Tag: development challenges south-south solutions

  • New Appetite for Nutritious Traditional Vegetables

    New Appetite for Nutritious Traditional Vegetables

    By David SouthDevelopment Challenges, South-South Solutions

    SOUTH-SOUTH CASE STUDY

    Throughout the history of farming, around 7,000 species of plants have been domesticated. Yet everyday diets only draw on 30 percent of these plants and even this number has been going down as more people consume mass-market foods (FAO).

    One consequence has been poor nutrition resulting from the reduction in consumption of high-vitamin foods, leading to stunted mental and physical development across the global South.

    Once-rich culinary traditions have wilted and left many people not knowing what to do with formerly common vegetables and fruits, even if they can actually find them in markets.

    Between 94,000 and 144,000 plant species — a quarter to a half of the world’s total — could die out in the coming years, according to an estimate by Scientific American (2002). Among them are vital food crops, threatened by a world in which climate change is causing more weather turbulence and diseases and viruses can spread rapidly and destroy crops.

    This scale of plant loss risks leaving the world’s food security dependent on fewer – and more vulnerable – domesticated species.

    Despite being rich in vitamins, minerals and trace elements, African leafy vegetables have been overlooked in preference for cabbage, tomatoes, carrots, and other imported produce. But with rising food prices at local markets, people are looking again at these neglected African vegetables. In East Africa, this includes indigenous plants like amaranth (http://en.wikipedia.org/wiki/Amaranth), African eggplant, Ethiopian mustard, cowpea, jute mallow and spider plant.

    Like tomatoes and potatoes, some of these vegetables are members of the nightshade family — but unlike those imports, they are indigenous to Africa. According to Patrick Maundu of Bioversity International (http://www.bioversityinternational.org/), African nightshades provide good levels of protein, iron, vitamin A, iodine, zinc, and selenium at seven times the amounts derived from cabbage. The high levels of vitamins and micronutrients, he says, are especially important to people at risk of malnutrition and disease, particularly HIV/AIDS.

    As the cost for basic foodstuffs have shot up during the global economic crisis, growing food has become an increasingly lucrative source of income. Estimates of the number of people doing this across Africa range from hundreds of thousands to millions.

    In the bid to reduce the over-dependence on imported foods, urban farming is coming to the rescue and becoming an effective survival tactic in Africa’s fast-growing cities. Thousands of urban workers in Kenya’s capital, Nairobi, are supplementing their wages by investing in farms growing food.

    Eunice Wangari, a nurse in Kenya, supplements her US $350/month salary with money earned from growing food. “For too long our country has been flooded with imported food and westernized foods,” Wangari told The Guardian newspaper. “This is our time to fight back – and grow our own.”

    In Kenya, this type of agriculture usually involves an urbanite taking a stake in farmland outside the city. Relatives then do the farming. Mobile phones play a key role in this approach. The urban dweller can keep in touch with the farm by phone and receive updates on progress. They use their knowledge of urban food tastes to then adjust the crops and increase profits.

    An accountant, James Memusi in Nairobi, is growing mushrooms in a spare bedroom in his home and then selling them to hotels and supermarkets, according to The Guardian. Miringo Kinyanjui is selling unrefined maize and wheat. Loved for its nutritional qualities, the flour is also flavoured with amarathan, a common green vegetable in Kenya.It is a clever way to make the most of the fact that many urban dwellers have some access to land in the countryside.

    Pride is also returning to the topic of food, as people re-discover traditional foods and vegetables and fruits.

    In Liberia, president Ellen Johnson-Sirleaf has launched a “Back to the Soil” campaign to get urban dwellers to farm and help the country lose its dependence on foreign food imports.

    Liberia is trying to reduce the importing of rice and tomatoes.

    In Zambia, the embracing of traditional foods has been fuelled by recipes used by a chain of popular restaurants. This appetite has driven demand for dried pumpkins, ‘black jack’ leaves and fresh okra.

    The success of this revival of traditional foods has attracted big multinationals as well. Unilever Kenya ran a campaign in 2008 called ‘taste our culture,’ promoting African herbs and spices.

    Published: November 2009

    Resources

    1) The Global Trees Campaign, a partnership between Fauna & Flora International, Botanic Gardens Conservation International and many other organisations around the world, aims to save threatened tree species through provision of information, conservation action and support for sustainable use. Website: http://www.globaltrees.org

    2) World Vegetable Center: The World Vegetable Center is the world’s leading international non-profit research and development institute committed to alleviating poverty and malnutrition in developing countries through vegetable research and development. Website: http://www.avrdc.org/

    3) Sylva Professional Catering and College: A well-known Zambian food entrepreneur who runs a range of businesses, including restaurants, a cooking school and a guest house. Website: http://sadcbiz.com/countries/zambia/categories/index.htm

    4) Marketing African Leafy Vegetables: Challenges and Opportunities in the Kenyan Context By Kennedy M. Shiundu and Ruth. K. Oniang. Website: http://www.ajfand.net/Issue15/PDFs/8%20Shiundu-IPGR2_8.pdf

    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. 

    Creative Commons License

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

    ORCID iD: https://orcid.org/0000-0001-5311-1052.

    © David South Consulting 2023

  • African Hotel Boom Bringing in New Investment and Creating Jobs

    African Hotel Boom Bringing in New Investment and Creating Jobs

    By David SouthDevelopment Challenges, South-South Solutions

    SOUTH-SOUTH CASE STUDY

    Africa is experiencing a boom not seen for decades. The IMF forecasts economic growth in sub-Saharan Africa of 6 per cent in 2014, compared to global growth of 3.6 per cent.

    And this boom is getting an additional jolt of support from the world’s multinational hotel chains. January 2014 saw Africa’s largest hotel chain bought by global giant Marriott (marriott.com). For decades major global multinationals shied away from Africa, but today they are battling to get a place in Africa’s fast-growing economies and to serve the growing middle classes.

    Marriott is leading the way by investing US $1.5 billion in 25 new hotels equalling 5,000 rooms. To boost capacity further, Marriott is taking over South Africa’s Protea group (proteahotels.com) and its 116 African hotels.

    “We have 25 Marriott brand hotels under construction in seven countries in Africa that will come on stream over the next four years,” Alex Kyriakidis, the chain’s president for the Middle East and Africa, told Bloomberg (bloomberg.com).

    The new hotels “are going to bring us into Benin, Gabon, Ghana, Ethiopia and Mauritius. With our existing hotels plus those in the pipeline and those Protea operates today, we will be in 16 countries in Africa by 2017.”

    Bloomberg calls what Africa is experiencing the “fastest pace of hotel development in the world”.
    “Our mission here is to grow, grow, grow,” according to Kyriakidis.

    Meanwhile, a further boost is coming from the US $5 billion Angolan sovereign wealth fund, Fundo Soberano de Angola (fundosoberano.ao/language/en/). It will be investing in hotels and commercial infrastructure in sub-Saharan Africa, according to Bloomberg. This could include 50 sub-Saharan African hotels in the next three years.

    “We believe there’s a lot of investment interest in Africa,” said Chairman Jose Filomeno dos Santos. “It has a lot of mineral potential, almost a commodity hub. We believe this interest will remain there for the coming years.”

    Little thought is given to the role hotels play in development, yet they are a critical development tool for any country wishing to move up the economic ladder. As the quality of hotels improves, they tend to become key gathering and meeting places. Conferences and seminars can act as catalysts for change, attracting people from around the world. When quality hotels are in place, then the top-drawer global conferences will come to town, in turn bringing new tourist income for local businesses.

    Anyone who has stayed in a hotel in Africa knows that standards are variable: the pool with dirty water, the power cuts, the food hygiene standards that might not match what people are used to at home. This is what international hotel chains can change. Not only do they demand the highest standards in their own establishments, they also push up standards at local competitors, as all of them battle for the attention of visitors.

    Africa has been overlooked by the large global hotel chains and brands since the end of the colonial period in the 1960s and 70s. Africa was considered too poor, too chaotic, too dangerous and too much hard work for it to be worth the effort.

    But now the tune has changed. With Africa’s population over a billion, and many of the continent’s economies experiencing rapid growth while also urbanizing, conditions are fortuitous for the hotel trade.

    The situation has changed in the last decade, for a variety of reasons: debt relief, a rise in commodity prices, expanding trade and investment with China and the global South, and a growing middle class — all slowing the growth of poverty. Africa is still notorious for under-investment in infrastructure and has a long way to go to catch up to the fast-moving economies of Asia. But greater optimism is leading to greater real investment. And the world’s large hotel brands are the latest to join in the rush to Africa.

    Large chains including Four Seasons, Ritz-Carlton, Hyatt and Kempinski hope to open 300 new hotels in Africa over the next five years. The number of hotel beds is set to increase by 30 per cent by 2018.

    Four Seasons Safari Lodge Serengeti in Tanzania (http://www.fourseasons.com/serengeti/) is the first investment in Africa by the Canadian brand. Four Seasons is known for its luxury, upmarket city hotels and has kept with this tradition by building the largest and most luxurious safari lodge ever built in Africa.

    This is having a knock-on effect on African hotel operators. The surge in investment is giving these local operators the right incentives to create African brands and to raise their game.

    Nairobi in Kenya has become something of a test market for high-end boutique hotels. Already a city benefiting from its status as an international development hub, home to many agencies including the UN Environment Programme’s sprawling and verdant headquarters (unep.org), it has also become a corporate headquarters for Africa and has a large U.S. presence (nairobi.usembassy.gov). This means lots of people coming to the city to do business and attend events, creating a market for better quality accommodation.

    The Kenyan-owned, 156-room Sankara Nairobi Hotel (sankara.com) boasts of having the best wine list in Africa and claims to be a five-star hotel. It also capitalizes on being close to the international airport and the UN’s Nairobi headquarters.

    “There’s an appetite for something local that’s different and, for the first time, there’s the confidence and funding to bankroll new developments,” said Sankara Hotel Group director Rohan Patel to Wallpaper Magazine. “Africans don’t want a theme-park African hotel, with prints of ‘the big five’ on the wall. That’s condescending. Nor do they want a New York-style hotel. They’ve probably been to New York. They want modern, connected Africa.”

    Elsewhere in Nairobi, the Kenyan-owned Tribe Hotel (tribe-hotel.com) is looking to expand to meet growing market demand.

    “The market for new, authentic, yet modern African hotels is growing,” manager Michael Flint, who previously ran New York’s Ritz-Carlton, told Wallpaper.

    “We’ve been so successful here we are building a new 187-room hotel in Nairobi. We’ve taken over a boutique hotel called Westhouse (westhouse.co.ke). And we’re looking to expand further, with properties at the airport and on the coast. Who knows what will be next? Tribe will be a mini empire.”

    In Rwanda’s capital Kigali, the Rwanda Marriott has ambitious plans. Rwanda was ripped apart by ethnic genocide in the 1990s that killed an estimated 500,000 to 1 million people (http://en.wikipedia.org/wiki/Rwandan_Genocide). Now, the country’s economy is booming and its hotels are getting an upgrade.

    The Akilah Institute for Women (akilahinstitute.org) in Kigali has been helping in training women for the hotel sector. They sent trainees to Dubai and Doha to learn how to do hotel service the Marriott way.

    Starwood (starwoodhotels.com), a competitor to Marriott, is hoping to grow its African hotel investment by 30 per cent as well. It will be done through the Sheraton, Aloft, Le Meridien, St Regis and Four Points brands. The first St Regis has already opened in Mauritius.

    Neil George, Starwood’s head of African development, believes “Africa is the final frontier. It’s adventurous.

    “I would rather arrive in Kinshasa and work out how to do a hotel there than do it in Frankfurt,” he told Wallpaper.

    The Hyatt (hyatt.com) brand is now running the Hyatt Kilimanjaro Hotel in Dar es Salaam (http://daressalaam.kilimanjaro.hyatt.com/en/hotel/home.html), Tanzania. Peter Norman, Hyatt’s African head, is working on opening a Park Hyatt in Zanzibar (http://zanzibar.park.hyatt.com/en/hotel/home.html) and another Hyatt Regency (http://investors.hyatt.com/phoenix.zhtml?c=228969&p=irol-newsArticle&ID=1863203&highlight=) will open in Arusha and a further 140-room Hyatt in Senegal (http://investors.hyatt.com/phoenix.zhtml?c=228969&p=irol-newsArticle&ID=1863204&highlight=).

    The 200-room Villa Rosa Kempinski in Nairobi (http://www.kempinski.com/en/nairobi/hotel-villa-rosa/welcome/), boasting an outdoor heated pool, and the Olare Mara Kempinski (http://www.kempinski.com/en/masai-mara/olare-mara/welcome/) luxury camp in the Maasai Mara will also be joined by projects in Ghana and Equatorial Guinea.

    Kempinski also has properties in Chad and the Congo, has bought the Hotel des Mille Collines (https://www.millecollines.net/) in Kigali and aims to operate 20 hotels across sub-Saharan Africa.

    British entrepreneur Richard Branson has the Mahali Mzuri in the Maasai Mara and it is seen as a stylish role model for other hotels. The local landowners and herdsmen have been included in the business, benefiting from the hotel and helping to preserve the local ecosystem.

    EasyHotel (http://www.easyhotel.com/news/2011/africa0.html), a low budget hotelier, is also rapidly expanding across southern Africa.

    Published: May 2014

    Resources

    1) Catererglobal.com: Catererglobal.com offers a unique service that provides an easy-to-use, specific recruitment website for vacancies in the world’s best hotels and cruise ships. Website: http://www.catererglobal.com/jobs/africa/hotel/

    2) South African hotel jobs: HotelJobs South Africa is an industry specific job website for the hotel, hospitality and catering industry. Website: http://www.hoteljobs.co.za/

    3) Hotel Staff Africa: Many hotel jobs across Africa. Website: http://www.hotelstaff.co.za/

    4) Hotel Career: Many hotel jobs for the Middle East and Africa. Website: http://www.hotelcareer.com/jobs/middle-east-africa

    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. 

    Creative Commons License

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

    ORCID iD: https://orcid.org/0000-0001-5311-1052.

    © David South Consulting 2023

  • Global South’s Rising Economies Gain Investor Spotlight

    Global South’s Rising Economies Gain Investor Spotlight

    By David SouthDevelopment Challenges, South-South Solutions

    SOUTH-SOUTH CASE STUDY

    A new book is arguing that the world’s attention should switch away from BRICS countries – Brazil, Russia, India, China and South Africa – and take another look at nations and regions elsewhere across the global South. It argues many are lodestones of future growth and prosperity in the making and will see dramatic changes over the next decade.

    The story of the BRIC and BRICS countries is an impressive one. In just eight years from 2000 to 2008, the BRIC countries’ combined share of total world economic output rose from 16 to 22 per cent. This led to a 30 per cent increase in global output during the period, showing how key these countries were to global prosperity in the 2000s. BRIC countries make up nearly half the world’s population and are regional leaders. Taken together, their gross domestic products (GDPs) are not far behind the United States.

    Ruchir Sharma’s Breakout Nations: In Pursuit of the Next Economic Miracles (http://www.amazon.com/Breakout-Nations-Pursuit-Economic-Miracles/dp/0393080269) argues that the BRICS are now entering a more stable growth path and thus will not see the rapid-fire expansion and quick profits investors have become used to in the past decade.

    “The BRICs,” Sharma told Forbes magazine, “were last decade’s team.”

    The BRIC acronym (http://en.wikipedia.org/wiki/BRIC) was coined in 2001 by Goldman Sachs managing director Jim O’Neill, in a 2001 paper titled “Building Better Global Economic BRICs” (http://www.goldmansachs.com/ourthinking/brics/building-better.html). O’Neill predicted that this handful of countries would dominate the growth and economic development story for the years 2000 to 2010. This was because they all shared a similar stage of advanced economic development.

    The BRIC states first began meeting together in 2006. South Africa was added in 2010 to form the BRICS acronym.

    The buzz surrounding the BRICS countries over the past decade has been justified by their impressive growth rates, declining poverty levels,modernizing economies and societies and growing middle class populations.

    China alone had seen its gross domestic product grow by US $5 trillion between 2001 and 2011.

    Now, Sharma argues, it is someone else’s turn.

    Sharma is head of emerging markets with Morgan Stanley Investment Management in New York, and Breakout Nations looks at where the next economic surprise stories will take place.

    “A breakout nation is a nation that will grow above expectations, and will grow more than nations with similar per capita income,” Sharma told Forbes. “You can’t bunch all of the emerging markets together anymore. The last decade saw these countries behaving the same economically, but I think that is behind us now. Investors today will really have to pick their spots.”

    He points out that Indonesia was the best performing emerging market in 2011 and has an economy that will surpass a trillion dollars in the coming years.

    He also believes Sri Lanka and Nigeria are economies to watch.

    Sharma says funds flowing into emerging market stocks grew by 478 per cent from 2005 to 2010, a massive jump compared to 2000 to 2005, when they grew by 92 per cent.

    As he sees it, China has now reached middle-income status and its growth rates will not be as high as they have been for the past two decades. In his research, he found that countries like Japan, South Korea and Taiwan all slowed down once their per capita income went past US $5,000.

    Investors who watch the emerging markets predict the hot growth areas for the next decade will be around energy, technology, and agricultural resources.

    Sharma picks out Indonesia, Turkey, the Philippines, Poland and the Czech Republic for future investment interest, but urges caution with thinking all emerging economies are on course to boom.

    “You’ve got to pick your spots, rather than just assume that because you put a tag of emerging on a particular nation, it’s going to boom,” Sharma told The Globe and Mail newspaper.

    To make sense of the complexity of fast-emerging economies, a flurry of new investor acronyms has popped up. One of the country clusters is called the CIVETS: Colombia, Indonesia, Vietnam, Egypt, Turkey, South Africa (http://en.wikipedia.org/wiki/CIVETS).

    The MINTS (Mexico, Indonesia, Nigeria and Turkey) are also set for great growth in the next decade, many investors believe.

    Then there is the N-11 or Next 11. This is the MINTS plus Bangladesh, Egypt,Iran, Pakistan, the Philippines, South Korea and Vietnam.

    And after that there is VISTA (Vietnam, Indonesia, South Africa, Turkey and Argentina). While clearly the creative juices are flowing at investment houses as they come up with ever-catchier acronyms, a more serious point is being made: many countries in the global South, for the first time in history, are no longer solely dependent on the Western economic system for demand.

    These countries, investors note, now have an unprecedented range of options uncoupled from the political, financial and economic legacy of Western developed nations. They say that many nations in the global South are set for a runaway investment boom because they are making changes and modernizing their economies faster than many expect.

    As the BRICS economies mature and slow down and take on different priorities based around improving the quality of life of their citizens, those seeking faster profits will look elsewhere. This trend is even happening within the BRICS, as Chinese and Brazilian companies offshore work to Vietnam and Colombia.

    There are many new centres of economic activity and rising prosperity across the emerging markets that often fail to gain wider attention. Few would probably know that the Northeast Asian nation of Mongolia – mired in the 1990s in the worst peacetime economic collapse in half a century (http://www.scribd.com/doc/20864541/Mongolia-Update-1998-Book) – is now the world’s fastest-growing economy (http://www.worldbank.org/en/news/2012/02/28/what-behind-mongoliaeconomic-boom) and one of the top places for mobile phone usage and penetration (http://www.businessmongolia.com/mongolia/2012/03/19/mongolia-ringing-the-changes/).

    Then there is Myanmar (formerly Burma), where many are hoping recent moves toward democracy and improvements in diplomatic relations will lead to an economic boon for the region. Investors are also targeting Kazakhstan in Central Asia.

    Reflecting these changing realities, Standard Bank, Africa’s largest bank, has been documenting the rising role played by the Chinese currency in international trade. A recent report forecast US $100 billion (R768 billion) in Sino-African trade would be settled in the Chinese currency, the renminbi, by 2015. This would be double the trade between China and Africa in 2010. It also found 70,000 Chinese companies are using the renminbi in international trade transactions.

    Published: April 2012

    Resources 

    1) Beyondbrics blog: A blog by the Financial Times calling itself “The Ft’s emerging markets hub”. Website: http://blogs.ft.com/beyond-brics/

    2) BRICS Summit: The Fourth BRICS Summit was hosted in New Delhi on 29 March 2012 under the overarching theme of “BRICS Partnership for Global Stability, Security and Prosperity.” The Summit has imparted further momentum to the BRICS process. Website: bricsindia.in

    3) Market Oracle: A good source for updates on investor sentiment about the emerging market economies. Website: marketoracle.co.uk

    4) Monocle magazine: “A briefing on global affairs, business, culture and design” often featuring trends in the emerging market countries. Website: monocle.com

    5) BRICS Information Centre, University of Toronto. Website: brics.utoronto.ca

    https://davidsouthconsulting.org/2022/04/15/african-youth-want-to-do-business-in-fast-growing-economy/

    https://davidsouthconsulting.org/2022/03/20/global-south-eco-cities-show-how-the-future-can-be/

    https://davidsouthconsulting.org/2021/07/19/global-south-trade-boosted-with-increasing-china-africa-trade-in-2013/

    https://davidsouthconsulting.org/2022/10/20/global-souths-middle-class-is-increasing-prosperity/

    https://davidsouthconsulting.org/2022/10/20/global-souths-rising-economies-gain-investor-spotlight-2/

    https://davidsouthconsulting.org/2021/11/12/global-souths-rising-megacities-challenge-idea-of-urban-living/

    https://davidsouthconsulting.org/2022/11/15/indonesian-middle-class-recycle-wealth-back-into-domestic-economy/

    https://davidsouthconsulting.org/2022/10/20/trade-to-benefit-the-poor-up-in-2006-and-to-grow-in-2007/

    https://davidsouthconsulting.org/2022/11/20/venezuelas-currencies-promote-cooperation-not-competition/

    https://davidsouthconsulting.org/2022/10/10/wireless-internet-culture-helping-zimbabwe-economy-recover/

    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. 

    https://davidsouthconsulting.org/2021/03/05/southern-innovator-issue-2/

    Creative Commons License

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

    ORCID iD: https://orcid.org/0000-0001-5311-1052.

    © David South Consulting 2022

  • China Consumer Market: Asian Perspective Helps

    China Consumer Market: Asian Perspective Helps

    By David SouthDevelopment Challenges, South-South Solutions

    SOUTH-SOUTH CASE STUDY

    The rise of China since 1989 has been the most remarkable development story of our times. The number of people lifted out of poverty is historically unprecedented: 65 percent of Chinese people lived below the poverty line in 1981; in 2007 it was 4 percent (World Bank).

    Many commentators have focused on China’s astonishing work ethic, vast labour resources and ability to export great quantities of products. But while China has been busy meeting the needs of the world economy, domestic Chinese consumption has received less attention.

    Yet, with the Chinese firmly established as keen savers and very ambitious to improve their living standards, a vast new opportunity has emerged: the Chinese consumer market. But it will be a tricky market to tap. Chinese consumers are notorious bargain hunters and prefer to save and invest rather than consume. Poor rural families earning less than US $200 per person a year still are able to save 18 percent of their income.

    This makes a lot of sense: social supports have been stripped away as China’s economy embraced the market system. If you do not save and invest, then you will not have the resources to meet the costs of education and health care, for example. China has also seen a dramatic move to urban areas, with over 43 percent of the population now urban.

    China, despite all the hype, is still a marketplace that is difficult to easily enter for Western brands and businesses. And this makes for an opportunity for local brands to raise their game.

    In order to compete in the consumer market, businesses need to do more than compete on price: they need to also offer something more and that usually involves building a strong brand.

    The Chinese urban consumer market could grow from around US $570 billion in 2005 to around US $4.7 trillion by 2025 (PWC) (http://www.pwc.co.uk). Fast growth will be seen in discretionary spending, things other than food, clothing and utilities.

    While Chinese businesses have focused on export markets and meeting the needs of the global marketplace – a focus which has been very successful and led to remarkable wealth gains – the Chinese consumer has come lower down the list of priorities.

    Growing the domestic consumer market offers a substantial wealth-creating opportunity. Since the global economic crisis erupted in 2008, it has become apparent that the old model of exporting vast quantities of products to Western consumers alone will not be enough to keep living standards rising. Western economies are highly indebted and will take many years to recover from the mistakes and debts from the boom years and the economic crisis.

    This is an opportunity for South-South trade, which made up 20 percent of global exports by 2010. Foreign direct investment to developing economies rose by 10 percent in 2010 due to a rapid economic recovery and increasing South-South flows.

    One company successfully targeting this market is the Singapore-based Banyan Tree Hotels and Resorts brand (www.banyantree.com), which bills itself as specializing in luxury sanctuaries to rejuvenate the body, mind and soul. It is notable for deliberately not competing on price but on its brand reputation and for tailoring its offering explicitly to Asian tastes. The company claims its resorts are “naturally-luxurious, ecologically sensitive, culture-aware experiences for the discerning, responsible traveller.”

    The first Banyan Tree resort was built in Phuket, Thailand in 1987. It now employs 8,200 people from 50 nationalities in 26 resorts. Founder and executive chairman Ho Kwon Ping focused from the start on the business’s brand as critical to driving the growth of the company.

    He told INSEAD Knowledge: “The difference between us and some others is that, for many other companies having a strong brand is a reward for being successful in many things that you do but it’s sort of coincidental. It comes afterward; it’s a reward for success in other areas. For us, we’ve always said from the very beginning – having a strong brand is imperative for our survival.”

    Banyan Tree has also eschewed quick-growth models, instead trying to do as little environmental damage as possible and to include community development and environmental projects at each resort.

    Its Banyan Tree Ringha resort in China’s Yunnan province tries to bring the atmosphere of the fictional earthly paradise of Shangri-La to China. Ringha Valley sits near the Temple of the Five Wisdom Buddhas, 3,600 meters above sea level. The resort has 15 one-bedroom suites, 11 two-bedroom lodges, and six spa suites, decorated in a Tibetan style. The area is home to the Naxi people who trace their origins to nearby Tibet (http://en.wikipedia.org/wiki/Naxi_people).

    The accommodation is rustic and the resort is located in the middle of a village. Visitors can see farmers at work right from the resort. Overlooked by Tibetan mountains and settled in a lush, fertile valley the sight was picked for its tranquillity and isolation. The appeal of the area to tourists is clear: mountain peaks, deep canyons, rivers, valleys, streams and tranquil lakes. And in polluted urban China, it is an area free from pollution.

    The resort is built from transplanted Tibetan farm houses and offers hikes, mountain lakes, hot springs, gorges, forests. There are Asian touches like a welcome at the resort of Tibetan horns, songs and a tea ceremony.

    Tourism is transforming the area. Towns and villages have been renovated to showcase traditional architecture.

    The hotel and resort chain gets its name from the tradition of ancient merchants gathering under the branches of the banyan tree to conduct business in the cool shade.

    “The 21st century is really going to be the age of Asia – both India and China,” said Ho Kwon Ping. “The huge consumer markets are going to be Asian … Now there’s a real opportunity for people of Asian origin, who have an instinctive cultural feel for where their consumers are moving towards, to come out and create a brand which can be primarily rooted in their own Asian context, but have a global relevance.”

    Published: March 2011

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    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. 

    https://davidsouthconsulting.org/2021/03/05/southern-innovator-issue-1/

    https://davidsouthconsulting.org/2021/03/05/southern-innovator-issue-2/

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