I want to share with you some of the reasoning behind my passion for educating the more fortunate people on the planet about the world’s poor via my Frontier Markets Compendium. The best way I can think of to do that is to write about some of the frontier countries I have visited. My intent was to focus on the each country’s culture encompassing people, sights, sounds and the wonderful aromas emanating from indigenous cuisines. I wanted to begin to understand motivations, work ethics and specific ethnic idiosyncrasies. This blog reports a sampling of my first impressions of Sri Lanka, “the jewel of the Indian Ocean” and a true feast for the senses.
Let’s start with people. Sri Lankans are a handsome people, thanks in large part to their Indian heritage. When I took a WWII vintage train from the capital, Colombo, to the resort town of Galle on the southern tip of the island. I stopped part way at the Dehiwala station to try (few spoke English) to engage in polite conversation. I noticed a young woman holding her daughter and asked if I might take their picture. She proudly obliged and I was fortunate enough to capture an example of the beauty of Sri Lankan people,as well as the seeming satisfaction with their circumstance. Most of the country is quite poor (GDP/capita:$4,900), yet I was amazed how many smiles met mine and how life seemed to move at a comfortable pace. The train tracks were close to the western seaside, affording beautiful tropical vistas but also clear evidence of the terrible structural damage inflicted on the simple seaside communities by the tsunami of 2004. Life goes on, however, as the poor people who live on the coast are busily back at making their tiny homesteads neat and tidy. Children playing outside are friendly and pitching in with household chores. Sri Lanka is the world’s largest exporter of cinnamon, with other spices high on the list, presenting a pleasantly subtle, breeze-borne aroma to discerning nose. Sri Lanka’s population is 21 millIon, their literacy rate is 91% and their median age is 31 years. Compare that to many of the developed countries’ 45 years! Their tropical latitude is roughly equal to that of Central Africa and Venezuela. However Kandy, a primary city in the High Country to the North, experiences temperatures as much as 20d below the tropical South, has beautiful vistas (some disappearing into the clouds) including tall waterfalls nurturing the rice paddies below. The Sri Lankan majority is Buddhist as is evidenced by the vast number of Buddha statues and beautiful shrines and temples. The people seem industrious and eager to better their lives, and the government is now beginning to accommodate that betterment. Aligned with their Buddhist tendencies is their love of the elephant whom they consider sacred. I had occasion to visit an elephant orphanage and later in the evening relax with the setting sun over the Indian Ocean. Next up, Cambodia.
This is an excellent article from the WSJ, September 24, about the progress Africa is making in building up small business: “Across Africa, scores on tiny manufacturers have been going where most multinationals fear to tread…”
As I have been reading about the many challenges facing the frontier markets, I was reminded of Paul Collier’s comments in his book, “The Bottom Billion”, about the different kinds of traps that can, and are, hampering growth and progress in many frontier market countries. One trap, that of being “resource rich” often results in a corrupt government siphoning off the revenues of resource extraction for its own use rather than for the good of the populace. One organization, The Extractive Industries Transparency Initiative (EITI) has created several strict protocols involving accountability, transparency of cash receipts and expenditures and systematic reviews as a prerequisite for membership. Here is a link to a very powerful video documenting this “trap” through the eyes of those directly affected.
In today’s WSJ:
The government of Rwanda will create a new graduate engineering program in conjunction with a major U.S. university, a step toward building itself into an African technology hub 17 years after a genocidal conflict claimed nearly a million lives.
Rwandan President Paul Kagame and Jared L. Cohon, president of Pittsburgh-based Carnegie Mellon University, will sign the agreement Friday in Pittsburgh to establish and operate the program from Rwanda’s capital, Kigali, where a new campus is to be built. The African Development Fund is supporting the project with $13 million in funding, according to the fund’s parent, the African Development Bank.
The tie-up says as much about the ambitions of the tiny landlocked African country as it does the U.S. engineering powerhouse, which wants to bring into its folds a new generation of tech-savvy African leaders.
Unlike China and India—two other billion-person markets—Africa generally lacks the top-flight universities to feed young talent to companies that are now investing on the continent.
“You can’t leave a billion persons behind and make this a better world,” said Pradeep K. Khosla, the head of Carnegie Mellon’s College of Engineering. “Our goal is to educate people who will have influence.”
Read more: http://online.wsj.com/article/SB10001424053111904491704576570603601801670.html#ixzz1Y1l3M6uo
An excerpt of a post this morning from the World Economic Forum:
“Our strategy for nuclear power will not change because of the Fukushima incident,” Mohamed Bin Dhaen Al Hamli, Minister of Energy of the United Arab Emirates (UAE) told participants. The UAE is building four nuclear power plants, the first of which is slated to go on stream in 2017. “There will be much greater emphasis on nuclear safety but, in the long run, it will not derail our plans. We are fortunate that we are in the inception stage and can incorporate the latest safety features.” He added: “Just because of Fukushima, we cannot condemn an entire industry.”
Pakistan’s Minister of Science and Technology, Mir Changez Khan Jamali, stressed that his country had to develop nuclear power because it faces an energy crisis. “We have the raw materials and expertise,” he observed. “We need nuclear energy because of our energy deficit.” Safety concerns are not an issue for the public, he maintained.
Today I received a new post from Jason Wulterkens who stated, in part, “in the absence of a sharp deterioration in global growth, commodities should remain an important pillar of growth [in Ghana, Nigeria and Angola], where firm oil prices of above USD110/bbl continue to support growth [and help] economic activity remain robust.”
In this morning’s FT (page 4), there’s an article about China losing manufacturing to some frontier markets because of their soaring labor costs. The named beneficiaries were Bangladesh and Vietnam. Check out the article at http://www.ft.com/intl/cms/s/0/0b5b63de-d860-11e0-8f0a-00144feabdc0.html#axzz1XHR2msYx. Next, in today’s Wall Street Journal, in an article on page A8 entitled “Advanced Nations Lose Edge In Economy,” an excerpt states: “In general, anemic growth and high public debt marred the standing of any advanced countries, while strong growth and some progress on longstanding problems such as poor infrastructure have made emerging markets more competitive.”
The same holds true for the frontier markets. As developed economies stagger under the weight of massive debt, aging populations that will require increased spending on health care and slowing growth, the frontier countries will be taking up the slack with their younger populations, lower debt burdens and increasing concentration on infrastructure, banking systems and political reforms.