Indian ID Project is Foundation for Future Economic Progress

India is in the midst of the biggest national identification project in the country’s history. The aim is for every Indian to receive a voluntary electronic identification card containing his or her details and a unique number. Called an Aadhaar, it is a 12-digit unique number registered with the Unique Identification Authority of India (http://uidai.gov.in) (UIDAI). The project joins a growing trend across the global South to map populations in order to better achieve development goals.

About one-third of the world’s urban dwellers live in slums, and the United Nations estimates that number will double by 2030 as a result of rapid urbanization in developing countries. How to improve slum-dwellers’ living conditions and raise their standard of living is the big challenge of the 21st century.

With just four years to go until the 2015 deadline to meet the Millennium Development Goals (http://www.undp.org/mdg), and the current economic downturn reversing some gains, any tool that can make development decisions more precise has to be a benefit.

Innovators are turning to the opportunities afforded by digital technologies to reach slums and poor areas. The approaches vary, from India’s national identification system to new ways of using mobile phones and Internet mapping technologies. With mobile phones now available across much of the global South, and plans underway to expand access to broadband internet even in poorly served Africa, it is becoming possible to develop a digital picture of a slum and poor areas and map population needs.

Put to the right use, this powerful development tool can fast-track the delivery of aid and better connect people to markets and government services. In a country of severe regional disparities and caste (http://en.wikipedia.org/wiki/Caste) divisions, the national identification number has the advantage of not documenting people in a way that would bring prejudice.

India’s Aadhaar is intended to serve a number of goals, from increasing national security to managing citizen identities, facilitating e-governance initiatives and tackling illegal immigration. While critics of ID schemes complain about the civil liberties implications of national identity card projects (www.bigbrotherwatch.org.uk), it is a fact that countries that want to increase the social benefits available to their citizens need to understand who those citizens are, where they live and what their social needs are. India’s problem to date has been a lack of knowledge of its citizens: many millions exist in a limbo world of not being known to local authorities.

The unique number is stored in a database and contains details on the person’s demographics (name, age, etc.) and biometrics (http://en.wikipedia.org/wiki/Biometrics) – a photograph, 10 fingerprints and an iris scan. Residents in an area find out about the Aadhaar through various sources, from local media to local government agencies. An ‘Enrolment Camp’ is established in the area where people go to register, bringing anything they have that can prove their identity. The biometric scanning takes place here. ID cards are issued between 20 and 30 days later.

On January 13, 2011 the project declared it had registered its millionth person, a 15-year-old named Sukrity from North Tripura. The goal is to register 600 million people in the next four years.

One of the immediate advantages to many poor people is gaining access to banking services for the first time, because an Aadhaar number is accepted as sufficient ID to open a bank account. The identification authority says the scheme will be “pivotal in bringing financial services to the millions of unbanked people in the country, who have been excluded so far because of their lack of identification.”

The Times of India reported in 2010 that Khaiver Hussain, a homeless man in an addiction treatment programme, was able to get a bank account after receiving the identification number. He was able to open an account with the Corporation Bank along with 27 other homeless people. Having a bank account has removed the fear he had of being robbed of his meagre savings while he slept.

Another homeless day labourer, Tufail Ahmed from Uttar Pradesh, said “This passbook and the UID card have given people like me a new identity. It has empowered us.” He has been able to use the saved money to rent a room with four other day labourers.

In countries where no national ID card schemes exist, people are turning to other methods to register and map populations in order to improve their living conditions.

In Kenya and Brazil, digital mapping projects are underway using mobile phones to paint a picture of the population living in slum areas and shanty towns. An NGO called Map Kibera (www.mapkibera.org) began work on an ambitious project to digitally map Africa’s largest slum, Kibera in Nairobi, Kenya. The Map Kibera project uses an open-source software programme, OpenStreetMap (www.openstreetmap.org), to allow users to edit and add information as it is gathered.

An NGO called Rede Jovem (www.redejovem.org.br) is deploying youths armed with GPS (global positioning system)-equipped (http://en.wikipedia.org/wiki/Global_Positioning_System) mobile phones to map the favelas of Rio de Janerio.

Powerful tools now exist to aid digital mapping. Google Maps (www.maps.google.com) is one example.

While the project is impressively ambitious – and it remains to be seen if it is completed as planned – the economic and development implications of this vast data collection and national identification are enormous. It will enable very accurate identification of markets and needs and also of development challenges and needs. This should lead to many business innovations in the country in coming years and also draw in more business from outside the country.

By David South, Development Challenges, South-South Solutions

Published: April 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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Bolivian Film School’s Film Scene Paying Off

 

A film school in Bolivia shows how a creative hub can become the start of something much bigger. The school is inspiring a new generation of young people to get into filmmaking. And one of its lecturers is already experiencing global success acting in an award-winning new Spanish film.

Bolivia’s economy has grown over the last decade, and the country is beginning to shed its long-standing reputation for grinding poverty and political instability. Public spending has risen, and more money has been put into programmes to reduce poverty. More students are entering higher education and the country recognizes an urgent need for greater awareness and understanding of modern technology.

Film and media production have been targeted as an important way to advance Bolivia’s social and economic development.

Veteran Bolivian filmmaker Jorge Sanjines (http://en.wikipedia.org/wiki/Jorge_Sanjin%C3%A9s) has been one of the most passionate exponents of using film to spread the stories and wisdom of Bolivia’s indigenous people. He believes their stories understand the need to balance the demands of humanity with preservation of the environment. Film, to him, is a way to liberate Bolivian society and address its pervasive problems of poverty, hunger and marginalization.

This chimes with rising global awareness of the importance of the creative economy in future development. No longer seen as a frippery, the creative economy is the “interface between creativity, culture, economics and technology in a contemporary world dominated by images, sounds, texts and symbols” (UNCTAD). It is seen as a way for emerging economies to leapfrog into high-growth areas in the world economy.

It’s a formula that has worked well in many other places. A successful art gallery fosters a scene and draws in audiences, buyers and new businesses. Soon, a creative economy comes alive and that means serious money. Both New York and London have shown how this can work. By 2005, New York City’s creative economy employed over 230,899 people in 24,481 businesses (Americans for the Arts).

Creative economies tend to create excitement and pride in the country; creative businesses like advertising and design make it much easier to sell products and connect with customers. It is hard to imagine the Apple computer brand (http://www.apple.com/) being as successful as it is without intelligent and engaging design.

Regeneration – of poor neighbourhoods, districts, even whole countries – is both a challenge and a key to transforming lives. There is a strong track record of turning to artists and creative people to re-imagine neighbourhoods or a country’s culture, restoring pride and vitality to places beaten down by life’s hardships.

In the Bolivian city of El Alto (http://en.wikipedia.org/wiki/El_Alto,_La_Paz), the Cine Alto film school at the Municipal Arts School of El Alto (http://cinealto.blogspot.com/2009/01/nueva-carrera-de-artes-cinematogrficas.html), offers students a free education in filmmaking. Lecturer and actor Juan Carlos Aduviri is one of the high-profile successes to come from the school since it opened in 2006.

A graduate of the school and a lecturer on screenwriting, he got a big career boost by acting in a major new, award-winning film and is nominated as Best Newcomer by Spain’s top film awards, the Goyas (http://www.academiadecine.com/home/index.php). The nomination is for his role in the Spanish film Even the Rain (http://www.tambienlalluvia.com/) – set in the Bolivian city of Cochabamba, where protests a decade ago broke out over privatisation of water services. It stars well-known Mexican actor Gael Garcia Bernal, who plays a filmmaker set on making a movie about the Spanish conquest of the Americas. While making the film, the so-called “water wars” break out and the actor played by Aduviri must balance his film role with being a protest leader.

The protests against water privatisation in Cochabamba led to the election of Evo Morales (http://en.wikipedia.org/wiki/Evo_Morales) as Bolivia’s president in December 2005.

Cine Alto is one of four film schools in Bolivia but the only one that does not charge students tuition. Cash is tight for the school, which is a simple place and runs on thin resources. The classrooms have bare walls and broken windows, but the school is serious about transforming the lives of young people. The curriculum emphasises a strong theoretical foundation in combination with technical and practical training.

“Conditions in Bolivia to make a film are challenging and in El Alto, it’s even more difficult,” Aduviri told the BBC.

“Life is hard here in El Alto, and this film school is trying to rescue this talent, and support these young people.”

A member of Bolivia’s indigenous people, the Aymara (http://en.wikipedia.org/wiki/Aymara_people), Aduviri grew up in El Alto, a city known for its strong pride and resilience. It is home to almost a million people, most of whom are Aymara.

He studied screenwriting and turned to teaching at the school after graduating. He is passionate about filmmaking as an alternative to negative influences in the community: he wanted the film school “to give a voice to all the talent that we’re losing to alcohol, drugs, prostitution, homelessness and gangs.”

One student, Edson Chambiborque, told the BBC: “”He has taught us to value the little that we have in this school, and never drop our heads despite all the difficulties we may have.”

Aduviri comes from a poor family but now makes a good salary by Bolivian standards: US $200 a month. (The average monthly wage in Bolivia is around US $90). He still lives with his mother in a poor neighbourhood. His father, a miner, died of lung disease.

He wants to become a director and screenwriter and dreams of his film career taking him to the Cannes Film Festival in France (http://www.festival-cannes.com/).

He will continue acting to raise the money to be able to finance his own films. With the money he has made from appearing in the Spanish film, he has bought a computer with film editing software and a television. He has a goal to watch two movies a day on his new television and keep learning.

Appearing in the film has catapulted his career to the next level: the phone is always ringing and the world’s media keep asking for interviews. It has come with trips to Europe to promote the film and receive awards. He also won the best actor award from the Festival de Cinema Europeen des Arcs (http://www.lesarcs-filmfest.com/2010/programme/). An impressive journey for somebody from a poor family.

When he saw his first movie he was inspired by the magic of filmmaking. He told the BBC: “It was showing Rambo. And that day I realised what I wanted to do. When I left the cinema, I said: I want to make films.”

Bolivian film has had to fight for attention with other Central and South American countries. Brazil, Argentina and Chile all have experienced global success. The country has a rich – but little-known – film history, with significant Bolivian filmmakers including Pedro Sambarino, Jorge Ruiz, Oscar Soria, Jorge Sanjines, Antonio Eguino, Paolo Agazzi, Rodrigo Bellott, Juan Carlos Valdivia, Adriana Montenegro, Marcos Loayza.

Bolivia is looking to the digital age to rectify its relative anonymity, and Cine Alto may be ground zero for a Bolivian film new wave.

By David South, Development Challenges, South-South Solutions

Published: March 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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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).

Africa’s Consumer Market in Spotlight for 2011

While other parts of the world will spend 2011 worrying about their debt levels and how to spur economic growth, many factors are pointing to Africa potentially following a different story. A frenzy of activity has been building around Africa’s market opportunities and its growing middle class consumer population. Years of steady growth rates up to 2008 and the vast, untapped opportunities on the continent have sparked interest from investors and businesses alike.

Foreign direct investment (FDI) to developing economies rose by 10 percent in 2010 due to fast economic recovery and increasing South-South flows. Africa peaked in 2008 because of the resource boom and fell by 14 percent to US $50 billion in 2010 (UNCTAD). Rising FDI from Asia and Latin America has still yet to match the decline from developed countries – still the majority of FDI to Africa.

However, foreign direct investment to Africa had risen sixfold to US $58.56 billion between 2000 and 2009 (UNCTAD). The amount going to manufacturing and services has been growing, despite the slow down in 2009 because of the global economic downturn. Africa’s 11 largest economies are now being seen as the next to match Brazil and Russia, economic stars of the last few years.

The continent as a whole forms the 10th largest economy in the world. Of Africa’s more than 1 billion people, 900 million can be classified as part of the consumer economy. Out of this group, there is a third – approximately 300 million people – who make modest sums by Western standards, about US $200 a month, but have spare cash to buy things like mobile phones, DVDs and new clothes, or pay for better schools. They are the population that is overlooked when attention is focused only on the very poor living on less than US $2 a day.

This vast group is captured in the book Africa Rising by University of Texas professor Vijay Mahajan, which details the phenomenon of Africa’s middle class consumer society. He calls this group of middle class consumers “Africa 2,” with the desperately poor called Africa 3s, and the extremely rich Africa 1s.

This new group has expanded far beyond ruling elites and government workers. Many of its members work in the private sector, as secretaries, computer entrepreneurs, merchants and others who have benefited from consistent growth rates in many African countries.

The portion of African households with discretionary spending power rose from 35 percent in 2000 to 43 percent in 2008. The challenge will be to turn this wealth to the benefit of made-in-Africa businesses and to create stable, high-quality jobs to ensure this wealth effect lasts.

The new wealth effect can give Africa the tools needed to tackle its long-standing development challenges and lift more and more people out of poverty and misery while reducing dependence on foreign aid. And this can add rocket fuel to the surge toward meeting the Millennium Development Goals deadline in 2015 (http://mdgs.un.org/unsd/mdg/Default.aspx).

The rapidly rising profile of Africa is reflected by the prestigious business newspaper the Wall Street Journal recently running a series titled “Africa’s Growing Consumer Class Lures Multinationals” (http://online.wsj.com/article/SB10001424052748704720804576009672053184168.html).

Consulting firm McKinsey (http://www.mckinsey.com/) believes Africa’s billion citizens should be seen as consumers and says the continent’s growing number of middle-income consumers now outstrips India’s. It boldly claims consumer spending will reach US $1.4 trillion in Africa by 2020, up from US $860 billion in 2008. Consumer spending rose by 16 percent a year from 2005 to 2008 before the global economic crisis.

It is forecast that 220 million Africans now frozen out of this consumer wave will become consumers by 2015 if current trends continue.

The IMF believes the steady growth will continue, with 5.5 percent growth for the 47 sub-Saharan countries this year.

That’s the good news. But many African countries still rank at the bottom in the World Bank’s Ease of Doing Business survey (http://www.doingbusiness.org/rankings). Africa remains a logistical nightmare for companies. Poor quality roads, inadequate harbours and inefficient rail systems, all make it difficult to move goods around the continent and across borders.

This makes distribution in Africa costly. Companies also often have to import building supplies and equipment to construct factories and plants. Then there is the unreliable electricity supply. Unable to trust local power supplies, many companies use their own electricity generators.

If handled right, new brands and companies are set to join African global success stories like Mo Ibrahim (http://en.wikipedia.org/wiki/Mo_Ibrahim), who founded the mobile telecommunications company Celtel.

Some of the new success stories include African companies pairing up with global firms as they seek local knowledge and experience. This will be a substantial opportunity for companies wise enough to organise themselves for global competition. In 2010, Sweden’s Electrolux – one of the world’s largest makers of home appliances – bought Egypt’s Olympic Group (http://www.ameinfo.com/145039.html), a North African powerhouse for household goods.

In the Ivory Coast, Nouvelle Parfumerie Gandour (http://www.npgandour.com/english/index.html) – makers of perfume, cologne, cosmetics and talcs – is an African cross-border success story. It has factories in Ivory Coast, Senegal, Morocco and Cameroon. Thirty percent of its profits come from exports, some of which are to the United States and Europe.

Sonatrach (http://www.sonatrach-dz.com/NEW/) in Algeria is the largest oil and gas company in Algeria and Africa. Is using its base in oil and gas exploration, production, pipeline transportation and marketing of hydrocarbons and by products, to move into other areas. It is increasing its investments in power generation, new and renewable energies, water desalination, and mining exploration and exploitation. Looking to grow its business with 30 percent coming from exports by 2015, it has spread across Africa ( Mali , Niger , Libya , Egypt ), to Spain , Italy , Portugal , United Kingdom , Peru and the United States.

Marwa (http://www.marwa.es/) from Casablanca, Morocco, is an African fashion success story. The brand started by Karim Tazi in 2003 began with just two stores in Casablanca and Rabat. It identified the niche of very fashionable but good quality and inexpensive clothing. It blends international trends with subtle influences from Moroccan tradition. Its prices hover between six euros for a t-shirt and 100 euros for a coat. It has successfully created a Moroccan high-street fashion look that can be exported. It has opened a branch in Zaragoza, Spain and is expanding to Riyadh, Saudi Arabia, Paris, France, Beirut, Lebanon and Istanbul, Turkey.

A survey by consultants AT Kearney (http://www.atkearney.com) found eight out of nine West African subsidiaries of global consumer goods companies discovered quicker revenue growth than their parent companies.

All this new wealth and growth provides substantial opportunities to African brands to build their businesses and markets. The big issue will be who will rise to the occasion and who will be clever enough to learn from existing African brands that are already thriving and have shown the way.

Two trends will also power this growth: urbanization and large youth populations. Africa’s youthful, urban population has already been reached by the telecoms sector through the rapid growth of mobile phones. More than 500 million subscribers have been signed up since 2000 (Informa Telecom and Media), a user base greater than the entire US population.

“By 2040, the continent will be home to one in five of the planet’s young people and will have the world’s largest working-age population,” according to Charles Roxburgh and Susan Lund, authors of a study for the McKinsey Global Institute.

“If Africa can give its young people sufficient education and skills, they could be a substantial source of consumption and production in years ahead.”

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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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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