Horizon ScanSOUTHERN AFRICA

Issue 52, December 2013

The information and commentary expressed here are the selection and views of the scanning organisation and do not necessarily reflect the views and opinions of the Rockefeller Foundation

POVERTY, DEVELOPMENT AND DONOR ISSUES 1

Migration as Structural Transformation 1

South African companies spend more on social investment 2

ECONOMIC ISSUES 3

Policy reform of South Africa’s small-scale fisheries sector: an upstream battle 3

Benefits, including social, of cheaper African airfares 4

POLITICAL ISSUES 5

The investment regime: break-out or reform? 5

Can cities change the politics of fragile states? 7

SOCIAL ISSUES 9

Remitting to Zimbabwe: Migrant experiences and remittance strategies in Botswana 9

SCIENCE, TECHNOLOGY & INNOVATION ISSUES 9

Impact of Africa’s innovation hubs: Too early to call? 9

Exploring the role of intellectual property in open development 10

Google Translate launched in Zulu, Hausa, Yoruba, Igbo and Somali 10

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Southern Africa Horizon Scan, Issue 52, December 2013

POVERTY, DEVELOPMENT AND DONOR ISSUES

Migration as Structural Transformation

An excellent, succinct, blog post about thebenefits, and positive impacts, of migrationwith a strong recommendation about theneed for more knowledge around theresistance to migration at the end. Theauthor, Shantayanan Devarajan, is the ChiefEconomist of the World Bank’s Middle Eastand North Africa Region. He was the directorof the World Development Report 2004,Making Services Work for Poor People.

When a poor person moves from a low-productivity job to a higher-productivity one,we usually celebrate. The worker is clearlybetter off; the hiring firm is no worse off; andit’s good for the economy as a whole.Indeed, development is often described asthe process of structural transformation,where low-productivity workers (typically inagriculture) move to higher-productivity jobsin manufacturing or services.

But when that same worker happensto cross a national border, we call it“migration” and, instead of celebrating, westart investigating the effects on workers,firms and public finances in the newenvironment; and on those left behind (theso-called “brain drain”). Instead of promotingstructural transformation, we look for policiesto manage it.

Even more troubling, many of thestatements made about the effects ofmigration on the receiving and sendingcountries are based on rhetoric rather thanevidence. Thanks to painstaking data workand rigorous research by Michael Clemens,Lant Pritchett and my colleagues ManjulaLuthria, Caglar Ozden, and Dilip Ratha,among others, we now have a fairly robustpicture of the effects of migration:

Not only do migration patterns followwage differentials, but those differencesare huge and growing over time. Aworker from Haiti moving to the U.S., orfrom Ethiopia moving to Italy, couldincrease his or her earnings seven-fold.No other development intervention canmatch this 700% gain. Nevertheless, thestock of migrants worldwide has grownonly slightly faster than world populationgrowth (opens pdf).

The gains to the global economy ofallowing labour to move to where it ismost productive are truly massive—ofthe order of 100% of global GDP. Bycontrast, freeing up all restrictions to

trade will generate gains of the order of2-3% of global GDP.

The effects of migration on the receivingcountry are positive. While some nativeworkers (who are easily substitutable formigrants) may see their wages decline,most of the economy will see an increasein wages and employment, as migrantsperform jobs—such as childcareservices—that permit the economy to bemore productive (for instance, byallowing both spouses to work outsidethe home).

Across OECD countries, the fiscal burdenof migration is either zero or slightlypositive, partly because migrants tend tobe younger and hence less of a drain onthe health-care system.

The effects on the sending country varydepending on whether the migrant isunskilled or highly skilled. If the former,there is generally a gain, since there is aglut of unskilled labour in poor countriesand a shortage in rich ones. For skilledworkers, there is some evidence thatwages of the remaining workers goesdown, but the effects are too small tojustify the hype about the brain drain.The exception may be very smallcountries, such as those in the PacificIslands or some in Africa. But even here,there is the possibility of migration“chains”, where skilled people frompoorer countries fill the jobs vacated bythose leaving to OECD countries.Furthermore, there is growing evidenceof a “brain gain,” as the possibility ofmigrating abroad prompts more peopleto seek higher education in their owncountries.

Independent of the empiricalmagnitudes, there is an argumentagainst skilled migration that goes asfollows: since developing countrygovernments paid for these people’seducation, they—and not the receivingcountry—should get the benefits of theirpost-graduation services. This argumentis fragile. First, it applies equally to thosewho join the private sector in their owncountries. Secondly, if a skilled workersuch as a doctor is offered a high-payingposition in an OECD country, he or she ispart of an internationally mobileworkforce. If the source country wants tokeep them, they should pay theminternationally comparable salaries. Thereason they don’t is political: they wouldhave to raise the salaries of all thedoctors in the country, including those

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who are not internationally mobile. Youcannot solve this domestic, politicalproblem by restricting migration. Finally,at least one study shows that Nigeriandoctors in North America remit morethan the cost of their education.

In light of all this evidence, why is there somuch resistance to migration? Why do somany people try to control migration whileembracing structural transformation? Politicscannot be the answer, as the small group ofpeople who are likely to lose—typically recentmigrants—are not powerful enough to blocksuch a major gain to society. It cannot bedue to racism because migrants (and,increasingly indigenous populations) comefrom all races. In his recent book, Paul Colliersuggests that migration may upset the socialequilibrium in the receiving country, wherebythe current residents are willing to pay forthe level of social services in their country,given a particular ethnic mix. Migration willchange that mix.

Instead of modelling the effects ofmigration, future research could usefullymodel the resistance to migration. Thisresearch will probably take us into the areaof behavioural economics. We should buildthe empirical base to test hypotheses such asthe one above. And we should design policiesthat are informed by the research on theresistance to migration, rather than just theeffects.

Source:http://blogs.worldbank.org/futuredevelopment/migration-structural-transformation?cid=EXT_TWBN_D_EXT (Click tofind the post which has hyperlinks to the researchsupporting the assertions made in the articleabove.)

South African companies spend more on

social investment

South African companies devoted aboutR7.8bn (±US$550 million) to corporate socialinvestment [during 2013], despite notknowing how much good it is doing, newresearch released on Wednesday reveals.

Half of this spend comes from just 31companies — mainly in the mining, financialservices and retail sectors, according toTrialogue, a consulting company thatspecialises in business sustainability andcorporate social investment (CSI).

Economic conditions have been toughthis year, but companies have managed toincrease CSI spend from last year’s R6.9bn(±US$.

Fifty-five per cent of companiesincreased their CSI expenditure in 2013,while 20% kept their budgets the same. Thetop 100 companies account for almost 70%,or R5.4bn (±US$370 million), of all social

investment, which includes cash, goods andservices, according to Trialogue.

“Some company reputations clearlybenefit from this. But few are able to tell justhow effective their social investments are infostering positive societal change,” said NickRockey, director at Trialogue.

Most corporate respondents — 95%— had a system in place to monitor theirlarge CSI projects, but these tend to focusmore on monitoring than on evaluating theimpact of the initiatives.

Almost all of the companies surveyeddid physical site visits and documented theinputs and outputs of projects.

“While CSI departments understandthe importance of gathering and analysingevidence around their developmental work,few companies fund or conduct usefulresearch to inform their work,” said MrRockey.

About 84% of companies said themoral imperative was a significant driver ofCSI, followed by reputation management.But a significant share (44%) said theDepartment of Trade and Industry’sempowerment codes drove their CSI spend.

The same proportion of companiesdetermined their CSI budget according to thebroad-based black economic empowermentcodes’ guideline that calls for 1% of net profitafter tax to be spent on socioeconomicdevelopment.

Companies, in practice, are actuallyspending more than this — on average 1.4%,according to Trialogue. The lion’s share ofCSI spend — 41% — went on propping upSouth Africa’s ailing education system.

Social and community developmentwas the second most favoured sector,receiving an average 15% of CSI spend.Mining companies spent, on average, R62m(±US$4,3million) on CSI initiatives, often oninfrastructure projects in areas around theiroperations.

Almost 80% of the companiessurveyed had employee volunteerprogrammes and had started to introduceformal volunteering policies, with almost two-thirds of respondents employing dedicatedstaff to run them.

“Since 2007, the prevalence ofvolunteering policies has risen from 46% to60% of corporate respondents having somekind of policy in place,” Trialogue said.However, few of these companies monitoredthe social impact of these programmes.

Research was conducted betweenJune and August this year among 103companies and 208 non-profit organisations,using one-on-one interviews, online surveysand analysis of annual reports to determinetheir approaches to social investment over

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the past year. Some state-owned enterpriseswere also included.Source:http://www.bdlive.co.za/business/2013/12/04/sa-companies-spend-more-on-social-investment

A handy snapshot of the extent of CSI inSouth Africa, together with the motivationbehind it, as well as the shortcoming of notevaluating or measuring impact. Monitoringdoes take place at least.

ECONOMIC ISSUES

Policy reform of South Africa’s small-

scale fisheries sector: an upstream

battle

World Fisheries Day (celebrated each year on21 November) comes at a time when theSouth African Parliament is consideringlegislation that many feel will finally givesmall-scale fisheries a rightful stake in thecountry’s marine resources.

During Parliament’s public hearingson the Marine Living Resources AmendmentBill in October 2013 the inputs from varioussmall-scale fisheries associations and NGOscoalesced around a central message: passthis legislation without delay, the wait hasbeen long enough!

South Africa’s fisheries legislation hasbeen structured around three primarycategories: commercial operators who wereallocated individual quotas; a recreationalsector; and a large subsistence categorywhich incorporated a wide range of fisherstargeting near shore resources. This framingof the sector, however, excluded thousandsof small-scale fishers who were unable tosecure the limited individual commercialfishing rights available, yet engaged infishing as a commercial livelihood rather thanfishing ‘for the pot’ on a subsistence level.

In many cases excluded fisherscontinued to exercise what they felt was theirhistorical right to access marine resources,contributing to an opaque environmentwhere illegal fisheries and overfishing havegreatly reduced South Africa’s near-shorefish stocks, particularly high-value abaloneand rock lobster. Interim relief quotas wereintroduced as a stop-gap measure toaccommodate a greater number of small-scale fishers, but these were seen asinadequate in formalising the small-scalesector and have also been implicated inoverfishing of the allowable quotas.

The adoption of South Africa’s Small-Scale Fisheries Policy in June 2012 was animportant milestone in addressing theshortcomings of the country’s fisheries

governance system, but the implementationof many aspects of the policy, including suchcentral issues as the allocation of quotas tosmall-scale fishers, cannot proceed withoutthe passing of the Marine Living ResourcesAmendment Bill. The principal feature of thenew legislation is that the small-scale fisherssector will no longer be allocated limitedindividual rights or temporary interim reliefquotas, but rather receive collective rightsallocated to fisheries co-operatives. Fisherswill also be allowed to target several fishspecies rather than being allocated rights toa specific species. This approach overcomesseasonal variability and is more in line withthe historic, diversified and economicallyviable practices of small-scale fishers.

The struggle by South African small-scale fishers for formal recognition andsupport is mirrored in many fisheries-dependant economies, where large-scaleindustrial fisheries have tended to beprioritised in both the policy and researchcommunities.

In recent years, however, there hasbeen growing recognition of the role thatsmall-scale fisheries can play in supportinglivelihoods and contributing to food security,particularly within remote coastalcommunities where alternative livelihoodsmay be scarce. In 2011 the UN’s Food andAgriculture Organisation (FAO) initiated awide-ranging consultative process aimed atthe development of an internationalinstrument in the form of guidelines forsecuring sustainable small-scale fisheries(SSF Guidelines). The process is expected tolead to the adoption of the SSF Guidelines atthe 31st session of the FAO Committee onFisheries in June 2014.

Despite the progress made in thegovernance of small-scale fisheries, researchconducted by SAIIA (South African Instituteof International Affairs) on fisheriesgovernance in Uganda and Mozambique hasunderlined the complexities faced in thesector.

Increasing numbers of fishersentering the sector, improved technologiesthat allow fishers to more effectively targetexisting stocks, limited monitoring capacityby fisheries officials, and widespread illegalfishing practices threaten the sustainability ofmany small-scale fishing communities. Thereis a strong sense of optimism that SouthAfrica’s Small-Scale Fisheries Policy and thereform of the Marine Living Resources Act willallow numerous historic fishing communitiesthat have long been excluded from theformal fisheries sector to again pursue a legaland economically viable livelihood,contributing to the revitalisation of many ofSouth Africa’s coastal towns.

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Questions remain, however,regarding the ability of South Africa’s nearshore stocks to support an expanded small-scale sector. In 2012 the Department ofAgriculture, Forestry and Fisheries (DAFF)released a report on the status of SouthAfrica’s marine fishery resources, whichnoted that “most linefish stocks are currentlyin a collapsed state”. Abalone and rocklobster stocks, the most high value speciesfor small scale fishers, are also in a collapsedstate, with rock lobster populations at 3.5%of pristine levels. The Southern AfricanSustainable Seafood Initiative (SASSI)recently downgraded west coast rock lobsterfrom a green to orange listing (encouragingconsumers to think twice before buying dueto sustainability concerns); a decision whichDAFF has argued is unjustifiable given therock lobster recovery plan currently beingimplemented by the department. However,SASSI has noted that rock lobster stocksremain at critically low levels and widespreadillegal and unreported fishing have not beeneffectively addressed.

The reform process currentlyunderway to allow historic small-scale fishingcommunities to participate legally in SouthAfrica’s fishing sector is a criticaldevelopment in redressing the inequity ofSouth Africa’s fisheries governance system.There is a compelling case for the inclusion ofa greater number of small-scale fishers onthe grounds of social justice and economicdevelopment; however, the biological statusof South Africa’s near-shore fisheries stocksare undeniably under severe pressure.

Without more effective efforts toaddress illegal fishing and overfishing,therefore, the progress in small-scalefisheries policy reform may represent ahollow victory for fisheries communities.

Source: http://www.saiia.org.za/opinion-analysis/policy-reform-of-sas-small-scale-fisheries-sector-an-upstream-battle

The article speaks for itself; and see herehttp://www.ecologyandsociety.org/vol18/iss4/art17/ for a case study of a fishingcommunity in Ocean View, Cape Town,where researchers examine a Thyrsites(locally known as snoek – a fish speciessimilar to Barracuda) fishery that operatesdifferently, through a community supplychain and informal markets, than that of thehigh value individual transferable quotasregulated species, yet plays a significant rolein the livelihoods of artisanal fishers and inthe food security of poor households. Thefindings of this case study show the failuresof existing policy frameworks and theimplications for the implementation of the

new small-scale fisheries policy in SouthAfrica.

Benefits, including social, of cheaper

African airfares

A very interesting blog article by LeeCrawfurd who is a development economist atOxford Policy Management, where he iscurrently focused on education policystrategy and evaluation. (Hyperlinks areauthor’s.)

When thinking about regional integration inAfrica we often think first of trade policy,telecommunications, ICT, and roadinfrastructure. But on a continent larger thanChina, India, the US, and Europe combined,air transport is inevitably going to play a keyrole in facilitating integration. For Africans tointeract and do business with each other,they need to get there. Moreover, as incomesrise, patience with long and arduous roadjourneys is bound to diminish. On a personalnote, I thought little of taking a 24-hour busride in East Africa as a student, but as aworking professional I very gladly pay extrato take a one-hour flight instead.

However, Africa accounts for lessthan 2% of global airline passenger trafficand about 1% of global airlines’ cargo. Thechallenges facing the African aviationindustry range from strong stateprotectionism, lack of an enablingenvironment for new investors, high taxesand charges (above comparative worldaverages), a poor safety record due toageing fleet and insufficient regulatorysupervision. Likewise, a lot of air transportinfrastructure across the continent is in needof upgrade.

So how do we get safer, moreefficient and cheaper airlines?

One of the key problems is a lack ofcompetition which contributes to high fares.Although in some cases low passengervolumes may create natural monopolies, inmany countries competition is artificiallyrestricted by making it difficult for foreignairlines to access certain routes, in order forgovernments to support their own nationalcarriers. This is despite an agreement morethan 13 years ago to “open the skies.” TheYamoussoukro Decision (1999) was signedby 44 countries, who agreed to liberalizeintra-African air transport, including allowingnon-national airlines to land and takepassengers to a third country – so-called“fifth freedoms” of the air. Implementing thisdecision could do much to reduce fares andincrease air traffic across the continent.

All of this sounds fine in theory, butwhat about in practice? A comprehensive

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2010 World Bank study led by CharlesSchlumberger looked at a number of specificexamples of what happened when routeshave been liberalized in Africa. When theNairobi-Johannesburg route was fully openedup in 2003, passenger volumes increased 69-fold. When the domestic South Africanmarket was liberalized, passenger volumesincreased by 80%. On average in theSouthern African Development Community(SADC), routes that were liberalized sawfares drop by 18%. The study estimates thatfull liberalization in the Southern AfricanDevelopment Community (SADC) regionwould increase passenger volumes by around20%.

A more recent study was presentedat the AfDB’s African Economic Conferenceby Megersa Abate, an Ethiopian transporteconomist, looking at air transport routes toand from Addis Ababa. While Abate did notfind any impact of liberalization on prices, hedid find large increases in the number offlights – up to a 40% increase. He concludesthat in the long run competition is likely toreduce prices. Even without price drops,more flights and more routes are clearlyneeded.

Despite these potential gains, atpresent over a quarter of air routes in Africaare served by only one carrier. In total up to70% of air transport is served by a monopolycarrier. Why are countries slow to “open theskies”? Too often it comes down to simpleprotectionism, driven by fear that thenational carrier won’t be able to competewith the continent’s big players from Kenya,Ethiopia and South Africa as well as othercompetitors from the Gulf and beyond.Earlier this year it took the total collapse ofAir Malawi for Kenya Airways to be allowed tooperate flights between Malawi and othercountries, despite “fifth freedom” rightsalready agreed to by Malawi through theYamoussoukro Decision. Individual airlinesand countries should not need to make ad-hoc bilateral agreements, when anagreement for open competition continent-wide already exists.

The challenge of financial viabilityand efficiency is not confined to Africa alone.Major European and American airlines havefolded or receive billions in state aid, capitalinjections, and debt write-offs –demonstrating that the airline industry isfraught with difficulties. Moreover, developedand emerging markets have witnessed thegrowth of low-cost carriers which are allowedto compete on the same routes with themajor carriers, thereby driving down prices.To be sure low-cost carriers in Africa face ahost of additional challenges including highcosts due to poor safety records and slow

courts, but implementing “open skies” wouldbe one less thing for them to worry about.

Lower airfares and more flights couldgenerate a whole host of new economicopportunities. The successful flowerindustries in Kenya, Ethiopia and elsewhererely critically on air transportation, as doother similarly perishable agricultural goods.International tourism earned Africa US $43.6billion in 2012 (opens pdf) and directlycreated 8 million jobs. This could grow withincreased and cheaper air transport.

Cheaper air fares will also likely havesocial benefits, facilitating interactionbetween people of different cultures.Increased intra-African tourism might alsocontribute to the non-economic aspects ofintegration goals, preparing the ground forstronger transnational feeling. Economistslike to say that there is no such thing as a“free lunch.” But for the cost of some short-term political pain, Africa could gain some bigeconomic and social benefits.

Source: http://www.afdb.org/en/blogs/integrating-africa/post/on-african-airlines-12723/#.UrXJtE5ONfo.twitter

POLITICAL ISSUES

The investment regime: break-out or

reform?

This edition of the Southern Africa Scannewsletter is somewhat focussed on policyreform that can improve the lives of thepoor. This refers not only to direct policy-making, such as that of the small-scalefisheries mentioned in an article above, butalso policies that can affect the competitiveposition of nation states in which poor peoplelive, including sustainable and economicdevelopment. Such is the case of articlebelow, which deals with trade andinvestment decisions currently being madeby South Africa. In this blog post, JamesZhan, Director of the Investment andEnterprise Division at UNCTAD, argues thatright now there is a unique opportunity toupdate and modernize investment treaties.

South Africa's systemic review of its bilateralinvestment treaties (BITs) has marched thissomewhat sterile topic right up the popcharts. The country in the past three weekshas revoked BITs with Germany andSwitzerland, following treaty terminationswith Belgium, Spain and the Netherlands.Some other countries have also opted tobreak out of the regime. Australia is optingout of dispute settlement mechanisms, forinstance. Several other countries areweighing their options.

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There are several concerns withthese treaties. But the system is not all bad.It can serve as a base to enhancepredictability and security for foreigninvestments – much like the World TradeOrganization does for trade. But for that tohappen a more coherent, streamlined andfairer system needs to be established,otherwise countries will continue to breakout.

A priority area for redress is the BITregime's compatibility with the developmentagenda. To an extent, investment treaties“freeze” a country's legislative environmentfor foreign investors. This puts the treaties atodds with evolving sustainable developmentobjectives. Some other concerns stem fromprovisions that are phrased in terms that aretoo general, or are not properly defined, andare therefore open to broad interpretationthat may undermine developmentalobjectives.

The second problem is the investor-State dispute settlement (ISDS) mechanism.The allowance under investment treaties forprivate investors to sue States is unusual. Inthe WTO disputes can only be initiated byStates. Moreover, whereas WTO panels canat most order erring countries to align theirrules with their WTO commitments, Statesunder investment disputes may be liable tocostly awards against them. Last year arecord award of $1.77bn was made againstEcuador, in a case brought by OccidentalPetroleum Company of the US.

With access to ISDS an attractivefeature, the number of investment suits hasspiked. A cumulative 514 investment caseshave been brought – compared to the 405cases heard in the WTO. It is not to sayinvestment disputes do not often havemerits, but this system may serve as anincentive for investors to adopt creativemeans to gain access to ISDS and referdisputes to arbitration even when not strictlynecessary.

There is also wide recognition thatthe arbitration process has flaws: arbitralfindings, for instance, are sometimesinconsistent, which means divergent legalinterpretations of similar provisions exit,undermining the predictability of the system.Moreover, no well-functioning appeals optionis available. Because arbitration may result incostly findings against States it is notunreasonable to expect that it shouldfunction properly.

The acknowledgment of the system'sweaknesses has spurred change. Most newinvestment agreements negotiated thesedays simply don't resemble the firstgeneration BITs. Today's treaties clarifyprovisions or give narrow definitions for

terms such as “investment”, “fair andequitable treatment” and “expropriation” tobetter guide tribunals on treaty makers'intent. The new treaties even provide forsustainable development and corporate socialresponsibility elements. Generally they striveto better balance the rights of investors andthe obligations imposed on States.

But that does not solve the problem,because the current body of investment lawcontinues to exist. And exist in thethousands. The international investmentregime comprises just under 3,200 BITs – abloated network of treaties, characterized bycomplexity and incoherence.

Instead of the piecemeal reformsinduced by individual countries’ actions, acomprehensive multilateral review of theinternational investment regime would be farmore useful to address systemic deficiencies,while strengthening its positive contributionto provide a stable regulatory environmentfor investment.

In the absence of a multilateral bodyto spearhead change, options for reformseemed bleakly absent until recently.However, two concurrent developments haveopened the doors of opportunity.

The first stems from an increasingtrend for countries to negotiate multipartyinvestment agreements within or betweenregions. Right now, 22 such regionalnegotiations are under way, involving 110countries. This rising regionalism presents avaluable chance to streamline the system. Ifthe negotiators of these regional pacts opt toreplace existing BITs between all parties witha single regional treaty, this would be a giantstep towards regime consolidation.

The second opportunity for reform isthe one South Africa is using. Many countrieshave accumulated a stock of BITs concludedin the 1990s, whose expiration dates are nowfalling due. Expiry of the initial treaty termgives countries options to review, renegotiateor revoke.

According to an UNCTAD analysis,more than 1,300 treaties (40% of the currentBIT network) will have reached maturity bythe end of this year. This constitutes astunning opportunity to update andmodernize. It is that rare opportunity forcountries to decide what they want fromforeign direct investment (FDI) and refinetreaties accordingly. This is the chance toalign investment policy with environmentalobjectives and labour standards. It is also themoment to construct a more responsibleinvestor-State dispute settlementmechanism.

The best forum for such an overhaulwould be a multilateral one. The dynamics ofmulti-stakeholder engagements will ensure

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that the interests of all parties involved arecatered for and yield fairer and morebalanced outcomes. A multiparty approachwould also transcend narrow interests andmore effectively address broader social,economic, environmental and developmentalchallenges.

The appetite for a multilateralinvestment agreement is absent. There is,nonetheless, a compelling argument to bemade for incremental multilateralism. In theabsence of a formal supranationalinstitutional framework to spearhead thisdebate, UNCTAD has drafted an InvestmentPolicy Framework for SustainableDevelopment [PDF] as an attempt to providea road map. But we will reach further, faster,through a formal multilateral process.

South Africa's reframing ofinvestment protection shows there are waysto improve the system. The hope is thatcurrent developments spur a multilateralmoment for the investment system. Theworld indeed needs an updated regime thatheeds sustainable development imperatives.

Source: http://www.thetradebeat.com/content-type/opinion-analysis/item/301-the-investment-regime-break-out-or-reform

See also herehttp://www.tralac.org/2013/11/20/south-africas-promotion-and-protection-of-investment-bill/ for some analysis on theissue by trade law centre (tralac), and herehttp://www.vcc.columbia.edu/content/lessons-south-africa-s-bits-review for an op-ed bySouth Africa’s Deputy Director General of theDepartment of Trade and Industry. ForJoseph Stiglitz’s view on the matter, see herehttp://www.project-syndicate.org/commentary/joseph-e--stiglitz-on-the-dangers-of-bilateral-investment-agreements . He concludes:” It is no surprise that South Africa, after acareful review of investment treaties, hasdecided that, at the very least, they shouldbe renegotiated. Doing so is not anti-investment; it is pro-development. And it isessential if South Africa’s government is topursue policies that best serve the country’seconomy and citizens. Indeed, by clarifyingthrough domestic legislation the protectionsoffered to investors, South Africa is onceagain demonstrating – as it has repeatedlydone since the adoption of its newConstitution in 1996 – its commitment to therule of law. It is the investment agreementsthemselves that most seriously threatendemocratic decision-making. South Africashould be congratulated. Other countries,one hopes, will follow suit.”

Can cities change the politics of fragile

states?

An op-ed by Seth Kaplan who is aProfessorial Lecturer in the Paul H. NitzeSchool of Advanced International Studies(SAIS) at Johns Hopkins University. Heteaches, writes, and consults on issuesrelated to fragile states, governance, anddevelopment. He is the author of FixingFragile States: A New Paradigm forDevelopment and a forthcoming book onpoverty and state governance. The articleappeared on Global Dashboard, whichexplores global risks and international affairs,bringing together authors who work onforeign policy in think tanks, government,academia, and the media. (Hyperlinks areauthor’s.)

Discussions about how to fix fragile statesusually start and end with national levelpolitics and institutions. But what if the keyto improving their condition lies elsewhere –in their major cities?

As Tom Goodfellow, Dennis Rodgersand Jo Beall recently pointed out, “cities arewhere state-building projects in thedeveloping world unravel rather thanconsolidate.” This is so because “violent civicconflict is generally linked to state failures toprovide security, growth and welfare in urbanareas and is exacerbated by the particularnature of the latter.” Moreover, “civil conflictstend to drive rapid urbanization [and] thencivic conflict is a common response to thatrapid urbanisation.”

Competition between groups forcontrol of cities and their resources mark thelandscape of many fragile states, producingprotests and riots (in the Arab world), gangcrime (in Central America), criminal activity(across West Africa), and even terroristattacks (in Beirut, Karachi, and Baghdad).Often these are the result of a failure toprovide institutionalized mechanisms forpolitical contestation and large-scale socialexclusion.

As more and more people live incities in fragile states the only way toimprove lives in these countries is byimproving the governance of themetropolises where they live. Almost one-half of the developing world’s population nowlives in cities, and rapid urbanization willgrow this proportion to almost two-thirdswithin a few decades. Although the numbersfor fragile states will run somewhat behindthese totals, the cities in these places are stillrapidly growing. Lagos already has over 20million people. Cairo, Karachi, Dhaka, andKinshasa are all in a similar class.

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The scope for improvement is vast.For tens of millions of people, existence incities in fragile states—and many developingcountries beyond—is precarious to say theleast. A United Nations Human SettlementsProgram report declared, “The urban poorare trapped in an informal and ‘illegal’world—in slums that are not reflected onmaps, where waste is not collected, wheretaxes are not paid, and where public servicesare not provided. Officially, they do notexist.” Around a billion people—almost half ofthe developing world’s urban population—livein slums.

Urban planning in Africa and SouthAsia is incredibly out-dated, exacerbatingproblems in the regions with the worst urbanproblems. A recent report by the AfricaResearch Institute pointed out, “Urbanmanagement is notoriously erratic andfragmented, and the overwhelming majorityof buildings are constructed in contraventionof planning laws.” Illegal structurespredominate, planning and building laws areoften used against vulnerable groups, andwealthy and powerful elites act withimpunity. As is the case for much else inthese countries, there are really two sets oflaws: one for the most powerful actors andanother for everyone else.

Despite the many difficult challengesthey face, cities are easier to fix than states.The political dynamics of running a city arepotentially much more favourable than thatof a fragile country for a number of reasons: First, elections work differently. Whereas

national polls pit various ethnic andreligious groups against each other, andturn into a mud fight between elites forcontrol of rents earned from naturalresource wealth or foreign aid, a city’scompact size, blurring of identities, anddaily grind makes elections more a testof competence and pragmatism. Thereare also many more ways to hold officialsaccountable in a city than in a hugeweakly cohesive country.

Second, the compact size of cities makethe creation of mechanisms to promotecollective action and to institutionalizenegotiation between disparate societalinterests easier than at the national level.As Goodfellow, Rodgers and Beall pointout, “cities arguably also offer thegreatest potential for the development ofinclusive institutions for managingpolitical conflict rather than suppressingit. The concentration of diverse actorsand state institutions in cities makethem, in theory at least, critical spacesfor institutionalised forms of politicaldebate and participation that translate

into demands on the state rather thanviolence.”

Third, the powerful and wealthy actorswho strongly influence how governmentworks in poor countries are more likely todesire better governance when they livein a place—and not in a distant capital.

Fourth, there is ample scope to increaselocal taxation, which is crucial forincreasing the accountability of officials.Whereas national governments oftendepend on foreign sources of revenue—natural resources and foreign aid—themore dynamic cities have no need to.The more they depend on taxes, thegreater their motivation will be toenhance services, improve infrastructure,and invest in activities that expandbusiness activity. The better they work,the more money they earn. Lagos, forinstance, earns almost three-quarters ofits money from local taxes and fees. Incontrast, Nigeria’s central government,which is awash in tens of billions of oilmoney, earns only one-fifth of itsrevenue from local taxes.

Fifth, as improving public services iseasier in a city than a whole country—there are fewer geographical,infrastructure, and political bottlenecks—politicians have a greater incentive to try.When you cannot win an election basedon delivering the goods—as is often thecase in Africa—leaders are more likely tofocus on ethnic politics or corruption todo so.

What all this means is that cities need tobecome a much larger focus of attention forthose wishing to improve fragile states.Devolving more power to cities—and theirsurrounding areas—offers a chance toremake the political dynamics that currentlyhold back whole countries. Once that is done,effort could be concentrated on improvingelectoral processes, forging developmentalpolitical settlements (just as important hereas in national politics), and strengthening taxadministrations and planning offices.Source:http://www.globaldashboard.org/2013/12/15/can-cities-change-politics-fragile-states/?utm_source=rss&utm_medium=rss&utm_campaign=can-cities-change-politics-fragile-states

A very useful piece that may serve tovalidate Rockefeller Foundation’s decision tofocus on developing world cities and theirdynamics.

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Southern Africa Horizon Scan, Issue 52, December 2013

SOCIAL ISSUES

Remitting to Zimbabwe: Migrant

experiences and remittance strategies in

Botswana

Below is an abstract of a recently publishedgraduate research paper by Riley Dillon,commissioned by the Africa Initiative (AI),which is a multi-year, donor-supportedprogram, with three components: a researchprogram and exchange program (bothrecently concluded) as well as an onlineportal. An undertaking led by The Centre forInternational Governance Innovation, theAfrica Initiative aims to contribute to thedeepening of Africa’s capacity and knowledgein five thematic areas—conflict resolution,energy, food security, health, and migration,with special attention to the cross-cuttingissue of climate change. By incorporatingfield-based research, strategic partnerships,and online collaboration, the Africa Initiativeis undertaking a truly interdisciplinary andmulti-institutional approach to Africa’sgovernance challenges. Work on the coreareas of the initiative focus on supportinginnovative research and researchers, anddeveloping policy recommendations as theyrelate to the program’s core thematic areas.

Economic and political crisis in Zimbabwesince 2000, characterized by politicalrepression, economic turmoil and soaringunemployment rates, has led thousands ofindividuals to emigrate in search of newopportunities in neighbouring countries andfurther afield.

The remittances sent home by thesemigrants often play a key role in alleviatingpoverty for households and thus, arguably,within the national economy. Drawing on keyinformant interviews, as well as in-depthinterviews with twenty migrants in Botswanaand fifteen of their family members inZimbabwe, [the] paper provides an overviewof these Zimbabwean migrant remitters, theirremitting purposes and patterns and thepotential developmental impact of the goodsand money they send. These Zimbabweanmigrants are reliable remitters, and some areopen to formalizing their remittances and toparticipating in development initiatives athome. However, they face a number ofbarriers to doing so. These include: their living and working conditions in

Botswana; difficulty accessing information and

opportunities for investment inZimbabwe;

the Zimbabwean government’s lack ofconstructive engagement with the

diaspora on policies directed at them;and finally, and

the absence of organization andrepresentation among the Zimbabweandiaspora in Botswana.

Source:http://www.africaportal.org/articles/2013/12/11/remitting-zimbabwe-migrant-experiences-and-remittance-strategies-botswana

Download the pdf version of the researchpaper herehttp://www.africaportal.org/sites/default/files/no2.pdf and see herehttp://www.africaportal.org/articles/2013/08/16/formal-and-informal-remittance-systems-zimbabwe for the accompanyingbackground paper which in summary states:- “It is estimated that yearly remittance

transfers to Zimbabwe amount to USD$490 million. However, this amount doesnot include informal remittances sent infrom neighbouring countries.

- Governments and international bodiesmost often favour formal remittances, asthey are reliable and regulated. Informalremittances, however, are usually moreaccessible, particularly for migrants inlow-income categories.

- Attempts to formalize remittances musttake into account the advantages ofinformal systems for migrants, so as toretain the accessibility of these longstanding systems.

- Undermining informal transfer methodswould likely widen inequality and becounterproductive to overall povertyalleviation and development efforts.”

SCIENCE, TECHNOLOGY & INNOVATIONISSUES

Impact of Africa’s innovation hubs: Too

early to call?

Innovation and technology hubs have beenspringing up across the continent in recentyears. From Hive Colab in Uganda, to iHub inKenya and to kLab in Rwanda, these ICThubs were founded in an effort to catalysetech and innovation by establishing acommon space for knowledge transfer andresource sharing for Africa’s aspiring andtech savvy entrepreneurs.

According to Hilda Moraa, a seniorresearcher at iHub in Kenya who spoke at theAfricaCom conference in South Africa lastmonth, the hubs are growing at atremendous rate. “Currently we have morethan 90 hubs in Africa and the number justkeeps on growing. According to the lateststatistics that I saw, in every two weeksthere is a new hub starting in Africa. And

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Southern Africa Horizon Scan, Issue 52, December 2013

what does that mean? Are we saying thatthis is the best way to build entrepreneurshipand youth development in Africa?”

However, because these innovationhubs are relatively new on the continent, it isdifficult to tell yet if they are successful intheir goal of preparing and turning outtechpreneurs and commercial business ideas.

“We have been conducting a researchstudy to understand clearly how these hubswork and who is actually doing the rightthing; we don’t know because most of themare in their early stages,” explained Moraa.“So it’s very difficult to know who is doingthe right thing, who has the best model toscale, who has the best sustainabilitypractices in place that other hubs can [use asa tool kit to grow].”

According to Moraa, the mostimportant thing Africa’s innovation hubs cando is collaborate and learn from each other.

Many of these hubs share commonchallenges – such as limited resources,reliance on funding by donors andgovernance struggles – and while they mighthave different governance structures andmembership models, it is necessary for themto share their successes and failures.

Moraa said it became clear from herresearch that most of these hubs, if not all,where looking for more partnerships withboth public and private institutions, such asmobile operators and local universities whocould, for example, provide market research.She added that they also need the support ofgovernment to provide research anddevelopment, as well as monitoring andevaluation programmes.

Collaboration between the differenthubs is also needed to share ideas onengaging hub members. Networking eventsand competitions are ways of keepingmembers involved and inspired, while inter-hub member exchanges can allow membersof various hubs in other countries to connectand share knowledge with each other.

“The road to success of these hubs isreally going to be a long journey and no oneup to now really knows how to do it… Most ofthese hubs are in the early stages and I thinkthat the most important thing is for them torealise that they need to work with otherpeople to build sustainable models as well asbe at the centre of helping the entrepreneursbuild their ventures,” added Moraa. “Becauseif the entrepreneur is not successful thenautomatically the hub is not successful.”Source:http://www.howwemadeitinafrica.com/impact-of-africas-innovation-hubs-too-early-to-call/33491/?utm_source=twitterfeed&utm_medium=twitter&utm_campaign=Feed%3A+HowWeMadeItInAfrica+%28How+We+Made+It+In+Africa%29

Exploring the role of intellectual

property in open development

The September 2012 edition of the SouthernAfrica Scan newsletter reported on the OpenAfrican Innovation Research and Training(Open A.I.R.) Project which is investigatinghow intellectual property (IP) regimes can beharnessed in Africa to facilitate innovationthrough collaboration – and through makingprocesses more participatory, knowledgemore accessible, and benefits more widelyshared. This project has now culminated Thisproject has now culminated, when from 9 to13 December 2013, delegates from nationaland international governmental entities, theprivate sector, civil society and academiagathered for five days of interconnectedevents in Cape Town, South Africa. Hostedby the University of Cape Town (UCT),participants engaged with diverseperspectives and future scenarios forintellectual property (IP), innovation anddevelopment during the combined 3rd GlobalCongress on IP and the Public Interest andOpen A.I.R. Conference on Innovation and IPin Africa.The Congress & Conference also featured thelaunch of two books on IP, innovation andknowledge in Africa: (1) a book published byUCT Press and authored by Open AfricanInnovation Research and Training Project(Open A.I.R.) researchers, entitledInnovation and Intellectual Property:Collaborative Dynamics in Africa, and (2) acompendium of forward-looking researchwith scenarios, Knowledge & Innovation inAfrica: Scenarios for the Future.The ground-breaking scenarios reportgrapples with the complex and dynamicforces shaping innovation systems over thenext two decades. It distils three differentbut equally plausible future scenarios: one aworld of “wireless engagement,” anotherwhere “informal is the new normal” and athird that is “sincerely Africa.” Each scenarioraises different issues for control and accessto knowledge in Africa. The book is fullyillustrated and in full colour. It is well worthdownloading, and can be accessed herehttp://www.openair.org.za/images/Knowledge-Innovation-Africa-Scenarios-for-Future.pdf(opens pdf)

Google Translate launched in Zulu,

Hausa, Yoruba, Igbo and Somali

Whether you’re trekking to a new place orsimply trying to communicate with someonewho doesn’t share a language with you,Google Translate can help you connect tonew information and people. [On 11December 2013 Google Translate] launched9 new languages that span Africa, Asia, and

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Southern Africa Horizon Scan, Issue 52, December 2013

Oceania and have over 200 million nativespeakers, collectively.

In Africa, [Google Translate] addedSomali, Zulu, and the 3 major languages ofNigeria. Hausa (Harshen Hausa), spoken in

Nigeria and neighbouring countries with35 million native speakers

Igbo (Asụsụ Igbo) spoken in Nigeria with 25 million native speakers

Yoruba (èdè Yorùbá) spoken in Nigeriaand neighbouring countries with 28million native speakers

Somali (Af-Soomaali) spoken in Somaliaand other countries around the Horn ofAfrica with 17 million native speakers

Zulu (isiZulu) spoken in South Africa andother south-western African countrieswith 10 million native speakers

There are lots of languages in Africa, and thisis the largest expansion into Africanlanguages to date (Google Translate supportsSwahili and Afrikaans already). The morelanguage is used on the web, the higherchances for [Google Translate] to launch itone daySource: Google Africa Blog http://google-africa.blogspot.com/