, that was the case in China under Deng Xiaoping in the 1980s and 1990s. To a large extent, however, the countries concerned have become democracies. China is an obvious exception. That President Xi’s regime is becoming more repressive, indicates that it does not trust its people. That in turn shows that frustration is growing, disparities are widening and the regime’s legitimacy is weakening.

Regardless of China’s domestic politics, I don’t think it is useful to consider China’s international engagement binary terms. It is neither totally good nor perfectly bad. Whether African countries make meaningful use of the opportunities that Chinese aid offers depends on their governments to a large extent. African leaders must pay attention to what kind of deal they strike. They must assess carefully what kind of projects will drive development and what kind of debt burdens their countries can bear.

It has been argued that China is systematically ensnaring African countries in debt traps and thus threatening western security. I think that argument has some merit, but must not be exaggerated. Dealing with an over-indebted client is not easy. Defaults mean that a lot of money is lost, and it may well prove impossible to claim anything valuable in return. China does not have the military muscle to enforce its will all over Africa. If it tried to do so, the experience would probably be very painful. The most likely scenario is that Chinese troops be dragged into long-lasting and devastating civil wars.

I think is unlikely that China will be able to use debts to set up military bases all over Africa. Lacking the soft power of western governments, those outpost wourld face even more animosity that western military bases do - and typcially, the Chinese bases will be in countries were NATO military is present too. I worry much more about what financial crises may lead to. In my eyes, China would probably want to expand its military reach to Africa, but will be far more interested in handling econmic turmoil in a way that does not execerbate crises.  

Sustainable business and sustainable environmentDemocracy and the rule of lawInternational relations and cooperationPhysical and social infrastructuresSub-Sahara AfricaMENA Middle East North AfricaEast Asia
Kategorien: english

Inefficient agency

31. August 2018 - 9:36
Maize farmers in Zambia are stuck in poverty because a government agency is not doing its job properly

Most of the households in rural areas of Zambia, where two thirds of the people live, depend on maize farming as the main source of income. In theory, the FRA’s should stabilise the market by buying their produce. But it pays smallholder famers only very low prices. Their work therefore does not allow them to escape poverty.

Maize is Zambians’ staple food. On urban markets, this cereal fetches good prices – but rural people do not have access to those markets.

For the 2018 marketing season, FRA has pegged the price for a 50-kilogramme bag at K 70 (about $ 9.5). In a statement issued in July, the Zambia National Farmers’ Union (ZNFU) declared it to be “absurd and low”. The ZNFU maintains that “Zambia’s biggest challenge lies in trying to address poverty in rural areas where most of the people depend on farming.” The union argues that success would slow down rural-urban migration.

Last year, ZNFU warned that as a consequence of the low maize price, the production of the country’s staple food was likely to drop in 2018. And indeed, maize production has gone down by one third to a mere 2.3 million metric tons this year. By the end of July, the FRA had not even started buying maize from farmers. ZNFU officials were still negotiating with government to get a better price.

In view of the delays, middlemen took advantage of the situation. They bought maize from farmers who were desperate to sell because they needed cash. The “briefcase businessmen” paid even lower prices than the FRA was offering. They exploited the dire situation of the smallholder farmers who do not have access to the most important markets.

Charles Bulaya, a farmer in Zambia’s Copperbelt, says he was forced to sell his maize cheaply  because he needed money urgently. He had to pay his children’s school fees. Bulaya explains: “The problem with selling maize to FRA is that it takes too long to for payments to be done.”

A study conducted in 2015 by scholars from American universities showed that many poor households do not take advantage of FRA services because of its inefficiency. “Poorer households that produce enough to sell to the FRA may be discouraged from doing so due to the frequently long and uncertain delays between when farmers deliver their maize to the FRA and when they receive payment,” the authors concluded. The study was published by IZA, the Bonn-based Institute for the Study of Labour.

More recently, the office of Zambia’s Auditor General reported that considerable funding allocated to the FRA for maize purchases in the national budget were not fully utilised. The data showed that the equivalent of $ 100 million was earmarked for maize purchases in 2016, but that only half of it was used for that purpose. 

Humphrey Nkonde is a journalist and media researcher based in Ndola, Zambia.


Fung, W., Liverpool-Tasie, S., Mason, N.,  and Oyelere, R., 2015: Can crop purchase programs reduce poverty and improve welfare in rural communities? Evidence from the Food Reserve Agency in Zambia.


Kategorien: english

Do what you preach

31. August 2018 - 9:26
Mahbubani’s criticism of the west deserves attention; his praise for authoritarian Asian leaders does not

Mahbubani, who teaches public policy at Singapore’s national university, spells out “the west’s” interest in a rules-bound global order in a convincing manner. He emphasises, for example, that the EU has brought about lasting peace on a continent that used to be rocked by wars. At the same time, he warns western governments, whose global hegemony is waning fast, that they are about to waste a great opportunity.

Explicitly referring to Steven Pinker and his many statistics on child mortality, hunger, war and accidents (see D+C/E+Z e-Paper 2018/07, p. 16), the former diplomat writes that people in emerging markets and developing countries are aware of how positive recent trends were internationally. In his eyes, the west should endorse multilateral policy approaches to ensure that global goals are achieved.

He worries, however, that domestic frustration in view of the west’s own relative stagnation is leading to short-sighted and destructive nationalism. He makes it quite clear that US President Donald Trump is undermining his nation’s influence rather than making America  great again.

Mahbubani praises the west for having replaced feudalism with reasoned policymaking, as well as for overcoming fatalism and driving technological progress. One chapter actually has the title “The gift of western wisdom”. However, he declares that Asian, African and Latin American countries have learned those lessons and are applying them. Mahbubani correctly points out that China and India – the world’s most populous nations – are set to become its largest economies moreover.

On the foundation of “reasoned thinking”, the author argues, economies are growing fast, and “the rest” is catching up with “the west”. He points out, for example, that the G7’s share of global GDP was 31.5 % in 2015, whereas the seven biggest emerging markets together accounted for 36.3 %.

Mahbubani declares: “The west has been at the forefront of world history for almost 200 years. Now it has to learn to share, even abandon, that position and adapt to a world it can no longer dominate.” The former UN ambassador accuses the west of several serious mistakes in recent years. Western arrogance, he argues, has fuelled resentment in many places, including Russia as well as predominantly Muslim countries.

Generally speaking, western interference in foreign countries’ domestic affaires, according to Mahbubani, tends to be “thoughtless” and counter productive. The worst example was probably the Iraq war, which US President George W. Bush launched on the basis of lies, lacking a mandate from the UN Security Council. Mahbubani appreciates the reasons why many US citizens are appalled by Russian interference in the 2016 elections, but he also emphasises that consecutive US administrations interfered in many elections all over the world. 

Instead of trying to impose their will, Mahbubani admonishes western governments: “We can and should strengthen multilateral institutions of global governance, like the UN, the IMF, the World Bank and the WHO to take care of common global challenges.” He calls for a new global consensus and elaborates that the “Charter of the United Nations and the Universal Declaration of Human Rights, which espouse many universal values, can provide the foundation”. By living up to multilateral principles, the west can entrench those values, which may then bind the rising powers, Mahbubani argues. Attempts to cynically manipulate global affaires, by contrast, will only speed up western decline.

Western policymakers are well advised to pay attention to Mahbubani. He articulates grievances that are shared by many people in developing countries and emerging markets. That said, readers in the less advantaged countries should carefully check whether everything he writes is really accurate.

For example, he offers no serious evidence for his claims that President Xi Jinping of China feels accountable to his people or that Prime Minister Narendra Modi of India is keen on improving governance. Both leaders are known for restricting the civil-society space and maximising their personal grip on power. China’s spectacular successes in the fight against poverty, however, occurred before Xi rose to power (see Nora Sausmikat in D+C/E+Z e-Paper 2017/02, p. 33), and its people are less and less allowed to express criticism.

In India, where courageous journalists are still able to express critical views, some people  certainly do not share Mahbubani’s assessment (see Arfa Khanum Sherwani in D+C/E+Z e-Paper 2018/05, p. 36). Mahbubani’s criticism of the west certainly deserves more attention that his praise for authoritarian leadership.

His definition of good governance as “functional” rather than democratic governance is not convincing. Singapore is an unusual country in the sense that it is known both for comparatively authoritarian rule and comparatively low levels of corruption. To people living there it may seem that strongman-imposed order is benign. In most places, that is not so – at least not in the long run. Dictatorship typically goes along with exploitation and abuse. Developmental dictatorships are the exception.

Mahbubani, K., 2018: Has the west lost it? A provocation. London: Allen Lane.


Kategorien: english

Forgotten patients

31. August 2018 - 8:29
Neglected patients need better healthcare systems

Schistosomiasis is caused by parasitic worms and affects 240 million people worldwide. More than 700 million people live in areas where it is endemic, according to the WHO. The disease is spread via contaminated water.

It can be treated with tablets that kill the worm, but the medication is not approved for children under the age of six. Jutta Reinhard-Rupp, who heads the German pharma corporation Merck’s Global Health Institute, is part of a consortium that wants to change matters by developing a new formula of the medicine Praziquantel. A smaller, better-tasting tablet would be suitable for children and boost compliance in general.

All too often, however, people who received treatment go back to bathing in the same contaminated river, Reinhard-Rupp says, adding: “Medication is not enough, we also need to invest in awareness and prevention.”

NTDs are a group of diseases caused by viruses, bacteria, protozoa and parasitic worms that mostly affect poor people in Africa, Asia and the Americas (see interview with Martin Kollmann in D+C/E+Z e-Paper 2018/03, p. 28). They never got the same attention as diseases that affect rich nations. Moreover, the UN considered the fight against HIV/AIDS, tuberculosis and malaria to be more important. Accordingly, only scant funding for prevention and research was committed to NTDs. Between 2000 and 2011, only four percent of the 850 new drugs approved worldwide were indicated for an NTD.

Non-profit organisations like the Drugs for Neglected Diseases initiative (DNDi) are trying to fill the gap. With donor support, DNDi is developing new pharmaceuticals. Together with Sanofi, a pharma giant, DNDi has been working on a treatment for African trypanosomiasis or “sleeping sickness”. The new drug has been tested and is currently being evaluated by the European Medicines Agency. “We believe it will contribute to the elimination of the disease,” says Graeme Bilbe, research and development director of DNDi. “Results like these can be achieved by setting ambitious goals and bringing together stakeholders like governments, researchers, pharmaceutical companies and generics producers.”

In the eyes of Thomas Gebauer of medico international, an international non-governmental organisation, the neglect of NTDs is a result of the intellectual-property laws: “The patent system allows pharmaceutical companies to inflate prices so they focus research on well-off patients who will pay high prices.” Innovation in other fields is thus stifled. “Competitors try to gain access to lucrative markets, so they develop slightly altered versions of existing drugs and have them patented.” Gebauer says that 50 % of newly developed drugs do not make health-care systems stronger. He argues that a publicly funded research pool would be best suited to address the issue. More­over, civil-society organisations are putting pressure on companies, governments and international organisations. Such action, Gebauer points out, helped to make anti-retroviral AIDS treatments affordable in developing countries.

Medication is only one part of the puzzle however. “Neglected diseases are neglected patients,” Franz von Roenne, a GIZ expert on global health, said at a public event organised by his agency and local media in Frankfurt in August. Poor infrastructure, mismanagement and corruption mean that many people do not get access to pills. With the support of GIZ, Cameroon has set up regional funds for health promotion to facilitate decentralised pharma distribution, involving community representatives at the grassroots level even in rural areas.

Ultimately, improving health will depend on addressing social factors. Adequate housing, clean water and sanitation, nutritious food, working conditions, education and other factors highly influence health outcomes. This requires an integrated multi-sectorial approach – which would also help to improve health care in general. After all, non-communicable diseases such as diabetes, cardio-vascular diseases and obesity are increasingly plaguing developing countries (see focus section of D+C/E+Z e-Paper 2018/03 and print issue 2018/03-04).

Drugs for Neglected Diseases initiative (DNDi):

Kategorien: english

Turkey’s lira in downward spiral

30. August 2018 - 13:35
Trump has not caused Turkey’s financial problems, but he is compounding them

In the aftermath of the global financial crisis of 2008, investors from G7 countries have been channelling funds to the private sector in emerging markets. The idea was to get higher returns than were to be expected in advanced nations. Due to the inflow of foreign capital, loans became unusually cheap in Turkey and other emerging markets. A stronger dollar and higher interest rates in the US mean that this trend is now ending and even going into reverse (see D+C/E+Z e-Paper 2018/08 p. 21). In face of similar problems, Argentina’s government prudently asked the International Monetary Fund (IMF) for help (see article by Jorge Saborido).

At this point, global trends are hurting Turkey in particular. According to some estimates, Turkey needs an inflow of about $ 200 billion per year. Instead, money has begun to pour out of the country. The Turkish economy is caught in a downward spiral. As the dollar appreciates, Turkish borrowers find it increasingly difficult to service dollar-denominated loans. Accordingly, investors doubt they will get the returns they expect. The incentives to withdraw from Turkey thus increase as the lira depreciates, putting additional downward pressure on the lira. Many private-sector companies must service dollar-denominated loans and are under increasing stress accordingly.

Turkey’s President Recep Tayyip Erdogan, however, is in denial. To strengthen the lira and fight inflation, Turkey should tighten its monetary policy and reduce public spending. Instead, Erdogan has been saying for a while that high interest rates cause inflation. Economic history proves him wrong. International business papers are discussing when – not whether – Turkey will need to turn to the IMF for support.

Erdogan is not the only one to bear responsibility however. A financial crisis is not brought about by one party alone. If unsustainable debts accumulate, debtors as well as creditors are at fault.

In normal times, all governments would be expected to cooperate on containing a crisis. We are not living in normal times however. US President Donald Trump thinks he can take advantage of Turkey’s macroeconomic problems. By tightening sanctions, including higher steel and aluminium tariffs, he has accelerated the lira’s downward spiral. Trump wants his Turkish counterpart to free an American pastor, but Erdogan says this man has ties to those who orchestrated a failed military coup two years ago. He is now complaining that Trump is at fault, distracting from the underlying macroeconomic issues.

It is important to bear in mind that Trump has not caused them. He is only making them worse. The US president does not have the power to redirect flows on international capital markets. The forces that are dragging the lira – and other emerging-market currencies – down are much stronger.

By making Turkey’s economic problems worse, however, Trump is playing with fire. One characteristic of financial crises is that they can fast spread to other countries if investors think the scenario is similar. At some point, the solvency of major international banks may be at risk, and the global system could freeze to a standstill as it did in 2008 when Lehman Brothers failed. The risk of things going terribly wrong is real.

Global cooperation is needed to safeguard global public goods, and containing a financial crisis is a global public good. To judge by past experience, international institutions do not always handle such crises well. However, they have been quite successful in some cases. Lessons can – and must – be drawn (see D+C/E+Z e-Paper 2018/08, p. 23).

Multilateral action can succeed, though Trump’s destructive stance on multilateralism is well known. At the same time, Erdogan’s claim that he has alternatives to cooperating with the USA is reckless. Qatar recently committed to investments worth $ 15 billion in Turkey. That is useful, but the sum is too small to really stem the tide in the long run. Russia might also want to help Erdogan, but quite obviously lacks the funds. If and when other emerging markets are sucked into the crisis, moreover, there will be only one alternative to multilateral cooperation: severe crisis.

Hans Dembowski is editor in chief of D+C/E+C.

Kategorien: english