2011 Trends for the South

The world has been through a dramatic and fascinating period since the global economic crisis erupted in 2008. While the wealthy, developed nations of the North have been pitched into one crisis after another, the countries of the global South (many of whom are well accustomed to crises) have been part of a powerful new economic phenomenon: the rapid growth of South-South trade, investment and exchange. Its effects include stronger ties between Asia and South America and between China and Africa.

South-South trade is the great economic success story of the past decade. World Trade Organization (WTO) (www.wto.org) figures show South-South trade grew to 16.4 percent of the US $14 trillion in total world exports in 2007, from 11.5 percent in 2000. While the global economic crisis has slowed trade down, the overall trend for South-South trade and connections seems firmly established.

South-South trade made up 20 percent of global exports by 2010, and foreign direct investment to developing economies rose by 10 percent in 2010 due to a rapid economic recovery and increasing South-South flows.

Trade between China and Africa has surged during the decade since China joined the WTO in 2001, from around US $10 billion in 2000 to US $73.3 billion in 2007, a year-on-year increase of 32.2 percent. By 2008, it had soared by 44.1 percent to reach a record high of US $106.84 billion, according to Zhang Yongpeng of the Institute for West Asian and African Studies (IWAAS).

The surge is remarkable and recent. For example, according to accountants KPMG, between 2001 and 2009 China invested just US $215 million in Brazil. But in 2010, China invested US $20 billion in energy and chemical companies in Argentina and Brazil. And Luis Alberto Moreno, president of the Inter-American Development Bank, told the Financial Times that “seven percent of Colombian gasoline has been replaced by domestic ethanol, produced with green Indian technology – while Indian companies, including Infosys and Tata, now have 17,000 employees in Latin America and the Caribbean.”

This jump in investment has also had its downside: coming fast and furious as investment cash chases better investment profits in the global South, it has pushed up inflation and commodity prices and spawned property speculation bubbles. This, as can be seen across North Africa and the Middle East, can lead to political and social instability.

A review of the big trends bubbling under the surface in 2011 shows how important South-South exchange will be in alleviating poverty and improving lives in the run-up to the 2015 Millennium Development Goals (http://www.un.org/millenniumgoals/). It also shows up the dangers inherent in this new environment – rising inflation without economic growth can crush the poor. A focus on innovation and new thinking will be necessary to get through this year and beyond.

Some of the top trends that will have a big impact in 2011 are:

– Inflation: In 2011 it looks like we will hear a lot about inflation. As the global economy tries to stabilize and return to growth, there will be inflation surges for a wide variety of reasons. People will need strategies and new techniques to make sure they can afford the necessities of life. This will be critical if development gains from the past decade are not to be lost.

– Super cycle: Some are putting forward the theory we are entering a ‘super cycle’ (http://www.bloomberg.com/news/2011-01-23/super-cycle-leaves-no-economy-behind-as-davos-shifts-to-growth-from-crisis.html) created by better connectivity, global travel and mobility and the ease of moving around investment to create businesses and jobs. The super cycle theory claims that this will spark the greatest period of human development in history – raising all national economies – as more and more people benefit from rising living standards and opportunities.

– Switch to South-South trade: With the trend of increasing South-South trade now firmly established, there is a greater awareness now of the power of sharing ideas across the South. One example of this idea-sharing is the annual Global South-South Development Expo (http://www.southsouthexpo.org/) run by UNDP’s Special Unit for South-South Cooperation Unit (http://ssc.undp.org/).

– New technologies: The spread of new technologies around the world will continue and bring many changes. Africa is seeing increasing access to high-speed Internet as new undersea cables are laid around the continent. Mobile phones will continue to be a critical tool for many to stay in touch and boost incomes.

– MDGs on horizon in 2015: The Millennium Development Goals (MDGs) target of 2015 is just four years away. This will face the headwinds of the global economic crisis and urgent attention will be needed to make sure gains are not lost as 2015 approaches. The role played by South-South trade will be a critical partner in aiding goal achievements.

– Cities: A surge to the urban was pronounced by 2007 and we are now living in a majority urban world. Innovation and sharing experiences and knowledge will play a key role in ensuring this is not a disaster. A recent book, Arrival City by Canadian journalist Doug Saunders, detailed this urban surge occurring across the global South, the largest movement of people to cities and urban and semi-urban areas in human history. It follows the pattern that was seen in Europe in the 19th century, as economies change and people seek the new opportunities promised by cities, or find rural economies unsustainable.

– The China model of development: The big talking point will be China’s economic model for eradicating poverty on a mass scale. A new book by Dambisa Moyo, How the West Was Lost: Fifty Years of Economic Folly – And the Stark Choices Ahead, investigates the mistakes made in developed, Western nations and what can be learned from the experiences in the global South.

– Food crisis: At the beginning of February, the Food and Agricultural Organization (FAO) issued a warning about the risk of a new global food crisis after its food price index reached a record high in January 2011. The FAO also issued an alert about severe drought in China, the world’s largest wheat producer. Flooding in Brazil and Australia have also devastated crops, much of which are exported to countries across the South. There is also risk to crops from flooding in southern Africa. Wheat, corn and soybean prices are rising, and prices reached a peak just as they did in 2008 (FAO).

Even developed countries normally used to food surpluses are at risk. In the US, corn reserves are at a 15 year low (US Department of Agriculture), and the price of corn has doubled in past six months.

A billion people go to bed hungry every night; someone starves to death every 3.6 seconds – 75 percent are children under five, according to the World Food Programme (http://www.wfp.org/1billion).

China’s Booming Wine Market Can Boost South

A great South-South opportunity has emerged with the recent boom in wine drinking in China and the pursuit of quality tastes. Matching high-quality wine producers from the global South – including South Africa, Chile, Morocco, and Lebanon – with China’s thirsty wine drinkers could deliver a major income boost.

In the past year China has become the world’s fastest-growing wine market with newly wealthy seeking sophisticated tastes and young working women seeking the health benefits of wine (http://www.healthtree.com/articles/red-wine/). Yearly wine consumption in China is expected to increase by 20 percent to 126.4 million cases by 2014, a fact that is grabbing the attention of old and new-world wine producers.

Women are driving China’s growing market for wine, which is perceived as a symbol of affluence, a benefit to health – in moderation – and good for the skin. A new report from the International Wine and Spirit Research (IWSR) group says wine consumption in China and Hong Kong jumped 100 per cent between 2005 and 2009, from 46.9 million to 95.9 million cases.

Import taxes have been reduced as China entered the World Trade Organization (WTO), and this has prompted foreign wine brands to lunge into the market.

The government is trying to get people to switch away from high-strength alcoholic drinks by increasing the tax on them.

Awareness and experience varies widely amongst the winemakers of the global South. Some countries, such as South Africa, Chile and Argentina, have long-standing international reputations for producing quality wine, and use sophisticated branding and marketing campaigns to connect with their customers. But other countries, including Lebanon, Tunisia and Zimbabwe, have lower profiles and do not pack the same brand punch. But all these countries help show the role viticulture can play in economic development. By tapping into this Chinese wine drinking boom, they could reap rich rewards.

In Lebanon, viticulture – the harvesting of grapes for wine (http://en.wikipedia.org/wiki/Viticulture) – has prospered despite the country’s wars and instability.

Lebanon has a long and illustrious history of winemaking stretching back 5,000 years. The modern Lebanese wine industry dates itself from 1857, when Jesuit monks at Ksara in the Bekaa Valley began importing vines from Algeria. After World War I, when the French took control of Lebanon, its vineyards expanded to satisfy France’s thirsty imperial troops.

Then Lebanon was hit by the brutal civil war of the 70s and 80s. And things have remained unstable and uncertain since.

But despite this, well established businesses like Ksara (http://www.ksara.com.lb/), Kefraya (http://www.chateaukefraya.com/) and Musar (http://www.chateaumusar.com.lb/english/cave.aspx), and small boutique producers, thrive.

Massaya (http://www.massaya.com/old/wine.htm) is one of Lebanon’s most dynamic and successful wineries, owned by brothers Sami and Ramzi Ghosn. Both are Christians like many of the Lebanese winemakers. They have been able to succeed in an area fraught with tension from past conflicts.

Another winery is using the business to revive a community and restore old skills. In the hills east of Beirut, the BBC found Naji Boutros – who used to be an investment banker in London – and his wife Jill. Boutros started Chateau Belle-Vue in Bhamdoun (http://www.chateaubelle-vue.com/), in the village where he grew up. As well as producing wine, the Chateau finances community projects and a library.

The two kings in the global South of wine exports are South Africa and Chile. Both countries have very strong brand awareness in export markets and both have triumphed after years of boycotts due to the political situations in the respective countries (Chile’s military dictatorship and South Africa’s Apartheid regime).

Wine-making is one of South Africa’s oldest industries and plays a key part in the economy (http://www.wine.co.za/), with exports growing from less than 50 million litres in 1994 to more than 400 million litres in 2008 – year-on-year growth of 17 percent.

Since the end of the racist Apartheid regime (http://en.wikipedia.org/wiki/South_Africa_under_apartheid) in the mid-1990s, various government and industry initiatives have begun to reverse the iniquities of the country’s wine-making industry. South Africa has been pioneering switching black Africans on to the pleasures and profits of wine making and drinking.

Like Argentina, Chile (http://www.winesofchile.org/) has a strategic plan for its wine industry by 2020. It hopes to be “the Number One producer of sustainable and diverse premium wines from the New World by the year 2020.”

Chile – recovering from the severe earthquake on February 27, 2010 – uses a sophisticated marketing strategy to promote its wines, including websites, social networking media and events and tastings. Since 2007, it has unified its marketing efforts under one umbrella organization, the Vinos de Chile, and it also offers wine tourism to further develop a close relationship with drinkers, The Wines of Chile Experience (http://www.chilewinetourism.com/), launched in 2010.

Chile’s neighbour Argentina (http://www.winesofargentina.org/) is the world’s fifth largest producer of wine,

The country has seen its domestic consumption of wine shrink as tastes changed, and has also experienced very extreme economic fluctuations. It has had to raise its game in order to earn income from exporting. This has been a spur to the wine industry and it has seen growth since 1996.

Wine growing has a long history in Argentina, going back to its Spanish colonial foundations in the 1500s. Argentineans drank large quantities of wine domestically in the 1970s but this tailed off in the later decades.

That had been balanced by a great export success with wines from the malbec grape. The flavour of this wine and its brand image has proven to be a weighty ambassador for Argentinean wines in general. By keeping a competitive price, Argentinean wine has flourished during the global economic crisis as people have moved to less expensive brands. The country cleverly has a wine marketing strategy based on Australia’s experience. This is an ambitious plan with the goal of capturing 10 percent of the global wine market share by 2020.

Argentina also aggressively pursues new markets by visiting them regularly and doing wine promotions and tastings with potential customers. It also brings people to the country to visit the wineries and experience Argentinean culture and food.

In North Africa, Algeria, Tunisia and Morocco have a long history cultivating wine and have been winning awards since the 1859 Fall Exposition in Paris. Over the years quality control was an issue as political and economic factors disrupted access to global markets. But in the last few years governments have been working to support the industry and regain its past reputation.

Winemaking in North Africa goes back to the Romans and the Phoenicians. Despite Islam prohibiting the consumption of alcohol, the industry has survived. The industry is currently being re-organized to make the most of a free trade agreement with the European Union.

Tunisia has a long, rich winemaking heritage known the world over. About half of Tunisia’s vineyards are dedicated to producing grapes for wine production rather than for sale as table grapes.

Over the last 20 years, Les Vignerons de Carthage, a cooperative of 10 cellars located in the Cap Bon region of Northern Tunisia, have been working under the leadership of Belgacem D’Khili, a Bordeaux trained oenologist to improve and maintain wine quality.

They have kept the old vines, persevered with hand-harvesting and traditional techniques, but have modernised the cellar equipment, the storage and overall approach to hygiene.

North African wines are being collectively marketed by resellers like Cotes d’Afrique (http://www.cotes-d-afrique.co.uk/tunisianwine/history.aspx).

Morocco, too, has become a respected wine maker and has a robust domestic wine-drinking market. Morocco’s oldest winery, Celliers de Meknes (http://www.lescelliersdemeknes.net/), told the Global Post how it handles the delicacies of wine-making in a majority Muslim country.

“We are tolerated,” said Jean-Pierre Dehut, the export manager for Celliers de Meknes. “But the tolerance requires that we stay within certain boundaries.”

Celliers de Meknes sells some 30 million bottles of wine per year — 25 million in Morocco.

A little-known wine producer, Zimbabwe has been producing wines since the early 1950s and commercially since 1965, according to Zimbabwe Tourism. Production peaked in the 1980s and later suffered from an export ban. Despite the country’s economic and political problems, the wine industry has grown. New techniques, equipment and grape varietals have been introduced and winemakers have been trained in Germany, Australia and South Africa. Regular visits from outside consultants have helped with raising standards.

Apart from economic problems the industry struggled with viruses and climate. But since the 1990s the industry has started to win international wine competitions

One of the successful wineries is Mukuyu Winery (http://www.africanbeersandwine.com/pages/wine.html), which produces an average of 1.5 million litres per year from 100 hectares under vines. Over the past 13 years, Mukuyu wines have won Silver and Bronze medals at the International Wine and Spirit Competition in London, and regional wine tasting competitions in South Africa.

By David South, Development Challenges, South-South Solutions

Published: January 2011

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.  

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Turning Animal Waste Into Paper

Animal waste is a messy fact of daily life in rural communities across the global South. This byproduct of life has many uses – but an ingredient for making writing paper is probably not the first that springs to mind.

But animal dung is cleverly being recycled into high-value products in Sri Lanka and Thailand. Both countries have elephants who are under threat. In Sri Lanka (http://en.wikipedia.org/wiki/Sri_Lanka) the large but endangered elephant population is considered a nuisance. They damage crops and are often killed for this reason. There are upwards of 3,000 elephants in the country – down from 14,000 in the 1800s. Nonetheless, they create vast quantities of excrement. In Sri Lanka, they face many threats: ivory poachers, being killed to protect crops and houses, starvation from drought and deforestation.

Animal waste (http://en.wikipedia.org/wiki/Feces) has many uses: it can be turned into fertilizer for crops, fuel for cooking, placed in a digester and fermented into bio-gas for heating and cooking, and if from a herbivore animal, into fibrous products like paper and cardboard. Packing boxes can also be made from the excrement.

As a vegetarian animal, elephants’ excrement and dung is made up of vegetable matter and is rich in cellulose (http://en.wikipedia.org/wiki/Cellulose). And cellulose is what makes up the majority of traditional wood-pulp paper (http://en.wikipedia.org/wiki/Pulp_%28paper%29).

Re-using the waste is also a good way to make elephants valuable to local people, rather than just being perceived as a nuisance.

Dung produces a natural, recycled paper. While harvesting trees for paper is an expensive and energy-wasting process, the elephant’s digestive tract does the hard work by breaking down the cellulose, making it ideal for the next stage in becoming a paper product.

According to the Environmental Paper Network (http://www.environmentalpaper.org/stateofthepaperindustry/confirm.htm), 50 percent of the world’s forests have been destroyed, and 80 percent of the remaining forests are in a degraded state.  By turning to alternative sources to make paper, trees are saved and vast quantities of energy reduced. Traditional paper-making also uses many chemicals in the process, something that is avoided in using animal dung. Vegetable products are used to bind the paper together and water-soluble dyes are used to colour the paper.

Dung paper has earned some high-profile fans as well. The Turner Prize-winning British/Nigerian artist Chris Ofili (http://en.wikipedia.org/wiki/Chris_Ofili), uses elephant dung paper in his works.

The Elephant Dung Paper company (www.elephantdungpaper.com) in Thailand was one of the first to pioneer the technique. This business was started by dung paper pioneer Mr. Wan Chai. He tells a story of how he became enchanted by the paper-making process when he walked past a paper factory one day. Later, when he was at the Thai Elephant Conservation Center in Lampang, northern Thailand (http://www.changthai.com), he noticed the elephant dung was rich in fibres like those used in making paper from wood pulp.

Inspired, he embarked on a process of trial and error using his wife’s food processor to turn elephant dung into a fibrous stew that is then shaped, dyed and dried to make paper (http://www.elephantdungpaper.com/process.html).

Wan Chai has gone on to be a formative influence in the founding of a sheep dung paper making operation in Britain, Creative Paper Wales.

Another dung paper business is Mr. Ellie Pooh (http://www.mrelliepooh.com/) in Sri Lanka. Established with the goal of reducing conflict between humans and elephants, it has turned to making paper products to boost local incomes and create a direct economic incentive to protect the elephants. It is setting up handmade paper workshops in rural areas and teaming them with artisans to add value to the products and make them more desirable. Design is critical to making any product – no matter how ethically produced and how green – desirable to consumers.

The dung products Mr. Ellie Pooh makes include a wide variety of coloured papers, scrapbooks, note boxes, stationery pouches, greeting cards, ‘to do’ list pads, memo books, and a children’s book.

The process of making elephant dung paper takes about 13 days – three days of sorting, boiling and disinfecting, followed by 10 days to pulp, mix, press and dry the paper. Mr. Ellie Pooh makes about 1,000 sheets a day and 30,000 a month. Each sheet makes six A4-size pieces of paper.

The company was founded by Dr. Karl Wald and Thusitha Ranasinghe, and is managed by recycled paper firm Ecomaximus (http://www.ecomaximus.com/) based in Colombo, Sri Lanka, with a workshop in Kegalle.

Ecomaximus was started in 1997 by its Managing Director, Ranasinghe, who was following a family tradition going back three generations of working in printing.

The business started recycling waste printing paper and then moved into recycling a wide variety of other cellulose waste: rice paddy straw, cinnamon and banana bark. It now employs over 35 people on two sites.

It is proof that it just takes creativity and a new perspective to turn something considered as waste into wealth: and jobs and sustainable incomes.

By David South, Development Challenges, South-South Solutions

Published: January 2011

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

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Food Diplomacy Next Front for South’s Nations

The meal is a universal bonding ritual, a time for families or friends to socialize and catch up on the day’s activities. Food has the ability to transcend cultures and societies when humour, the arts, and diplomacy cannot. A person may know nothing about a particular country or culture, but they know what their appetite and palate likes. So it’s no surprise that countries in the South are turning to cuisine as a new weapon in their armoury of diplomacy and cultural outreach.

The phenomenon of ‘gastrodiplomacy’ got its start in Thailand. Thai cooking and restaurants had been on the rise around the world since the 1980s. But in 2002 the Thai government decided to use these kitchens and restaurants as new cultural outposts to promote brand Thailand and encourage tourism and business investment. The “Global Thai” campaign sought to increase the number of Thai restaurants around the world and boost Thailand’s cultural impact.

As The Economist reported at the time, more restaurants “will not only introduce delicious spicy Thai food to thousands of new tummies and persuade more people to visit Thailand, but it could subtly help deepen relations with other countries.”

Thailand’s 2002 campaign boosted the number of Thai restaurants around the world and made popular dishes like pad Thai and tom yum soup (http://www.bbc.co.uk/food/recipes/tomyumsoup_85069) familiar to many more people. They are now signature dishes, as synonymous with Thailand as hamburgers are with the United States.

Malaysia, whose varied and delicious cuisine is less known globally than that if its neighbour Thailand, has been running an aggressive campaign in Britain to promote its food. This included setting up a street market in the famous Trafalgar Square in central London: a high foot-traffic spot guaranteed to get the city’s attention.

South Korea also has been pursuing its “Kimchi” diplomacy, an ambitious US $44 million campaign to promote Korean food, or hansik (http://www.visitkorea.or.kr/enu/CU/CU_EN_8_1_5.jsp) as it is known, to more nations. They aim to make Korean food one of the top five most popular cuisines in the world. Using a master plan, South Korea is opening Korean cooking classes at top culinary schools like France’s Le Cordon Bleu and the Culinary Institute of America, increasing the number of overseas Korean restaurants to 40,000 by 2017, and promoting the food’s health qualities. The Korean staple of kimchi – a fermented, spicy cabbage dish – will be perfected at a “kimchi institute” to appeal to foreign palates (http://www.korea.net/detail.do?guid=45469).

Neighbouring North Korea has also turned to gastrodiplomacy with its chain of “Pyongyang Restaurants” (http://www.pyongyangrestaurant.com) around Asia and Europe. These eateries first appeared in China, near the border with North Korea, but have expanded widely during the last decade. Pyongyang Restaurants can be found in Vientiane, Laos; Siem Reap and Phnom Penh, Cambodia; and Bangkok and Pattaya, Thailand. In Europe, a restaurant has opened in the Dutch city of Amsterdam. The restaurants’ formula offers staff in traditional clothing, authentic North Korean interiors, North Korean art, cooking lessons, cultural performances, and singing. The food includes traditional Korean dishes like kimchi (fermented spicy cabbage), Pyongyang “cold noodle” and barbecued cuttlefish (squid).

One example of how gastrodiplomacy can work on the ground is the Kogi Taco Truck (http://kogibbq.com/), which serves up Korean-Mexican fusion food  in Los Angeles, California. This food truck moves around the city and uses social media like Twitter (www.twitter.com) to notify customers and fans of its location. The truck quickly developed a cult following and had lines lasting two hours as people ordered barbecued beef tacos topped in Korean “salsa roja” with coriander, onions, cabbage and a soy-sesame chilli dressing. The truck has been praised for bringing the appreciation of Korean food and culture to parts of the city that knew little about Korea.

A passionate promoter and chronicler of gastrodiplomacy is Paul Rockower, Communications Director of the Public Diplomacy Corps (http://publicdiplomacycorps.org), an organization dedicated to bringing
diplomacy to the public. He noted on the Nation Branding (www.nation-branding.info) website that “a keen eye for the irreverent is a must if you really want to make the nation brand stand out. Highlighting exotic tastes and flavors, and engaging in nontraditional forms of public diplomacy help under-recognized nation brands gain more prominence in the field of culinary and cultural diplomacy.”

For Taiwan, which has tense relations with China, which does not recognize it as a nation, gastrodiplomacy is a way to get the island’s message across. Taiwan is spending US $31 million on its food diplomacy campaign around the world.

“Taiwan has figured out it can do better outreach work through the kitchen table,” Rockower told The Guardian newspaper. “When someone tries a sea-salt latte (a Taiwanese drink) it creates awareness about Taiwanese culture. The Koreans embarked on Kimchi diplomacy partly because their brands weren’t being recognized as Korean – Samsung was being recognized as a Japanese brand.”

By David South, Development Challenges, South-South Solutions

Published: December 2010

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

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Indian Newspapers Thrive with Economy

The onslaught of digital media in the developed countries of the world regularly brings pronouncements of the death of the traditional newspaper. But this assumption of digital triumph misses out on the reality in countries across the global South.

As incomes rise and literacy levels go up, so does the desire to consume news and information. And while many are jumping straight to online and mobile phone sources, just as many are enjoying more traditional print media offerings like magazines and newspapers.

India boasts both a fast-growing economy and the largest number of paid-for newspapers in the world. The print media industry in India has seen phenomenal growth since 2005, with the number newspaper titles increasing by 40 percent to 2,700 (World Association of Newspapers). The two factors driving this growth in newspapers are rising literacy and a booming economy

The World Association of Newspapers found China leads the world for newspaper subscribers, with 93.5 million readers a day. India is second. It is estimated the Indian newspaper industry will generate US $3.8 billion in revenues in 2010, a 13 percent growth rate over the last five years.

Estimates place growth in the newspaper industry in the next four years at 9 percent a year, to US $5.9 billion (KPMG).

Part of the reason India is defying the decline in newspaper numbers and readership seen in developed countries is poor internet penetration across the country. Because of this, only 7 percent of the population uses the web for information. And the country’s high number of illiterates (just 65 percent of the population can read) means even if many could afford a newspaper, they couldn’t use it.

According to Amar Ambani, head of research at India Infoline Group, “Unlike the West where the internet publishing and advertising has significantly hit the print media, the Internet threat to print media is still in its nascent stage in India, given the low penetration of computers and adequate bandwidth across the country.”

Newspapers are also growing in a highly competitive market exploding with new television channels on cable and satellite and other media distractions like mobile phone applications.

The newspapers (http://www.world-newspapers.com/india.html) are a strong reflection of how much the economy has changed in the past decade. They contain advertisements for property, mobile phones, cars and dating services.

Cost is also a critical element in their success: at only four rupees each (US $0.09 cents), many Indians buy several newspapers at a time for their home. The publications are able to charge so little because of the health of the advertising revenue coming in. Newspaper advertising in India increased by 30 percent between January and Match 2010 alone, the quickest jump in ads for the Asia-Pacific region (Nielsen India).

There is a hierarchy in the newspaper industry: English-language newspapers attract wealthier readers and can charge the most for advertising. But rising literacy rates combined with increasing personal wealth is fuelling growth in regional papers written in local languages. India has 22 official languages and English as an associate language. The country as a whole has about 33 different languages and over 2,000 local dialects. Hindi newspaper circulation rose from 8 million in the early 1990s to over 25 million in 2009.

The Times of India (http://timesofindia.indiatimes.com) is now the world’s largest circulation English-language newspaper, with 4 million readers. It uses this success to charge 10 times what regional papers can for advertising. At present, the regional newspapers’ bread-and-butter is mostly government-paid advertising.

But if trends continue as they are, then the tables will turn on big beasts like the Times of India. Regional papers will grow as people look for an opportunity to read in their own local language.

Flush with cash and confidence, Indian newspapers are also innovating new ways to advertise untried in other countries. Talking ads attached to the actual newspaper’s back pages caused a great stir when they were trialled in India recently (http://www.guardian.co.uk/media/greenslade/2010/sep/28/newspapers-advertising). The talking ads for a car company delivered a sales pitch but also alarmed and annoyed many people because the talking ad wouldn’t stop talking.

Ambani puts the success of the Indian newspaper industry down to five factors: the economic boom in semi-urban and rural India; growing local content; more opportunity to grow the number of readers; rising advertising spending; and rising literacy as a result of rising secondary school enrolment. He believes students aged between 10 and 15 are getting the newspaper habit and they represent huge future growth in newspaper readers.

By David South, Development Challenges, South-South Solutions

Published: October 2010

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.  

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