Tag: Economic development

How to ‘Do’ Economic Development in Conflict-Affected Contexts (Hint: It’s About Politics)

Two Afghan truck drivers stack bags of grain in Shorabak, Afghanistan
Two Afghan truck drivers stack bags of grain in Shorabak, Afghanistan. Photo: JBLM PAO/flickr.

The economic security of individuals and households is a major challenge for development interventions in conflict-affected countries. Once the conflict is over and humanitarian aid leaves, how do you feed people, secure livelihoods and improve markets and market access? An important finding from a major EU-funded research program on conflict analysis is that the answer to this question is closely linked to processes of institutional change that take place during violent conflict.

As the research conducted thus far as part of the MICROCON  project illustrates, violent conflicts kill and destroy. However, conflict-affected countries are also characterized by intense institutional change that needs to be better understood. Institutional change takes place when different actors contest and sometimes win over former state institutions, transforming social, economic and political structures, organizations and norms.

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Realising the Dream of Greater Intra-African Trade

Border ferry between Zambia and Botswana.
Border ferry between Zambia and Botswana. Photo: Jack Zalium/flickr.

How to break the colonial legacy of exporting goods ‘overseas’ and raise the level of trade between African countries? This has been an issue the African Union (AU) has grappled with since it devoted its January 2012 summit to the issue of ‘Intra-African trade’. The annual Economic Development in Africa report by the United Nations Conference on Trade and Development (UNCTAD) launched in Ethiopia last Friday, 11 July 2013, gives interesting answers to some of the questions African governments and the AU have been asking.

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The Detroit Syndrome

Construction Workers
Construction workers in China. Photo: Zhou Ding/flickr.

SINGAPORE – When the city of Detroit filed for bankruptcy last week, it became the largest such filing in United States history. Detroit’s population has dropped from 1.8 million in 1950, when it was America’s fifth-largest city, to less than 700,000 today. Its industrial base lies shattered.

And yet we live in a world where cities have never had it so good. More than half of the world’s population is urban, for the first time in history, and urban hubs generate an estimated 80% of global GDP. These proportions will rise even higher as emerging-market countries urbanize rapidly. So, what can the world learn from Detroit’s plight?

As recently as the 1990’s, many experts were suggesting that technology would make cities irrelevant. It was believed that the Internet and mobile communications, then infant technologies, would make it unnecessary for people to live in crowded and expensive urban hubs. Instead, cities like New York and London have experienced sharp increases in population since 1990, after decades of decline.

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China: Superpower or Developing Country?

This illustration highlights the disparity between China’s per-capita income and its aggregate income in comparison with other countries.

China is not a superpower, said Major General Pan Zhenqiang, deconstructing one of the “myths” about his country. A retired officer from the People’s Liberation Army (PLA) and deputy chairman of the China Foundation for International Studies, Pan Zhenqiang talked at the Center for Security Studies (CSS) at ETH Zurich last week. He was also a guest of Vivian Fritschi of ISN Podcasts. In his talk Pan said that China is a poor developing country. Is he right? Or is China a superpower, after all? The answer to this question depends on whom you ask.

Chinese leaders themselves perceive their country as a developing one with a number of paramount domestic challenges. The largest share of China’s population lives in rural, underdeveloped areas and there is a large urban-rural income gap. And although China’s per capita income has been increasing at a remarkable pace – it grew more than threefold over the last decade – it is still comparatively low. To anyone familiar with rural China, it is obvious that this is in fact a developing country. But that’s only one side of the coin: even though China is a poor country in per-capita terms, it is a rich country in aggregate terms, due to its immense population.

From a Western perspective, China’s development is usually seen at the macro level: China is the second largest economy in the world today and might surpass the US within the next decade.

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Indexing Happiness

scatter plot GDP per capita / North Korean Happiness Index
Rich countries poor souls, according to the North Korean Happiness Index. Data source: shanghaiist/wordbank

It’s official: China is the happiest country on earth. North Korea comes a close second, while the American Empire (the U.S.) ranks at the bottom of the list. That’s according to a Happiness Index released by – surprise! – the Democratic People’s Republic of Korea. For anyone outside Kim Jong-il’s monopoly of information, the index is a surreal and somewhat comical attempt to legitimize the government’s performance. The idea of measuring happiness in general, however, is not quite as far-fetched.

Indices like GDP per capita continue to dominate national debates about social and economic progress, but critics of this practice are no longer ridiculed. Traditional gauges of prosperity are seriously flawed; they do not, for example, take into account environmental degradation or the exhaustion of natural resources. And that’s only part of the problem. The more important argument is that measures such as the GDP disregard most factors that make life worth living.

The Economist has recently launched a debate about whether or not new measures of economic and social progress are needed for 21st century economies. Proposing the motion, Emeritus Professor of Economics Richard Layard argued that quality of life, as people actually experience it, must be a key measure of progress and a central objective for any government. An overwhelming majority of the readers agreed.

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