Wireless Internet Culture Helping Zimbabwe Economy Recover

Zimbabwe’s turbulent descent into hyperinflation at the beginning of the 2000s – and the food crisis it caused as prices soared and purchasing power shrank – captured the world’s attention. From refugees fleeing the country to widespread hunger and poverty, the impact of hyperinflation was stark and distressing. Since the country’s economy stabilized in 2009, various signals are showing that Zimbabwe is slowly making its way back to growth and stability.

The scale of the hyperinflation is summed up by Zimbabwe’s eye-popping inflation rate. By December 2008, inflation was estimated at 6.5 quindecillion novemdecillion percent (or 65 followed by 107 zeros — 65 million googol) (Forbes Asia).

One recovery strategy is emerging in Zimbabwe’s booming eating and drinking establishments. It seems the urge to socialize and network has become the source of economic vitality where so much else has been damaged.

The proliferation of coffee shops with wi-fi (wireless internet access) (http://en.wikipedia.org/wiki/Wi-Fi) has spawned a new, connected business culture that is flexible and entrepreneurial.

Zimbabwe’s unity government was formed in September 2008. By the beginning of 2009, the government relented on the crippling hyperinflation and allowed business to be conducted in the US dollar. This made it possible to save again and do business with greater predictability. At this time, the country had the world’s highest inflation rate and the central bank printed a 100 trillion Zimbabwe dollar note.

The economic result of greater stability has been new shopping malls opening and a boom in new eating and drinking establishments.

During the hyperinflation, eating out was the last thing on most people’s minds. Just surviving was the paramount daily task.

In the capital, Harare (http://en.wikipedia.org/wiki/Harare), the shopping mall Sam Levy’s Village (http://samlevysvillage.com), in the prosperous Borrowdale area of the northern suburbs, is full of thriving coffee shops, restaurants and pubs.

Outside of the wealthy enclaves, coffee shops have sprung up in the city’s art gallery, in sports clubs and a local supermarket chain.

While the coffees are still expensive relative to local wages, the Zimbabwe Online Hotspots (ZOL) (http://www.zol.co.zw) in the coffee shops have proved a big attraction. Most people in Zimbabwe have unreliable or non-existent electricity or, if lucky, poor-quality phone and internet dial-up in their homes.

ZOL Hotspots typically offer the first half hour of internet use for free. To surf longer, users must buy a voucher.

The damage done to the economy from hyperinflation and the political crisis means the country is still on the mend. But people have now resorted to what they call “networking,” according to Bryony Rheam in the Daily Telegraph newspaper. The functioning economy is all about making deals. And coffee shops with wi-fi are the perfect place to meet with a potential business partner.

But while the coffee shops are buzzing with people doing business, the proprietors still need to work out how to make better profits. Sales are still poor as people are mostly fixated on the wi-fi. One owner told the Telegraph: “We need to start charging people who sit here all day surfing the net.”

It is the restaurants who seem to be enjoying the boost in incomes and better spirits after the economic troubles. Zimbabwe’s black middle class are enjoying big occasions and celebrating with friends and family in restaurants.

“We went without for so long, that a lot of people almost see it as their right to spend money on eating out,” one patron told the Telegraph.

More good news has come from outside investors as well: Amstel Securities NV (http://www.amstelsec.com), based in Amsterdam, Netherlands calls Zimbabwe’s economy “the final frontier market in Africa”. It believes the country has the potential to grow its GDP (gross domestic product) to US $12 billion by 2015. The International Monetary Fund says the economy jumped from US $4.4 billion in 2009 to US $9 billion now.

In Amstel Securities’ report, it pegs the dollarization of the economy as the reason for stability: “These improvements have made Zimbabwe a much more vibrant economy with good further recovery potential.”

And these good vibes are contagious: it has been reported that the American hamburger chain McDonald’s is revisiting the idea of setting up in Zimbabwe. McDonald’s is currently present in a handful of African countries: South Africa has 132 restaurants.

By David South, Development Challenges, South-South Solutions

Published: September 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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Tourist Passion for Quirky Holidays Helps South

 

Conventional thinking holds that any country with a poor or non-existent reputation in the international media will not attract tourists. But this conventional thinking is wrong: The hottest tourist trend for 2009 is directly benefiting the South’s more out-of-the-way and under-appreciated countries. So says a travel expert who specializes in overlooked travel destinations.

Prior to the economic downturn, tourism accounted for more than 10 percent of global GDP and 8 percent of total employment worldwide. It grew by 6 percent in 2007, according to the UN World Tourism Organization. Tourism in the Asia-Pacific region grew by 10 percent and Africa by 8 percent.

But it has since declined by 8 percent between January and April of 2009 compared to the same period in 2008. Destinations worldwide recorded a total of 247 million international tourist arrivals in those four months, down from 269 million in 2008 (UNWTO World Tourism Barometer).

This means competition is heating up for tourists. Well-travelled tourists are now looking for out-of-the-way places and places far off the beaten track. They want to be unique and have a tale to tell when they get home.

Tony Wheeler, author of the book Bad Lands: A Tourist on the Axis of Evil and co-founder of the Lonely Planet travel guides, said “Lots of tourists want to be the first through the door.”

During the Fitur Travel Fair in Madrid in January 2009, Myanmar (formerly Burma) appeared for the first time. Europe’s biggest travel fair also saw Zimbabwe, the Palestinian territories and Iran chasing travellers to come and see the sights.

Wheeler told Britain’s Daily Telegraph newspaper that, ironically, the more negative reports in the media a country gets, the more this new breed of tourist want to visit and find out the truth.

And his travel experiences have taught him, for example, the Burmese people do not believe in isolation and boycotts, as he wrote in the Guardian.

“Over the three decades since my first visit, tourism has grown from 20,000 tourists a year to more than 100,000.”
“Cutting the country off from the rest of the world isn’t going to help. We recently received a letter from one of our Burma authors saying the psychological damage of being isolated can be as bad as the economic damage.”

North Korea – which was labelled part of the “axis of evil” by President George W. Bush – saw its foreign tourist numbers rise to 4,500 in 2008 from just 600 in 2001.

Ross Kennedy of Africa Albida Tourism, which operates safari lodges in Zimbabwe, said bad headlines hurt but presenting an alternative view can reverse apprehension and lure tourists to come.

The lodges saw a 4 percent rise in visitors in 2008 in spite of chaotic elections in Zimbabwe that drew negative press.

“You certainly can’t write off an entire destination because of the choices or behaviour of a few individuals,” Kennedy told the Telegraph.

Tourism is now generally recognized to be one of the largest industries in the world, if not the largest. It has grown rapidly and almost continuously over the past 20 years, and is now one of the world’s most significant sources of employment and of Gross Domestic Product (GDP). Tourism particularly benefits the economies of developing countries, where most of the sector’s new tourism jobs and businesses are being created.

Tourism, because it is a labor-intensive industry, is seen as a great way both to reduce poverty and to meet all the Millennium Development Goals. It favours small-scale businesses, it is decentralized and can diversify regional economies, it is relatively non-polluting and can contribute to the conservation and promotion of natural and cultural heritage, and most importantly it can act as a catalyst for kick-starting other sectors of the economy.

In Iran, the Laleh Kandovan International Rocky Hotel, located in the province of East Azerbaijan in the north-west of the country, has been luring in tourists with the villages’ cave homes. Located in the village of Kandovan, where residents speak a Turkish dialect, the homes look like craggy sandcastles with holes in them; around 700 people live in the hollowed out rocks.

Prior to the hotel opening, it was only possible to visit for a day and the locals, who make their money harvesting fruit and walnuts, were suspicious of outsiders.

Kandovan means “Land of the Unknown Carvers”. An added attraction to visiting Kandovan is the mystery surrounding the houses. No one knows how long people have been there or when the homes were carved out of the rock. Others claim it is the biblical land of Nod, where Cain was left to wander after murdering his brother Abel.

The hotel occupies a hillside of caves and has a large restaurant and rooms that blend traditional décor like Persian rugs with modernist touches like recessed lighting. The rooms offer under-floor heating and some even have whirlpool baths. The hotel currently has 10 rooms, but plans to expand to 30.

By David South, Development Challenges, South-South Solutions

Published: July 2009

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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Web 2.0 to the Rescue! Using Web and Text to Beat Shortages in Africa

The beep-beep of a received text on a mobile phone is now becoming a much-needed lifeline to Africans. Zimbabweans, who continue to struggle every day with inflation that has shot to 3,731 percent (Zimbabwe Central Statistical Office), have usd African ingenuity and 21st century technology to survive another day.

New website services have become a literal lifeline for millions suffering from economic and social hardships. At least four new web-based services have stepped in to link expatriate Zimbabweans working outside the country with their relatives back home. All share a common service: people can log into the websites and shop and select what they like to purchase or transfer to their relativs. Once a purchase has been made, a message is sent by mobile phone text to Zimbabwe, either transferring money credits or credits for fuel, food or medical services.

Mukuru.com is the most elaborate and ambitious of the services, and is expanding across Africa (currently in Zimbabwe and South Africa, it is expanding to Kenya, Malawi and Zambia). Started in 2006, it now boasts 8,000 customers and is averaging 1,200 orders per month, ranging from money transfers to fuel and digital satellite television subscriptions. A voucher number sent by mobile phone also allows the recipient to swap a PIN (personal identification) number for coupons redeemable at certain garages.

One of the great advantages of this new technology is its ability to give real-time updates and tracking throughout the transaction. Senders are informed about every stage of the transaction, right up until the gas is gushing into the car’s tank.

“Basically anybody who is able to work will do their best to support family back home,” said Mukuru’s UK-based Nix Davies. “Mukuru’s birth is the result of our inability to sit back and watch, as well as the desperate need to help those back home. The power of an instant SMS being able to provide value to its recipient is inspiring.

“Launching Mukuru.com has not been without its hurdles,” continues Davies. “Promoting a brand with one foot in the first world and having to deal with third world inconsistencies is always challenging.” Mukuru also has plans to expand into travel, freight, mail (letters are printed out and sent within Zimbabwe), and music to help local musicians.

Over at another website, Zimbuyer.com, expatriate Zimbabweans can buy groceries for their relatives at home and make sure that the money is not spent on the wrong thing.
“They’re a lot of people who left Zimbabwe and, for example, have left their children over there,” a spokesman told the BBC’s website. “But sometimes the money they have sent home for the care of the children is diverted into other things. With our service, people buy the stuff – and we deliver them to the recipients so they know what they’re buying.”

Zimbuyer’s website is similar to food shopping websites in developed countries. Prices are listed in British pounds, but the food items are Zimbabwean staples like sadza maize, Cashel Valley Baked Beans and Ingrame Camphor Cream – all delivered to people living in Harare, Chitungwiza and Bulawayo.Zimbuyer’s most popular products are cooking oil and sugar, while “power generators are proving popular because the electricity always goes off nearly every day.”

Another service is Zimland.com, which has a network of 52 supermarkets nationwide. As it starkly boasts on its website, it gives Zimbabweans abroad “a quick and efficient way of ensuring their families do not starve in Zimbabwe.”

The Zimland Superstore offers a variety of hampers of food and essentials for families, from the Madirativhange to the Mafidhlongo to the Hotch Potch Delux, and boys and girls ‘Back to School’ hampers.

Yet another service has taken on the problem of paying for medical and health services. Beepee Medical Services allows Zimbabweans to pay for doctors’ appointments, prescription drugs and surgery for relatives.

Launched in September 2006 by Dr Brighton Chireka and his wife Prisca, a nurse, the business is small but growing.

“Mostly we’re running it as a service to help people,” said Dr Chireka, adding he gets about two consultation bookings a day (US $30 an appointment). “It should be able to pay for itself… We’ve employed people who are working full-time in Zimbabwe. This side (the UK), it’s on a part-time basis to answer the calls.”

By David South, Development Challenges, South-South Solutions

Published: June 2007

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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