Tuesday, 26 November 2013

South-South Cooperation in aid, trade and FDI? A closer look at the economic engagement footprint of rising powers in Africa

By Musab Younis 

What do the activities of Chinese businesses in Angola, Brazilian state agencies in Mozambique and Indian exporters in South Africa have in common? For one thing, they all might be seen to represent the trend of (re-)growing linkages between African, Asian and Latin American countries.

As such, they are surrounded by a specific discourse which contains a number of signifiers referring to a particular view of history and economic development. A recurrent phrase within this discourse, ‘South-South Cooperation’, suggests that such linkages represent a kind of post-colonial recovery of extra-European patterns of trade and exchange. And to varying degrees, bureaucrats and businesspeople from the ‘rising powers’ do claim that their modes of interaction with African countries are fundamentally different from those behaviours associated with rich countries in the OECD.

The true picture is complex, of course, and any overview does violence to subtleties. A number of headline stories are well known. There has been a major increase in South-South trade over the past 30 years in both goods and services. Such trade has been dynamic and has grown unusually fast. GDP growth figures appear to have been high in many African countries. Large countries of the South (Brazil, China, India) have expanded their ‘development cooperation’ programmes in poorer countries in a range of areas from agriculture to health policy. But few studies have elaborated on these headlines by looking closely at the nature of these evolving patterns.

Two recent studies take a closer look at South-South economic engagement

One exception was an instructive study published earlier this year by Kathryn Hochstetler, which found that: ‘the most important dimension of the rise of South-South trade is the way it has both followed and reinforced increasing differentiation among the countries of the South.’ Hochstetler observed that developing country exports are dominated by a group of just eight countries (Brazil, China, India, Indonesia, Malaysia, Mexico, Thailand, and Turkey), which alone accounted for almost half of the annual exports of all the developing economies from 2005–2009. The Least Developed Countries (LDCs), she pointed out, actually send larger shares of manufactured goods to higher income than to lower income countries. LDC exports to other Southern countries were dominated by agricultural, fuel, and mining goods.

Another exception can now be added in the form of the work of Xavier Cirera, until recently at IDS, who has just published a careful analysis of the ‘economic engagement footprint’ of the rising powers in Africa. Rising powers – which Cirera defines as the BRICS countries plus the Gulf states and Turkey – are found to be important trade and aid partners for sub-Saharan Africa. Their importance (especially that of China) has increased dramatically over the last decade at the expense, mainly, of the OECD. Analysing such trade flows, Cirera finds that they are largely represented by the export of natural resources from sub-Saharan Africa and products with very little added value.

Given the work of Hochstetler and others, Cirera’s findings are perhaps unsurprising. Using a statistical tool called a similarity index to assess the trade and FDI flows, he finds significant similarities appear between OECD and rising power countries in terms of their interactions with sub-Saharan African countries. By the same token, and contrary to some reports, Cirera does not find a pattern of aid allocation by the rising powers which conforms to political affinity, corruption or trade links any more than the existing pattern of OECD countries. In other words, Chinese aid appears to be statistically linked to China’s interests in African natural resources only as much as British aid is linked to its own interests in African natural resources.

Such findings do not render all talk of ‘South-South Cooperation’ redundant, of course. But they do suggest that some of its rhetoric is (at best) premature, failing to characterise the actual pattern of relationships that is evolving between countries of the South. Such relationships continue to develop, as a range of scholars from Giovanni Arrighi to Susanne Soederberg have reminded us, within the confines of a global capitalist economy in which sclerotic hierarchies of production, labour and value can still be found.

It is precisely in this context that UNCTAD’s recent Trade and Development report (PDF) warned of a race to the bottom amongst Southern countries attempting to develop by supplying cheap manufactured goods to the credit-fuelled markets of the North. “[T]he expansion of the world economy, though favourable for many developing countries, was built on unsustainable global demand and financing patterns,” it observed, adding: “reverting to pre-crisis growth strategies cannot be an option.”

UNCTAD’s report comes at a time when the ‘developmental state’ paradigm is increasingly being questioned by a range of work looking at patterns of labour, dependency and industry. South-South trade and aid flows will, at least in the short term, continue to increase. But, as Cirera’s study suggests, the impact of these flows for the populations of sub-Saharan African countries remains open to question and contestation.

Musab Younis, formerly a Research Officer with the Rising Powers in International Development programme at the Institute of Development Studies, is now a PhD candidate at the University of Oxford.

Previous blogs by the same author: 

Thursday, 21 November 2013

From campaigner to crusty academic

By Jodie Thorpe

When I announced I was joining IDS, most people responded with “great opportunity” or “great fit – congratulations”! My partner was a bit less enthusiastic, it must be said, but only until I explained to him that it wasn’t the UK Secretary of State for Work and Pensions* that I was going to be working with.

My favourite response, however, was from a good friend and colleague.

She said IDS would be provide a fantastic chance to engage in high quality and rigorous analysis and methods, and in doing so make a difference to development. (Though she also cautioned me to be avoid becoming too “crusty”!)

A bit of context...For over 13 years now I’ve been working on business and development – the past four of which were at Oxfam.

My job at Oxfam was to help the organisation figure out how best to engage with business towards the vision of a just world with no poverty. By ‘engage’, I mean both ‘attack’ and ‘work with’, depending on the issue and the company.

Some people inside and outside Oxfam saw, and still see, this as a perilous strategy.

Given the often poor track record of many companies on issues ranging from child labour to environmental degradation, how could Oxfam risk its reputation working with these companies? Some thought even campaigning to change bad practice was a waste of time.

Certainly I could see the strategy was not without risks, but I found the critique frustrating. It seemed to me that many of the critics felt it was self-evident that no benefit could come from a private sector strategy. That the power and profit motive of business meant it was folly to expect meaningful engagement. In terms of influence, many saw governments as the proper development actor and advocacy target, despite the fact that many governments also have pretty mixed records themselves on human rights and poverty issues….

I wanted more robust evidence around the role of business in development

However, I eventually had to face up to the fact that I didn’t really possess evidence either. I was acting on the basis that business was an important actor, given the enormous power and reach of many companies. Sometimes their activities contribute to development and sometimes they hold it back, but it seemed clear to me that business plays an important role. Yet the more time went on, the more I wanted more robust evidence and analysis to support this.

This is where IDS comes in.

Next year, IDS is launching a new Business and Development Centre and for me it represents a golden opportunity to collaborate with others inside and outside IDS to grapple with these issues.

The types of questions I hope we tackle include:
  • What is the potential and what are the limitations of business as a development actor? 
  • How do you measure impact in a meaningful way?
  • And what does this tell us about what are the most effective interventions from a development perspective?
I don’t just want to tackle these questions in a theoretical way. I am hoping that we can generate some real evidence and come up with practical solutions and ways forward. This will, I hope, help those trying to understand business and its potential role in development, from NGOs like Oxfam, as well as from donors, governments – and from businesses themselves – to understand what interventions have the highest impacts and help them judge where they might best invest their time and energy.

I find the idea that we can achieve even part of this vision enormously energising. It’s a dynamic agenda with lots of potential for impact and influence. A small price to pay for a little crustiness!

*Iain Duncan Smith, popularly referred to in the UK as “IDS”.

Jodie Thorpe is a Research Fellow with the Globalisation Team at the Institute of Development Studies.  

Wednesday, 13 November 2013

Unpaid care work - should business care?

By Mar Maestre Morales

Last month I attended the seminar ‘Women’s economic empowerment: who cares?’ at IDS. We watched this beautiful video (that I recommend to everyone!), which unpacks what unpaid care work is, why it is important, and how it affects everyone’s wellbeing. It also highlights its invisibility in all agendas (policy, development, business) and why this has to be changed.

And it’s not just IDS and its research partners ActionAid International, BRAC University and SMERU Research Institute highlighting this issue.

UN Special Rapporteur, on extreme poverty and human rights, Magdalena Sepúlveda Carmona, recently presented a report stating that ‘unpaid care work […] is a major human rights issue […] unequal care responsibilities are a major barrier to gender equality and to women’s equal enjoyment of human rights.’

Strategic ignorance and the invisibility of care
In spite of this recognised importance, unpaid care work is ‘forgotten’ easily, or is considered too complex to include in development programmes. IDS Fellow Rosalind Eyben describes this as ‘strategic ignorance’, and explains in this blog post, it is one of the reasons why unpaid care work is still invisible in the agendas.(1)

Having experienced organisational challenges myself when trying to introduce care components in development projects; the seminar got me thinking firstly, how I can go about introducing ‘care’ into my work, and, secondly, who has influence to make care more visible.

What does cooking, cleaning or taking care of other family members have to do with businesses?
One of these influential actors is business. Although business and development have a somewhat contested relationship(2), business as an emerging and critical actor in development is a reality. As a result of this, and, also, because it is the focus of my research, the question I keep asking myself is, why should businesses care and how can they introduce ‘care’ on their agendas?

In her report, Ms Sepúlveda Carmona writes:
‘Unpaid care work is a major reason why women do not enjoy equal rights at work, including fair and equal wages and safe and healthy working conditions […] As a result, for many women living in poverty with unpaid care responsibilities, work is not empowering but rather a survival necessity.’
Does business have a role to play in addressing unpaid care?
On the other hand, more and more, businesses are promoting women’s economic empowerment programmes as potential ‘win–win’ solutions to improve poor women’s lives and reduce the gender gap, while still obtaining a benefit.(3) Incorporating women in business value chains is being considered a route to their ‘empowerment’.

Take for example Coca-Cola´s 5by20 programme. It aims to ‘enable the economic empowerment of 5 million women entrepreneurs across its global value chain by 2020’. They define empowerment as ‘access to business skills training courses, financial services and connections with peers or mentors – along with the confidence that comes with building a successful business’.

Hence, the programme and its hoped-for impact seem very straightforward: include women in Coca–Cola’s value chain so they can be empowered (following their definition). Nonetheless, it is important to acknowledge that, from the moment Coca-Cola started their 5by20 programme, they acquired a responsibility towards all the women involved.

What does economic empowerment have to with ‘care’ and what happens to ‘care’ when women are economically empowered?
Bearing that responsibility in mind, the immediate question is has Coca-Cola thought about unforeseen consequences that this new job might have on the women? What will happen to the unpaid care work they were doing now that they have less time to do it? And so on.

Consequences can be diverse: for example, women may now have a double burden, both working outside their household and inside it. Or, their care obligations might be transferred to their daughter, or might be left undone. It might be that women have to pay someone else to do the care now. Maybe, they have to migrate to work, leaving the responsibilities to older members of the family.

In my view, there is a gap between the goals programmes like Coca–Cola’s 5by20 aim to achieve, versus what actually happens in reality with regards to women’s economic empowerment. Outcomes vary, but by not asking these questions, the problem does not go away.

We tend to forget important things about unpaid care work. It can’t ‘not’ be done - if a woman cannot do it, the responsibility will fall to someone else, usually her daughter(s). Additionally, unpaid care is not only about hours spent, it is also about emotions, feelings and power relations within the household, hence the difficulty to measure it or include it on the programme goals (‘strategic ignorance’ again).

So, how can businesses care?
Recognising that care work is critical for everyone’s wellbeing is the first step. From here, programmes will start asking questions, identifying challenges and designing solutions.

New tools are emerging to help us deal with these challenges. For example, Oxfam has designed a ‘Rapid Care Analysis’ (RCA) exercise that helps assess these issues and define potential solutions in 1-2 days. By using this tool, businesses can obtain an assessment of the situation and include elements to deal with care concerns.

Still, the challenge remains today of engaging businesses to put care on their agendas. I have introduced Oxfam’s RCA tool as a possible starting point. What do you think? Do you know any other tools that businesses could use?

(1) To understand better why care has been forgotten in the development agenda, I recommend reading ‘The Hegemony Cracked: The Power Guide to Getting Care onto the Development Agenda’, also from Rosalind Eyben (2012). You can download it free at http://www.ids.ac.uk/publication/the-hegemony-cracked-the-power-guide-to-getting-care-onto-the-development-agenda.
(2) There is still reasonable doubt whether businesses should play a role in these issues or not be involved at all. However, I think it is important to acknowledge the role they are already playing and leave that debate for a different space.
(3) Care work does not only involve women, but given that, in many countries it is still considered a woman’s job, I have linked it with woman’s economic programme. This is, hence, another challenge for care, trying not to be categorised as a feminist or gender issue, while still being about women. Gender and care are related but not the same thing.

Mar Maestre is a Research Assistant with the IDS Globalisation Team. She is currently working on a case study of Grameen Danone.