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The future of public private partnerships is local, say development leaders
Partnerships and technology will define development assistance in the coming decade, and civil society will play an ever-greater role in both areas, said Lord Michael Hastings, KPMG’s global head of citizenship, at a Washington D.C. event convened to explore the future of development partnerships.
“It’s a different way of thinking about partnerships. It is not just the action of bringing together the empowered, those with resources and decision-making power, the development agencies and governments and businesses, but it’s about bringing in the voices of those who receive the development impact,” said Hastings at the event, hosted by the Center for Strategic & International Studies’ Project on Prosperity and Development.
The half-day forum, sponsored by KPMG, brought together representatives from government development agencies, international NGOs, and corporations who described emerging trends in the area of public-private partnerships for development.
William Reese, president and CEO of the International Youth Foundation, which has led innovative multi-year partnerships with corporations including Hilton, Caterpillar and Microsoft, said today’s public-private partnerships may be most useful as a “model” that can be replicated at a more local level.
“Partnerships should not just be the province of big global companies. The true wealth is at the local level, with the local private sector,” said Reese. By partnering with local businesses, development actors can “not only tap megabucks but also get the sustainability, political will and country ownership we’re all looking for.”
Companies have become increasingly sophisticated in their approaches to development, said other speakers at the event.
Paula Luff, vice president for corporate social responsibility at Hess Corporation, said that where companies once aimed to perform “random acts of kindness” for “beneficiaries,” they now aim to engage strategically with customers and partners.
Luff, who previously worked at Pfizer, said that the AIDS crisis in Africa represented a turning point for many multinationals.
“Companies realized that if we were not at the table with stakeholders, rolling up our sleeves and coming up with real solutions, we’d be on the menu for lunch,” she said.
British Robinson, senior vice president for innovation and strategic initiatives for the nonprofit Women for Women International, said she has observed a growing confidence among companies as they work in development.
“The style has changed in the last three years. Companies are saying to their partners: You don’t get to design this alone. We’re going to co-design this or we’re going to walk away,” said Robinson, who previously served as director of private sector engagement for the U.S. President’s Emergency Plan for AIDS Relief, or PEPFAR.
Tam Nguyen, corporate responsibility manager for Chevron, said his experience has taught him that companies must have a clear business case for entering into partnerships for development.
“It’s hard to justify projects internally in the long term if it is built solely around a social objective,” said Nguyen.
For some companies, this confidence has meant they no longer feel the need to partner directly with implementers and government agencies. She pointed to recent corporate citizenship activities at Coca-Cola, Goldman Sachs and Wal-mart, where corporations consulted with other development actors but clearly retained leadership of their initiatives.
“We are starting to see companies and foundations cutting out the middle man and working directly with civil society,” she said. “That’s not necessarily a bad thing, but we need to understand it better.”
Robinson argued that development leaders should see the increasingly autonomy of companies as a sign that partnerships have come of age. “We’ve taught them so well, now they are able to do it on their own.”
She cautioned that in this new landscape, government development agencies will need to define a new role for themselves. “If companies are handling the areas they are better at, like technology, then government can deal with the issues of deep poverty.”
Luff, of Hess Corporation, agreed that corporations in some cases choose to bypass bilateral and multilateral donors and focus instead on local governments.
“As companies become established in different countries, their local staff bring their own relationships, whether that’s with the ministry of health” or a local nonprofit, said Luff. In the future, “there will be less of an affinity for [bilateral donors] and less value to that intermediary role.”
Photograph: Andrea Useem. Credit Devex impact
Andrea Useem Content Director and Associate Editor, Devex Impact at Dexis Consulting Group United States
As Associate Editor and Content Director for Devex Impact, Andrea creates and manages cutting-edge content on the intersection of business and international development.
Paving the way for tech transfer
A new UN body to advise nations on climate tech may break the deadlock in the long-running debate on transferring technology
Rich nations have the technological know-how needed for poor nations to develop — but how do you deliver it without compromising the intellectual property and the business edge that such technologies gives economies that have it?
This is one of the big development questions that has been debated in the UN arena for decades, with little real progress made in finding a sustainable way of transferring technology and finding a way to pay for such transfer.
Now, some see the Climate Technology Center and Network, one of the pillars of the UN's new Technology Mechanism, beginning its work to help developing countries access technologies related to climate change, as an example of a way forward.
"You'd like to buy a new camera and you can find lots of information online but sometimes the best thing is to talk to a 'friend' that you trust. So you go to third parties, to independent testers or consumer advice magazines," says Mark Radka, the chief of the energy branch of the UN Environment Programme (UNEP). "We want to fulfil that sort of role."
The CTCN was established by the UN Framework Convention on Climate Change (UNFCCC) and is designed to transfer technology from developed to developing countries.  It was officially launched in Nairobi, Kenya, in February.
As well to provide a platform for sharing knowledge, the CTCN's aim will be to build capacity in entrepreneurship and in developing policies and programmes to attract foreign investment in climate technologies.
It will also work to expand international partnerships — both North-South and South-South — to accelerate the diffusion of environmentally sound technologies, particularly among communities in developing countries.
The Technology Mechanism's second pillar is the Technology Executive Committee (TEC), which will examine broader policy questions, such as barriers to and mechanisms for technology transfer.
It will also consider countries' technological needs, promote collaboration and catalyse the development and use of technology action plans by countries.
Plugging the advice gap
"When we decided to put in a proposal to run the CTCN, we sat down and gave some thought as to what was currently not working, not delivering, or missing," Radka says.
"Governments and people in the private sector who make decisions about climate technology often have a lot of information but not much confidence in making decisions based on that information," he says.
There was a conundrum, he adds: "if you had a well-articulated idea, funding was not such a problem, but you couldn't get funding to develop an idea, at least not easily."
The CTCN is a UN Environment Programme-led consortium of organisations from around the world, each with more than 20 years' experience, that can provide detailed advice on a range of technology issues to a country on request.
It includes the Asian Institute of Technology in Thailand; the Bariloche Foundation in Argentina; South Africa's Council for Scientific and Industrial Research; India's The Energy and Resources Institute; Environment and Development Action in the Third World in Senegal; The Tropical Agricultural Research and Higher Education Center in Costa Rica; and the Kenya-based World Agroforestry Centre as well as organisations in Denmark, Germany and the United States.
Energy and food
In its proposal, the consortium gave two examples of how it might help transfer climate technology in practice.
One was to help a country that needed further investment in its energy supply and currently relied on fossil fuels to prepare and implement a national energy programme to increase supply with at least half coming from renewable sources.
The CTCN would aim "to build long-term capacity of institutions, to strengthen enabling policies, and to assist in mobilizing increased investment in renewable energy development".
The second example was helping a country with variable rainfall and an under-resourced agricultural research institute to formulate a strategy for developing drought-resistant crops, including ideas for involving regional, national and international institutions and carrying out joint research with another country.
In both cases, a technical team would "provide training, technical assistance, data, analysis tools, and other technical resources along with support for peer exchanges with other countries".
The Technology Mechanism has been welcomed as "an important milestone towards operationalising the technology transfer provisions in the UNFCCC" by Ahmed Abdel Latif, senior programme manager for innovation, technology and intellectual property at the International Centre for Trade and Sustainable Development, Switzerland.
Padmashree Gehl Sampath, an expert on innovation, technology and development, agrees. "We have moved from simply dealing with it in a rhetorical sense, to identifying the key issues, to fostering mutually acceptable solutions for all countries," she tells SciDev.Net.
"I think the Technology Mechanism's main strength is that it is somehow trying to move away from dealing with technology transfer as an individual issue to looking at it in a systemic perspective. I think this is a very important and a very fresh change, and it's needed," she says.
However, it is still early days and, despite the optimism, doubts remain.
"The institutional set-up at least is progressing, but whether in fact effective technology transfer will happen or not is yet to be seen," Meena Raman, coordinator of the Climate Programme of the Malaysian-based Third World Network tells SciDev.Net.
"Technology transfer actually means real transfer of the know-how and the technology, so that the developing country is able to manufacture, produce and adapt the technology for its purposes," she says.
Nevertheless, Gehl Sampath thinks the Technology Mechanism's proposed approach — geared towards fostering innovation and technology development as opposed to a limited focus on technology transfer from developed to developing countries — is very promising.
"Other approaches to technology transfer have looked at it in terms of granting access to certain existing technologies, but not interfacing it with aspects that really lead to learning from them," she says. "Innovation constraints in developing countries stem from the inability to build local indigenous technological capabilities," she adds. These capabilities "are not only essential for innovation of completely new products and processes, but also for greater adaptation, deployment and use of existing environmentally friendly technologies within local contexts".
This does not mean the financing of entire new production activities, she points out, but may involve simpler support such as seed money or demonstration and deployment facilities, where you can show how the technology can be developed into a product.
"Whether or not, and to what extent, this will really find a place in the implementation of the mechanism will be decisive, of course. But at this nascent stage, it is important that the emphasis [on fostering innovation] is there.
"I think that is the change in the Technology Mechanism, and that is a very important thing," she says.
Not a funding body
The CTCN will not charge for its assistance, but it does not include funding.
"We might provide initial technical assistance to help the client really dig into the heart of the matter and formulate an approach or take a decision," says Radka, "but the money to actually put it in place will come from somewhere else. The CTCN is not a funding mechanism."
However, the CTCN does intend to assist countries "in pursuing opportunities for additional donor support". These might include the Global Environment Facility, the Green Climate Fund and the World Bank.
Initially, the CTCN and its activities will be funded by contributions from developed countries. So far, Canada, Denmark, the European Commission, Japan, Norway and the United States have expressed an interest. In the longer term, a more sustainable source of funding is needed, says Radka.
Gehl Sampath agrees this is necessary if the CTCN is to be able to provide services to all developing countries. "Its performance will hinge upon it," she says.
Photograph: Climate Change Conference in Bonn, Germany Flickr/UNClimateChange
Impact of intellectual property rights
She points out that one issue that has haunted technology transfer negotiations as part of an internationally agreed climate change agreement is intellectual property rights. Traditionally, developing countries have seen IP rights as a potential barrier to technology transfer, while developed ones have seen it as an incentive to innovation.
The TEC is looking at this issue. According to Abdel Latif, the wide diversity of climate technologies makes it difficult to precisely define the impact of intellectual property rights on the transfer of these technologies.
"It's important to look at individual countries' and sector situations on a case-by-case basis and in light of concrete evidence," he argues.
Abdel Latif says that while intellectual property rights should not be a stumbling block in the TEC's work at this early stage, ultimately they must be considered as it is hard to envisage a credible approach to technology transfer without pondering their role.
If the Technology Mechanism is successful, it may point the way to successful technology transfer in fields other than technology to fight climate change.
"If we are able to make it work in the field of climate change, there will be lessons that we can derive from that for sectors beyond," says Gehl Sampath.
Joanna Carpenter is a Member of the Association of British Science Writers and an Associate of the Society for Editors and Proofreaders.
Joanna Carpenter is a freelance science writer and technical editor. Her academic background is in natural sciences. Her first degree is in natural sciences from Cambridge University. She has a doctorate from Oxford University for research on Magnetic field effects on electron transfer reactions in photosynthetic bacteria. That combined quantum chemistry with physics, and biology. She also holds a Masters in science communication from Imperial College London.
Source: SciDev Net
Corporate volunteerism emerges from infancy, identifies key challenges
New data shows that international corporate volunteer programs like those run by IBM, PepsiCo and Intel win high marks inside companies, but the practice faces questions about its development impact – and whether it is scaling fast enough among companies.
A “benchmarking” study of corporate volunteerism programs conducted by CDC Development Solutions, a Washington D.C.-based nonprofit that works with companies to run volunteer programs, found that 94 percent of companies surveyed were “pleased” or “extremely pleased” with their programs. The top benefit mentioned was building employee skills and leadership capacity.
“If these were Yelp reviews, the restaurants would be flooded,” said Steve Hurley, a senior consultant at CDC Development Solutions, which hosted its fourth annual gathering of companies, nonprofits and others at the International Corporate Volunteerism conference this month in Washington, D.C.
The rate of growth of new programs has been “steady but slow,” according to the benchmarking report. While some figures are impressive – the number of volunteers in the field has more than quadrupled since 2008, from 375 to 1,700 – other indicators show modest progress. For example, three new programs were launched in 2012 – the same number established in 2003.
These numbers include data from the 22 companies that participated in the survey. Hurley said that he is aware of only another 10 to 15 companies with existing programs.
“I am unhappy with the growth rate,” he commented. “I don’t know why we don’t have 50 or 100 companies in this game.” Hurley challenged companies to collectively send 10,000 volunteers a year, roughly 2,000 more than the Peace Corps currently annually deploys outside the United States. Given that companies sent an average of 10 to 20 volunteers in 2012, at least 500 companies would need to have international volunteerism programs in order to reach that goal.
Frederick K.W. Day, Buffalo Bicycle Company, Southern Africa
Rural Africans experience challenges of daily survival, including limited water, food and fuel, as well as inadequate access to education and healthcare. With transportation, access to these elements can be greatly enhanced. Compared to walking, a bicycle quintuples carrying capacity and quadruples travel distance while saving time. The Buffalo Bicycle Company is a robust, purpose-built bicycle designed specifically for African terrain and load requirements. More than 45,000 have been sold to individuals and organizations and another 70,000 bicycles have been granted using a unique work-to-own model.
More than service
As defined by CDC Development Solutions, international corporate volunteerism is skills-based pro bono work that involves volunteers moving from one location to another, usually across a national border. The time volunteers spend overseas is usually several weeks to several months, compared to the Peace Corps, which deploys volunteers for 27 months.
Deirdre White, president and CEO of CDC Development Solutions, explained that this type of volunteerism is different from “heart-and-hands” corporate service, which has traditionally involved corporate employees in activities like painting community buildings or planting trees.
The employees rather draw on their core professional skills in everything from logistics planning to strategic communications to website design to assist local nonprofits, universities or other organizations that work directly with people in need. While employees may receive their salary while participating in this type of corporate volunteerism, they are engaged in projects that don’t directly bring revenue to their company.
White described visiting with a team of IBM corporate volunteers recently in Nigeria, who were working alongside a state government to improve an onerous procurement process. “There were 55 steps in the process to get any goods and services to the government offices or to the people of the state,” she said. The IBM team worked with government employees to eliminate 22 of the steps. “What a massive improvement, just by helping them identify bottlenecks” and building a consensus for change,” said White.
Two of the best-known corporate volunteer programs celebrated anniversaries this year: IBM’s Corporate Service Corps turns five, having sent 2,000 volunteers overseas since 2008, while Pfizer marks the tenth anniversary of its Global Health Fellows, that has involved 300 employees.
Lessons from an emerging field
While the number of companies engaged in international corporate volunteerism may be limited, for those who’ve invested, the learning has been fast.
For PepsiCo, one lesson of its three-year-old “PepsiCorps” program is that volunteer work must fit within company strategy. “Every project has to fall within our global citizenship agenda,” known as Performance with Purpose, said Sue Tsokris, vice president for global citizenship and sustainability. “That’s an important glue.”
As an example of this strategic integration, Tsokris pointed to PepsiCo’s company-wide citizenship focus on water access, and how a group of PepsiCorps volunteers worked with a local nonprofit in rural India to address extreme water scarcity through improved catchment systems. In addition to personalizing the companies’ citizenship agenda, PepsiCorps aims to help employees develop new skills and leadership traits.
Tsokris said that for Pepsi to be competitive in the future, it needs leaders with a “global mindset” and skill set that includes agility, flexibility and the ability to “influence and align people over whom you have no direct authority.”
According to the benchmarking report, companies reported that the three most important factors for success were selecting highly motivated employees; assigning volunteers to clearly defined projects; and working with strong implementing partners, who are often responsible for selecting the projects on which employees work. Other companies have been experimenting with where to locate international corporate volunteerism within their company.
According the benchmarking report, 55 percent of companies locate international corporate volunteerism programs within their corporate social responsibility offices, while others nest it within human resources (18 percent) or the corporate foundation (14 percent). Only four percent run volunteer programs through business units. Google operates its corporate volunteerism program like a hybrid, located within two separate parts of the company. “We believe there are different ways to make an impact,” said Samantha Hennessey, program manager for social responsibility at Google.
Half of the program is “purely philanthropic,” with volunteers working on projects in partnership with Grameen Foundation, said Hennessey. The other half of the program is run through the company’s emerging markets business unit and is not considered pro bono, since it is part of a business strategy. One initiative in Ghana has been building and running a technology innovation center, where small business owners can take classes from Google volunteers. “We see that as important to the community but also aligned with our core business,” said Hennessey.
She noted, however, that even the philanthropic programs, which emphasize leadership development, have a clear tie to business objectives. “At Google, we see culture as part of our core business and part of the innovation required to create our products,” she said. Volunteerism programs reinforce Google’s “non-hierarchical” culture by bringing together employees across functions, regions and seniority. “You’ll find a senior level executive working with an entry-level sales person.”
Another open question for corporate volunteerism, as in many areas of global corporate citizenship work, is how to show development impact. While two-thirds of the companies measure the business impact of their program, only half formally measure the social impact, the benchmark report says.
“It’s something that we can all admit is a challenge,” said Gina Tesla, director of corporate citizenship initiatives at IBM. “We’re looking at how to measure the short-term impact, the long-term impact, and balancing quantitative versus qualitative data. The question is: How do you measure the expertise you’re imparting?”
As companies work to measure development impact, she said it was important not to lose sight of the “intangible benefits” that arise when volunteers work closely with local organizations. “They can spark new ways of thinking and be a catalyst for change.”
Source: Devex Impact
How global health money should be spent
After emerging from a long war that tore apart the fabric of our society, ruined our institutions and destroyed our infrastructure, we are rebuilding and have a vision of a healthy population with social protection for all our citizens.
Under the strong leadership of President Ellen Johnson Sirleaf, my job as Minister of Health and Social Welfare has been to coordinate the rebuilding of the health sector, to improve the health and social welfare status of all Liberians, and to set the health care system on a course to a sustainable future.
It is said that health is wealth, and from my experience, this must be true because providing health care is definitely very expensive. I have had to spend a great deal of my time as a hospital director, a county health officer and as a minister trying to raise the necessary funds to ensure essential health services are available. If there is one thing I have learned along the way, it is that there is no such thing as free health care — someone always has to pay for it.
Since the end of the war in Liberia, donors have funded the majority (60 percent) of health service delivery costs, but their combined share is decreasing. The government has gradually become the largest single source (40 percent) of funding for health, as was the case before the war.
As the economy grew, domestic revenues increased and the amount of government money spent on health has steadily risen, even though as a percentage of the national budget, it has remained stable at about 8 percent. However, the cost of health care also continues to rise as we work to expand access, increase the quality and the variety of services we provide according to the changing health needs of the population, and improve the oversight of a proliferating private health care market. Moreover, our health needs are only one of many on a long list of national development priorities that the government must address, including improving our education system, our road network, our access to safe water and good sanitation, and our justice system and the rule of law.
Therefore, with the high cost of improving the health care system and competing demands on limited resources, future health financing in Liberia will continue to rely on vital donor support until domestic revenues are sufficient to meet our own health care needs, and the transition must be gradual to avoid disrupting services. But we want the support only if it will strengthen, not weaken, our national systems and build institutional capacity while helping us to help ourselves, as we have mutually agreed to do in Paris, Accra, Busan and elsewhere.
In addition to donor support, we must also leverage partnerships with the private sector that bring real added value, but be realistic about what role the private sector can play. In Liberia, creating jobs, protecting the environment and paying their fair share of taxes are the most significant ways in which the private sector will impact the population’s health. To enable this, government’s role is to establish a regulatory framework and foster an economic environment in which the private sector can thrive. After all, economic development leads to improved living standards, and only by reducing poverty will we achieve sustainable gains in human health.
Ultimately, a balanced approach to health financing is required whereby government, bilateral aid and the private sector contribute according to the comparative advantage that each offers and the needs of a particular context. To achieve this balance, investment made to strengthen public sector governance and the ability of government to coordinate and manage health financing will be money well spent. After all, financing health is fundamentally about establishing and executing sound public policy, and this is first and foremost the mandate of government.
Photograph: Walter Gwenigale Credit Devex impact
Walter T. Gwenigale is the minister of health and social welfare of the Republic of Liberia. A practicing surgeon for more than 30 years, he has served as Bong County health officer, director of Phebe Hospital and president of the Christian Health Association of Liberia.
Mr. Gwenigale also served on the World Health Organization’s executive board and as a board member of the Roll Back Malaria campaign.
Source: Devex impact
6 reasons companies fail to reach the bottom of the pyramid
It is no secret that, when it comes to commercial ventures at the base of the pyramid, our greatest hopes and expectations have been placed on the potential of multinational corporations to mitigate poverty.
Early studies on the BoP relied on the premise that large companies, with their financial muscle, distribution channels, technological know-how and managerial sophistication, are best positioned to meet the challenge of serving the poor. This assumption continues to guide the efforts of multilateral agencies, NGOs and development organizations that work on market-oriented solutions to poverty.
In practice, however, large companies have been less than fully enthusiastic when given the chance to engage the low-income segment commercially.
Large companies, large disappointment
Consider a program called “Developing New Market Opportunities for the Base of the Pyramid,” launched in 2006 by the Inter American Development Bank’s Multilateral Investment Fund and the Mexican Business Council’s Private Sector Study Commission for Sustainable Development to drive Mexico’s large companies to develop inclusive business ventures.
It had all the makings of success: a large population of under-served consumers, a growing economy and local companies with the research and development capacity to make innovation happen. After 186 awareness sessions, 65 general workshops and 13 focused workshops – and in spite of generous offers of financial support to participating companies – not a single project came to life.
Faced with this disappointing reality, program organizers adjusted their offering to target small-to-medium enterprises and NGOs, in addition to large companies. Originally viewed as the program’s starring actors, large companies were now on the margins. Even after the initiative was revised, only about a third of all proposals came from large companies, and only half of those were actually executed.
What explains this mismatch of expectations and reality?
Through my research inside large companies, I have identified six internal barriers that prevent large companies from executing BoP strategies.
Disconnect with middle-management
Due to their profound business implications, BoP-oriented initiatives generally cannot be executed by just a group of committed individuals –they usually require a substantial mobilization across the organization. To be effective, coalitions for change must unfold both horizontally (linking functional areas within and across organizations) and top-down (linking organizational leadership with middle management).
This is a tall order for any organization, but is particularly challenging for large organizations with substantial sunk costs embedded in their status quo, which generates a built-in aversion to change.
Coordination among company levels only becomes viable when the new initiative fits in with the organization’s values, processes and routines. The experiences surveyed often revealed a disconnect between upper organizational levels, which push the initiative, and middle management, which is expected to execute it.
Promotora Ambiental S.A.B. (PASA) was one of the few large companies in the sample that remained committed to their BoP initiative. PASA’s initiative blended in naturally with the company’s routines, processes and organizational culture. As PASA’s operations manager put it, the initiative “fitted in naturally with what I did. The project hinged on picking up containers, and that’s what I do at my job. One more container made no difference at all.”
At another multinational, which decided to reach out to the BoP segment following a mandate from its controlling shareholder, middle management began to voice discontent a year-and-a-half into the project, when it became clear the BoP venture was not a success in business terms.
The company had developed a new line of business with an ad-hoc distribution model that largely relied on a cross-sector partnership with a grassroots leader. In the view of middle management, the company provided all kinds of benefits and grants to the social leader, with no accountability for results. Managers’ objections were brushed aside with the explanation that these deviations were understandable on account of the “social work” being done.
The fact that the company’s “social project” had different values and norms than other company projects began to undermine middle management’s support, building a gap between top management’s perceptions and those of the people in charge of executing the initiative.
Management rotations and the loss of a ‘champion’
The business concept and market intelligence supporting a BoP venture are often developed by ad-hoc teams, which develop empathy for their target audiences. But when that data flows to the rest of the organization, or there is a change in leadership, the project comes to be assessed differently. The path from research to pilot, and from pilot to full execution, may run into these “discontinuity spots” several times –and it only takes one of them to kill even the most brilliant idea.
For some companies in the research sample, leadership changes (and the agenda shifts associated with those changes) proved fatal for BoP initiatives. At one of the companies, the marketing development chief officer and BoP project head was promoted to general manager of another company in the group. One interviewee said of the change: “It became harder to secure internal buy-in when the project’s champion was no longer around.”
Of course, all organizations have some level of staff turnover, but large companies that have professional-development plans often decree that managers rotate every few years. The result is that that large companies may have a particularly hard time sustaining innovative BoP ventures.
Opportunity costs of capital and time
Opportunities are not assessed in a void, and the notion of “opportunity cost” means a business will only choose a project if it creates more benefits than the best foregone alternative. A perfectly profitable business proposal may be overlooked if a company has access to even better choices.
Large company executives are pressured to identify lines of business with relevant bottom-line impact; their career development and financial rewards depend on making the numbers. One interviewee said, “The sales manager hated the project and kept telling me, ‘What do I care about the base of the pyramid? … I don’t care what the CEO says; this project is in the red, and my bottom line is taking a massive hit.”
In contrast, the operations manager at PASA, the company cited earlier that successfully executed its BoP project, said, “It was easy to see that this initiative would benefit our business. It had a direct impact on the metrics used to assess my performance at the end of the year.”
Opportunity costs also apply to managers’ time. Every hour large company executives spend on a low-margin or uncertain project is an hour not invested in developed markets they already know how to profitably service.
As one multinational’s marketing development head noted, “Time is the most costly resource in this corporation, where you put in long hours, your reputation is at stake, and $200,000 is just the fee charged by your lawyer for reviewing the agreement.”
This organizational context creates strong pressures to speed things up and get tangible results quickly – a result that may not be possible with a new and innovative BoP initiative.
Traditionally, the poor in Latin America have been largely viewed as people needing assistance from the government, civil society organizations, and corporate foundations in order to survive. In short, they tended to be seen as passive objects of charity, rather than active economic subjects.
This attitude is not only still prevalent among private-sector actors but also among members of the BoP communities themselves. The population targeted by inclusive business ventures “is very used to grant- and gift-based philanthropy,” according to Carlos Ludlow, USEM’s corporate social responsibility vice president. “Engaging these groups in a company’s value chain calls for a preparation process that may prove highly complex.”
Fundar, an NGO that participated in this pro- gram, reports being hurdled by an ecosystem built on“assistentialism” in their inclusive businesses: “a substantial number of outside (public and private) agents whose intervention offerings are intended to reproduce clientelistic relations, fostering the charity culture.
A zero-sum relationship
The concept of inclusive business assumes that some market-based initiatives can yield synergies between the financial value created for companies and the social value built for communities.
Some interviews revealed that some percentage of those actually executing BoP ventures perceive the relationship between social and economic value as a zero-sum. To them, imbuing a company’s business strategy with a social dimension feels artificial and forced. As an interviewee put it, “Our foundation is already supporting these communities. Why should we engage in that?”
This dissociated approach may lead to a false choice between one path or the other. An interviewee argued, “The worst that can happen is for the BoP notion to be associated with philanthropy and social responsibility. It should be a much more detached concept. Ideally, companies should view it shamelessly as an opportunity to make money with the poor.”
Earlier research on disruptive innovation has established that organizations with significant investments in their status quo tend to resist change and risk taking. That basic pattern seems to hold true at large companies experimenting with BoP ventures.
As one multinational’s marketing development head said, “This company has no appetite for risk. If the president has to choose between earning an additional 10 percent or doubling our business with a 50 percent failure risk, he will consistently lean towards the first choice.”
Similarly, a sales and strategic planning department’s project leader reported that her company retraced its steps on its BoP project because the segment was riddled with uncertainty. She said, “They couldn’t risk venturing into an area with no information available.”
This research suggests that creating adhoc terms, values, processes or routines for BoP ventures may build a gap between the “BoP team” and the rest of the organization. Separating the inclusive business from the assets and capabilities that make an organization successful in its core business will turn the inclusive business venture into a cost unit used to enhance the organizations’ reputation but yielding no attractive returns.
Other barriers uncovered stem from the very structure of large companies and are unlikely to disappear. It may be best to just acknowledge and adjust to them. Our analysis suggests that large companies will find it more feasible to incorporate low-income groups in established markets, where companies can quickly turn them into suppliers and consumers. It makes more sense to leave the development of new customers in innovative industries, with disruptive technologies, processes and structures, to other organizations that are more flexible and risk-acceptant.
Photograph: Ezequiel Reficco Credit Devex impact
Ezequiel R. Professor of Strategy at Universidad de Los Andes School of Management Colombia
Ezequiel Reficco, PhD, is a professor of strategy at the Universidad de Los Andes School of Management in Colombia. His research and consulting is focused on social entrepreneurship and on inclusive business models that target the base of the pyramid.
Source: Devex impact
Samsung Develops 15 KVA Solar Power Generator For Africa
As part of its “Built For Africa” product initiative, electronics and mobile phone giant Samsung, has manufactured a solar powered generator equivalent of a 15 KVA diesel plant, to alleviate electricity infrastructure problems on the continent.
At the 2013 Samsung Africa Forum in Cape Town, South Africa,where the eco-friendly product was unveiled, Ntutule Tshenye, Head of Business to Government (B2G) and Corporate Citizenship for Samsung Electronics. Africa, said:
“The Samsung Solar Power Generator forms one important component in Samsung’s broader business enabler solution offering, which is naturally a plausible option for outlying areas, where power supply is absent.”
Tshenye said the Samsung solar power generator capitalises on the one resource that Africa has an abundance of – sunlight. The product is therefore perfectly positioned for any facility where alternative energy sources are required, especially remote areas of Africa.
“So for example, we can now power Samsung products in rural areas. A smart school for example or perhaps a community centre with LED lighting and technology or even a remote border post, given their online access requirements.
“And if that wasn’t enough, it is built in such a way that it has the capability to allow someone to dial in over the Internet remotely to analyse the generator and troubleshoot any problems before sending out a technician if need be.
“By harnessing the sun’s energy, we are able to provide the African continent with an extremely affordable power source, characterised by an environmentally-friendly footprint.”
According to Tshenye: “The generator is safe to use, easily deployable to site and has very low maintenance requirements making it an ideal business and infrastructure enabler.”
He added that “the product provides a reliable, efficient and cost-effective way of powering rural facilities and by combining two or more generators, the energy requirements of larger installations can also be accommodated to meet any African requirement.”
Africa’s lack of adequate power generation and supply has attributed to the rising cost of doing business on the continent therefore raising market entry cost extremely high for its aspiring entrepreneurs, and contributing to inflation.
Apart from the benefits provided by green energy product, the generator can provide power for up to eight years without any additional maintenance and it is credited to be a reliable power solution with a lifespan of up to 25 years.
Source: Ventures Africa
Africas Fuel Subsidies: Grasping The Nettle
Faced with a rising food and fuel import bill, numerous African governments are reviewing their energy subsidy schemes.
Between the end of 2003 and mid-2008, nominal international fuel prices increased more than fourfold, with most of the increase occurring during 2007 and the first half of 2008. Prices have stayed high through the recession, due to geopolitical shocks in North Africa and the Middle East. And fuel costs are only going to increase over time, given the world’s continuing reliance on non-renewable fuel resources and Africa’s lack of capacity in delivering finished fuel products.
Deconstructing fuel subsidies is a cheerless job for any government. Private sector actors and trade unions complain of rising production costs and loss of export competitiveness, while consumers object to rising living costs. Populations are directly affected through higher prices for fuels consumed for cooking, heating, lighting, and private transport. The indirect impact hits the poor, through higher prices for all goods and services for which higher input costs are passed on. IMF estimates suggest that a $0.25 per litre increase in fuel prices equates to a 5.9% decline in household real incomes – hardly a popular move, whatever the long term economic merits might be.
The effect of subsidy removal on all segments of society means few have the stomach to tackle this head on. Egypt’s government is in a drawn-out dispute with the IMF over its fuel subsidy scheme, which could have cost as much as $4.7bn over the first three months of this year. Nigeria’s energy subsidies have also grown at a frightening pace, reaching a 97% yearly growth rate by 2011. But energy subsidies are often regressive overall, with over 80% of the total benefits accruing to the richest 40% of households, according to one global analysis by the IMF. “Fuel subsidies are a costly approach to protecting the poor due to substantial benefit leakage to higher income groups,” argue the IMF in a report. “In absolute terms, the top income quintile captures six times more in subsidies than the bottom”.
Senegal provides an example of the burden, and inertia effects, of energy subsidy outlays. Subsidies for electricity consumption, as measured by the annual budgetary transfer to the power utility SENELEC to compensate for the tariff gap, amounted to about 1.4% of GDP last year, meaning SENELEC now soaks up more funds than are allocated for new capital expenditure on health or education. And even with this expensive scheme in place, power is expensive and unreliable due to the dearth in private investment; itself a response to the flaws in the subsidy payment framework. A restructuring of SENELEC is imminent, and would allow the government to widen its currently limited safety net programme.
Nigeria’s fuel subsidy, meanwhile, has mushroomed of late. But reforms last year – which led to the highest price jump in fuel in the country’s history, from $0.42 to $0.89 – led to eight days of nationwide strikes supported by a range of groups, including the Nigerian Labour Congress and the Trade Union Congress. In the end, the government reduced the subsidy increase to a $0.63 increase, and many of the gains from the initial removal were lost through the economic shut-down, and corruption in the subsidy reform procedure. A bigger public policy flop is hard to imagine. Little more will happen now, as Nigeria re-enters elections season in mid-2014.
Does fuel subsidy reform unavoidably entail strikes and economic woe? Not necessarily. Several African countries have drawn down subsidy schemes while implementing compensation mechanisms to protect the most vulnerable. In 2004, Ghana’s government announced plans to raise fuel prices by 50%; the increase was pursued in parallel to a targeted anti-poverty programme, including the elimination of primary and junior-secondary school fees, extra funds for primary health programmes, rural electrification and urban transport investment. There was still resistance – notably from trade unions – but a thorough debate led to a smoother reform process overall.
Gabon raised gasoline and diesel prices by 26% in March 2007. A cash payment scheme to the poor was resumed, and assistance to single mothers was increased, as was a microcredit program targeting disadvantaged women in rural areas. School enrolment fees were waived for public schools and investment in rural health, electricity and water supply was accelerated. The public transport network in Libreville was modestly expanded. Finally, Guinea has lowered its budget deficit from 14.3% in 2010 to 3.9% in 2011, in part due to a lowering of fuel subsidies which has been crucial in allowing the government to get a handle on its disastrous public finance inheritance from the previous military regime. Yet social spending has been able to rise in step, with free malaria net distribution to vulnerable populations, immunisation campaigns and lowering of healthcare costs.
While some argue that higher fuel prices would hamper competitiveness, in reality few African countries – with the possible exception of Mozambique – are in a position to use energy as a comparative advantage yet. And ironically, private investment in energy would likely increase if prices were market-determined, as energy companies are reluctant to make major investments when key prices are determined by political whim. By supporting the public purse, drawing down on unsustainable subsidies could also help governments make the much-needed investments in health, education and infrastructure.
Adam Robert Green
Adam Robert Green is Senior Reporter with This is Africa, a bimonthly publication from the Financial Times Ltd.
Source: Royal African Society
Africa: Engen Leads the Charge for a Greener Transport Fleet in SA
Engen Petroleum, the country’s leading fuel company, continued its ‘greening’ efforts with a purchase order for nine new trucks that run on 50ppm cleaner automotive diesel oil (ADO).
Jeeva Chetty, national operations manager at Engen, says this follows on the company’s purchase of two new trucks in 2012, which comply with the latest European emission requirements (Euro 4 and 5).
“It is a significant step forward for Engen’s sustainability efforts,” he says. “Our commitment is to eventually have only Euro 4 and 5 vehicles across our transport fleet of 220 trucks.”
Besides running cleaner fuel, the trucks also sport exhaust gas recirculation and particulate filter technology, which translates into fuel consumption savings. Uniquely, they are also equipped with safety features such as driver airbags and pre-tension seat belts.
The additional ‘green’ vehicles’ will be purchased in accordance with the company’s fleet replacement programme and roll-out of ADO 50ppm nationally, says Chetty.
“The Engen Transport Department has monitored the performance of our first two vehicles and, given their excellent efficiency and sustainability, we are set to roll-out the programme further.”
Chetty says these vehicles will be operating out of Engen’s 20 terminals.
“These are exciting times for Engen,” says Chetty. “It’s exciting to see the business evolving and matching the demands of the market and the environmental challenges we are faced with.”
Source: Engen Petroleum Group www.engen.co.za
EU Seals Deal to Boost Transparency of Oil, Gas and Logging Firms
Payments of more than €100,000 to governments in resource-rich countries must be declared, as EU agrees landmark law fight tax evasion and corruption.
The EU has adopted new laws aimed at increasing the transparency of government payments from the oil and gas industry, in a move hailed by U2 frontman Bono as a "gamechanging breakthrough" on corruption in resource-rich developing countries. Ministers, the European commission and parliament on Tuesday ended negotiations on the accounting directive by agreeing a compromise proposal, after fierce lobbying from industry and NGOs.
The deal requires European companies to report payments of more than €100,000 (£85,000) made to the government in the country they are operating in, including taxes levied on their income, production or profits, royalties, and licence fees. The EU executive will oblige companies to disclose the payments they make at project level as opposed to government level only, revealing the sources of taxable government income from the extraction or logging industries.
Bono, the singer and co-founder of poverty campaign group One, said: "Europe's leaders have stepped up and delivered a gamechanging breakthrough tonight. Transparency is one of the best vaccines against corruption, and now citizens the world over will know what their country's resources are really worth." The agreement will also cut red tape for small and medium-sized enterprises (SMEs) by simplifying accounting rules. The deal goes beyond disclosure rules adopted by the US last year by including the logging industry along with mining and petroleum operations.
"The agreement will bring in a new era of transparency to an industry which is far too often shrouded in secrecy, and help fight tax evasion and corruption, as well as create the framework so both companies and governments can be held to account on the use of revenues from natural resources," said Michel Barnier, the European commissioner for the internal market.
For Barnier, project-level disclosure will ensure that communities living near extraction sites are rewarded through tax redistribution. "Local communities in resource-rich countries will finally be better informed about what their governments are being paid by multinationals for exploiting oil and gas fields, mineral deposits and forests," he said. This is particularly important in countries where tax evasion laws are weak. But without the disclosure of further information – such as turnover, profits, employee numbers, and costs and assets – regulators may struggle to work out if companies are paying the full amount of tax they owe.
"Information on payments alone is not enough to show that companies pay their fair share of tax," Catherine Olier, an EU development analyst at Oxfam, told EurActiv. "This means that the information on payments can be used to hold the government accountable for the use of this income, but that neither governments nor companies can be held accountable for whether the correct amount was paid."
Ministers agreed on a review clause to decide in 2015 whether to expand the laws to include other industries, such as telecommunications and construction. "This will be a springboard for similar disclosures," said Joe Williams from Publish What You Pay, a campaign group focusing on the transparency of the oil and gas industry. "If it can be done with a dodgy industry like the extractives then it can be done with others. But extractives represent the greatest source of income for developing countries." The move follows leaks showing that politicians, tycoons and companies have used tax havens such as the British Virgins Islands to hide funds. It comes against a background of European-level crackdowns on the transparency of the banking sector (pdf). The European commission estimates that the EU economy loses about €1tn from tax evasion by both private persons and companies.
"It will better hold government to account, with some impact on rooting out tax evasion" – Joe Williams, Publish What You Pay
"[The rules] mean citizens can know what companies paid for each project even in specific areas, so how much communities can get back" – Catherine Olier, Oxfam
"Despite today's promising progress, there is still a long way to go to have EU legislation that properly fights tax dodging. While it is very important to know how much companies pay to governments, this figure alone does not give a clear picture of whether they pay their fair share of taxes. Multinationals will continue plundering developing countries until they are obliged to report information such as sales volumes, assets, staffing and profits. The currently negotiated EU banking sector reform is an example to follow in this regard" – Øygunn Sundsbø Brynildsen, senior policy officer at Eurodad, the European Network on Debt and Development
"The priorities of the Irish presidency are stability, jobs and growth. At the heart of this directive is the drive to cut red tape and reduce the administrative burden on SMEs. That is why this agreement is so important. The more we can reduce red tape, the more we free up business to grow and create jobs" – Irish minister for jobs, enterprise and innovation, Richard Bruton
"Today's agreement is a major step forward in the fight against corruption. This law will shine a light on the often murky world of oil, gas and mining deals in Africa, helping ordinary people see where the money paid for their countries' natural resources is really going and potentially lifting millions out of extreme poverty" – Eloise Todd, Brussels director of ONE
"The UK has pushed hard for Europe to agree rules that will set a new global standard for transparency, working tirelessly with industry, civil society and European governments to achieve robust proposals. It is fantastic that the commission, council and European parliament have reached agreement on strong extractive reporting requirements that will ensure that those in the gas, oil and mining industry report the payments they make to governments in all the countries in which they operate. This is a priority for our G8 presidency and it's great that the EU is leading by example. We have succeeded in making sure that citizens can get access to the detailed information they need to be able to hold their governments to account" – UK business minister Jo Swinson.
'NestlÃ© in Society: Creating Shared Value and meeting our commitments' 2012 report
Creating Shared Value and meeting our commitments' 2012 report, which is now available to download.
It follows the publication of the summary version of the same report in March. The Global Reporting Initiative (GRI), a leading organisation in the field of non-financial reporting, has verified that the report is prepared according to the GRI Guidelines, at Application Level A+.
Read the report:Full Report (pdf, 5 MB)
Africa: Water and Sanitation Seek Rightful Place in Post-2015 Agenda
With the end of the Millennium Development Goals, as we know them in sight, the post 2015 agenda aims to pick up from where its ends. The Special Thematic Session of the General Assembly on Water and Disasters seeks to address the importance and rightful place for water and sanitation in the new agenda.
United Nations — When the General Assembly unanimously adopted the Millennium Development Goals (MDGs) back in 2000, water and sanitation were reduced to a subtext – never a stand-alone goal compared with poverty and hunger alleviation. Now, as the United Nations begins the process of formulating a new set of Sustainable Development Goals (SDGs) for its post-2015 agenda, there is a campaign to underscore the importance of water and sanitation, so that the world body will get it right the second time around.
Ambassador Csaba Korosi of Hungary, whose government will host an international water summit in the capital of Budapest in October, says, “Sustainable development goals for water should be designed in order to avoid the looming global water crisis.” Speaking to reporters last week, Hungary’s Permanent Representative to the United Nations said water resources have remained virtually unchanged for nearly 1,000 years. “But the number of users have since increased by about 8,000 times,” he said. With global food production projected to increase 80 percent by 2030 – and with 70 percent of water consumption flowing into the agricultural sector – Korosi said 2.5 billion people will very soon live in areas of water scarcity.
Addressing the Special Thematic Session of the General Assembly on Water and Disasters last week, Deputy Secretary-General Jan Eliasson was blunt: “We must address the global disgrace of thousands of people who die every day in silent emergencies caused by dirty water and poor sanitation.” The theme of the Budapest water summit, scheduled for early October, will be “The Role of Water and Sanitation in the Global Sustainable Development Agenda.” The summit will be preceded by a High-Level International Conference on Water Cooperation in Tajikistan in August and World Water Week sponsored by the Stockholm International Water Institute (SIWI) in Sweden in September, plus several regional summits and conferences in Asia, Africa and Latin America. The meetings take place at a time when the General Assembly has declared 2013 the International Year of Water Cooperation – and even as the United Nations commemorates World Water Day next Friday.
Torgny Holmgren, SIWI’s executive director, told IPS that in a survey of U.N. member states on priority areas for post-2015 goals, food, water and energy were “a distinct top trio”. For a second year in a row, he said, the water supply crisis was also among the top three global risks in the yearly survey by World Economic Forum in Switzerland. “We are also seeing how water issues are being prioritised by actors outside of the traditional water community, most significantly from the food and energy sectors,” said Holmgren, a former ambassador and head of the Department of Development Policy at the Swedish Ministry of Foreign Affairs. Amidst all this, he said, there is significant talking and thinking going on to develop new ambitions that will support the movement towards a sustainable and desirable world for all the so-called post-2015 development agenda. “I am optimistic that the newfound awareness about the importance of water will be converted into far-reaching goals and targets on water as a resource, as a right and as a service,” said Holmgren.
John Sauer, head of external relations at Water for People, told IPS the United Nations took an important step to make water and sanitation a human right through a General Assembly resolution (64/292) in 2010. Despite this effort, he said, its work to ensure lasting and affordable water and sanitation service delivery must evolve and innovate to meet the immensity of this challenge. “As the U.N. shifts attention to the post MDG goal of universal coverage, monitoring should shift to ongoing service delivery,” he said. This is critical to prevent the large number of projects that presently fail, Sauer noted.
“This means looking beyond projects funded, and beneficiaries reached, and instead looking at systematic capacity building within government, civil society and the private sector institutions. This also means creating stronger partnerships,” he said. “If the U.N. could better demonstrate their impact, for example, by using indicators to show capacity built, this would be progress in the right direction.” Together with non-governmental organisations (NGOs), the U.N. must rise to the occasion and increase transparency to reveal the true impact of their operations, he added.
Asked about the role of international organisations in resolving the impending global water crisis, Richard Greenly, president of Water4, had a different take. He told IPS that organisations like the U.N. will always have little to no effect on the growing crisis in water and sanitation. “But it is not for lack of very good intentions or much effort,” he added. “The fact is, we as a civilisation cannot give or grant another country into prosperity and health.” It has never worked in the history of the world and it will not ever work in the water and sanitation crisis, he added. Every developed country paid for their own water development by developing water businesses, he argued. “Commerce is the way out of poverty and although the U.N. is well-meaning, sustainable water development must be put in the hands of local citizens to solve their own water issues.
”What these people desperately need from the U.N. is the opportunity to develop their own water resources, he added. Rather than a 10,000 dollar “donated” borehole or even 10,000 donated boreholes, they need the opportunity to develop their own way out like non-profit organisation Water4 (www.water4.org), which gives people the opportunity to hand drill water wells as a business for one-tenth the cost of a mechanised rig. “This will allow rapid sustainable gains in the world water crisis,” Greenly argued.
SIWI’s Holmgren told IPS, “I am also seeing clear indications of both the need for and the openness to new collaborations and ideas.” He said the post-2015 goals are being discussed as inclusively as our electronic means of communication permits. “We do see more cooperation emerging between governments, the private sector, academia and civil society.” He said there are even cases where common ground for collaboration for a more water-wise world is found between competitors. “It is of course most fitting that all these efforts are emerging during the International Year of Water Cooperation, and we at SIWI look forward to contributing even further towards improved cooperation and more concrete outcomes through the World Water Week on the same theme in September in Stockholm,” he added.
Africa: How Do We Ensure Universal Access to Water and Sanitation?
Universal access to safe and clean drinking water and sanitation is a universal human, how do we ensure this is met managing the realities on the ground.
Access to safe and clean drinking water and sanitation is a universal human right and central to human wellbeing and development. Yet 780 million people still receive drinking water from unimproved sources and 2.5 billion people continue to live without access to improved sanitation facilities. IDS’ work on water and sanitation has been looking at what more needs to be done, particularly through a new set of post 2015 development goals, to ensure that this right is enjoyed by all.
UK parliamentarians discuss universal access
IDS co-hosted an event with the All Party Parliamentary Group for International Development and the Environment which brought together parliamentarians with representatives from the NGO and academic communities to discuss how we can accelerate progress towards universal access to water and sanitation.
Some of the key points raised included: Universal access to water and sanitation is central to making progress against all MDGs, not just the water and sanitation MDG. The water part of the MDG target to halve the proportion of the population without sustainable access to safe drinking water and basic sanitation was met in March 2012. However, this achievement does not refer to the quality of the water, for example, has there been an improvement in rates of diarrhoea? There is also still a long way to go in terms of the sanitation target.
Current indicators for measuring access to water, sanitation and hygiene do not incorporate gender, equality and sustainability dimensions. They have also overlooked issues of power and social justice. More attention needs to be paid to the gender dimension of water and sanitation. Improvements in access to water and sanitation have a profound impact on the health, wealth and life opportunities for women and girls who often bear the brunt of the burden in terms of water collection and maintenance of sanitation facilities. The issue of women and girls and managing menstruation is also still taboo and remains largely overlooked in the planning of sanitation and hygiene facilities.
Improvements in access to water and sanitation often do not reach the poorest and most vulnerable, and the needs of groups such as the elderly, the disabled, particular castes, women and children continues to be overlooked. The needs of rural and peri-urban dwellers are often ignored. It is often unclear about where responsibility and accountability for the provision of water and sanitation services to these groups lies.
The realities on the ground about decision making and practical action in terms of water and sanitation services often differ greatly from global targets and frameworks. More thought should be given to the maintenance and sustainability of newly built water and sanitation facilities. For example, whether local communities can afford the cost of maintaining facilities in the long term and what more needs to be done to improve capacities of all communities to save and allocate resources to pay for crucial maintenance.
Universal access to water and sanitation is central to achieving global justice for women and girls. Better access to water and sanitation facilities can reduce poverty and provide immediate health benefits for women and girls as well as better educational and economic opportunities and life chances. As debates on the MDGs – and what comes after them – abound, World Water Day 2013 offers a timely opportunity to look at the MDG goal on water and sanitation and what it means for gender justice. In her latest blog post, IDS researcher Lyla Mehta reflects on water and sanitation targets, and achievements and barriers in working towards universal access for all.
New Global Water Risk Maps Offer Free Knowledge and Data
A new version of Aqueduct provides companies and governments with a free global water-risk mapping tool that can help them plan around falling water supplies.Aqueduct combines maps with 12 different water risk indicators, including water quality, regulatory risk and groundwater stress.
Samuel Taylor Coleridge's The Rime of the Ancient Mariner may well prove prophetic: "Water, water, every where / And all the boards did shrink / Water, water, everywhere / Nor any drop to drink." The world may not yet be as desperate for the "elixir of life" as the dying sailors on Coleridge's becalmed ship but water, and its continuing availability, is shaping up to be one of the most important resource issues of this millennium.
A survey of chief executives and world leaders, carried out by the World Economic Forum for their Global Risk Report, indicated that they see water risk in the top five global risks to business, a list that also includes chronic fiscal imbalances and systemic financial crises. A lack of water might mean you can't operate; become involved in conflict with local communities who feel you are compromising their water needs and new water regulations that may make it uneconomical to operate in specific locations. For these reasons and many more, investors increasingly want to know what companies' exposure to water risk is.
But even though water is critical to economies, business and public health, it has been historically difficult to work out where the high and low water risk areas are in the world. The World Resources Institute (WRI) is hoping to change that with the launch of Aqueduct, a new version of global water-risk mapping tool. Aqueduct uses more up to date data, as well as new data sets and is higher resolution, more comprehensive and has a more sophisticated user interface that the previous version.
It combines maps with 12 different water risk indicators, including physical water stress, water quality, regulatory and reputational risk, and, for the first time in a water-risk tool says WRI, groundwater stress information. The maps are free to use and anyone can key in where they are based or upload supplier locations, and choose the sector they work in. Users can customise the level of individual indicator risks to create a bespoke risk profile. They can then view overall, as well as individual, indicator water risk scores and maps. The tool also includes a "water risk news" feature that geocodes key water-related stories around the globe, so users can see what is happening on the ground where they operate.
Increasingly, businesses are waking up to water risk, and WRI has worked with a number of them to develop the tool, including Proctor & Gamble. "Water is an incredibly important part of both the manufacture and use of P&G brands," says Len Sauers, the company's vice president of global sustainability. "We want to make sure all of our operations are in locations that are best for both our business and the environment, so partnering to understand water scarcity and related issues throughout the world is critical."
Last year, MacDonalds asked 353 of its biggest suppliers to map their facility locations on the previous version of Aqueduct and report their water risk levels back to the corporation. Misjudging water risk can damage a business, as Coca-Cola's Indian subsidiary Hindustan Coca-Cola Beverages found out in Kerala. It was accused of depleting the water sources of the surrounding communities and though it disputed the claims, shut down its operation in 2005 with its reputation in tatters.
But it's not just companies and investors that should pay attention to water risk; governments need to as well, as water stress can have serious national and international consequences.Last year, for example, the US Department of Agriculture said 70% of US national disaster areas had been created by drought conditions and high temperatures. This has had a devastating impact on soybean and corn crops and is estimated to have led to a drop in GDP of 0.5-1%. In Brazil, a lack of water supply means the country is facing the possibility of power rationing for the first time in a decade.
Two thirds of the country's energy is generated by hydro, so dropping water levels will have an impact on energy supply and prices, which have increased by 60%. Aqueduct's water risk maps can help countries measure and tackle these kinds of impacts, but given the importance of water, it's curious that few governments seem to treat water risk as a priority.
It was this inertia that inspired 45 companies to sign a special communiqué at Rio+20 highlighting the urgency of the global water crisis and calling on governments to address it. "Part of the problem is that people see water as an inexhaustible, free resource when it isn't," says Betsy Otto, director of Aqueduct at WRI. "As a result we have not invested as we should in understanding it, tracking it, even pricing it and allocating it well. In a large part, this is governments' responsibility."
Africa: Cheap Nano-Tablet Purifies Water for Up to Six Months
Researchers have developed a water purification tablet comprised of nanoparticles that can be used by developing world communities with no access to clean water.
The tablet, MadiDrop, invented by PureMadi – a non-profit organisation of the University of Virginia, United States – was presented at the organisation’s one-year celebration event last week (8 March).
It consists of a small ceramic disk filled with silver or copper nanoparticles that is placed on a water vessel, where it can repeatedly disinfect water for up to six months. “There is nothing easier,” James Smith, a professor in the Environmental and Water Resources programme at the University of Virginia who co-leads the PureMadi project tells SciDev.Net. “You drop it in your water container, fill the container up at night and the water will be safe to drink for all the next day.” The tablet is capable of treating 20 litres of water per day. Only trace amounts of silver and copper nanoparticles are released into the water – at levels that are safe for human consumption, but high enough to kill waterborne pathogenic micro-organisms, says Smith.
The tool developed for use in communities without safe drinking water is named ‘Madi’ after the Tshivenda (one of the official languages of South Africa) word for water. Smith says there is need for more long-term field tests on the tablet’s life span. “Based on shorter-term tests that we can extrapolate, it should work for six months,” he says. “We will be conducting longer-term tests in South Africa in June, July, and August.”
It is hoped that the tablet will improve the supply of safe water to the community of Mashamba in South Africa and beyond, says John Mudau, director of the Centre for Rural Development and Poverty Alleviation at the University of Venda, South Africa. The university is ensuring that the tablet complies with South African safety standards; that education on water quality reaches the rural communities of Limpopo province that have little or no access to clean water; and that locals accept the tablet.
The process is technically viable, says AnthonyTurton, a water and environment expert in the Centre for Environmental Management at the University of Free State, South Africa. However, he warns that the filter’s sustainability is predicated on a number of factors including cost and social acceptability. PureMadi established a water filter factory in Limpopo province, South Africa last year, employing local workers who have already produced several hundred alternative flowerpot-like water filters. This means that it is likely to attract support from other companies eager to demonstrate their commitment to sustainability and regional development, Turton adds.
The additional value of the tablet lies in the way it provides a transfer of skills through usage of cheap local materials and the employment of local people from deeply impoverished communities to produce these gadgets, he says. Smith is uncertain as to how much the tablet will cost. But he adds: “If we can obtain a price point of US$5, it would likely be the least-expensive or among the least expensive point-of-use water purification methods available on the market”.
Source Article from: This article has been produced by SciDev.Net’s Sub-Saharan Africa desk.
Is Africa ignoring the huge potential of its renewable energy?
Africa’s wealth is often quantified in terms of the huge potential of its minerals. The Democratic Republic of Congo, for instance, is believed to have trillions of dollars worth of mineral wealth which has often been a source of numerous conflicts in the region.
Another of Africa’s resources is arable land. This too has proved controversial because governments often have to uproot communities in order to lease this land to foreign governments and firms. But there is another resource that is barely mentioned, though it has the potential to put Africa on the world map as an energy giant. This is renewable energy.
It’s worth noting that the kind of energy polices being implemented across the continent have largely failed to make the continent energy secure. Even African businesses complain at the inefficiency of the power system on the continent. The statistics on Africa’s energy potential are staggering. According to a UN report, the continent sits on a 14,000 MW potential of geothermal energy. There is a further 1,759 TWh (terra watt hours) of hydro energy.
One of the biggest hindrances to tapping this energy and others like solar power and wind is the contrasts you find on the continent. According to the report, for instance, sub-Saharan Africa generates only about 25 percent of the continent’s electricity despite having 80 percent of the continent’s population.
AFRICA'S UNIQUE POSITION
But perhaps Africa’s largely underdeveloped energy sector could be a blessing in disguise. One needs to only to look keenly at recent opinion about current power generation and distribution models to appreciate that Africa is in a unique position. For example, most of the population on the continent is not connected to national electric grids. This could be an opportunity for the continent to develop “distributed energy generation” or “micro grids” as they are better known.
Distributed energy generation allows power generation mostly in small generation plants - such as wind turbines - close to or in areas where the energy is needed. This differs from the traditional generation methods where large power plants may be constructed away from populations. This demands the transmission of power over large distances with losses that can be as high as 40 percent in some cases.
While it’s worth appreciating that some of the renewable energy resources such as hydro power plants and geothermal locations are not close to populations, other sources such as solar and wind can be integrated close to populations with ease. The two systems tend to complement one another. While in a micro grid power is generated, stored and distributed within a small locale, the grid also can be connected to the national grid - but in a way that allows for it to be easily disconnected when need arises.
Micro grids can easily be installed in urban areas and even in the middle of populations. With proper design for instance, a biogas project in Nairobi’s Kibera slum, which uses human waste to generate gas fuel, could be expanded to include rooftop solar panels and micro turbines with a small control center where excess energy could be sold to the national grid. This would not only make sure that the population in the area has access to electricity but also a chance to earn extra income from selling to the national grid.
The development of smart ways of energy management has lead to the term “smart grids”. And it’s easier to build smart micro grids than smart centralized grids. The use of micro grids allows for a wider user of generation methods and could spur growth in manufacturing these systems on the continent.
It seems that the current low uptake of renewable energy is covered in one word: incentives. Though the long term benefits of having renewable energy integrated into available energy options are known, governments on the continent have simply not turned to innovative ways to improve uptake of renewable energy.
Many people on the continent view grid-supplied electricity or alternative renewable energy as two separate options, not bearing in mind the fact that the two can coexist and that in the long term having renewable solutions as part of your energy mix is economically smarter. While the acquisition costs for renewable energy seem prohibitive, most people would be willing to borrow to spend on renewable energy for their homes and businesses if there was a workable way for them to repay the costs.
This is where governments on the continent can actively encourage a variety of incentives like reversible electric meters, which would enable someone who has solar panels installed on their roof to “sell” any excess power they generate to the national grid. At the end of that financial year if the person has supplied more power than they have drawn from the grid they get a cash rebate that goes to pay for the cost of installation.
Another version of this is via a micro grid, where a community of perhaps 200 to 500 homes comes together and collectively installs renewable energy options as a group, using economies of sale to reduce the costs. They would then interlink with one another in a network (a local grid) which is smart enough to efficiently transfer power from one member to another to meet demand. The collective excess power (which could be in the order of megawatts) is then sold to a national grid from a designated interconnection point. The proceeds are shared among the members of the grid depending on their generation capacity.
Governments could go further and offer tax rebates or price cuts for the equipment used in developing a local grid. Grids could be interconnected as well as being linked to the national grid but the key is for them to remain independent. With such policies it would be possible for people in rural areas to use their resources collectively to get electricity as well as earn an income from their investments. Banks would also be much more willing to lend to such projects because of the obvious financial gain and the fact that risks are minimized.
Further benefits lie in the potential for communities to directly earn carbon credits from such projects which could further enhance the economic potential of such technologies.
Another front where governments can increase private sector participation is in collecting data on renewable energy. There is very little detailed data on the continent for the potential of wind, solar and other renewable energy resources. Most figures quoted – which are few and far between – are based on estimates rather than studies.
Governments could facilitate collection of renewable energy data the way they facilitate mining and mineral exploration data. For instance, a private company could carry out research on the potential of an area for renewable energy and then have the rights to the findings. The company could then sell this information to other companies wishing to invest in renewable energy. This could be particularly helpful in developing wind farms and solar energy farms. This could be particularly useful in some areas of the continent that are not particularly productive agricultural land and don’t have any mining potential. Some of the harsh grazing lands on the continent could effectively host wind or solar farms with minimal disruptions to grazing activities. These projects could be encouraged as communal efforts since most of this type of land is communally held.
It’s true to say that legislation on the continent has lagged behind in creating adequate policies to encourage renewable energy adoption and use on the continent. The sad statistics about electricity use on the continent could be overturned within a decade, just the way mobile phones brought a communication revolution on the continent.
Governments need to make it possible for power utilities to adapt to globally acceptable ways of integrating renewable energy into their load mix. Such policies have seen countries like Italy attain grid parity for solar power, which means that the price of solar power per watt is now equal to price per watt supplied by the grid.
Ray Obiero is a physics graduate of Kenya’s Egerton University. He has previously worked for Green Earth Energy Solutions in Kenya and is a writer at Kenya’s Management Magazine on technology and new knowledge issues.
Source: Thomas Reuters Foundation
New efficiency world record of Ripasso Energy gives lowest cost for Dish Stirling solar power
Ripasso Energy, a solar technology provider based in Sweden, has demonstrated a new solar-to-grid-quality-electricity efficiency world record of 32 % for 30 kW Stirling dish modules in Upington,
South Africa at an ambient temperature of above 28oC.The Ripasso Energy Stirling Dish technology is especially suited for arid and hot climate in the “sun belt” when one third of the solar energy directly is converted to three-phase electricity through a heat engine driving a rotating generator and without any need for water cooling.
Earlier tests and reports from U.S. DoE, IRENA, ESTRELA, IEA and others have pointed out the many advantages for Stirling dish technology. However this has not been fully demonstrated for commercial operation until now.
“The large engine size of 30 MW, professional automotive production and very accurate solar tracking provides cost efficient and robust CSP technology and an important step towards a clean energy sustainable future”, says Gunnar Larsson, Managing Director for Ripasso Energy.
The Ripasso Energy solution is modularized without any need for central turbines or DC/AC converters allowing step-by-step implementation with generation starting from the first units in service. Low environmental impact in combination with low Levelized Cost Of Energy (LCOE) offers a new “Fast-track” path for solar based world future energy in “the sun belt”.
“The solar conditions in parts of MENA, South Africa and Chile indicates that it is possible to obtain LCOE levels of less than 0.1 Euro per KWh for a 30 MW plant and even lower for larger plants where 0.05 Euro per kWh is our target. This makes the Stirling dish competitive with all other electrical energy technologies in these countries and also feasible in other regions in Asia, Australia and Americas with relatively high solar radiations”, says Carl Ohlen, Marketing & Sales Director for Ripasso Energy and continues;
“Recent reports from IEA, the World Bank as well as the negotiations at the latest UN COP conference in Doha all points out the urgency to de-carbonize the energy system. The Ripasso Energy Stirling Dish offers here an efficient solution with fast implementation for many countries in need of electricity.”
The design of the Stirling Engine is based on a license from Kockums and since many years used in submarines for the Swedish Navy but also with a previous solar-to-electricity efficiency record from an installation in United States. Ripasso has further developed and commercialized the Dish-Stirling concept to a cost efficient and modularized system with automatic sun tracking modules operating independently and generating 2x30 kW three phase AC power each.
Ripasso Energy Stirling Dish modules in operation at Upington, demonstrating the new world record. These modules are not depending on large centralized turbines but can individually generate electricity from the start and then gradually be combined to larger CSP power plants from hundreds of kW for local and industrial use to hundreds of MW utility scale plants for grid connections.
Gunnar Larsson, the director of Ripasso Energy and earlier with Kockums summarizes; “To find an energy solution that does not need water for desert climate with submarine technology is really anenlightening sunshine story to be told at the World Future Energy Summit.”
Ripasso Energy (www.ripassoenergy.com) was founded in 2008 with Ahlström Capital (www.ahlstromcapital.com) as main owner. Based on the very good experience of the Stirling Engine from submarines and also from CSP demonstration sites in USA, Ripasso acquired the license from Kockums and entered other strategic partnerships in order to further develop the Dish-Stirling concept. Since 2011 the Ripasso CSP design has been tested in the factory in Sweden and in Antalya, Turkey.
The first commercial power plant is now being built for the South African company, GHG Reductions in Upington, RSA where the solar radiation gives DNI levels which are among the highest in the world (2800 to 3000 kWh/m2 and year). And generating a new world record! Ripasso Energy is located in Malmö, Sweden, near Kockums and close to a highly experienced supply chain originating from the automotive and telecom industry. This ensures efficient and high quality production for the key components. Ripasso Energy is now actively looking for local partners and suppliers around the world in order to further customize CSP solutions to meet each market demand.
Ripasso Energy participates in WFES2013 in Abu Dhabi at the Swedish Exhibition and also in the CSP today South Africa 2013 2nd Concentrated Solar Thermal Power Conference & Expo 4-5 February in Pretoria where it is possible to get more information about this state-of-the-art CSP solution. For more information please contact Marketing & Sales Director Carl Öhlén, email@example.com who is participating in both conferences.
Ripasso Energy South African team inspecting the world record setting units in Upington, RSA
Chinese NGOs reach out to African countries
Groups give new impetus and direction for people-to-people exchanges in Africa with their community outreach programs, report Meng Jing and Sun Yuanqing.
At almost the same time that President Xi Jinping announced during his recent visit to Africa that China will extend a $20 billion credit line to the continent over the next two years, Zhang Ming, a director of the Red Cross Society of China, was busy raising funds of more than 30 million yuan ($4.85 million) from China to build public health centers in Africa, the first overseas project by her organization.
Though the project may not seem as generous as the $20 billion credit line from the Chinese government, it is a giant leap for China's non-governmental organizations. Giving back to society with an enlightened self-interest is the common tag line used to identify NGOs globally. But with more than half of the nation's people living in poverty before the 1990s, Chinese NGOs were more likely to receive financial assistance from developed countries, rather than extending help.
"We have been receiving donations from other member nations of the International Committee of the Red Cross for quite some time. Though we did donate money to other countries for emergency disaster relief from time to time, we had never set up operations or run long-term projects outside China," said Zhang, director of the external liaison department of Red Cross China.
Her plan for the organization's first steps abroad include a three-year program covering Kenya, Tanzania and Uganda, setting up community-based centers that offer first aid, healthcare and water supplies.
With the rapid economic development of China and the country's transition from an "upper middle income" economy to a "high income" economy over the next 15 to 20 years, a small but growing group of NGOs are eager to go outside China and give a hand to less well-off countries. The friendly relationship and increasingly strong trade ties between China and Africa have made the continent an ideal destination for Chinese NGOs wanting to test the waters.
Photograph: Wu Peng from the China Foundation for Poverty Alleviation visits Sudan to learn about the country's living conditions for mothers and babies. Provided to China Daily
Financial help from the Chinese government has been a big factor in the growing number of Chinese NGOs that are keen on undertaking projects in Africa. According to experts on the ground, Chinese NGOs have not only made meaningful contributions in Africa, but also played an important role in promoting bilateral relations between China and Africa through people-to-people exchanges.
What explains this mismatch of expectations and reality?
There are no official statistics about the number of Chinese NGOs operating in Africa, but Liu Hongwu, director of the Institute of African Studies at Zhejiang Normal University, estimated that there are more than 100 Chinese NGOs operating in Africa, and 10 of them have permanent operations and local offices in Africa.
Liu, who is also an expert in NGO studies, said that the number of Chinese NGOs operating in Africa has seen tremendous growth over the past four to five years.
Li Liqing, board member of the Chinese-African People's Friendship Association, said that the rapid economic development of China is one of the major reasons pushing these organizations into Africa.
For Red Cross China, the decision to go abroad came in 2011, when China officially overtook Japan as the world's second-largest economy.
According to Zhang, membership countries of the International Committee of the Red Cross are broadly divided into two categories. Donors such as countries in northern Europe are partnership national societies, while receivers, such as Nepal and China, are operational national societies.
"When China became the second-largest economy in the world, we knew that we could not be a receiver forever. We needed to step forward and offer our help to other countries," she said.
Strong government support is another major driver. President Xi Jinping has in his keynote address to the 2nd China-Africa People's Forum indicated that a new type of China-Africa strategic partnership is being promoted, in which cultural and people-to-people exchanges are the key.
Li from the friendship association said there is a growing emphasis from the Chinese government on people-to-people exchanges being the foundation for strong China-Africa ties.
"China-Africa cooperation is mainly on the government-to-government level. To further develop strong ties with Africa, it is important to make more African people know and understand China," Li said.
You Jianhua, secretary-general of China NGO Network for International Exchanges and the organizer of the People's Forum, said unlike many other countries, the relationship between the Chinese government and NGOs is friendly.
"With strong government support, going to Africa is now recognized as the first step for Chinese NGOs to go abroad," said You, who recently organized a team of Chinese NGOs to build water wells in Africa.
"We can tell the trend from the increasing number of NGOs who took part in China-Africa People's Forum," he said. The forum, held alongside the ministerial conference of FOCAC since 2012, attracted around 300 delegates from NGOs in China and Africa last year.
"Not all the NGOs in China are ready to go abroad, but I think the top ones, which have the ambition to grow themselves into international organizations, are ready to step onto foreign shores," said Tu Meng, secretary-general of China Youth Development Foundation.
He added that being international doesn't necessarily mean extending financial assistance to other countries but also means in having operational and long-term projects in these nations along with representative offices.
Since March 2011, nearly $3.5 million raised by WECBA has gone toward the construction of 17 schools in Tanzania, Kenya and Burundi. Thousands of African children in these low-income countries have benefited immensely from the project.
Yan Shi, deputy director of the department of Project Hope for Africa with CYDF, said the demand for help in Africa is quite strong.
"Many of the rural schools we visited in Africa are made of mud and animal dung. There is even one school in Kenya, which has no walls at all, and is just a blackboard under a tree with some stones on the ground for children to sit on," he said.
Yan, who worked for Project Hope China between 2008 and 2011, a program that has built around 17,900 schools in China since 1989, said in terms of help, the landscape in China and poor countries in Africa is quite different. "Project Hope in China has increasingly involved constructing schools to equipping schools with computers and other facilities, including training rural teachers, while the demand in Africa is still at the stage of school construction," Yan said.
Academics and insiders in NGOs said that China has progressed rapidly to something that is in between a developed economy and a developing economy, which means Chinese NGOs are in a better position to help, and the experiences they gather in their operation in China suit African situation better than their Western counterparts.
Academics and insiders in NGOs said that China has progressed rapidly to something that is in between a developed economy and a developing economy, which means Chinese NGOs are in a better position to help, and the experiences they gather in their operation in China suit African situation better than their Western counterparts.
Karla Simon, a law professor at the Columbus School of Law, Catholic University of America, and an expert in civil society of China, said Chinese NGOs are closer in terms of their development to African NGOs, compared with Western NGOs.
"The civil society movement in China is really quite young. Nobody had heard of the term NGO until 1995 in China. But I think Chinese NGOs have a lot to bring to Africa as they are relatively recent," the Washington DC-based Simon said.
He Wen, director of project management center with the Amity Foundation, agreed, saying compared with NGOs from Western countries, it is easier for Chinese NGOs to fit their skills into African society because poverty alleviation is a much more recent event than in the West.
Since 2011, He's Nanjing-based foundation has trained dozens of people from Madagascar the skills of building biogas digesters and provided the country with 263 units of equipment for the building of biogas digesters in rural areas.
"A biogas digester, a practical equipment that turns organic waste into usable fuel, is very popular in rural China. We can take more useful technologies from rural China to meet demand in Africa. Western countries are quite developed and many of their skills may not fit into the African context quite well," he said.
However, every coin has two sides. The advantages can easily turn into disadvantages. Wu Peng, director of the International Development Department of the China Foundation for Poverty Alleviation, said that the young civil society in China can also means inexperienced NGOs.
"We haven't been engaged in international relations as long as Western NGOs. Western NGOs have been in Africa for 10 or 20 years. We don't have local contacts, we don't have enough talented people qualified to work overseas and we know nothing about running a project in Africa," Wu said.
Four years ago, China surpassed the United States as Africa's biggest trading partner. Bilateral trade between the two sides has grown from $10.6 billion in 2000 to around $220 billion last year.
More Chinese companies now consider Africa as an ideal investment destination, said a 2011 report from China Council for the Promotion of International Trade.
The report said that the number of Chinese companies investing in Africa has sharply risen and out of the $59 billion outbound direct investment that was invested abroad in 2010, 22 percent was invested in Africa. The strengthening business ties have prompted an increasing number of Chinese corporate donors, which are eager to give back to local communities after years of doing business in Africa.
Liu Hongwu, director of the Institute of African Studies at Zhejiang Normal University, said Chinese companies are the biggest financiers of charity projects in Africa.
Chinese businesses in Africa have enacted the role of NGOs, especially in terms of making a difference in local communities through their corporate social responsibility projects.
Hainan Airlines has been helping cure cataract patients in Africa since 2010, one year after the Shenzhen-based airliner opened its Beijing-Dubai-Luanda route.
The program called China-Africa Brightness Action is sponsored by Hainan Airlines and Anhui Foreign Economic Construction Group with help from doctors at the Beijing-based Tongren Hospital. The project, originally started in China's Qinghai-Tibet Plateau, where the strong sunlight results in millions of cataract patients, has cured more than 2,000 patients in Africa.
"When we entered Africa, we found that many African people suffered from cataract, which can be easily cured once you have doctors and medicines. So we decided to extend the project to Africa," said Li Xianhua, chief executive of Hainan Airlines. "We know we can't put money on top of our agenda; we also need to shoulder more responsibility and give back to local people."
According to Li, the company has invested 25 million yuan in the African project and the carrier would extend further assistance by sending a team of Chinese doctors to Africa in May.
Hainan Airlines is no exception. Huawei Technologies and ZTE Corporation, two high-tech giants in China, have also undertaken various corporate social responsibility projects in Africa.
Source: China Daily.com