The WaPo reported today on a trend that could have impacts from African stability to the global food supply: companies and governments from developing nations are leasing or buying large swaths of agricultural land, especially in Africa, but also in Southeast Asia and Latin America.
The WaPo article focuses on Ethiopia, which uses only about a quarter of its arable land despite facing chronic food shortages. Indian investment there has already reached $2.5 billion, and Saudi Arabian and Chinese firms are moving in as well, with active encouragement from the Ethiopian government.
This could have positive effects:
- This kind of project could increase global farmland and the global food supply.
- This could bring new flows of investment to poor nations, and improve their infrastructures.
- Access to inexpensive food might rise in the land-leasing countries.
- People could gain access to paid work, and learn modern farming skills.
However, the potential downsides seem serious:
- Land may be diverted from local food production to exports, increasing hunger.
- Poor locals might be deprived of land and water so that governments or elites can profit from it.
- This could extend the “resource curse” to agriculture, as it could enable elites to make money from farmland while largely excluding their own countrymen from the benefits. The WaPo article notes an Ethiopian river that is now to be used for irrigation, with locals banned from watering their cows in it.
- With many of the companies coming from India, Saudi Arabia, and China, the potential for serious ill-treatment of workers, and even human rights abuses, is vast. Indian and Chinese companies often treat their own workers abysmally, and Saudis sometimes revert to near-enslavement of foreigners, so the fate of African workers could be grim — especially if their own governments fail to protect them, which is likely in many poorly governed countries.
- The land leases run for as long as 99 years; exactly what this means, and how far the rights of the leasing country extend, could bring diplomatic clashes.
- The sum of the problems above points suggests that this trend could drive instability in some land-leasing countries.
(Image courtesy mrflip, Flickr)
The Washington Post reports on the spread of mobile telephony in Africa, taking Congo as its example.
That mobile phones are spreading even in the disaster area that is Congo is telling; if they can be deployed there, they will go everywhere, given that Congo has “almost no roads, mail or telephone system” and is in the midst of a chaotic war.
Mobile phones achieve several immediate goals:
- They allow rapid communication, sometimes replacing extreme difficulty. The article cites a man who previously had to journey eight days by riverboat to see his mother, and now talks to her on the phone every day.
- They enable e-commerce, or more technically m-commerce. African phones are increasingly equippped with the ability to transfer money and pay merchants.
- Mobiles bring efficiencies to commerce, potentially boosting economic activity.
Mobiles also have several larger effects:
- Information speed — They vastly speed up information flows. In a place like Congo, they supplement sparse broadcast media with millions of person-to-person information nodes.
- Information decentralization — As information accelerates, it also decentralizes, with a variety of social and political effects. The classic Third World coup-starter, seizing the radio and TV stations, will have less and less meaning.
- Leapfrogging — Mobiles enable leapfrogging over other technologies, from broadcast TV to fixed-line phones and even the Internet. The Post notes that Congo now has 3.2 million mobile customers, compared to only 20,000 land lines. Mobiles can help begin to close the information devide that grew steadily wider between developed and developing world over the last century.
Mobiles will be particularly transformative in Africa, the least-wired of all regions. They are actually growing fastest here now, and have 152 million users on the continent, the Post says. (This probably includes North Africa, but growth seems to be faster in sub-Saharan.)
PriceWaterhouseCoopers has released a study of potential growth in the world’s 17 largest economies out to the year 2050.
The study forecasts the eclipse of the current developed economies. The E7, largest emerging market economies (China, India, Russia, Brazil, Indonesia, Mexico, Turkey), were only 20% of the size of the G7 economies at market exchange rates in 2005, but would be 25% larger than the G7 by 2050. By purchasing power, the E7 economies were only 75% as large as the G7 in 2005, but would be 75% larger by 2050.
In purchasing power terms, the shifts in relative GDP would be stark:
COUNTRY — relative econ size 2005 / 2050
US — 100 / 100
Japan — 32 / 23
Germany — 20 / 15
China — 76 / 143
UK — 16 / 15
France — 15 / 13
Italy — 14 / 10
Spain — 9 / 8
Canada — 9 / 9
India — 30 / 100
South Korea — 9 / 8
Mexico — 9 / 17
Australia — 5 / 6
Brazil — 13 / 25
Russia — 12 / 14
Turkey — 5 / 10
Indonesia — 7 / 19
Note that the values are relative within their respective years, but not across them; all economies are projected to be larger in 2050 than at present.
Purchasing power suggests, among other things, the military power the economy can afford to buy, suggesting that the realignment of power toward Asia will have substantially occurred. It will no longer be possible for the US to massively outspend all potential rivals.
The study also offers some startling numbers for per capita income. The figures suggest that the developed countries could have universal prosperity, and the emerging markets could achieve levels of wealth like those of developed countries today, eliminating dire poverty.
COUNTRY — 2005 / 2050 purchasing power GDP per capita (constant 2004 dollars)
US — $40,339 / $88,443
Japan — $30,081 / $70,646
Germany — $28,770 / $68,261
China — $6,949 / $35,851
UK — $31,489 / $75,855
France — $29,674 / $74,685
Italy — $28,576 / $66,165
Spain — $25,283 / $66,552
Canada — $31,874 / $75,425
India — $3,224 / $21,872
South Korea — $21,434 / $66,489
Mexico — $9,939 / $42,879
Australia — $31,109 / $74,000
Brazil — $8,311 / $34,448
Russia — $10,358 / $43,586
Turkey — $7,920 / $35,861
Indonesia — $3,702 / $23,686
These numbers suggest massive value shifts: countries reaching these wealth levels have shifted toward democracy, social freedom, and humane governance.
There is an underlying problem in these hopeful figures: sustainability will be strained with far more of the planet living at developed levels of wealth.