Indian City Slum Areas Become Newly Desirable Places to Live

 

With India’s urban economy experiencing rapid growth, its slums – once seen as the most undesirable places to live in the country, if not on Earth – are attracting the attention of affluent residents and developers inIndia’s rapidly expanding cities. The prosperity inIndia’s cities has made these areas’ proximity to business and entertainment zones highly desirable. In turn, this has led to slum dwellers either upgrading their homes and in the process boosting their value, or being offered the opportunity to sell their rudimentary dwellings to real estate agents and property developers.

For some, this could be a great leap forward in income and opportunity; for others, it could mean exploitation and hard choices, weighing up the cash boost against moving out of the slum area.

How to best handle slum areas in urban and peri-urban communities will be a major challenge for most countries in the South as they continue to urbanize.

India’s phenomenal economic growth rate – forecast to be 7.9 percent this year by the Asian Development Bank, after averaging 7.7 percent per year over the past decade – has been the force behind an expanding middle class population, now estimated at 50 million people (McKinsey). Forecasts see it swelling from 5 percent ofIndia’s population to 40 percent by 2025.

With 30 percent of the population living in urban areas and cities contributing 60 percent of the country’s GDP and 90 percent of government revenues (Wall Street Journal), city-dwellers’ fate is critical to the functioning of the economy.

According to the 2001 Indian census, slums make up 25 percent of all housing and 26 percent of urban households lack access to sanitation facilities.

But Indu Prakash Vaidya, a 32-year-old housewife, is part of new trend in India’s city slums. Vaidya lives in a small shanty house in Mumbai with no running water, no sewage services and a jerry-rigged electrical connection.

Vaidya’s home is a just a single room for the five people in her family. They sleep on the cement floor and the ‘kitchen’ is a two-burner gas stove. The dwelling is so poorly constructed that they have to move around inside the room when it rains outside to avoid getting soaked.

But her humble home has been valued at US $24,000 by people looking to buy it.

According to real estate agent Hari Ram, the average price of a 91 square metre shanty home in Mumbai is now US $46,000.

“Shanties as small as 120 square feet… are as expensive as US $93,000,” Dinesh Prabhu, a construction company owner, told NDTV television.

Sixty percent of Mumbai’s 21 million people live in slums. And many are now finding themselves the subject of a property boom. This has led to the bizarre spectacle of luxury high-rise buildings sprouting up in a sea of slum housing. The slums are attracting the attention of those with money because many busy city workers face long commutes and are desperate for homes closer to work and entertainment areas.

The value of living close to the action is summed up by one slum dweller:

“People would kill to be in a place like this,” said slum dweller Sundar. “There are four local train stations close by. And the bus stop is a stone’s throw away.”

Some say this real estate boom offers enormous potential for the poor.

“All I can say is, given the current real-estate rates, those slums are invaluable,” said Sharad Mahajan of the Pune-based nonprofit organization Mashal (http://mashalindia.org).  Mashal focuses on the problem of urban shelter and also implements housing projects. It has been working in the Dharavi slum area with theMaharashtra government on its redevelopment. The slum is well-known for its representation in the film Slumdog Millionaire, and the area is next to the Bandra-Kurla Complex business district of Mumbai. Mashal has been mapping the area, home to 60,000 families, to make sure the redevelopment is fair to the families living there.

Land tenure is an issue however. Many slum dwellers do not have official title to the land they live on. Over time, they have become semi-official places to live as governments have hooked many up to electricity and drinking water. Issues of corruption and exploitation are also other problems that need addressing if this real estate windfall is to actually benefit slum dwellers.

Typical slum dwellers are day labourers and poor migrants. But others are people who good easily afford to live somewhere else but don’t want the long commutes to work.

“It is simpler and less expensive to live here,” said Sankaralingam, a plastic merchant, who estimates his annual income at around US $9,300: an amount that could get him a home somewhere nicer.

For Indu Prakash Vaidya, the dilemma – to sell or not to sell – makes for some painful choices. While her current home is prone to flooding during the rainy season, she feels she would have nowhere else to go if she sold the home.

Yet the pressure to sell is great and elemental.

“I have three children, and their education and well-being need to be taken care of. Financial constraints can push me to sell this shanty in the future, then where will I live? I will have nowhere to go,” she told NDTV.

By David South, Development Challenges, South-South Solutions

Published: December 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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Indian Mobile Phone Application Innovators Empower Citizens

With mobile phones becoming ubiquitous across the global South, the opportunity to make money – and possible fortunes – by providing ‘apps’ for these devices is now a reality.

Apps (http://en.wikipedia.org/wiki/Application_software) – applications which allow users of new mobile phones to do everything from running a business to banking to navigating chaotic cities – have quickly become a very creative space and a dynamic market for innovators and entrepreneurs. Because they are pieces of software and are relatively inexpensive to create, requiring only time and hard work, an individual working out of their home can develop an app, introduce it to the online marketplace and see if it will succeed.

The only limit is the imagination.

They are also a great way to solve people’s problems and possibly make some money in the process. As economies and cities grow across the South, many everyday difficulties can be tackled with these apps.

Apps are revolutionary because they solve the problem of how to view websites on mobile phones and smartphones (http://en.wikipedia.org/wiki/Smartphone). Apps are designed for a small screen and have simple functionality and design. They often can function without any constant connection to the Internet, updating themselves sporadically when the phone can connect with phone networks or the Internet. They are also either free or inexpensive, using micro-payments to make a profit. The essence of the micro-payment business model is to charge a small amount and turn this into a large amount by having large numbers of people download the app. It is a successful business formula that has made many vast fortunes throughout the age of the mass consumer market, which began in the late 19th century.

Bart Decrem, co-founder of Tapulous, a maker of apps for the iPhone (http://tapulous.com), told The Economist: “Apps are nuggets of magic.”

Apps are sold in online stores run by companies like Apple (http://itunes.apple.com/us/genre/ios/id36?mt=8), Google, Sweden’s GetJar (http://www.getjar.com), and South Korea’s SK Telecom. Apple’s store has over 425,000 apps and Google’s Android Market has more than 250,000. Other stores include Mobihand, PocketGear, Mobango, Handango, Blackberry App World and Handster (http://www.handster.com).

Research firm Gartner (http://www.gartner.com/technology/home.jsp) estimated that 18 billion apps have been downloaded since Apple opened its first app store in 2008. Remarkably, it forecasts this number could rise to 49 billion by 2013. The most popular topics include games, weather forecasts, social networks, maps, music and news.

The dynamic documented so far for apps seems to follow the way music charts work. A few apps, out of the many on offer, become big sellers and popular favourites, getting the most users. Partly this reflects the difficulty of quickly searching through all the apps available in the world to find the right one, a process that favours well-marketed apps.

The recent TechSparks 2011 App4India (http://www.facebook.com/techspark) contest showcased the creative thinking about apps now happening in India.

One Indian success story is the 1000Lookz (http://www.vdime.com/pro1.htm) app, developed by Vasan Sowriraj (http://www.vdime.com/about.htm), which helps women perform a virtual beauty makeover. A woman can check what shades work best for her skin tone by using her own photos uploaded to the app. The user adds features like foundation, blush, gloss, eye-shadow, eye-liner and lipstick. The app uses facial recognition and skin tone detection technology to assist the virtual makeover. It was developed by VDime Innovative Works headquarterd in Atlanta, Georgia, with its technology developed by its Indian division.

1000Lookz’ mission is to create “innovative products that bring cheer to consumers’ faces.”

Sowriraj got his experience from working as a key member of the team developing special image processing for the Indian Space and Research Organisation (http://www.isro.org).

The same team has also developed another service enabling users to transform standard emoticons – those cartoons used in electronic communications to convey emotions – into emoticons using your own face image. It is called Humecons (http://www.humecons.com), and its slogan is “Emote Yourself”.

The India TV Guide, based in Bangalore, India’s software hub (http://en.wikipedia.org/wiki/International_Tech_Park,_Bangalore), is a mobile phone application developed by Jini Labs (http://www.jinilabs.com) offering programme listings for 150 television channels broadcast in India, and allows viewers to save reminders for favourite shows and build favourites lists.

Jini Labs also makes Jini Books (http://itunes.apple.com/in/app/jinibooks/id404988026?mt=8), a clever app to display books, magazines and journals that are hard to find in conventional shops. It is free and promises to have “indie book authors and publishers – including small size, mid-size independent publishers, university presses, e-book publishers, and self-published authors.”

A very useful app improving people’s lives is the Indian Railway Lite app. India’s railways are a critical part of the country’s economy, and the world’s largest railway system. The complexity of trying to work out the train schedule has been made easier with the app.

Founded by Srinath Reddy, the app’s chief technology officer at RSG Software Services (http://www.rsgss.com), the app enables users to discover train connections between stations, and find which trains pass through stations, while navigating the Indian Railways website. It is a good example of how an app can quickly become a big hit. It became the second most popular on the Apple India app store and is downloaded more than 1,000 times a day.

One of the advantages of the app is its ability to function without access to the Internet. It draws on its own database of information and offers a friendlier user interface than the Indian State Railways website.

“This feature has proved to be very popular as users can access train information even while they are travelling and are out of network range,” Reddy told Yourstory.in. “We update the app at regular intervals and the user has to download a new version of the app to get updated information. Trains are generally added once in a few months and the timetable does not change significantly, so the user can use the same version until the next one is released.”

The app’s creators initially found it difficult to get information and updates from Indian Railways.

“We took around four to five months to build the app,” Reddy said. “Significant effort went into compiling the train and station data as this was not easily available. Refining the UI (user interface) took quite some time as well.”

The company saw a market for the app because there were so many iPhone (http://en.wikipedia.org/wiki/IPhone) users in India. The app was downloaded 45,000 times between June and September, and other versions, including one for Google Android (www.android.com) are in the works to broaden access to people without an iPhone.

The company has its headquarters in Ranchi, India and has four development centers in India located in Delhi, Pune, Ranchi and Hyderabad. Currently, the company has approximately 250 employees with core competencies in Apple, Filemaker and Open Source technologies.

The Tuk Tuk 2 app is a clever and practical application for users of India’s ubiquitous motorized and bicycle rickshaws. They are an important part of the country’s transport infrastructure – but a journey in one can be a stressful experience for many reasons. This app seeks to lesson the stress.

Tuk Tuk 2 app (https://market.android.com/details?id=com.mindhelix.tuktuk2&hl=en) is designed to introduce fairness to the auto rickshaw marketplace. It empowers travellers to track where they are on a journey, check the fare and find the distance covered. It helps to reduce exploitation of travellers and makes sure they know where they are at all times: a powerful resource in crowded, busy and confusing cities.

It was developed by Mind Helix Technologies (http://www.mindhelix.com), founded in 2009 as a dedicated application development company with a mission to empower people with its apps. And that is really what apps are all about!

By David South, Development Challenges, South-South Solutions

Published: October 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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Anti-bribery Website in India Inspires Others

An Indian website tackling corruption has been so successful it has inspired a wave of followers in China.

The I Paid a Bribe website – motto: “Uncover the Market Price of Corruption” – was set up by the Janaagraha Centre for Citizenship and Democracy (http://www.janaagraha.org), a non-profit organisation based in Bangalore, India.

Janaagraha is dedicated to working with government and citizens to “improve the quality of life in Indian cities and towns,” according to its website.

Janaagraha’s initiatives strive “to make government departments transparent and accountable,” and the ipaidabribe programme (http://www.ipaidabribe.com) fits in with that goal. It seeks to harness the collective voices of the citizens to report and quantify incidents of corruption. The website will help to paint a picture of the level of corruption in cities and help the NGO in its fight to improve government oversight systems and procedures and to improve law enforcement and adherence to regulations.

The website tackles the “pernicious effect of corruption on destroying city life and disempowering citizens,” according to Raghunandan Thoniparambil, the site’s programme coordinator. “The original idea was that the website could become a simple means of tracking the market price of corruption – a kind of price prediction mechanism.”

He said the original idea was tongue in cheek and propelled by cynicism – but the site’s creators soon realized that “such an effort was indeed a very powerful one.”

The website displays reports and analytics on bribe patterns by city and by transaction amounts, frequency and averages.

The long-term goal is to reduce corruption faced by Indians when they use government services. The website asks users to log both recent and past incidences of bribery. It says: “Please tell us if you resisted a demand for a bribe, or did not have to pay a bribe, because of a new procedure or an honest official who helped you. We do not ask for your name or phone details, so feel free to report on the formats provided.”

Neither accusers nor accused are identified by name – only the incidents are logged. The website is funded by a grant of US $3 million and the NGO is planning to launch a mobile phone application as well.

The website doesn’t pursue individuals because it has found this approach is a distraction to getting systemic improvements by government.

“By not allowing names to be published, we have eliminated any incentive for any individual to make a false or malicious complaint,” said Thoniparambil. “Since nobody will gain anything by reporting a false complaint on our site because we do not act on complaints, we expect that the stories on the site are true.”

The site has been so popular it has spawned imitators in China and elsewhere. Thoniparambil said Janaagraha has been approached by civil society organisations in 13 countries about collaborating.

After a story was published in the Beijing News about I Paid a Bribe, a flurry of ‘tips’ and accusations flooded the Internet in China, and people set up similar websites to gather information on bribery and corruption in their country. One web developer called “Peater Q” set up a Chinese version of I Paid a Bribe, calling it wohuilule.com. Another two websites that popped up included “I Bribe…” (http://www.wxhwz.com) and http://www.tmzg.org. Some of the dozens of websites have been taken down, but others have received official support and encouragement.

“Peater Q” says he is a young Communist Party member and has received government permission for his site. He says the name of his site, wohuilule.com, is a Chinese translation of “I paid a bribe.”

These are still early days as these websites work out how to balance the need to ferret out corruption and bribery and the need to avoid gossip, rumour and slander. It is clear the damage done to a country when corruption and bribery get out of control is significant.

The United Nations’ Global Compact on anti-corruption calls it “one of the world’s greatest challenges.”

A report by the Carnegie Endowment for International Peace on Chinese corruption (http://carnegieendowment.org/2007/10/09/corruption-threatens-china-s-future/g4) found it threatens the country’s future by increasing socioeconomic inequality and social unrest. The report found 10 percent of government spending, contracts, and transactions goes to kickbacks and bribes, or is simply stolen. It also found the indirect costs of corruption to include efficiency losses, waste and damage to the environment, public health, education, credibility and morale.

“Corruption both undermines social stability (sparking tens of thousands of protests each year), and contributes to China’s environmental degradation, deterioration of social services, and the rising cost of health care, housing, and education,” the report said.

I Paid a Bribe is being used to build up an intelligent picture of corruption and bribery in India so that real change can be made.

“Citizens’ reports on the nature, number, pattern, types, locations and frequency of actual corrupt acts and values of bribes will add up to a valuable knowledge bank that will contribute to a reduction in bribe payments,” Thoniparambil said.

Not only does the website raise awareness about the problem and its dynamics, it maps out the path corruption takes through a public service. This, the website hopes, will enable better “more consistent standards of law enforcement and better vigilance and regulation.”

“We believe that every citizen who reports a story on our website about paying a bribe is angry enough to begin to resist it,” explains Thoniparambil.

“Except for using the data that we receive for further analysis, we will not take the complaints and stories forward. We do not intend to invoke the courts.”

But these websites need to be run with caution and care and they do have their critics.

“If you wanted to tarnish the reputation of the government or a department within it, or settle a vendetta, you could just get all of your friends to post claims against them,” Raymond Fisman, a professor at Columbia Business School who has studied corruption, told the BBC.

“There is no way of credibly aggregating the information to assess the magnitude of the problem,” he added.

Thoniparambil, however, remains positive that corruption and bribery are problems that can be tackled.

“I believe that corruption has grown this big only because as citizens, we have tolerated it,” he explains. “If we actively oppose it and there are enough of us, the government has to buckle down and tackle the problem effectively.

“Corruption may be rampant in India, but it is not endemic,” believes Thoniparambil. “Blaming it on our value systems is a poor alibi with no substance in it. I do not believe that Indians are inherently corrupt; our value systems are as good or as bad as anybody else’s. Corruption is not a social trend that arises out of an erosion of value systems; it is born out of systems failure. Corruption flourishes because we have poorly designed governance systems in the country.”

Thoniparambil sites a number of Indian successes to back up his optimism: competition in telephone service providers has reduced corruption; booking of railway tickets online has taken the power away from corrupt ticket sellers; and government departments have been forced to state how long services will take to complete.

Thoniparambil believes it is about changing the relationship between citizens and the public services they receive.

“We would like citizens to begin to realize that public services are our entitlements,” he says. “These are not favours dispensed from above. They ought not to be pessimistic about corruption. Countries have cleaned up very dramatically and the processes by which it has been done have been documented.

“Reduction of bribery in India will improve access to government services, particularly for the poor, reduce the cost of delivery of such services, speed up business and recourse to legal remedies. It will improve the quality of infrastructure and will be deeply empowering for Indian citizens.”

“It is only the collective energy of people that can turn the tables on the corrupt.”

By David South, Development Challenges, South-South Solutions

Published: August 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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Indonesian Food Company Helps Itself by Making Farmers More Efficient

The current global economic crisis is taking place at the same time as a global food crisis. Food inflation took off at the beginning of 2011. This is having a devastating affect on countries dependent on food imports and experiencing decreasing domestic production capabilities. The least developed countries (LDCs) saw food imports rise from US $9 billion in 2002, to US $23 billion by 2008 (UNCTAD), prompting Supachai Panitchpakdi, secretary general of UNCTAD, to say “the import dependence has become quite devastating.”

Garuda Food (www.garudafood.com), one of Indonesia’s leading snack food and drink manufacturers, has been boosting its own productivity by investing in improving the productivity of domestic small-scale farmers. This led to a doubling of crop purchases from peanut farmers between 2007 and 2009. By stabilising the market for peanuts and better guaranteeing income, it has attracted more people into becoming peanut farmers in the region.

This is crucial for the future of feeding the planet: we need more farmers.

Indonesia is the world’s fourth most populous country, with a population of over 238 million, spread out over a network of islands. Peanut farmers in West Nusa Tenggara (http://en.wikipedia.org/wiki/West_Nusa_Tenggara) (one of Indonesia’s poorest places) are a key part of the region’s wealth. Peanuts are the area’s third largest crop after rice, maize and soybeans, and the region supplies six percent of the country’s peanut production and 10 percent of Garuda Food’s needs.

Garuda Food says investing in farmers has raised its own productivity by a third. Turning past practices on its head, this large agri-food company is supporting small-scale farmers and helping them to boost their productivity and incomes. Conventional wisdom had been to view small-scale farmers as an inefficient hold-over from the past – the quicker they were driven out of business, the better.

The Indonesian peanut farmers were using traditional farming methods and local seeds. Knowledge of more sustainable farming methods and land management techniques was poor. The farmers were also beholden to the whims of local buyers and fluctuating market prices.

Then Garuda Food stepped in. The company’s field staff offer the farmers training, and through its subsidiary PT Bumi Mekar Tani, it spreads knowledge about new agricultural practices and provides the farmers with quality seeds and farming equipment.

The company buys crops directly from the farmers, rather than from middlemen, increasing the amount the farmer makes. A premium is also paid if the farmer achieves better quality for their crop.

“We receive substantial supply from peanut farmers in NTB (West Nusa Tenggara) and we hope the arrangement will continue,” Garuda Food’s managing director Hartono Atmadja told the Enchanting Lombok website.

Garuda Food’s initiative, with support from the World Bank’s International Finance Corporation and AusAID, through the Australia Indonesia Partnership, has raised the productivity for 8,000 small-scale farmers by 30 percent: an income boost for the farmers of 3.9 million Indonesian rupiah (US $456) per hectare annually.

Peanut farmer H. Sajidin told the IFC (International Finance Corporation): “My farm’s productivity doubled, my income improved significantly, and I can sleep peacefully at night knowing that Garuda Food will buy my crops at agreed prices.”

Raj Patel, author of Stuffed and Starved: Markets, Power and the Hidden Battle for the World Food System (http://stuffedandstarved.org/drupal/frontpage), has grappled with the conundrum of how to feed a rapidly growing planet. He finds the world is not lacking in food, but distributes its bounty very poorly and wastefully, leaving a planet where some people are literally ‘stuffed’ with too much food (the well-documented global obesity crisis) and others left to starve.

He finds the solution is often local.

“It turns out that if you’re keen to make the world’s poorest people better off, it’s smarter to invest in their farms and workplaces than to send them packing to the cities,” Patel wrote recently in Foreign Policy. “In its 2008 World Development Report, the World Bank found that, indeed, investment in peasants was among the most efficient and effective ways of raising people out of poverty and hunger.”

Patel uses the example of the southern African nation of Malawi, where “according to one estimate, the marginal cost of importing a ton of food-aid maize is $400, versus $200 a ton to import it commercially, and only $50 to source it domestically using fertilizers.”

By David South, Development Challenges, South-South Solutions

Published: May 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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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

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South Africa Innovates Healthcare with Prepay Phone Vouchers

Pioneers in Africa are experimenting with new ways to fund the delivery of healthcare that is affordable and sustainable and not dependent on foreign aid and donations. A South African company is prototyping the selling of pre-payment healthcare services through mobile phones with a range of vouchers that can be bought and downloaded at the tap of a keypad. They are priced at between US $12 and US $49 and cover medical and dental check-ups, tests, treatments, chronic care and medicines. They are flexible and can also be sent to friends and family who need help.

In South Africa, poverty is still widespread. The majority black population has a median income of US $2,000 a year (New Internationalist) and many still live in crowded townships and poor rural communities. Poverty has also increased for many white Afrikaner South Africans (http://en.wikipedia.org/wiki/Afrikaner). A study by the Standard Bank of South Africa found the number of whites earning less than US $80 a month grew from 2000 to 2004 by more than 50 per cent. In the government capital of Pretoria, 50 Afrikaner squatter camps have emerged in recent years. For many, affordable healthcare is a critical issue.

The story of healthcare in Africa is not a linear one of constant progress. The continent as whole achieved its lowest child mortality rates in the 1970s. But after that, the quality of healthcare declined as a result of various factors including economic crises and the HIV/AIDS crisis – both of which overwhelmed public systems. In sub-Saharan Africa, health systems reached rock bottom in the late 1990s.

“Few people could afford annual check-ups, medicines or user fees at hospitals,” wrote Dr. Ebrahim Malick Samba in the paper “African health care systems: what went wrong?” for News Medical (www.news-medical.net). “One result was the resurgence of infectious diseases such as malaria, tuberculosis and cholera.

“Prior to the 1980s, the district hospitals, community health centres and other outreach health posts provided medical services and essential drugs free of charge. With reforms, user fees and cost recovery were introduced, and the sale of drugs was liberalized.

“Many governments discontinued budget support to the health sector which paralysed the public health system. There was no money for medical equipment and maintenance; salaries and working conditions declined.”

Things have been steadily improving from this low base through the 2000s, the result of increased aid funding for public health systems and greater national investments in staff, facilities and equipment. There is still a long way to go, but Africa is becoming a world leader in developing and deploying mobile phone applications for health and healthcare.

Despite dramatic improvements to the quality of hospitals and the number of qualified doctors, the continent’s healthcare services are still a patchwork, with rural and slum dwellers poorly served and the stresses of treating patients with contagious diseases like HIV/AIDS and malaria pushing resources to the limit.

Research has shown it is better and fairer to develop pre-payment mechanisms for healthcare than to just hit patients with fees when they are ill. With pre-payment, a person can buy care services when they are financially able to and bank up care for when they become ill and not able to work and save.

This is a crucial issue for people with low incomes who can quickly be devastated by their illness or that of loved one or family member.

The World Health Organization (WHO) has taken a firm stand against so-called out-of-pocket payments and encourages the growth in pre-payment methods. The World Health Report 2000 found that “Fairness of financial risk protection requires the highest possible degree of separation between contributions and utilization.”

South Africa’s Yarona Care (www.yaronacare.co.za/prepaid.html) – a health insurance provider network – is rolling out prepaid mobile phone vouchers, allowing patients to see doctors or dentists and even traditional healers for treatment. When a patient visits, the healthcare worker redeems the mobile phone voucher to get paid. One product, Impilo Go, allows people to pay for one visit to a doctor and seven days of medicine for R230 (US $34). For people on a tighter budget, there is Impilo Care for R80 (US$12). A patient can visit a nurse practitioner for a medical check-up and receive tests.

Impilo One offers medicines alone for R100, while Impilo Plus for R195 (US $29) is aimed at people with chronic conditions. They can get a prescription from the doctor and then go to a pharmacy participating in the scheme to receive medicines.

Dental work is also covered by the vouchers.

An online demonstration shows how the mobile phone process works (www.yaronacare.co.za/cellphonedemo.html).

The service is marketed at a mix of customers, from individuals to corporate clients looking to cover large numbers of people to government and NGOs. They can purchase services by voucher, payroll schemes or mobile phones.

Prepaid by mobile phone as a concept is already well established across Africa. It is a simple way to make payments and sell services. In the case of Yarona’s offering, the customer or patient uses their mobile phone to dial a code to pay for a service. When at the doctor or dentist’s office, he or she spends the voucher for the service by giving a unique code to the healthcare professional. Once this is done, Yarona Care pays the healthcare provider for the service.

The voucher approach allows customers to buy health services for family members for a defined period of time. Vouchers can also be sent to family members for emergencies.

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.  

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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.