Brazil, others squeeze China in scramble for Africa

By: Reuters
Published: 04 Nov 09

China is leading the pack in the 21st century 'scramble for Africa' but anybody who thinks Beijing has the continent sewn up need only glance at the passport of Brazilian President Luiz Inacio Lula da Silva.

By the time he first visited the European Union in 2007, four years after coming to office, Lula had racked up six trips to Africa, covering 16 countries.

Then, in July, he was guest of honour at an African Union summit in Libya, a reminder to Beijing ahead of its second Forum on China-Africa Cooperation (FOCAC) in Egypt on November 8 to 9 that it is not alone in courting the continent and its raw materials.

Reflecting Lula's push, Brazil's annual trade with Africa has jumped from $3,1-billion in 2000 to $26,3-billion last year, a rate of growth outpaced only by China, which has seen two-way commerce soar tenfold this decade to $107-billion.

China has now eclipsed the United States as the continent's biggest trading partner.

"The balance of commercial power has shifted entirely," said Martyn Davies of Frontier Advisory, a South Africa-based consultancy for investors in emerging African markets.

"This is not something new -- it's just been accelerated by the economic crisis. It's towards inter-emerging market trade, rather than the traditional north-south trade."

It is not only Brazil and China that are muscling in on Africa. The two other members of the so-called BRICs grouping -- India and Russia -- are also setting up stall in a region that for generations European powers regarded as their own back yard.

Indian trade with Africa has jumped from $4,9-billion to $32-billion this decade, a similar growth trajectory to Brazil.

However, in terms of foreign direct investment in the last six years, India leads the way with 130 projects, compared to 86 from China and 25 from Brazil, according to research by South Africa's Standard Bank.

Both Brazil and India are also happy to use their cultural and linguistic links to advance their causes.

Besides sharing a language with Mozambique and Angola through common Portuguese heritage, nearly one in two Brazilians claims some African ancestry, while South Africa is home to more people of Indian origin than anywhere outside the subcontinent.

THE RUSSIANS ARE ALSO COMING
In the last 12 months, Russia has also launched a major diplomatic and trade offensive in Africa, with Mikhail Margelov, its envoy to Sudan, declaring in January that Russia was "back in Africa" and ready to play a "more active role".

His comments were followed within six months by a high profile visit by President Dmitry Medvedev to Egypt, Nigeria, Namibia and Angola to shore up Russian energy, mining, construction and telecommunications deals.

"These forays and the commercial deals which follow them are for the first time in 50 years forcing Western countries to play catch-up on a continent in which they have always maintained unlimited commercial access," Standard Bank said last month.

The rise of competing sources of trade and investment also fulfils the ambitions of many African countries to free themselves from overdependence on commercial ties to one or two Western partners, in particular the United States.

Besides energy and minerals, which make up the lion's share of African exports to the BRICs countries, there is growing interest in its arable land -- less than 25% of which is cultivated -- as a source of food for export.

Probably typical of the deals of the future is the $1-billion China lent Angola in March to develop a farming sector devastated by a 27-year civil war that only ended in 2002.

"Africa's agricultural potential will become an increasingly potent driver of the BRICs commercial engagement with the continent," Standard Bank said in a report.

http://www.engineeringnews.co.za/article/brazil-others-squeeze-china-in-scramble-for-africa-2009-11-04

Jugaad Part 2: Clinton in India

After all that talk of mobile phones and business models and meeting needs in my last post, I wake up this morning to read:


'Ms. Clinton hoped that India would leapfrog the dirty technologies that are leading to climate change "just as it has leapfrogged from having few phones to now having more than 500 million, mostly cellphones." '


I'm wondering how the Indian government is going to argue with that. Especially when innovative 'jugaad-like' business models have already been used to spread solar electricity through (hitherto unelectrified) tracts of rural India (FT reprint).

That isn't to say the Indian government's arguments on climate change are entirely without merit - it's just that they'll have to adjust their position now, especially if, as the article says:

'She said they would have "more intense discussions" on the subject with Indian officials in "both public and private sectors" during her trip that will take her to New Delhi Sunday [emphasis added]'.

I wonder what's up. I can see, however, that Hillary Clinton is well informed.

Update, July 20: It seems that the Indian government did argue with it. Environment Minister Jairam Ramesh (an MIT Tech Pol grad, by the way - so he's a sort of distant cousin of ours) says that New Delhi "is "simply not in a position" to sign up to enforceable emissions targets, even while the Indian government is committed to fighting climate change.

I think this last deserves a separate post (which I'll try and do later) - there's more to this than is immediately obvious, I think.

'Jugaad', and improvised innovation in India

Fascinating article in the WSJ, of all places, on the Indian tradition of jugaad - innovation based on improvisation, here in India.

Jugaad is a cultural tradition that's beginning to become a very powerful economic driver here, and Devita Saraf is right to have pointed it out.

I don't know if any of you are familiar with the writer Neal Stephenson - one of the great science fiction writers of our time, but also a superbly keen cultural commentator. In his masterpiece, The Diamond Age, Stephenson comments on the 'ancient relationship' between 'forgers' and 'honers'. Forgers are the go-getters with the world-changing ideas - who, after releasing a great new idea, forget all about it and go on to the next great thing. Honers are the people who tinker with the ideas that get left behind, refine them, and get them to do things that their 'forger' creators never imagined were possible.

You'll see a lot of the latter going on in India - as Devita Saraf says, it defines how innovation is happening in India today. It's driven by a pretty basic compulsion.

India has this diverse, deep, broad range of needs - driven by people fighting their way out of poverty, particularly in the rural hinterlands. This is increasingly backed by money, creating enormous new markets for everything from transportation to electricity - a 'boom from the bottom', as Newsweek puts it.

Accessing those needs, however is difficult: Markets are physically difficult to reach (in the rural hinterlands), economically difficult to access (because of low per capita affordability thresholds), and - because fifty years of socialist government apathy - have a sub-par infrastructure, with which to reach them. (How do you sell electricity to a rural village, when the state electricity board hasn't built power lines there in the last half century?)

This challenges Indian entrepreneurs, in our bottom-up economy: domestic markets represent a lucrative and safe business opportunity, but the opportunity can't be reached without some serious innovation. (If you want to sell villagers electricity, you'll have to use distributed power sources - solar panels, say.)

India's got a fairly good science and technology research infrastructure here , and a very good talent pool - but the public research network doesn't do very well at commercialisation. This means that emerging technologies aren't yet a viable source of such innovation.

The result - is a lot of tinkering. As Saraf points out, Indian entrepreneurs can't yet draw very easily on the public research infrastructure, so they use business model innovation to open up new domestic markets, and drive technology (and therefore, solutions) adoption. This is leading to some of the most exciting economic trends in the world.

Take telecom, for example. The telecom sector was crippled for decades by unbridled government apathy. Today, however, Indian mobile phone call rates are the lowest in the world - because our telecom companies use bottom-of-the-pyramid revenue models, that reach hundreds of millions of people with low affordability thresholds. This drives an enormous market for mobile phones and services, and a huge amount of economic activity transacted on them.

The knock-on effects are huge, and wide-ranging. In my own port city of Chennai, India, I see fishermen coming in from the sea calling their wives on their mobile phones. The wives are already located in the fish-markets, know what the prices are for different kinds of fish, and can tell their husbands what part of the catch to bring in - to which market, in which part of the city. Guess what that does for profitability?

PS: There's a second part to the WSJ article, where Saraf extends the discussion - almost - to a second important question: does current management theory do justice, as yet, to business forms outside the West?

http://www.nytimes.com/2009/07/10/world/americas/10degrees.html?_r=2&hp

Scramble for the Arctic

Deja vu! Didn't Grant write his thesis on this?

http://www.economist.com/displayStory.cfm?story_id=13649265

Virtual Life, Virtual Death?

Sorry for the delay, I've been without internet for a while. So its fitting that I bring you this article:

http://www.cnn.com/2009/TECH/05/18/death.online/index.html

He Twitters, She Texts.

Technology's role model in modern day romance:

http://www.washingtonpost.com/wp-dyn/content/article/2009/05/03/AR2009050302184.html?nav=hcmodule&sub=AR

Read Me A Story, Mr. Roboto

Slate article on the difficulties of text-to-speech conversion.

Should authors get an extra fee when Kindle's text-to-speech software is implemented on their writings?

How far off is this technology?

P.S. I have a special place in my heart for Speak & Spell. :)

Analog to Digital Conversion

Hopefully, you have been exempted from the excruciatingly repetitive advertisements warning of the shift from analog to digital television broadcasting. They air during what seems like every commercial break, and are more annoying than Surfing Bird. I've been counting down the days in hopes I'd never need to see another commercial. But congress has decided to delay the shift because apparently not everyone is aware.

Kudos to Missouri Rep. Roy Blunt for getting to the point: "If you don't know this date is coming up, you're probably not watching television, and if you're not watching television, you probably won't know on February 18 whether it occurred or not."

Just make the switch, and let me enjoy my good ol' fashioned US commercials again. God bless America.

"Technology Gets a Piece of Stimulus"

Excited about funneling money to electronic health records (How will we keep them secure? Biometrics!), but what function should technology play in a 21st century stimulus package when old-fashioned public works projects are time-tested?

http://www.nytimes.com/2009/01/26/technology/26techjobs.html?pagewanted=1&em

What's going on in England?

Hey guys, what's going on over there!? The US news media is overly preoccupied with the US economy, so we don't get much news about the UK...but this article is terrifying. What is the feeling in the city?

The Myth of the Autocratic Revival

Interesting article in the January/February Foreign Affairs about the relationship between politics and economy...namely, capitalism in a liberal democracy (ie, US/UK) versus capitalism in an autocratic government (ie, China/Russia). The authors argue that capitalism is best supported by a liberal democracy, and that current autocratic nations will continue to liberalize as their rising middle class demands transparency and greater control over decisions impacting their lives and wealth.

Third Runway at Heathrow

After years of debate, it looks like there will be a third runway at Heathrow.

Wall Street's Structure and the Root Causes of the Financial Crisis

One of the best and clearest explanations that I have read on the root causes of the financial crisis by someone who was lived through (and helped cause) several of them: http://www.theatlantic.com/doc/200812/blodget-wall-street