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Djibouti Re-shapes Itself as African Trade Hub

By David South, Development Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

Trade hubs can prove to be decisive in boosting regional growth. Trade hubs are places where commerce congregates, for a mix of geographical, cultural and economic reasons. Like a bicycle wheel, a trade hub sits at the centre as the spokes of trade routes travel towards it. Throughout history, trade hubs have emerged, from the outposts of the Silk Route running through Asia and Central Asia to the Hanseatic League cities of Northern Europe in the Middle Ages.

Trade is critical to increasing prosperity, and the more efficient trade becomes – and the greater the variety of goods and affordable prices – the higher the standard of living for the nations doing the trading.

With South-South trade the great economic success story of the past decade, new trade hubs are emerging. World Trade Organization (WTO) (www.wto.org) figures show South-South trade accounted for 16.4 percent of the US $14 trillion in total world exports in 2007, up from 11.5 percent in 2000. While the global economic crisis has slowed things down, the overall trend is firmly established.

One country hoping to become a key 21st century trade hub is the tiny African nation of Djibouti, which sits strategically between the Red Sea and the Gulf of Aden. It is surrounded by the nations of Eritrea, Ethiopia and Somalia and is across the Bab al Mandab Strait from Yemen.

It is at the nexus of Africa and Asia. Some of the busiest shipping lanes in the world float by the country’s coastline. Much of the oil shipped to Europe and the United States passes by.

“Djibouti is perfectly positioned to become a services and logistics hub,” said Jerome Martins Oliveira, chief executive officer of Djibouti port, operated by a subsidiary of Dubai World.

PwC (PriceWaterhouseCoopers) (http://www.pwc.co.uk), which recently published its third Transportation & Logistics 2030 Report, predicts that global trade hubs and routes will shift to emerging markets within the next 20 years.

“Trade volumes will move towards emerging markets such as Africa or Asia and competition for future large transport contracts will be determined within the next few years,” said Akhter Moosa, PwC’s South African Transport and Logistics Leader.

This underscores the growing importance of emerging markets. The majority of global trade is forecast to shift to emerging markets by 2030. As the trade shifts, so new trade routes emerge. PwC sees strong links between Asia and Africa and Asia and South America, as well as trade within Asia, transforming global supply chains.

Hot spots for trade are showing impressive growth. Trade between Asia and the former Soviet states grows at 42 percent a year. The volume of trade between South America and Africa is growing by double digits.

“China already owns seven of the world’s twenty largest ports,” said Christopher Siewierski, associate director in Corporate Finance at PwC. “India, Russia and South Africa are also expected to play a significant role as logistics giants.”

Respondents to the Transportation & Logistics 2030 Report
(http://www.pwc.com/gx/en/transportation-logistics/tl2030/tl2030-pub.jhtml ) believe it is unlikely that companies from emerging countries will seek further growth in the developed European and North American markets. Instead, they will concentrate on domestic markets and the strong growing neighbouring countries.

All of this is good news for Djibouti. At present, the population of Djibouti
(http://en.wikipedia.org/wiki/Djibouti) is small at around 864,202 people (2009 World Bank).

Ancient Djibouti traded hides and skins for the perfumes of Egypt, India and China: a classic South-South trade heritage. Djibouti became a French colony and gained its independence from France in 1977.

The geography is harsh: a rocky semi desert of plateaus and highlands. Djibouti has few resources, apart from its large salt reserves – the country has a long history of salt mining. Djibouti must depend on foreign assistance – or innovative trade.

Djibouti has to be clever in increasing income opportunities: the country has an estimated unemployment rate of between 40 and 50 percent. The country is heavily dependent on imports for food and fuel, and over the past decade has experienced recession – in the wake of a 1991 to 1994 civil war – and a growing population.

For years, the tiny state was overlooked and development had proceeded at a slow pace. But now investment from Dubai is pouring in to upgrade the port to make it a regional gateway.

The Djibouti Free Zone (http://www.djiboutifz.com/) was set up in the wake of the country being designated a free-export processing zone in 1995. In practice, this means a company or business working to export products can be designated as an Export Processing Company (EPC).

It was created to re-shape the landscape in Africa when it comes to trade. Push out the red tape, and bring efficiency and plenty of services: the prime habitat for business to flourish free of restrictions. Prospective businesses can find modern offices, distribution, storage and light manufacturing facilities.

Djibouti provides services as both a transit port for the region and an international trans shipment and refuelling center.

And even more ambitious plans are afoot: a multi-billion dollar, 29-kilometre bridge across the Red Sea has been proposed. The Bridge of the Horns (http://en.wikipedia.org/wiki/Bridge_of_the_Horns) will link Djibouti with Yemen and two new cities will be built on either side of the bridge. The new Noor City on the Djibouti side will become the “financial, educational, and medical hub of Africa” according to its developers.

Elsewhere, the United States is funding and operating four regional trade and competiveness hubs in sub-Saharan Africa. They aim to assist, enhance and broaden the flow of trade between the United States and the region, both inside and outside the terms of the historic African Growth and Opportunity Act (AGOA) (http://www.agoa.gov/). The four trade hubs — located in Ghana, Senegal, Botswana and Kenya — provide information and technical expertise to enhance and expand bilateral trade between the United States and Africa.

Published: December 2010

Resources

  • Port Management Association of Eastern and Southern Africa: Is a regional organisation for the ports and maritime sector in Eastern and Southern Africa. It seeks to promote and nurture best practices among member ports by creating an enabling environment for exchange of information and capacity building to contribute to the economic development of the region. Website: http://www.pmaesa.org/welcome.htm
  • Dubai World: Global holding company Dubai World “focuses on the strategic growth areas of Transport & Logistics, Drydocks & Maritime, Urban Development, Investment & Financial Services. Our portfolio contains some of the world’s leading companies in their industries, including Drydocks World, Economic Zones World, Istithmar World, Nakheel and majority ownership of DP World.” Website: http://www.dubaiworld.ae/
  • A Financial Times report on Africa-China trade in 2010. Website: http://www.ft.com/reports/africa-china-trade-2010
  • West Africa Trade Hub: The USAID West Africa Trade Hub uses a market-driven approach to increase exports from the region – making West Africa competitive in world markets. The Trade Hub provides direct assistance to hundreds of companies in six value chains. That work is complemented by teams tackling problems in transportation, telecommunications, access to finance and business environment that make it difficult for West African companies to compete. Website: http://www.watradehub.com/
  • Biz Community.com: Africa’s Leading Daily Retail News: Where the action is on Africa’s fast-growing retail markets. Website: http://www.bizcommunity.com/196/160.html
African Trade Hub in China Brings Mutual Profits
Chinese Trade in Angola Helps Recovery
Global South Trade Boosted with Increasing China-Africa Trade in 2013
Pioneering African Airlines Help to Expand Routes
Global South Trade Boosted with Increasing China-Africa Trade in 2013
2011 Trends for the South
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Help is at Hand for India’s Beleaguered Bus-riders

By David South, Development Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

The website is a simple affair: a distinctive logo sits above a lean-looking booking system that allows users to enter their journey start and end destination, date and then click for available buses and prices. Its simplicity is deceptive: redBus is a smart technological solution to a very complicated problem in India: booking and buying a bus ticket. The service it offers – relief from a chaotic, frustrating and time-consuming task – is transforming the experience of travel in India.

Based in India’s technology hub of Bangalore (http://en.wikipedia.org/wiki/Bangalore), redBus (redbus.in) is a web start-up begun by young whizzes from technology companies who decided to take a risk and venture out and do something new.

Back in 2005, redBus’ three founders, all graduates of one of India’s top engineering schools, were working in Bangalore for well-known information technology companies such as IBM, Texas Instruments and Honeywell.

As they tell the story on their website, it was the difficulty of getting a bus home during the Hindu religious festival of Diwali that prompted the inspiration. The trip was a last-minute decision, and buying bus tickets proved far from easy. On top of failing to get a ticket from various travel agents, journeying around Bangalore meant encountering the city’s traffic gridlock.

This experience led to the idea of developing a service to book bus tickets over the Internet.

RedBus quickly evolved into an innovative service offering multiple options to customers. They can call a phone number and speak to a customer service representative or use a mobile phone to book a ticket. RedBus claims to have sold more than 8,000,000 tickets to date.

Tickets are also delivered to customers in major cities in advance of their travel. Even more conveniently, redBus developed a service called mTicket. It sends the ticket by SMS (mobile phone text message) straight away when a customer makes a booking. The mTicket appears on the display screen of the mobile phone and the customer just has to show their mTicket to the driver to board the bus.

RedBus uses partnerships to expand their distribution network, and this means redBus tickets can be purchased at more than 75,000 outlets. The company now works with more than 350 bus operators, allowing customers to book tickets on more than 4,500 routes across India.

The service set out to achieve two goals: create a one-stop shop for ticket purchases, and to make it possible for customers to get tickets when they needed them and not be told they have been sold out.

Indians were already having success with booking airline tickets online. But nobody else had thought of doing central, online sales for bus tickets before.

Research was behind redBus’ success. The founders interviewed bus operators, consumers and venture capitalists before setting up the business.

They then set about writing the code for the Internet service and put together a business plan and presented it to The Indus Entrepreneurs (TiE) (tie.org) – a network of mentors who help young entrepreneurs. With the support in place, they were able to leave their well-paying, secure jobs to start redBus.

Among the many challenges they faced was changing the mindset of bus operators used to dealing only with travel agents working out of sales offices.

It also took time for the concept to take off. But as word-of-mouth got around, more people started to use the website. The young team grew from just three to 50 within nine months.

Their business success, as they describe it, is the result of listening to, and soliciting feedback from their customers. They say it has helped them identify what is going wrong and fix it, and describe their business culture as “learn, implement, grow.” They also have a culture of sharing ideas and mistakes to encourage learning. It seems it is this buzzy, youthful and always-learning business culture that is behind redBus’ success.

Resources

1) IDiscoverIndia: A website detailing how to explore India’s vast bus network.Website: http://www.idiscoverindia.com/Travel_Info/india_travel_bus.html

2) TiE: Fostering Entrepreneurship Globally: The Indus Entrepreneurs (TiE),was founded in 1992 in Silicon Valley by a group of successful entrepreneurs, corporate executives, and senior professionals with roots in the Indus region. TiE’s mission is to foster entrepreneurship globally through mentoring, networking, and education. Dedicated to the virtuous cycle of wealth creation and giving back to the community, TiE’s focus is on generating and nurturing our next generation of entrepreneurs. Website: tie.org

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New African Film Proving Power of Creative Economy

By David South, Development Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

A new movie is generating excitement around life in the war-torn, chaotic and impoverished Democratic Republic of the Congo(http://en.wikipedia.org/wiki/Democratic_Republic_of_the_Congo – the central African nation – and proving how versatile and resilient a creative economy can be in a crisis.

Viva Riva! (http://www.vivarivamovie.com) is set in the capital, Kinshasa, and gives a raw portrayal of sex, violence and gangsters in the city. The film has already won a fistful of awards, and will now be released in 18 African countries.

Written and directed by Djo Tunda Wa Munga, it is being hailed as the first feature-length film to be made in the Democratic Republic of Congo in 25 years. The industry was shut down by long-serving dictator and President Mobutu Sese Seko, who was overthrown in 1997 in the First Congo War by Laurent-Désiré Kabila, who was supported by the governments of Rwanda, Burundi and Uganda.

Africa has a rich film history but its movies have struggled to reach commercial audiences – both on the continent and around the world – outside of showcases at film festivals. Without access to a wide audience, filmmakers are not able to make the sort of profits possible for films with a wide commercial distribution. It has also been hard to compete with the big budgets and the big publicity machines of traditional film centres like Hollywood or Europe. But it looks like Viva Riva! could change that situation.

Indigenous African filmmaking took off as countries became independent of their colonial European rulers in the 1960s and 1970s. One example is the Senegalese film comedy Xala (http://www.imdb.com/title/tt0073915/), directed by Ousmane Sembéne, and considered a classic. Previous portrayals of Africa have mostly been viewed through the cinematic lens of Europeans.

As the second largest country in Africa, the Congo has an estimated population of over 71 million (2011 estimate), with Kinshasa home to more than 8 million people (CIA – The World Factbook). It has suffered badly from war and chaos and has some of the world’s worst statistics for rape and sexual violence brought about by these conditions. The so-called Second Congo War began in 1998 and is considered the world’s deadliest conflict since the Second World War.

As a result, the world’s biggest United Nations peacekeeping mission is in the country in an attempt to stabilise the situation. (http://www.un.org/en/peacekeeping/missions/monuc/).

Filmmaking forms part of the creative economy, a vital and growing sector in many countries. As the Creative Economy Report 2010 states: “A new development paradigm is emerging that links the economy and culture, embracing economic, cultural, technological and social aspects of development at both the macro and micro levels. Central to the new paradigm is the fact that creativity, knowledge and access to information are increasingly recognized as powerful engines driving economic growth and promoting development in a globalizing world.”

For example,Nigeria’s US $2.75 billion annual film industry is the third largest in the world, following the U.S. and India. Nigeria’s ‘Nollywood’ produces more than 1,000 films a year, creating thousands of jobs, and is the country’s second most important industry after oil. In recognition of its importance, the country’s government has invested in the industry, reforming policies and providing training to promote film production and distribution.

The Creative Economy Report 2010 has highlighted a few key trends for the global South. It found that creative industry products, especially domestically consumed ones like videos, music, video games and TV programmes, are weathering the global economic crisis well. It also found the creative economy can help boost economies and bring countries out of recession if the right government policies are in place.

The exporting of creative goods and services continues to grow, doubling from 2002 to 2008. This represented a 14 percent per year growth rate. The global South’s exporting of creative goods reached a high of US $176 billion by 2008 and represented 43 percent of the world’s total creative industries trade.

The majority of the world’s mobile phones are now in developing countries, representing a vast, new platform for distributing, sharing and selling cultural products and services. Broadband Internet is also being rolled out to more countries and represents an enormous emerging opportunity waiting for enterprising people to seize.

The report also found more and more cities across the global South are placing creative economies at the centre of their urban development, emphasising culture and creative activities.

For Viva Riva!, the next stop is Africa-wide release in Botswana, Burkina Faso, Kenya, Lesotho, South Africa, Swaziland and Uganda. The film’s producers have their sights set on even more countries in central and West Africa.

“We want to show that you can release African films acrossAfrica,” co-producer Steven Markovitz told The Guardian. “As far as we can tell, it’s unprecedented. No one has tried to do an Africa-wide release in so many countries.”

There is more at stake with the film than just Congolese pride: it is about proving an African film can successfully take on the slick and well-funded film distribution machines deployed byAmerica’s Hollywood and European film distributers.

With the African middle class growing and a burgeoning African consumer class now clearly identified, many see this as the right time to make African film pay.

“African cinemas have been dominated by Hollywood and European cultural programmes catering to the intellectual elite, not tapping into a growing middle class who are interested in seeing films about themselves and their neighbours,” Markovitz told The Guardian.

“There is an audience, a real market for African films. They have disposable income and they want to be entertained. We hope that this will create a pipeline for further African titles on the continent.”

Viva Riva! is in French and Lingala (http://en.wikipedia.org/wiki/Lingala_language). The story revolves around a hustler who makes quick cash stealing oil and celebrates by going on a hedonistic romp through Kinshasa’s night clubs.

The film had its international debut at the 2010 Toronto International Film Festival and won the 2011 MTV Movie award for best African film.

Markovitz is from South African film production company Big World Cinema (http://www.bigworld.co.za). The producers hope the film will appeal to both French speakers and English speakers.

“There are distribution challenges in Africa but we thought this one presents an opportunity to make it happen,” he said. “Some African films have felt like homework but this is an entertaining action film and we think it can cross language barriers. We have to try things out.”

Critics have said good things about the film. The Nigerian actor and director Akin Omotoso told The Guardian: “I loved Viva Riva! Absolute breath of fresh air, an adrenalin rush from top to bottom, a great gangster flick.”

The film is unique as an African production that has “captured not just international attention but the continent’s attention”, he added.

“I think it stands a good chance; as we know, it’s up to the audience but either way it has made history.”

Published: November 2011

Resources

1) UNCTAD Global Database on the Creative Economy. Website:http://unctadstat.unctad.org/ReportFolders/reportFolders.aspx?sCS_referer=&sCS_ChosenLang=en

2) Creative Economy Report 2010: Creative Economy: A Feasible Development Option. Website:http://www.unctad.org/Templates/WebFlyer.asp?intItemID=5763&lang=1

4) Dictionary of African Filmmakers from Indiana University Press. Website:http://www.iupress.indiana.edu/product_info.php?products_id=76770

6) The Filmmakers Guide to South Africa is the most recognised, established and representative brand marketing the South African film industry locally and internationally. Website: http://www.filmmakersguide.co.za

7) Youth Filmmakers Africa: An initiative in Kenya to inspire the next generation of filmmakers. Website:http://www.indiegogo.com/Youth-Filmmakers-Africa

Other Film Stories

Angolan Film Grabs Attention at Film Festival

Bolivian Film School’s Film Scene Paying Off

Local Animation: A Way Out of Poverty

New Cuban Film Seeks to Revive Sector

Nollywood: Booming Nigerian Film Industry

Riverwood: Kenyan Super-fast, Super-cheap Filmmaking

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Bolivian Film School’s Film Scene Paying Off

By David South, Development Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Published: March 2011

Resources

1) European film festival in Bolivia, with screenings across the country. Website: http://www.cineeuropeobolivia.org/

2) Cine Alto on Facebook: Website: http://es-la.facebook.com/cine.alto

3) Global Creative Economy Convergence Summit 2009: The summit is about the successful and emerging creative technologies and initiatives that are driving economic growth locally, nationally and internationally. Website: http://www.gcecs2009.com/

4) AltoTV: A non-profit television documentary-making project that has made small films on El Alto. Website:http://www.altotvgerman.blogspot.com/

5) The Public University of El Alto: Website:http://www.enlaupea.com/

6) Creative Economy Report 2008. An economic and statistical assessment of creative industries world-wide as well as an overview of how developing countries can benefit from trade in creative products and services, produced by UNCTAD and the Special Unit for South-South Cooperation in UNDP. Website: http://www.unctad.org/en/docs/ditc20082cer_en.pdf

7) A course on Bolivian filmmaking taught by award-winning filmmaker Ismael Saavedera. Website:http://www.sit.edu/studyabroad/sss_blv.cfm

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