Economy Still a Sick Puppy

By David South

Id Magazine (Canada), December 27 to January 8, 1997

It was a year when banks recorded their highest profits ever; it was a year when the economy was supposed to be chugging along as the stock market hit new records. Despite our political and corporate masters telling us otherwise, government statistics tell a grim tale for anybody who isn’t making over $100,000. 

After years of being told high government debt must stop, all three levels of government managed to take debt up another $45 billion, to a record level of $796 billion. It makes you wonder what all the food banks, unemployment and poverty is achieving. 

Prime minister Jean Chretien’s rallying cry of “jobs, jobs, jobs” has not panned out. A combination of high levels of immigration, seniors clinging to jobs for longer and a growing working age population is keeping unemployment high. The percentage of the working age population employed is 58.5 per cent, according to Statistics Canada. It was 58.4 per cent in April 1992, before 944,000 mostly part-time jobs were created. Youth are the ones suffering the most, with only 52.3 per cent actually working, down from 62.7 per cent in 1989. 

If that isn’t evidence enough that 1996 was a bad year, according to the Labour Relations Board, more people are spending time out on the picket line. The number of days lost to strikes in 1996 was 1,783,700, up from 473,000 in 1995. The bulk of those days were lost in the crippling public servants and auto workers strikes. 

Continental Drift And Military Complexities

By David South

The Canadian Peace Report, Summer 1993

A cornerstone of the Conservative government since 1984 has been the Free Trade Agreement (FTA) between the United States and Canada, soon to be followed by a North American version (NAFTA), which adds Mexico. 

Peace researchers differ over how much the deals could further militarize Canada’s economy. 

Under the Canada-US deal, articles 907, 1308 and 2003 immunize trade that fosters “national security” from charges of unfair subsidies. A free trade tribunal could deem subsidies to farmers or toilet-seat manufacturers as unfair competition - but not subsidies to weapons manufacturers. Articles 1018 and 2102 of NAFTA maintain the exemptions. 

CPA membership coordinator Gary Kaye argues that FTA, and NAFTA even more so, bind Canadian governments at all levels to military regional development. The United States has relied on investment in military industries as a regional development tool more than any other Western country, he says. 

“The Canadian government can invest in any military-related pursuit without fearing the U.S. or Mexico will say it is an unfair subsidy,” Kaye says. 

Ken Epps, a researcher with Project Ploughshares in Waterloo, Ont., agrees one reason the government insists on buying $5.8 billion helicopters in the face of overwhelming public opposition is that it’s a regional development program protected under the FTA. 

“Any other [subsidy] program of that size could well be protested by the Americans. The whole thing has been set up with new plants being built in different parts of Canada to build parts for the helicopters.”

But Epps disagrees that the trade agreements will integrate Canada much further into the U.S. war machine. De facto free trade in arms has existed since Canada and the U.S. signed the Defence Production Sharing Agreement in 1959, he points out, following the scrapping of Canada’s Avro Arrow jet plane. There-after Canada specialized in making military components rather than complete systems.

Epps and others say Ottawa’s high-tech hardware binge - including the 50 high-ticket EH-101 helicopters - and the Canadian military industries’ desire to sell to booming Pacific Rim and Middle East markets would exist even without the trade agreements. Epps sees the U.S. favouring its own defence industry at the expense of Canadian suppliers, which will increase Canadian businesses’ desire for foreign sales. 

Retired U.S. admiral Eugene Carroll, director of the Washington-based Center for Defense Information, says every nation is interested in boosting its own national prestige throught the military, and Western industrialized countries are looking to sustain exports by selling weapons to the Third World. 

“That’s just plain old profit-driven commercial activity,” says Carroll. “I don’t think trade agreements extend control onto military-related activities.”

Kaye, however, stresses that NAFTA will ensure the bilaterial agreements between Canada and the United States on military trade will continue untouched. “Under those agreements, we are committed to balance military imports and exports with the United States. 1992 figures show a $4-billion deficit; therefore we will be buying much more in the way of arms than anyone could imagine would be needed for Canada’s direct security.”

Many peace groups are worried about the implications. 

“NAFTA reveals an agenda for the military and the transnational corporations that binds the Canadian economy more to the U.S. military machine,” Marion Frank wrote for the Peace Alliance in Action Canada Network’s Action Dossier (Dec. 1992), drawing on a position reached by the CPA Steering Committee last fall.

“Under NAFTA, as under FTA, the only areas where government subsidies are allowed are in the military and energy sectors … Wide-ranging expansion of ‘intellectual property rights’ in NAFTA increases monopoly product protection for the transnationals here in Canada, and aids in the privatization of high-tech capacity, all of which ties us more closely to the U.S. military-industrial complex …

“In the U.S., trade strategy is linked to security strategy,” Frank adds, “The military tells U.S. industry what equipment to plan for and buy in order to meet U.S. strategic objectives. As we become more integrated into the North American [trading] bloc, our ability to develop our own strategies will disappear.”

Recommendations from the Peace Alliance-facilitated Citizens’ Inquiry into Peace and Security would be difficult to implement under NAFTA, contends Darrell Rankin of the Ottawa Disarmament Coalition. “Canada could no longer help developing countries by giving them better access to the Canadian market through preferrential tariffs.” Assisting military factories to produce civilian goods would be prohibited - but grants to develop weapons would not.

Last February, Science for Peace brought together labour, peace and other activist groups to make the connection between free trade and defence production and the weapons trade. “Both agreements are bound to cause in Canada what exists in the U.S.: a poweful military-industrial complex,” says S4P’s Terry Gardner. “It represents the loss of control of the institutions of government.”

Then prime minister Mulroney’s “unquestioning support” of the U.S. in the Gulf War “removed political roadblocks to Canada’s involvement” in U.S.-Mexico talks, recalls John Dillon of the Ecumenical Coalition for Economic Justice. Despite widespread Mexican opposition to the war, he adds, President Salinas increased oil production and exports to the U.S. during the build-up to it. 

The Ottawa Disarmament Coalition calls NAFTA “a vehicle for militarism without brakes.” It would create legal inducements for companies seeking government contracts to couch their bids in national security terms, a coalition brief to an Ontario cabinet committee on NAFTA argues. 

NAFTA would also hinder conversion of military to civilian industries and environmental protection above “generally agreed” standards, the coalition said.

The Ontario committee on NAFTA, which held public hearings in the spring, received briefs from: Northwatch (Brennain Lloyd, Sudbury), Voice of Women for Peace (Ann Emmett and Elizabeth Davies, Oshawa), Oshawa Peace Council (Doug Wilson), Ottawa Disarmament Coalition (Rankin), the CPA (Kaye), Science for Peace (David Parnas), Michael Polanyi, Allan MacIssac (Toronto Disarmament Network) and Veterans Against Nuclear Arms (Toronto). 

While recommending that Ontario oppose NAFTA, the committee’s report did not directly mention peace concerns. 

Abuse of resources

“The U.S. needs our resources and us to put together components for their military,” says J.J. Verigin of the Doukhobour peace and disarmament committee in B.C. He criticizes “any agreement that locks us more into a country wired to massive consumption and abuse of resources at the expense of Canadians and other countries.”

In the United States, the Women’s International League for Peace and Freedom opposes NAFTA as a stage in “the neoliberal economics of intervention” that particularly victimize women (Peace and Freedom, July/August 1992). 

At CUSO’s national office, Marc Allain wants to end the notion that NAFTA is about improving the living standards of people in developing countries. “What we’re seeing is quite the contrary,” says Allain. “Low wages, no health and safety - we’re already seeing in Mexico job losses as they move to the maquiladoras (Mexico’s free trade industrial zones).”

(In a trade advisory, Ottawa tells Canadian companies that the defence market in Mexico, a notorious human rights violator, “is not readily identified … Commercial/industrial security, however, is an expanding market.”)

Allain says CUSO is working with the Ecumenical Coalition for Economic Justice to produce education kits on NAFTA and distribute them to unions and community groups. 

Cuban Entrepreneurs Embracing Changes to Economy

The Caribbean island of Cuba has gone its own way economically and socially since its revolution in 1959. The country has seen significant gains in its human development in the decades since, and can boast impressive education levels and good public health care.

Cuba enjoys a good ranking on the Human Development Index (HDI) – 59 out of 187 countries – and it has been rising since 1980. For Latin America and the Caribbean, Cuba is above the regional average (http://hdrstats.undp.org/en/countries/profiles/CUB.html).

But the country has also had a turbulent economy with periods of severe economic contraction. This has increased poverty levels and hunger, in particular during the Special Period beginning in 1990 (http://www.historyofcuba.com/history/havana/lperez2.htm) when the significant subsidies enjoyed by the country from the Soviet Union were pulled and the country saw a steep drop in its ability to import fuel and other goods. Cuba is still trying to repair the economic damage.

In the book Cuba: Between Reform and Revolution, Louis A. Perez, Jr. explains: “The old socialist bloc Council of Mutual Economic Assistance (CMEA) had accounted for almost 85 percent of Cuban trade, transactions conducted almost entirely in nonconvertible currency. Commercial relations with the former Soviet Union declined by more than 90 percent, from $8.7 billion in 1989 to $4.5 billion in 1991 and $750 million in 1993. Trade with eastern European countries ended almost completely.

“Soviet oil imports decreased by almost 90 percent, from 13 million tons in 1989 to 1.8 million tons in 1992. Shipments of capital grade consumer goods, grains, and foodstuff declined and imports of raw materials and spare parts essential for Cuban industry ceased altogether.”

Conducting private business in Cuba was discouraged after the revolution as the state became the dominant arbiter of all economic transactions. Since the fall of the Soviet Union, Cuba has experimented at various times with moving to a mixed economy, only to pull back and return to the old ways. But now things are changing significantly after economic reforms that have accelerated since Cuban President Raul Castro took over from his brother Fidel in 2008.The reforms began in 2008 with the liberalizing of access to mobile phones, and accelerated between 2010 and 2013, when the number of people working in small businesses tripled.

Cuentapropistas – the Cuban term for entrepreneurs, named after “cuenta propria,” the ability to do business for oneself – have flocked to be officially registered as small businesses, with the number shooting up from 143,000 in 2010, to 429,000 by June 2013 (Report on Business).

Gustavo Kouri told the Report on Business magazine, “Although I enjoyed the work I was doing before – at an information centre in specialized health sciences – it wasn’t possible to earn enough to support my family.

“And then the state opened more opportunities to develop private businesses, for cuenta propia.”

He now owns the Rio Mar restaurant (https://www.facebook.com/restauranteriomar).

Artists and athletes have also been attracted to the opportunities that have opened up.

One is former volleyball Olympic gold medalist Mireya Luis (http://en.wikipedia.org/wiki/Mireya_Luis), who now owns Las Tres Medallas (http://www.alamesacuba.com/en/la-habana/restaurant/las-tres-medallas/), a pizza-and-pasta restaurant.

For Luis, becoming an entrepreneur means the chance to “realize a dream.”

“Being able to open a place – a restaurant, a bar, a cafeteria, whatever – is a good opportunity for self-development, for people to demonstrate a capacity for business, and for them to grow personally,” she said. “It’s something incredible.”

Gilberto Valladares owns a hair salon in Old Havana, Arte Corte Studio, and has been able to employ others.

“Initially, it was a dream of dignifying and recovering a certain degree of respect for the trade of hairdresser and barber,” he told the Report on Business. “As my business grew, so did the dream.” He now employs a half dozen people from the neighborhood.

Cuba is attempting to reform and modernize its economy while holding on to the things people hold dear and see as the good achievements of the revolution: free healthcare, education and other public services.

Gregory Biniowsky is a Canadian-trained lawyer and political scientist who has spent more than 15 years living and working in Cuba and works for Havanada Consulting, a firm that focuses on sustainable development projects and social enterprise initiatives. “The irony is those that will save the Revolution are the emerging small- and medium-sized private businesses,” he said. “And those that could destroy it are those elements in the bureaucracy that resist those changes.”

The entrepreneurial spirt gripping the island is infectious. At one time, much of the only reading material available in bookshops were works with a communist or socialist theme.
But Cubans now have an alternative: an English-language bookshop called Cuba Libro (https://www.facebook.com/cubalibroHAV). It is filing an urgent gap in the marketplace for English-language books and foreign works in general.

Set up by an American writer and journalist Conner Gorry (connergorry.com), who has been living in Havana, Cuba since 2002, the bookshop has become a hub for free thinking and new ideas.

“I know how hard it is to get English-language sources here,” she told The Associated Press. “So I started cooking this idea.”

Libro is the Spanish word for book and the play on words is meant to evoke a Cuba Libre, a rum-and-cola drink named for the country’s liberation from colonial Spain. The store bills itself as a “cafe, bookstore, oasis,” and  its logo features a woman reclining with a cup of coffee and a good book for reading.

The idea came about when a friend of Gorry could not find a place to unload 35 books she had. In time, Gorry amassed a collection of 300 English-language books, and this embryonic library became the book shop. The store also carries magazines, including U.S. titles The New Yorker and Rolling Stone.

So far, the store faces little competition. Government book shops feature the occasional Cuban novel translated into English or the English-language versions of state-run newspapers such as Granma (http://www.granma.cu/ingles/).

Cubans are enjoying the slow thaw and what it could bring. “It is increasing in Cuba, the possibility to have different alternatives,” said Carlos Menendez, a 77-year-old retired economist Menendez.

Cuba Libro has two licenses to operate – one for selling food and one for selling used books – and is run as a type of cooperative, a group-owned private enterprise with five Cubans.

Doing business in Cuba is not without challenges. The bookshop needs to steer a steady path and avoid selling anything that would be considered “counterrevolutionary.” Gorry also needs to avoid problems with the U.S. government, which bans Americans from any financial transactions with the Cuban government.

“I’ve had to tread extremely carefully, everything above-board and legal, because I’m an American, I’m a North American, I am beholden to U.S. laws,” she said. “And so I’m not in agreement with those laws, but I abide by them.”

The bookshop has the benefit of a well-educated pool of potential customers; the annual Havana book festival is a popular draw in the country (http://feriadellibro.cubaliteraria.cu/).
There is a strong thirst for self-improvement in Cuba, and to gain knowledge is to get a better paying job. To widen access to the shop, there will be a lending library for those who can’t afford to buy the books on offer, and there will also be English classes.

And how will the bookshop get restocked in a country that still exercises a lot of control over information?

“Getting donations is going to be another interesting piece of it, because importing books here is very difficult,” Gorry said.

By David South, Development Challenges, South-South Solutions

Published: October 2013

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

Follow @SouthSouth1

Google Books: https://books.google.co.uk/books?id=I_hcAwAAQBAJ&dq=development+challenges+october+2013&source=gbs_navlinks_s

Slideshare: http://www.slideshare.net/DavidSouth1/development-challenges-october-2013-issue

Southern Innovator Issue 1: https://books.google.co.uk/books?id=Q1O54YSE2BgC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 2: https://books.google.co.uk/books?id=Ty0N969dcssC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 3: https://books.google.co.uk/books?id=AQNt4YmhZagC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 4: https://books.google.co.uk/books?id=9T_n2tA7l4EC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 5: https://books.google.co.uk/books?id=6ILdAgAAQBAJ&dq=southern+innovator&source=gbs_navlinks_s

This work is licensed under a
Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

India’s Modernizing Food Economy Unleashing New Opportunities

Increasing prosperity in India is reshaping the country’s relationship to its food. A number of trends are coming together that point to significant improvements to India’s long-running problems with food supply and distribution. This matters because India, despite its two-decade economic boom – and increasing middle-class population – is still home to about 25 per cent of the world’s hungry poor, according to the World Food Programme (WFP).

According to Indian government figures, around 43 per cent of children under five are malnourished and more than half of pregnant women between 15 and 49 suffer from anaemia (http://en.wikipedia.org/wiki/Anemia), a consequence of poor diets (WFP).

Many Indians go hungry despite the fact that the country grows enough food for its entire population. The problem isn’t lack of food but a wasteful system that fails to distribute affordable food efficiently and to make participating in the food system a viable income source. Farming employs as much as 70 per cent of Indians. But many work small plots of land, are heavily in debt and earn a meagre income.

However, a number of developments are improving the efficiency of India’s food system and modernizing the way it works.

There are signs that big changes lie ahead: New restaurants exploring foreign cuisines; modern supermarkets; online food shopping services; food academies teaching new skills; food gurus proselytising for new approaches; and a thriving publishing and media sector.

They are creating new jobs, increasing price competition and encouraging more modern delivery, marketing and distribution systems.

In 2011 the introduction of global supermarkets into the Indian marketplace became a hot debate. The Indian government announced it would open the marketplace to global competition and foreign direct investment (FDI), but put the move on hold in December after an outcry by political parties and protests by small- and medium-sized retailers fearful it would harm livelihoods. The Indian supermarket sector is a market estimated to be worth US $475 (The Guardian).

One retailer that is already bringing international methods to Indian retailing is the Best Price chain of wholesale stores. Best Price is a joint venture between U.S.-based Walmart and Bharti Enterprises, one of India’s largest business groups. In 2007, Walmart India made a deal with Bharti Enterprises to set up a cash and carry business called Best Price Modern Wholesale. The first store opened in 2009, and by 2012 there were 15 outlets.

By teaming up with Walmart, Bharti Enterprises gets to learn from one of the world’s leading retailers and a pioneer in efficiencies, logistics, supply chain management and sourcing.

The stores have all the hallmarks of modern food selling – warehouses, sophisticated inventory control, hygienic conditions and connection to new information technologies (http://www.indiaretailing.com/bharti-walmart-II.asp).

Best Price Modern Wholesale employs 3,710 people, and the stores sell more than 6,000 items, a mix of food and non-food products. It claims 90 per cent of the goods and services are sourced locally.

Food is a highly volatile and politicized issue in India. High food inflation – which reached 12.21 per cent in November 2011, according to India’s Finance Minister Pranab Mukherjee – has led to political tensions. Inflation has driven up the price of staple foods, essential commodities and imported products.

At the same time, India’s commerce ministry has forecast that 10 million jobs will be created if foreign supermarkets are allowed to set up in India. Many of these jobs will be in logistics as more efficient, modern methods shake up India’s food industry. Poor logistics in the Indian food sector means that as much as 40 per cent of produced food does not reach consumers. This waste comes at a high cost in a country with 50 million malnourished children.

New jobs are already being created in the country’s restaurant industry.

While there have always been high-end restaurants in India’s cities, the gastronomic scene has received a recent boost from expatriate Indian restaurateurs returning from the competitive London, Tokyo and New York scenes, bringing skills and experience from some of the most demanding kitchens in the world.

One example is Megu, a restaurant in New Delhi’s Leela hotel(theleela.com/new-delhi-megu.html) that sells Japanese-influenced food.

Such cuisine is being called “elite Indian international gastronomy”, according to The Guardian newspaper.

“We are aiming at the affluent traveller or the ultra-rich local,” Aishwarya Nair, a senior executive at the Leela, told The Guardian. “The idea is to give people a taste of globalization. In our restaurant you don’t know you are in India. You could be in New York, Japan, anywhere.”

That appeals to many newly affluent Indians, food critic Vir Sanghvi told the newspaper.

“The food (at somewhere like Megu) doesn’t matter so much as the experience and the glamour,” Sanghvi said. “There is a lot of money outside the traditional elite now and these people are looking for ways to spend it on something that seems sophisticated.”

The new food fascination is also leading families who once would have employed a cook to watch 24-hour TV channels about food. This programming changes habits and encourages buying new foods and exploring new flavours.

Market analysts believe these trends are likely to continue. A middle class with spending power has been growing in India for almost two decades, and forecasts see the number of middle class Indians reaching 250 million by 2016.

“With bigger and better restaurants and international food brands coming in to the country, it’s only a matter of time before fine dining finds its place among a growing cosmopolitan population,” said Siddharth Mathur, manager of the independent Smoke House Room restaurant (facebook.com/SmokeHouseRoom).

Online food shopping in India is also thriving. Research by Juxt found that 65 million people use the web in India, four-fifths of whom shop online. Murali Krishnan, head of eBay India, told the BBC that the country could become one of the top 10 e-commerce hubs in the world by 2015.

Online grocery services include MyGrahak.com, which calls itself “India’s Largest Food Store” and offers home delivery of food, toiletries and pet supplies. Another is Greenytails.com, which brings together multiple food retailers into one online shopping website and is based in Bangalore and Hyderabad.

As an example of the spin-offs that can be created from rising interest in food culture, there is the story of Nita Mehta. Considered one of India’s most celebrated cookbook authors, Mehta (nitamehta.com) not only publishes recipes but also runs a chain of cooking academies.

As she tells it, her interest in cooking was always there and she started experimenting at home with new recipes for her friends and family. The response was encouraging and she started teaching people how to make ice cream in her home. Curious students flocked to her classes to learn how to make flavours like mint, chocolate chip and mocha.

Following on this success, she started teaching classes in baking, Chinese cooking and what she calls “multicuisine”.

The lessons soon turned into a cookbook, which she wrote after doing her household chores. But her battles had only begun: publishers were not interested so she self-published. She called her publishing company Snab Publishers and released her first book, “Vegetarian Wonders”. It was modestly successful but it was with her second book, “Paneer All the Way”, that things got cooking. Her publishing company has now produced 400 cook books and sold 5 million copies. She has won international awards, does TV cooking programmes, has established several cooking institutes in New Delhi and teaches classes in the U.S., Canada, Britain and other countries.

With successes like Nita Mehta, the Indian food revolution is well underway.

By David South, Development Challenges, South-South Solutions

Published: March 2012

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

Follow @SouthSouth1

Google Books: https://books.google.co.uk/books?id=ok-eBgAAQBAJ&dq=development+challenges+march+2012&source=gbs_navlinks_s

Slideshare: http://www.slideshare.net/DavidSouth1/development-challengessouthsouthsolutionsmarch2012issue

Southern Innovator Issue 1: https://books.google.co.uk/books?id=Q1O54YSE2BgC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 2: https://books.google.co.uk/books?id=Ty0N969dcssC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 3: https://books.google.co.uk/books?id=AQNt4YmhZagC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 4: https://books.google.co.uk/books?id=9T_n2tA7l4EC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 5: https://books.google.co.uk/books?id=6ILdAgAAQBAJ&dq=southern+innovator&source=gbs_navlinks_s

This work is licensed under a
Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

Kenya Turns to Geothermal Energy for Electricity and Growth

 

In an effort to diversify its power supply and meet growing electricity demand, Kenya is looking to increase its use of geothermal energy sources (http://en.wikipedia.org/wiki/Geothermal_electricity). Tapping the abundant heat and steam that lurks underground to drive electric power plants offers a sustainable and long-term source of low-cost energy.

Kenya currently gets most of its electricity from hydroelectric projects. This is great until there is a drought, which there now is. With water resources low, the country has had to turn to fossil fuels to power electricity generators. This means relying on imported diesel, which is both expensive and polluting. It is also not generating enough electricity to keep up with demand.

Electricity blackouts have become common in the country and this is harming economic development. This is a particularly damaging setback in a country that has, in the last five years, gained a deserved reputation for its technological advances in mobile phone applications and Internet services – all needing reliable supplies of electricity.

Kenya is Africa’s largest geothermal producer and has geothermal resources concentrated near a giant volcanic crater in the Great Rift Valley with 14 fields reaching from Lake Magadi to Lake Turkana. There are also low temperature fields in Homa Hills and Massa Mukwe (http://www.gdc.co.ke/index.php?option=com_content&view=article&id=191&Itemid=163).

Kenya is expecting its gross domestic product (GDP) to grow by 10 per cent from 2012 onwards. The country hopes to become a middle income country by 2030.

Around 1,400 steam wells will be drilled by companies to meet these goals.

There are also many spin-off opportunities from tapping geothermal heat sources. These include using the steam heat for greenhouses growing plants, for cooling and heating buildings, and for drying and pasteurising foods.

Kenya is currently building a 52-megawatt (MW) geothermal project with funding from the United States government. It is also receiving US$149 million funding from the African Development Bank Group (AfDB) to build the Menengai Geothermal Development Project. This plant will be able to generate 400 megawatts of renewable electricity from the Menengai geothermal sources in the steam field located 180 kilometres northwest of the capital, Nairobi (http://www.gdc.co.ke/index.php?option=com_content&view=category&layout=blog&id=49&Itemid=137).

Speaking at a press conference this month, Gabriel Negatu, AfDB’s Regional Director, said he sees geothermal technology as an important driver of Kenya’s green growth ambition.

“Geothermal generation yields energy that is clean, affordable, reliable and scalable,” he said.

The Geothermal Development Company (GDC) (gdc.co.ke) is a state-owned company in Kenya and recently declared it had tapped steam with a well in the Menengai steam field. GDC started surface exploration in 2009 and has been using two drilling rigs to look for geothermal steam.

The Menengai Geothermal Development Project is slated to be completed by 2016 and will boost the country’s geothermal capability by 20 per cent. It is estimated to be able to power the electricity needs of 500,000 Kenyan households and power the needs of 300,000 small businesses.

Geothermal as a source of energy and electricity can help a country make big development gains. The best example is the Northern European island nation of Iceland. According to Orkustofnun (nea.is/geothermal), Iceland’s National Energy Authority, the country is a successful example of how a small, poor nation (Iceland was one of Europe’s poorest countries in the 20th century), shook off its dependence on burning peat and importing coal for its energy use. By 2007, Iceland was listed in the global Human Development Report as the country with the highest level of human development in the world. And one aspect of this success was the country’s ability to tap its renewable energy resources. Around 84 per cent of the country’s primary energy use comes from renewable resources, and 66 per cent of this is geothermal.

It is estimated Kenya could generate 7,000 megawatts of geothermal power and the Kenyan government is looking to increase the nation’s geothermal capacity from the current 198 MW to 1,700 MW by 2020 and 5,530 MW by 2031.

By David South, Development Challenges, South-South Solutions

Published: March 2012

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

Follow @SouthSouth1

Google Books: https://books.google.co.uk/books?id=ok-eBgAAQBAJ&dq=development+challenges+march+2012&source=gbs_navlinks_s

Slideshare: http://www.slideshare.net/DavidSouth1/development-challengessouthsouthsolutionsmarch2012issue

Southern Innovator Issue 1: https://books.google.co.uk/books?id=Q1O54YSE2BgC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 2: https://books.google.co.uk/books?id=Ty0N969dcssC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 3: https://books.google.co.uk/books?id=AQNt4YmhZagC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 4: https://books.google.co.uk/books?id=9T_n2tA7l4EC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 5: https://books.google.co.uk/books?id=6ILdAgAAQBAJ&dq=southern+innovator&source=gbs_navlinks_s

This work is licensed under a
Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.