Africa in the news: Vaccine, energy, and climate change updates
New South African tech transfer hub to replicate Moderna vaccine
A tech transfer hub in South Africa established in June aims to replicate, with the aid of Moderna, the Moderna COVID-19 vaccine, according to a senior official with the World Health Organization. Moderna said in October 2020 that it would not enforce patents on its vaccine during the pandemic, but talks between the tech transfer hub and Moderna about disclosing the formula and the manufacturing process have yet to make significant progress. Regardless of whether the hub can rely on Moderna for assistance, the hub must still undertake requisite clinical trials, meaning it would not be able to distribute vaccines until the second half of 2022.
This new effort will supplement South Africa’s current production of mRNA vaccines. In July, Pfizer-BioNTech reached an agreement with South African pharmaceutical company Biovac to produce 100 million doses a year. However, the deal does not impart knowledge of the formula behind the vaccine, as the agreement is only to “fill and finish,” meaning Biovac will put the solution into vials and package them for shipping.
Expanded vaccine production is an urgent issue around the world, and Africa is no exception: According to the Africa CDC, only 3.3 percent of the continent is currently vaccinated against COVID-19 due to challenges in access, cost, and logistics, among other difficulties.
For more on Africa’s efforts to spur vaccine production and access, read, “Africa must produce its own vaccines.” Also consider listening to the Honorable Dr. Michel Sidibé, African special envoy for the African Medicines Agency of the African Union and Dr. Agnes Binagwaho, vice-chancellor of the University of Global Health Equity, share their thoughts on addressing vaccine inequity at the recent AGI event, “Accelerating COVID-19 vaccinations in Africa.”
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South Africa seeks international investment to shift away from coal; DRC attempts to renegotiate a 2008 minerals-for-infrastructure contract with China
On Thursday, September 16, South Africa’s Ministry of Environment, Forestry and Fisheries announced it will seek international cooperation around facilitating and financing the country’s energy transition away from coal, which generates over 80 percent of its electricity. As a first step, the British envoy to COP26, John Murton, announced an upcoming visit South Africa prior to the COP26 conference in Glasgow. The planned meeting follows a proposal from the state power company, and Africa’s largest source of emissions, Eskom, to raise $10 billion to replace most of their coal-fired power plants with renewable energy infrastructure by 2050. However, some South African government officials fear the transition away from coal, which supports more than 90,000 jobs in the country, will cause substantial economic disruption. Proponents of the plan suggest investing in decarbonizing South Africa’s electricity infrastructure offers magnitudes more impact than similar efforts in Europe: According to energy expert Clyde Mallinson, director of Virtual Energy and Power (VEP), “For every kilowatt hour of electricity you offset in South Africa, you get four or five times as much carbon reduction as you do in Europe.”
In related news, on September 11, Democratic Republic of the Congo (DRC) President Felix Tshisekedi proposed that the country review its $9 billion minerals-for-infrastructure mining contract, which it signed with China in 2008. In the announcement, Tshisekedi panned the contract, which was signed by former President Joseph Kabila, calling such agreements “exploitation contracts… [that keep the rich] getting richer while our people remain poor.”
Sudan and Kenya suffer from floods and droughts
According to a statement made Wednesday by the Kenyan National Drought Management Authority (NDMA), 2.1 million people in 23 counties across Kenya’s north and coast will be in urgent need of food aid in over the next six months as droughts continue to threaten livelihoods. Furthermore, on September 8, President Kenyatta officially declared the droughts a national disaster. In July, the Kenyan government, along with the Food and Agriculture Organization of the U.N. (FAO), established a drought response plan, which states that a total of 9.4 billion Kenyan shillings will be needed to support food and safety nets as well as non-food interventions to the drought.
As Kenya struggles to deal with droughts, Sudan is currently experiencing flash floods that have reportedly affected over 88,000 people in 13 of its 18 states since July. According to a report by the U.N. Office for the Coordination of Humanitarian Affairs (OCHA), more than 12,700 homes have been damaged and 4,800 homes destroyed. The latest flooding comes a year after the flooding in East Africa affected nearly six million people, including 1.5 million displaced. Sudan, according to the BBC, was one of the worst affected countries with 860,000 people having their homes damaged or destroyed.
As the region grapples with natural disasters, the World Bank released the 2021 Groundswell report The report projects that by 2050 sub-Saharan Africa could see as many as 86 million internal climate migrants due to climate-related losses in livelihoods and livability.
Liberia improves in economic opportunity but still tax mobilization, infrastructure, and business environment struggle to see gains
Good governance—according to the Mo Ibrahim Foundation, the provision of political, social and economic public goods and services that every citizen has the right to expect from their government—has been more crucial than ever before due to the COVID-19 pandemic. Indeed, good governance has been vital in ensuring that citizens are protected from any devastating impacts. It includes aspects of citizens’ participation, rights and inclusion, security and rule of law, human development, and economic opportunity.
To more deeply delve into these issues, on August 26, Brookings Africa Growth Initiative Senior Fellow and Director Aloysius Uche Ordu joined Jeanine Cooper, Liberia’s minister of agriculture; Bioma S. Kamara, former minister of finance; Mawine G. Diggs, Liberia’s minister of commerce and industry, and Monie R. Captan, chairman of the board of directors at the Liberia Electricity Corporation for a conversation on trends in Liberia’s governance record utilizing the Mo Ibrahim Foundation’s Ibrahim Index of African Governance (IIAG). The discussion, one of many panels, was co-hosted by the Mo Ibrahim Foundation and the Ellen Johnson Sirleaf Presidential Center for Women and Development.
While the event featured many panels, including on human development and security and rule of law, Ordu moderated the panel on “Foundations for Economic Opportunity”—Liberia’s most-improved category in this year’s IIAG. Despite this progress, as the panelists discussed, Liberia ranks second-lowest in the IIAG “trade environment” and has room for improvement in several other related indicators. As such, Ordu led the expert panel in a discussion of Liberia’s improvements in its rankings as well as barriers to success for the country in enhancing economic opportunity. The main points of the discussion included:
Public administration. According to the United Nations, good governance, supported by strong public administration, is the heart of sustainable development. This year, Liberia made substantial strides in the “public administration” category of the IIAG, most notably in civil registration, Liberia was able to improve its civil registration score by 37.5 points from 2010 to 2019, owing largely to an increase in birth registrations. Birth registration is important because it gives children a legal identity, which enables their access to their fundamental rights as citizens.
Liberia still has a long way to go in other areas of public administration, though, as the panelists noted. In fact, tax and domestic revenue mobilization was a central theme of the panel discussion, as the country’s score in this area declined precipitously between 2010 and 2019. Importantly, the World Bank recommends that, to effectively deliver sustainable and equitable growth, all countries should raise tax revenue equivalent or higher than 30 percent their GDP. In 2013, Liberia was reported at about 13 percent—showing urgent need for improvement. Panelists recommended a number of interventions including, making commitments to infrastructure, increasing public sector projects, and finding ways to collect taxes more efficiently.
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Business environment. Overall, Liberia’s performance also dropped in the category of “business environment.” More specifically, according to the IIAG, the country received high marks in regional integration but still suffers from onerous business regulations. For example, according to the World Bank’s Doing Business Report, bureaucratic compliance for trading across borders in Liberia takes an average of 193 hours to complete. Improving efficiency in compliance at its border is an important step in improving the ease of doing business in the country. Panelists agreed that border compliance is an issue and stated that Liberia needs to move into a digital space to fix this issue. With the processes at the border still being done manually, delays are inevitable, and compliance will continue to be a barrier for the country.
Infrastructure. Like in many sub-Saharan African countries, poor infrastructure in Liberia inhibits economic growth. Given the importance of technology for modern economic growth, the panel extensively discussed electricity access, reliability, and cost. Notably, Liberia has one of the lowest rates of electricity access in the world as well as some of the highest electricity tariffs, at $0.54 per kWh. Liberia also struggles with power theft rates of 55 percent, which are also the highest in the region. Power theft, defined by the Power Theft Act, is the tampering with meters, transmission and distribution lines, and general theft of meters, light poles, wires, and transformers. Indeed, a press conference in August of this year revealed that the Liberia Electricity Corporation (LEC) had lost $220 million to technical losses, commercial losses, and unpaid bills from this issue. Panelists were optimistic regarding the country’s ability to improve access and cost, though, arguing that the new Electricity Law of Liberia can better enable the country to build and regulate the electricity sector more efficiently.
Rural sector. Importantly, while Liberia’s performance in the rural sector (e.g., rural market access and rural sector support) improved since the last report, the panelists were keen to note how closely infrastructure and the rural sector are intertwined. With customary land ownership denied in some rural areas until the implementation of the 2018 Land Rights Act—which empowered rural communities by strengthening of rights of local, customary landowners—these communities suffered tremendously. According to one panelist, because 80 percent of the country’s citizens participate in agriculture in some way, this act has been a “game changer” for the rural sector. Panelists also noted that there have been uptakes in rural sector support as part of wider efforts to boost the rural economy through commercialization.
Gender equality. Another important aspect of the conversation was the role and rights of women, especially in rural areas. Indeed, one panelist noted that women do not have the same access to land as men in the country, despite about 70 percent of rural work being done by women. To truly strengthen the rural sector, the panel agreed, gender equality must be at the forefront of conversation, and women must be able to have autonomy over their own land.
Madame Ellen Johnson Sirleaf, former president of Liberia and founder of the Ellen Johnson Sirleaf Presidential Center for Women and Development, closed the full event by emphasizing the importance of good governance in bolstering economic development and inclusive growth as well as improving the livelihoods of all.
How to kick-start the decoupling of emissions from economic growth in MENA
The burning of organic materials (such as fossil fuels, wood, and waste) for heating/cooling, electricity, mobility, cooking, disposal, and the production of materials and goods (such as cement, metals, plastics, and food) leads to emissions. This affects local air quality and the climate. In a recent blog, we showed that the Middle East and North Africa region (MENA) lags behind all other regions in decoupling air pollutant emissions from economic growth.
Particulate matter with a diameter of less than 2.5 micrometers (PM2.5) is the air pollutant associated with the largest health effects. MENA’s cities are the second-most air-polluted following South Asia; virtually all of its population is exposed to levels deemed unsafe. In 2019, exposure to excessive PM2.5 levels was associated with almost 300,000 deaths in MENA and it caused the average resident to be sick for more than 70 days in his or her lifetime. It also carries large economic costs for the region, totaling more than $140 billion in 2013, around 2 percent of the region’s GDP.
A good understanding of the emission sources leading to air pollution is necessary to planning for how to best reduce them. Figure 1 shows that waste burning, road vehicles, and industrial processes accounted for around two-thirds of PM2.5 concentrations. Electricity production is also a significant contributor, most of which is used by manufacturing and households.
5 priority barriers and opportunities for policy reforms to kick-start decoupling
A forthcoming report titled “Blue Skies, Blue Seas” discusses these measures, alongside many others, in more detail.
1. Knowledge about air pollution and its sources is limited, with sparse ground monitoring stations. Detailed source apportionment studies have only been carried out for a few cities within the region, with results often not easily accessible for the public.
Extensive monitoring networks and regular studies on local sources of air and climate pollutants are foundational, as is making results easily accessible to the public (e.g., in form of a traffic light system as is done in Abu Dhabi). This will empower sensitive groups to take avoidance decisions, but also nurture the demand for abatement policies.
2. MENA’s prices for fossil fuels and energy (predominantly from burning fossil fuels), are the lowest in a global comparison. For example, pump prices in MENA for diesel ($0.69 per liter) and gasoline ($0.74 per liter) were about half the EU prices and less than two-thirds of the global average in 2018.
MENA’s heavy subsidization of fossil fuels, whether that is at the point of consumption or at the point of intermediary inputs in power generation and manufacturing, makes price reforms essential. Aside from incorporating negative externalities better, lifting subsidies also reduces pressure on fiscal budgets, with freed-up fiscal space being available to cushion the impact for low-income households. There have been encouraging steps by some countries such as Egypt, which reduced the fossil fuel subsidies gradually over the last couple of years, leading to significant increases in fuel prices, which in turn had positive effects on air quality.
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3. Underdevelopment of public transport, low fuel quality, and low emissions standards drive high levels of emissions from the transport sector. In MENA, the modal share is often heavily skewed toward the use of private cars; when public transportation is available, it has a low utilization rate in international comparison.
To support a shift in the modal share toward cleaner mobility, it is imperative to invest in public transport systems, while making them cleaner and supporting nonmotorized options such as walking and biking. Cairo’s continued expansion of its metro system has been effective in reducing PM pollution and other MENA cities have also invested heavily in their public transport infrastructure, moving the needle on improving air quality. Furthermore, it is also important to raise environmental standards, both for fuel quality and car technology, together with regular mandatory inspections.
4. Lenient industrial emissions rules and their weak enforcement. The industrial sector is characterized by low energy efficiency standards, also due to the low, subsidized prices for energy mentioned above. MENA is currently the only region, where not a single country has introduced or is actively planning to introduce either a carbon tax or an emission trading scheme.
Mandating stricter emissions caps, or technology requirements, together with proper enforcement and monitoring is crucial. Incentivizing firms to adopt more resource-efficient, end-of-pipe cleaning, and fuel-switching technologies are additional crucial means to reduce air pollution stemming from the industrial sector. A trading system for emissions could either target CO2 emissions, or air pollutants, such as the PM cap-and-trade system recently introduced in Gujarat, India. Such a system should target both the manufacturing industry as well as the power sector.
5. Weak solid waste management (SWM) is a major issue in MENA. Although the collection of municipal waste has room for improvement in many countries, it is mainly the disposal stage of SWM where the leakage occurs. Too often waste ends up in open dumps or informal landfills, where it ignites. Furthermore, processing capabilities are often limited, and equipment outdated, at least for the lower- and middle-income countries of the region.
Hence, enhancing the efficiency of disposal sites is critical to reducing leakage and the risk of self-ignition. To start, replacing or upgrading open dumps and uncontrolled landfills with engineered or sanitary landfills is a viable option. Going forward, recycling capabilities should be improved and the circularity of resources enhanced. For agricultural waste, the establishment of markets for crop residues and comprehensive information campaigns in Egypt showed that such measures can supplement the introduction of stricter waste-burning bans.
Kick-starting decoupling and banking on green investments hold the promise for MENA not only to improve environmental quality and health locally, and to mitigate climate change globally, but also to reap higher economic returns (including jobs). Moreover, decoupling now will prepare MENA economies better for a future in which much of the world will have decarbonized its economies, including its trade networks.
Cryptocurrency flows in Africa
The use of cryptocurrencies in Africa is on the rise, as digital currencies offer a swift, convenient, and direct peer-to-peer channel for remittance payments, international commerce, and savings. To better understand the global landscape around cryptocurrency use, Chainalysis, a leading cryptocurrency market research firm, recently released a report examining key geographic trends around the financial tool, including in the nascent African crypto market.
Although Africa captures only 2 percent of the global value of all cryptocurrencies received and sent (Figure 1), making it the world’s smallest cryptocurrency economy, the rising prominence of this innovative form of money is altering traditional financial flows to and from the continent.
Figure 1. Summary of Africa’s cryptocurrency usage (July 2019-June 2020)
Source: “The 2020 Geography of Cryptocurrency Report,” Chainalysis, 2020.
Chainalysis finds that the largest crypto channel connects Africa to East Asia, although channels to Northern and Western Europe and then North America trail closely behind (Figure 2). According to the report, the particularly high volume of funds sent from Africa to East Asia stems from the magnitude of Chinese nationals working in Africa.
Figure 2. Africa’s cryptocurrency inflows and outflows by region (July 2019-June 2020)
Source: “The 2020 Geography of Cryptocurrency Report,” Chainalysis, 2020.
Importantly, access to these digital currencies is providing an alternative to both traditional intra-regional transfer payments and international remittance systems, as transferring funds via cryptocurrencies circumvents paying transfer fees that remain higher in Africa than in the rest of the world. While transferring money through cryptocurrencies does incur a fee, the authors suggest its lower fee structure and the easy, universal access to cryptocurrency networks via mobile phones make these digital assets more convenient than rigid traditional-banking and money-wiring services.
Given the data challenges stemming from the decentralized exchanges that mediate crypto transactions, the authors warn that, beyond identifying the market share of retail-sized transfers (transactions under $10,000) it is very difficult to estimate the share of African cryptocurrency transfers dedicated to remittance networks (Figure 3). Notably, compared to other regions, Africa engages in the highest rate of retail-sized crypto transfers in the world, which the report attributes to the digital currency’s rising popularity for remittance payments.
Figure 3. Market share of retail-sized (less than $10,000) transfers (July 2019-June 2020)
Source: “The 2020 Geography of Cryptocurrency Report,” Chainalysis, 2020.
Chainalysis speculates the simplification and cost-competitiveness of sending and receiving money with cryptocurrency will fuel continued growth of digital currency utilization in the region. Alongside the use of cryptocurrencies as a medium of exchange, stablecoins, a cryptocurrency variant whose value remains stable by pegging its price 1:1 with the U.S. dollar, offers Africans facing unstable currencies an alternative outlet in which to save money without the anxiety of devaluation. Based on the multitude of advantages over traditional financial systems, the authors suggest that the relatively small cryptocurrency market in Africa is generating significant value for the early adopters who utilize the novel tool.
For more on cryptocurrency and financial flows in Africa, read “Keep remittances flowing to Africa,” “How finance flows to Africa” and Brookings Senior Fellow Eswar Prasad’s new book “The Future of Money.“
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The game is not yet over, and vaccines still matter: Lessons from a study on Israel’s COVID-19 vaccination
Just a few months ago, we almost sang a song of triumph in the fight against the pandemic. The infection numbers drastically decreased in countries with high vaccination rates. The Tokyo Olympic Games ended without a big outbreak. Many sports leagues resumed their activities, like Major League Baseball and the English Premier League. We dreamed of a world that was back to normal.
And then the COVID-19 delta variant emerged and changed everything. Although there is still some debate around booster shots, distributing a booster shot and tackling vaccine hesitancy seem to be needed to end the pandemic. A recent Israeli study shows that the booster shot is 86 percent effective in preventing infection among the older population. The U.S. Centers for Disease Control and Prevention has also reported that while vaccines show declining effectiveness against infection in general, they still show strong protection against hospitalization despite the variant. Once the model for defeating COVID-19, Israel is now facing a new stage of the pandemic—the infection count hit 8,000 as of August 17 (a month prior there were only 27 new cases) due to the delta variant. The booster shot of the COVID-19 vaccine is more necessary than ever. The problem is encouraging people to get it.
In March and August 2021, the Social Policy Institute (SPI) at Washington University in St. Louis and the Interdisciplinary Center (IDC) in Herzliya launched two nationally representative surveys to understand vaccination trends in Israel. The second survey asked respondents’ intention to get a third booster shot if available. Through the survey we found:
Demographic and socioeconomic characteristics were significant predictors of vaccination behaviors of Israelis in March 2021, but less so in August 2021.
Throughout the pandemic, confidence in COVID-19 vaccines is a major factor in vaccine hesitancy.
Who are the unvaccinated Israelis?
To understand those who are vaccine hesitant, we investigated the demographic and socioeconomic correlates to vaccination in Israel. In March 2021, 61.5 percent of 1,517 respondents answered that they had received at least one dose of a COVID-19 vaccine. Notably, vaccination rates varied by demographic and socioeconomic characteristics. The logistic regression model estimated that males (65.7%), older adults (Generation X: 71.0%; baby boomers: 83.4%), parents with one child (66.8%), those with a bachelor’s degree (67.2%), those in higher-income groups (fourth quintile: 68.7%; fifth quintile: 72.4%), and employed respondents (64.5%) were more likely to get vaccinated than the average population (p
Africa in the news: Guinea, Côte d’Ivoire, and vaccine updates
Guinean special forces oust president and dissolve government
On Sunday, September 5, Guinean special forces led by Col. Mamady Doumboya announced on state television that they had removed President Alpha Condé from office and dissolved the current government. In the announcement, Doumboya indicated that military officials would rewrite Guinea’s constitution and also accused Condé of human rights abuses and corruption. Condé, who was elected to a third term in October following a controversial amendment to the constitution allowing him to extend his stay in power, remains in an undisclosed location, according to the country’s military. Social unrest in the country had been building in advance of the coup, particularly after Condé’s government oversaw violent crackdowns on those protesting the constitutional amendment that led to the deaths of 92 protestors over several months.
In response to the coup, leaders of the 15-country Economic Community of West African States (ECOWAS) suspended Guinea from the regional bloc on Wednesday and sent a delegation to meet with the junta behind the coup. The African Union (AU) followed ECOWAS in suspending Guinea from its decisionmaking bodies and related activities, stressing the importance of diplomatic efforts to guide Guinea toward a civilian-led, constitutional government.
In related news, the price of aluminum skyrocketed this week as buyers feared supply disruptions in Guinea, which has the world’s largest reserve of bauxite, an ore that’s the most common source of aluminum.
Côte d’Ivoire discovers new oil and gas reserves
Last week, Italian oil company Eni announced the discovery of a large oil and natural gas field off the coast of Côte d’Ivoire. A deepwater exploration detected the field at a depth of 3,445 meters (11,300 feet) and produced estimates that it contains as many as 2 billion barrels of oil and more than 50 million cubic meters of natural gas. In reaction to the news, the Ivorian Energy Ministry stated that the field would “greatly increase Ivory Coast’s proven reserves in coming years.” The discovery reveals yet another oil field off the Ivorian coast: In total, Côte d’Ivoire has identified 51 onshore and offshore oil fields, of which 21 are still untapped.
Also in Côte d’Ivoire, substantial rainfalls across most of the nation’s cocoa-growing regions bode well for crop yields this year, according to farmers in the region. The rains come weeks before Côte d’Ivoire, the world’s largest cocoa producer, will begin its primary harvest season. In 2019, cocoa and cocoa byproducts accounted for almost 40 percent of the country’s exports. This week, Ghana and Côte d’Ivoire agreed to cooperate on cocoa pricing after Ghana, the world’s second-largest cocoa producer, reported that last year’s cocoa bean harvest of 1.1 million metric tons was its largest on record.
Africa’s vaccination campaign hits hurdles as COVAX lowers vaccine delivery goals
On Thursday, September 9, World Health Organization (WHO) Africa Director Dr. Matshidiso Moeti, announced that, for various reasons, Africa will receive 25 percent fewer doses than originally anticipated for the year. This statement came after a declaration on Wednesday from COVAX that is was lowering its delivery goal to 1.425 billion doses instead of its previous goal of 2 billion. According to a joint statement by the WHO, the Coalition for Epidemic Preparedness, and other involved organizations, the decision to lower the COVAX target is due to export restrictions of the Serum Institute of India as well as manufacturing problems at Johnson & Johnson and AstraZeneca facilities.
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Criticisms of many developed countries’ vaccine policies are on the rise, as the U.S. recently announced it would make booster shots available to its population: In fact, on Thursday, September 9, Moeti stated, “in the past week, the COVAX Facility delivered over 5 million doses to African countries—while the United States has thrown away three times that amount of doses during the pandemic.” In addition, countries such as the United Kingdom and Germany have secured enough vaccines for five times their populations.
Experts predict that, at the current pace of vaccinations, Africa will remain far behind the rest of the world: In fact, forecasting by The Economist Intelligence Unit predicts that most countries in Africa will not achieve widespread vaccination until the year 2023 while others such as the Unites States will achieve the goal later this year. Indeed, the region is far behind the rest of the world in obtaining and distributing the vaccine due to a myriad of challenges, including supply, cost, poor infrastructure, few cold chain storage facilities, and patient hesitancy, among other constraints.
For more information on vaccine equity and strategies for accelerating the rollout in Africa, join the Brookings Africa Growth Initiative on September 15 for the event, “Accelerating COVID-19 vaccinations in Africa.”
On space barons and global poverty
On July 21, 2021, billionaire Jeff Bezos rocketed about 65 miles above the Earth’s crust. Another billionaire, Sir Richard Branson, did the same nine days before, but his vehicle could only climb to 53 miles—some do not consider that a space flight, really.
Clearly, this was not the first time man ventured into space. However, in all earlier cases, explorers pursued a publicly defined mission and were paid from the public purse. Whereas Bezos and Branson were motived by private interest. Although Bezos thanked his company’s workers and customers for “paying for his trip,” it was, nonetheless, a privately financed venture. These two aspects, private interest and private financing, make these billionaires the world’s first space barons.
The public reception of the emerging elite space travelers club is mixed. Space enthusiasts celebrate the renewed interest in space travel, which could spark future technologies that, one day, help bring life to other planets. Critics suggest that the money used would be better spent for fighting global hunger and poverty.
There is more to both sides of this argument than meets the eye, and further inquiry is warranted. For starters, I shall rule out an otherwise interesting, but notoriously complex, dimension that gave economists a headache for decades. That is the problem of interpersonal comparison of utility. In this case, can we really compare the utility gained by Bezos from his $5.5 billion trip with that of 37 million people had the money been used to end their hunger? The question may seem rhetorical, but it is not.
The problem remains an interesting one even after Bezos, and thus the need to compare his well-being with that of others, is taken out of the picture. Let us look exclusively from the viewpoint of potential beneficiaries in the developing world. Would a transfer of cash to them be better than using the money on space tourism? Surprisingly, the answer is not necessarily affirmative.
Conspicuous consumption or an incubator for innovation?
Nobel laureate economist Angus Deaton suggests that technological innovations like antibiotics, pest control, and vaccines have been the primary drivers of humanity’s escape from destitution, including in developing countries, far surpassing development aid in impact. By this logic, space tourism could muster moral support, in addition to cash, if it also facilitates significant technological advances (in addition to conspicuous consumption).
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So far, blasting billionaires off to the edge of space has not exactly been earth-shattering, technically. Mankind had previously stepped onto the moon on six separate occasions; astronauts and cosmonauts have visited space routinely, often without such commotion; and Mars is already inhabited by robots. The NASA Voyager, built half a century ago, has become the first man-made object to exit our solar system—currently drifting at 14.2 billion miles away from us—that is about 21 hours of light-travel time from Earth (solar light reaches us in about eight minutes).
Previous research on space technology has undoubtedly improved life on earth. Modern water filtration systems, solar cells, firefighting equipment, insulin pumps, and artificial limbs are all reported to have been initiated by space research. It is too soon to see such impact from the new billionaire-driven space race. However, Bezos’ company Blue Origin is reported to hold at least 19 patents, whereas Elon Musk’s SpaceX has followed a different path: The company has not submitted any patent applications to avoid technological disclosure. Yet, there are some obvious advances including reusable rockets, which have reduced the cost of space flight dramatically.
Nonetheless, even in the presence of such innovations, there may remain significant doubts. Would for-profit innovations diffuse for public benefit as much as the publicly funded ones? The reluctance to lift intellectual property protections for COVID-19 vaccines has been a sobering test just recently.
The Samaritan’s Curse or trickle-down economics for the space age?
In some highly specialized settings, when a group tries to help those outside the group, their joint action can actually hurt the outsiders instead of helping them. This is called the “Samaritan’s Curse” and was In the case of foreign aid, a similar argument is considered when donors respond to deteriorating conditions in a country by providing more aid while the recipient country government acts strategically by leaving needs unfulfilled to qualify for further aid.
In space tourism, a Samaritan’s Curse argument can hold even without such mischievous behavior by potential recipients. Suppose the poor could benefit significantly from future innovations driven by selfish (for-profit) motives of space travelers. Then, using the space tourism money for simple cash transfers instead could be the worse option for the poor themselves. For example, in Africa, cellphone technology may have improved life more than a hypothetical transfer of equivalent size.
For such prominent technology effects, it is not enough if private space ventures muster a whole lot of innovations. The effects on the global poor will also depend on how easily those innovations can be utilized for practical purposes in daily life and how quickly those applications can diffuse to developing countries. This is an area where public policy can go a long way: Capping intellectual property protections at a reasonable level, especially when public funds are used, could help broadly. Similarly, a technology-focused assistance scheme for developing countries can complement other international aid programs. Without such discretionary actions, the benefits of space tourism could take a long time to trickle down.
The bottom line is that space tourism can hold its moral ground if it achieves life-changing technological advances. However, a public nudge is most likely needed to distribute such benefits beyond the elite space travelers club. Otherwise, humanity may jump out of the Samaritan’s Curse into the trickle-down economics for the space age.
Cash and the city: Digital COVID-19 social response in Kinshasa
As COVID-19 spread across the world, governments responded with an unprecedented increase in social assistance measures. Policymakers had to shift their focus to urban areas, particularly slums, whose residents were hit the hardest by the pandemic and its economic impact. Social safety nets, traditionally targeting chronic poverty in rural areas, had to be reinvented overnight: The new objective was to prevent informal workers affected by lockdowns from falling back into poverty. Exciting innovations in the design and delivery of social transfers followed, with emerging lessons informing us, as the world continues battling the pandemic.
COVID-19 in Kinshasa: A mission impossible scenario
Kinshasa, the capital of the Democratic Republic of the Congo (DRC), is a case in point. The social and economic effects of the crisis have been devastating in this megacity of 15 million people, two-thirds of whom were poor pre-pandemic. Job losses, price increases, and a drop in remittances quickly increased the financial vulnerability of most households. The situation called for a large-scale emergency cash transfer program, even if none of the prerequisites were in place: no program administration to build on, no social registry or fiscal records to target beneficiaries, and a weak financial ecosystem to make payments. In short, the program had to be built from scratch, remotely, and fast.
The DRC Social Fund took up the challenge with the Solidarité par Transferts Economiques contre la Pauvreté à Kinshasa (STEP-KIN) program. What was the plan?
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10 steps to set up a cash transfer program from scratch
A. Identification of the eligible population
Select poor neighborhoods based on all available data, from satellite imagery to flood-prone cartography. Everybody living in selected areas was deemed eligible for the program. Inclusion error was small—few rich people live in poor neighborhoods.
Sign nondisclosure agreements with telecom operators to obtain an anonymized list of mobile phone subscribers living in the targeted areas (cell tower mapping). This whitelist of phone numbers—granting eligibility to the program, as opposed to a blacklist—substitutes for the social registry.
Screen this whitelist with simple filters to further limit inclusion errors, e.g., no smartphones. Research shows that mobile phone data (also known as call detail records) are a reliable proxy for poverty status. In fact, their analysis can be an alternative to standard welfare surveys.
B. Self-registration of beneficiaries
Set up a system for self-registration that allows eligible people to express their interest in participating and remotely provide their information. To work at scale, the system has to be automated, leveraging simple technologies for interactive mobile data collection.
Launch the self-registration process by sharing information with eligible people. Bulk written (SMS) or audio (IVR) messages are sent to all the whitelist numbers. A radio campaign—or another traditional communication channel—complements this outreach for trust-building.
Finalize the program’s beneficiary registry. All the subscribers from the whitelist who have consented to participate and shared their data are now the program’s beneficiaries. Information collected must be minimal to maximize the response rate and protect respondents’ privacy.
C. Digital payment of transfers
Request telecom operators to open a mobile money account for all the beneficiaries. This is straightforward as program beneficiaries are already phone subscribers. Depending on the country’s financial regulation, this step may require a simplified Know-Your-Customer framework.
Instruct the operators to initiate the social transfers to the beneficiaries through digital payments. Note: This step and the following two are standard in any digital cash transfer program.
Ensure all the beneficiaries can cash out the transfers, i.e., large network of cash-out points in targeted neighborhoods and dedicated customer services. This also requires putting in place a grievance redress mechanism system like a 24/7 hotline.
Implement post-distribution monitoring surveys to collect information on the use of the transfers, confirm targeting effectiveness ex post, identify compliance issues early, and strengthen accountability.
In an independent effort, Togo has used a similar methodology for its successful Novissi cash transfer program. Other examples of tech-savvy innovations for each of these 10 steps abound.
Source: DRC Social Fund.
Does it work? 100,000 beneficiaries and counting
In three months, STEP-KIN identified, registered, and paid more than 100,000 individuals in 50 poor neighborhoods, becoming the largest cash-based operation in Kinshasa. The program is now expanding to 250,000 recipients for a total of $37.5 million to be transferred in monthly payments of $25. The first 6,500 randomized post-distribution surveys show that the targeting worked, i.e. beneficiaries are poor and vulnerable, with 40 percent unemployed and the remaining 60 percent earning less than $100 per month on average. They also document that the program’s objective is achieved: Recipients cash out for (i) meeting food needs, (ii) spending on health and education, (iii) reinvesting in their livelihoods, and (iv) paying rent.
Lessons and the challenges ahead
STEP-KIN was designed out of necessity and deployed with a learning-by-doing approach. This “quick and dirty” digital targeting approach works when the goal is to quickly reach a large population. Speed (and cost-efficiency) trump accuracy here. Other targeting methods would perform better where inclusion errors matter more, e.g. assistance for the ultra poor. Leveraging telecom data requires a very high mobile penetration rate (92 percent in Kinshasa). In many countries, it would work in urban settings only. Further, we should be careful of unintended consequences: the use of technologies may increase de facto exclusion of the most vulnerable, such as a lower registration and cash-out rate of women (38 percent of beneficiaries). Alternatives to technologies, such as on-site registration, must always be offered. Lastly, protecting beneficiaries’ privacy is a priority in processing personal data. The program must adhere to recognized industry standards by using data for legitimate purposes only and fairly and transparently.
Using telecom data and mobile technologies is not the panacea for social safety nets. However, given the new focus on crisis response in urban areas, why not continue to explore this promising solution?
Why is blue-collar work still male-dominated?
In the 20th century, women smashed glass ceilings across the world. But continued progress is not inevitable. Recent developments in the U.S. pose a stark warning: Abortion rights may be rolled back, and working-class women’s employment may be in jeopardy.
In the U.S., female school leavers are stuck in poorly paid “pink collar” jobs: as social workers, secretaries, beauticians, retail assistants, and waitresses. Mechanics, manufacturing, and other skilled manual jobs remain overwhelmingly male (Figure 1).
Figure 1. Sex segregation of middle-class and working-class occupations in the United States
Source: Cotter et al 2004.
Why is this? There are at least four possible explanations.
Brawn?
Physical strength is required in some manual roles—like construction in India and China. But in Western warehouses and factories, bulging biceps have been displaced by robots.
Culture?
Gender ideologies are pervasive. Stereotyped as caring and agreeable, working-class women may gravitate toward social care, retail, and hospitality. Conformity is also motivated by the desire for peer approval. With limited opportunity to collectively break out of this straitjacket, secondary school (or high school) graduates follow established norms.
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So, given the social costs of transgressing gender boundaries, women move upwards, but not sideways—or so it was famously argued by Paula England, whose article has over 1,600 citations. But does ideology trump economics? Do poor, working-class women willingly forgo lucrative job opportunities?
Low demand?
Low demand may be part of the problem. “Good jobs” for high school graduates have dwindled. Manufacturing and other manual-intensive occupations that on average paid substantially higher salaries than services have disappeared (Figures 2 and 3).
Figure 2. Job polarization between the mid-1990s and mid-2010s
Source: Will there be enough good jobs? MIT Technology Review.
Figure 3. Evolution of total employment by type of occupation based on skills, normalized to 1980 value
Source: Duran-Franch 2020.
Having lost jobs in manufacturing, American men increasingly pursue service and clerical occupations, as shown by Joana Duran-Franch. They have leaped ahead in these job queues. Unlike working-class women, they are not stymied by unaffordable child care. More importantly, employers anticipate that men will work longer hours, so may statistically discriminate in their favor. The overall downturn in demand means that even as “pink collar” jobs are growing, women lose out.
Men have capitalized on the growth in interpersonal work, even though it was historically feminine. Economics can trump culture! Gender stereotypes may well be pervasive, but individuals shift tack when they eye sufficient rewards.
Figure 4. Evolution of the share of low-educated employment, gender ratio, and wage by occupation type
Source: Duran-Franch 2020.
Automation?
Mining, manufacturing, and transportation have become increasingly automated. Workers have been displaced from routine tasks—as shown in Figure 5 by economists Daron Acemoglu and Pascual Restrepo.
Figure 5. Task displacement and component due to observed technologies (in %), 1987-2016
Source: Tasks, Automation, and the Rise in US Wage Inequality.
In the U.S., this may have positive consequences for productivity and workers might move into better jobs, as argued by David Autor. Indeed, some are! But as Duran-Franch’s analysis suggests, this transition is predominantly male.
There are strong parallels in emerging economies. Even if they industrialize, this is unlikely to generate mass employment. India’s industrial sector remains small and capital intensive. Job queues are long, and men are at the front. Since manufacturing demand can be met by men, employers seldom diversify.
Even as economies become more technologically innovative, working-class women from Michigan and Mumbai may be left far behind.
Can national statistical offices shape the data revolution?
In recent years, breakthrough technologies in artificial intelligence (AI) and the use of satellite imagery made it possible to disrupt the way we collect, process, and analyze data. Facilitated by the intersection of new statistical techniques and the availability of (big) data, it is now possible to create hypergranular estimates.
National statistical offices (NSOs) could be at the forefront of this change. Conventional tasks of statistical offices, such as the coordination of household surveys and censuses, will remain at the core of their work. However, just like AI can enhance the capabilities of doctors, it also has the potential to make statistical offices better, faster, and eventually cheaper.
Still, many countries struggle to make this happen. In a COVID-19 world marked by constrained financial and statistical capacities, making innovation work for statistical offices is of prime importance to create better lives for all. PARIS21 and World Data Lab have joined forces to support innovation in statistical offices and make them fit for this purpose, including Colombia’s national statistical office. If we enrich existing surveys and censuses with geospatial data, it will be possible to generate very granular and more up-to-date demographic and poverty estimates.
In the case of Colombia, this novel method facilitated a scale-up from existing poverty estimates that contained 1,123 data points to 78,000 data points, which represents a 70-fold increase. This results in much more granular estimates highlighting Colombia’s heterogeneity between and within municipalities (see Figure 1).
Figure 1. Poverty shares (%) Colombia, in 2018
The averages for each municipality still contain big variances as poverty depends on many more factors than geography.
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Traditional methods don´t allow for cost-efficient hypergranular estimations but serve as a reference point, due to their ground-truthing capacity. Hence, we have combined existing data with novel AI techniques, to go down to granular estimates of up to 4×4 kilometers. In particular, we have trained an algorithm to connect daytime and nighttime satellite images. In a next step, we have used this algorithm to predict poverty rates based on daytime satellite imagery. Since these remotely sensed data are available on a very granular level, this has allowed us to significantly increase the granularity of the data on poverty. Finally, we have combined these predictions with information from the latest census to ensure their reliability. This combination of traditional and novel techniques has allowed us to capture the variance in poverty rates across and within communities all over the country. Applying these techniques to poverty shares sheds light on the differences in poverty rates in Colombia, even within municipalities. Take the department of Antioquia with its capital Medellín, the second largest city in Colombia. In Figure 2, the detected variance, which is as high as 48 percent, becomes visible by comparing the existing data with the hypergranular estimates.
This reveals the capabilities of combining conventional poverty analysis methods with novel AI techniques and the potential to get more granular in the future.
Figure 2. Poverty shares (%) in Antioquia, in 2018
We further used satellite imagery to predict population density on the city-block level, by using a machine-learning technique called Random Forest. This approach builds on a large number of individual classifications or regression trees, each of them aimed at providing the best possible prediction. Averaging over the predictions of all individual trees eventually leads to the final prediction of the Random Forest. This technique has allowed us to distribute input data on the municipality level to a granularity of a 100×100 meter area. Breaking down each municipality into even smaller fractions reveals immense deviations from the average. Let us take the district of Bogotá D.C. as an example. The census data suggest an average population density of 46 persons living in a range of 100×100 meters. However, our methods reveal a more heterogeneous distribution, notably between rural and urban regions, ranging from one to 999 people per 100×100 meters. This instance shows how we can drastically improve the granularity of existing data by integrating state-of-the-art methods and novel data types into our analysis.
Figure 3. Population density in Cundinamarca in 2018
Previous examples show how valuable this kind of engagement is in a country like Colombia, where 42.5 percent of the population lives in monetary poverty, with great disparities between and even within municipalities (as shown in Figure 2). The granularity obtained from the use of novel machine-learning methods, as developed in this exercise, allows public entities to formulate and implement policies that focus on the most vulnerable and strive to leave no one behind—even more as these policies can be addressed to the most suitable areas, with the highest impact. The outcomes of this collaboration have proven to be essential for the decisionmaking processes associated with the recovery agendas to overcome the difficulties caused by the COVID-19 pandemic.
In conclusion, innovation in statistical methods and AI technology could be a facilitator for NSOs to become the main provider for data-based decisionmaking. The opportunity to create hypergranular and quality data depends on the investment of resources in AI techniques and novel scientific approaches. The future demand for, and the technical improvement of, real-time data and forecasts can resolve the prevalent perfectionism fallacy in NSOs. Consequently, contributing to technical innovation and partnering up with providers of cutting-edge enterprises will accelerate the transformation process. If this opportunity window is used properly, we can pave the way for statistical offices to enter the 21st century.