Development

Several years ago an Indonesian girl named Widya posted a message on my blog. She asked where she could obtain the drug Sorafenib for her father, who was terminally ill with liver cancer. Her family had already spent a significant sum on her father’s healthcare and could not afford further treatment. I forwarded the message to a pharmaceutical executive in Jakarta, who responded that Sorafenib was available in Indonesia but a month’s dosage would cost around $4,500 (the average monthly salary in Jakarta is about $1,180). “I hope the patient has health insurance coverage, otherwise the family will have to pay out of pocket,” he said. Widya’s plight highlights one of the most important reasons to implement universal health coverage (UHC): to reduce out of pocket spending and ensure everyone access to quality healthcare without incurring crippling financial hardship. Drug expenditure typically places the largest burden on the people who can least afford healthcare. A considerable share—up to 68 percent—of out of pocket health costs in resource-limited countries is for medication. The rapid increase of the burden of non-communicable diseases (NCDs) has posed further challenges to accessing healthcare in in low- and middle-income countries, where the high price of promising anti-NCD medication can deter people from seeking care or impoverish families and health systems. Not surprisingly, the UHC target included in goal three of the UN Sustainable Development Goals (SDGs) emphasizes “access to safe, effective, quality, and affordable essential medicines and vaccines for all.” Inclusion of off-label drugs in the UHC benefit package, as shown in the use of bevacizumab in Thailand, serves as an example of how to offer high-cost NCD treatment in a safe and effective way. As a result of rapid population aging, thousands of elderly persons in Thailand suffer from age-related visual impairment, especially macular degeneration (AMD) and diabetic macular edema (DME). Absent timely and effective treatment, these eye diseases often result in blindness. Injection of ranibizumab (Lucentis)—an FDA-approved anti-vascular endothelial growth factor (anti-VEGF) manufactured by Genentech—has shown to stop, even reverse vision loss in most patients with AMD and DME. With a price tag of $1,733 per dose, however, Lucentis is hardly affordable to people with limited or no health insurance coverage. Since 2005, another drug manufactured by the same company, bevacizumab (Avastin) has been applied by eye doctors as a highly effective but far cheaper alternative to Lucentis. A study published in the British Journal of Ophthalmology in May 2007 found that while Lucentis is about fifty times more expensive than Avastin, the former needed to be two and a half times more effective to justify the additional cost. Unlike Lucentis, Avastin is FDA-approved only for treatment of colon and other cancers, but not for macular degeneration, which means that Avastin can only be prescribed as an off-label (“unlicensed”) treatment for AMD or DME. Off-label drug use potentially can improve affordable access to innovative medicines largely because of its flexibility. While a pharmaceutical company is prohibited from advertising a drug for any unapproved purposes, physicians are free to use it for any purposes that in their professional judgement are considered safe and effective. This practice can be adopted by almost any country in the world: in the United States, for example, off-label use of drugs is very common in cancer treatment. Older, generic medications (which tend to be less expensive) are most commonly prescribed for off-label use when they have found new uses not formally approved. They are cheaper also because the developer has not yet invested considerable resources seeking its official approval. In 2011, at the request of the subcommittee of the National List of Essential Medicines (NLEM), the Thai Ministry of Public Health’s Health Intervention and Technology Assessment Program (HITAP) conducted a systematic study of the clinical efficacy and effectiveness of both Avastin and Lucentis for the treatment of AMD and DME. The study found that the efficiency of Avastin was not significantly different from Lucentis, although the safety of Avastin for treating macular disease is inconclusive. Based on the study, the sub-committee negotiated with the pharmaceutical company, which offered to halve the price of Lucentis. Finding the reduced price would still not fundamentally solve the affordability problem, the sub-committee listed Avastin in the NLEM for AMD and DME, making Thailand the first country to officially endorse Avastin for macular treatment. Since November 2012, all Thai patients eligible for treatment of AMD and DME have been able to get Avastin nearly free. NLEM constitutes the minimum reimbursement list for all major health insurance schemes, including Civil Servant Medical Benefit Scheme, Social Security Scheme and Universal Coverage Scheme (UCS). Under UCS, which covers everyone regardless of socio-economic status and is used by three quarters of the country’s population, a patient pays only thirty baht ($0.8) to the hospital he or she was referred to receive eye injections of Avastin. For fear that the wide use of Avastin may negatively affect the marketing of Lucentis, the pharmaceutical company opposed the government’s endorsement of Avastin’s off-label use. In April 2012, Novartis (the other developer of Lucentis) actually challenged the use of Avastin as an alternative to the licensed Lucentis in England and Wales. This concern did not affect the use of Avastin for off-label treatment in Thailand because the original market for Lucentis was kept intact in that country: wealthy people still pay out of pocket for Lucentis and government employees are still able to receive Lucentis for free under the Civil Servant Medical Benefit Scheme. Those two customer segments have remained loyal to Lucentis due to the belief that it is safer and more effective than Avastin. Furthermore, in making the decision of including Avastin in the NLEM, the sub-committee engaged multiple stakeholders including ophthalmologists, academicians, Thai FDA and the pharmaceutical industry. According to Dr. Paisan Ruamviboonsuk, President of the Royal College of Ophthalmologists of Thailand, the government’s alliance with ophthalmologists increased its leverage vis-à-vis pharmaceutical firms in the off-label use of Avastin. The story of Avastin is dramatically different in China, where at least 10 percent of patients with eye diseases suffer from AMD. Until September 2010, Avastin had been used as an off-label treatment for AMD in more than thirty hospitals where more than one thousand patients had reportedly received the injections. But the hospitals could only use the drug “secretly” because no regulation exists on off-label drug use of medications. Until the end of the month, when Avastin was officially launched in mainland China, the drug had been considered legally “fake.”  Any drug not marketed via legal channels is categorically considered counterfeit by Chinese law. Unfortunately, right before the Chinese hospitals could use the drug legally, adverse reactions were reported among sixty-one patients receiving the injection of Avastin at the Shanghai No. 1 People’s Hospital. The local regulatory body rushed to announce that it was caused by a “fake” version of Avastin, even though it was very likely caused by contamination in repackaging of the drug. By punishing those who marketed and used the drug, the government sent a signal that off-label use of drugs in China was a crime. Unlike their Thai counterparts, the Chinese Medical Doctor Association, which represents two million medical practitioners nationwide, played no active part in the decision making process. As a result, few Chinese hospitals have continued the off-label use of the drug ever since, and a large number of the AMD patients have lost access to affordable and effective treatment. That said, off-label drug use is certainly not the only means to access high-cost drugs. Access can be increased significantly if off-label use is combined with multiple interventions implemented by different stakeholders, such as compulsory licensing, negotiating prices with pharmaceutical firms and engaging in pooled procurement, expanding patient assistance programs and voluntarily lowering drug price by pharmaceutical firms. No matter what measures are adopted, the decision-making should be an evidence-based process participated in by multiple stakeholders and supported by health technology assessment (HTA), which takes into account human rights, cost-effectiveness, safety, and intellectual property rights.

Nigerian President Muhammadu Buhari’s anticorruption campaign continues to gain credibility. Over the weekend, the Economic and Financial Crimes Commission (EFCC) searched the Abuja residence of former Vice President Namadi Sambo and found documents that it described as “helpful.” The EFCC is the point institution for Buhari’s anticorruption campaign. Its search of Sambo’s residence likely implies that he had some sort of connection with other investigations. The anticorruption campaign may be leading to behavior change, or at least diminished consumption. There are anecdotal reports that the luxury housing market in Abuja is at a standstill. There are now EFCC or other anticorruption processes under way with respect to former President Goodluck Jonathan’s vice president, his national security advisor (Sambo Dasuki), and his oil minister (Diezani Alison-Madueke), among numerous others. News on the security front is much less positive. There were major Boko Haram attacks in the northeast over the weekend, with an ineffectual initial military response. In the Niger Delta oil patch, which has historically been the source of more than 70 percent of the government’s revenue and more than 90 percent of its foreign exchange, unrest is growing, with attacks on the oil infrastructure and high profile kidnappings. Among some of the Igbo people, there is renewed interest in Biafra, the erstwhile territory that seceded from Nigeria in 1967, precipitating the Nigerian Civil War, which ended in 1970 with Biafra’s reabsorption. With oil prices continuing to fall, government revenue shrinking, and the Nigerian Stock Exchange incurring big losses, the Buhari administration is seeking billions of dollars in loans from international financial institutions. It will probably succeed. However, the cost may be devaluation of the naira, the national currency, a step President Buhari has rejected. Like Sisyphus, President Buhari pushes the rock uphill with respect to corruption, only to have it roll back down with respect to economic and state security.

The following is a guest post by my colleague Yanzhong Huang, senior fellow for global health at the Council on Foreign Relations. As one of the single biggest funders in global health, the Bill and Melinda Gates Foundation has not only helped renew the dynamism and attractiveness of global health, but also played an important part in improving health conditions in developing countries. What role do policy and advocacy play in shaping the global health and development agenda, particularly as it relates to the Sustainable Development Goals (SDGs)? What are the implications for development and governance following the adoption of the health-related SDGs? Finally, what role is the foundation playing in pandemic preparedness following the Ebola crisis? In this podcast, I discuss these and other questions with Mark Suzman, president of Global Policy, Advocacy, and Country Programs at the Gates Foundation.

This is a guest post by John Causey, a private equity and transaction advisor with a focus on sub-Saharan Africa. The U.S. dollar’s dominance in sub-Saharan Africa is no longer certain. Despite the current volatility of the Chinese renminbi an auspicious moment may exist for China’s currency to challenge the dollar’s hegemony in the region. Apart from the structural advantages granted by the Bretton Woods Conference in 1944, two factors have historically benefited the dollar in Africa: the dollar denominated nature of virtually all developmental finance and aid institutions, and oil being priced in Dollars. Psychology also played a role. Though a number of today’s ruling national parties, such as South Africa’s African National Congress, were sympathetic to the Chinese and Soviet regimes during their struggles for independence, following independence the U.S. was widely viewed as a role model: its black celebrities and athletes inspired the continent, and a history of fighting for civil liberties and liberal democratic ideals gave Americans moral authority. Adopting the dollar as the preferred reserve currency was hardly a considered choice, it was a foregone conclusion. As Bob Dylan famously sang, the times they are a changin’… The timing now may be opportune for the renminbi to strike at the dollar in Africa for at least three reasons. First, oil’s precipitous drop in price and America’s waning interest in crude – nod to Texas fracking entrepreneurs – has decimated U.S. Dollar foreign exchange (FOREX) reserves in oil rich African nations. Diminished reserves weaken central banks’ abilities to prop up domestic currencies and for foreign companies to repatriate profits. Second, the newly established Asian Infrastructure Investment Bank and New Development Bank (formerly BRICS Development Bank) aim to rival the traditional developmental finance institutions, and it’s conceivable that these and others will soon move to be Renminbi based. Third, arguably China operates in Africa with greater aplomb and with more nuanced and mutually beneficial relationships than America’s corporations and its federal. The USG’s most visible diplomatic effort in Africa, Power Africa, is sputtering. American businesses haven’t sufficiently picked up the slack. With diminished American interest in Nigeria’s crude, U.S.-Africa export/import figures could worsen further in the new year. Globally, any material retreat in the dollar’s dominance likely means the U.S. can no longer safely run large deficits with key trading partners and remain economically viable. The enormous financial benefits of pervasive dollar internationalization allows America, a country which produces relatively little these days, to remain an influential economic super power. The psychological effects of losing the reserve currency status would complicate diplomatic efforts, and call into question the future role of the United States in global financial markets. Might the U.S. benefit from these de-dollarization events? Although the process likely would be excruciating, some argue that de-dollarization could benefit America. The argument goes this way: removing the ability to mask current account (trading) deficits with a capital account (borrowing) surplus would lead to higher American exports and less domestic reliance on foreign products. By making it more onerous to borrow fresh capital to service old debts, America would be encouraged to deleverage more quickly. Domestic manufacturing would be strengthened and the depreciating dollar would attract higher rates of foreign investment into the U.S. This argument sounds credible until factoring in other realities: approximately 20 trillion dollars in sovereign debt, much larger unfunded future liabilities, and that the United States is entering into an environment of rising interest rates.

Voices from the Field features contributions from scholars and practitioners highlighting new research, thinking, and approaches to the advancement of women and U.S. foreign policy interests. This article is from Melissa Guinan, a 2014-15 Fulbright scholar researching women, peace, and security. Guinan is now special assistant to the president of the Council on Foreign Relations. In October 2000, the UN Security Council passed Resolution 1325 on women, peace, and security, which sought to promote women’s participation in all aspects of conflict prevention, peacebuilding, and post-conflict reconstruction. In October of this year, government officials and civil society representatives came together at the United Nations to mark the fifteenth anniversary of the resolution with a packed slate of events, including the release of a Global Study, numerous civil society and academic events, and an open debate on October 13, 2015 that included the passing of a new resolution on women, peace, and security (WPS). Resolution 2242, passed unanimously, reaffirmed many of the goals that resolution 1325 laid out fifteen years earlier---promoting women’s participation in formal international peace and security processes, respecting human rights and humanitarian law, supporting local women’s groups, and incorporating a gender perspective into peacekeeping operations—and it proposed new areas of work. In the past, activists have harshly criticized deficient levels of funding and minimal consultation with civil society as symptomatic of actors’ lack of commitment to the WPS agenda. Resolution 2242 promotes two important new tools in these funding and consultation areas. One new tool is the Global Acceleration Instrument, developed under the initiative of civil society organizations and announced in the open debate by UN Women Executive Director Phumzile Mlambo-Ngcuka. The resolution recognized the instrument as an “avenue to attract resources, coordinate responses and accelerate implementation.” The Global Acceleration Instrument will direct funding to women’s organizations working on WPS and has received initial pledges from member states. Resolution 2242 advances a second tool: a new ability for the Security Council to convene meetings of relevant experts as part of an Informal Experts Group on Women, Peace, and Security, a measure recommended in the Global Study. Chloé White of the Georgetown Institute for Women, Peace, and Security argues that the Informal Experts Group “will be an integral part of ensuring” that the incorporation of WPS concerns across all country-specific issues on the Security Council’s agenda “is meaningful and effective.” Despite the seemingly clear progression of the policy agenda from UNSCR 1325 to UNSCR 2242, the latter is not the second resolution on WPS—it is the eighth. Between 2008 and 2013, the Security Council passed six other resolutions, often called “follow-on resolutions.” Four of these address sexual violence in conflict, a sub-theme of the WPS policy area that has received the most sustained high-level attention, if unfortunately not transformative funding, commitment, or action. The other two, plus Resolution 2242, focus on furthering the broader goals originally stated in resolution 1325. The resolutions build on each other, ostensibly pushing the agenda forward, hypothetically requiring indicators and reports, and amplifying the parallel development in many countries of national action plans to implement resolution 1325. Diplomatic actions like these resolutions can refocus high-level debate, provide political momentum, and attract media attention. Just as the development of a national action plan can catalyze a process of internal review and commitment to the WPS agenda on the national level, the negotiation process that leads to a resolution can offer an important stocktaking of the progress on WPS. Security Council resolutions, importantly, can provide backing and legitimacy to activists on the ground and can set international norms, but they still are not an end in themselves. Women remain underrepresented in peace processes and in politics, and with each successive resolution on WPS, the concern over slow progress becomes more obvious. Furthermore, member states disagree on the priorities within the agenda, as evidenced in the open debate statements immediately following the passage of the latest resolution. Divides between the global north and global south on how to approach WPS create challenges in an under-resourced policy area. For example, as the Global Study suggests, states in the European Union focus heavily on representation of women in the security sector and prevention of sexual violence in external conflicts, while countries in the global south prioritize economic empowerment and local and community-level needs. So while new resolutions and concrete policy innovations like the Global Acceleration Instrument and the Informal Experts Group are welcome additions to the stockpile of tools to address WPS issues, member state governments should back their verbal commitments with concrete actions — or eight more resolutions will pass and remain only words.

Modi’s Reforms at Odds A senior official in Indian Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP) is pushing a corruption probe that threatens to derail his own party’s Goods and Services Tax (GST). A linchpin of Modi’s economic platform, the reform would replace numerous local and state taxes with a single nation-wide tax. The government expects GST to boost government revenue, attract foreign investment, and add up to two percent to GDP. With the corruption case’s targets—opposition Congress Party leaders Sonia and Rahul Gandhi—denouncing the investigation as politically motivated, the fallout will likely halt Modi’s tax reform in India’s opposition-led upper house. As the Gandhi case advances, the GST may not, putting Modi’s ambitious pro-business and anticorruption agendas at odds. Does the WTO Still Matter? This week’s failure to advance the Doha Round of trade talks further diminishes the World Trade Organization’s (WTO) clout in setting global trading rules. Stuck for over a decade on issues of market access for poor countries and sharing globalization’s gains more equally, the United States and others have already refocused their energies on bilateral and regional trade agreements (RTAs)—completing nearly two hundred such deals during fourteen years of Doha negotiations, most recently the Trans-Pacific Partnership (TPP). U.S. Trade Representative (USTR) Michael Froman made the shift official this week, publicly calling for WTO members to move beyond Doha. Where the WTO’s strength remains is in trade dispute resolution as businesses and nations still turn to it for arbitration. Last week alone, the WTO ruled in favor of Canada and Mexico against U.S. meat labeling with up to $1 billion in damages, and the United States lodged a formal complaint against China for discriminatory aircraft pricing—reflecting the WTO’s evolution from setting the rules to enforcing them. New United Nations Development Report The 2015 Human Development Index (HDI) released this week reflects on the report’s twenty-five year history, with the United Nations Development Program (UNDP) finding that living standards improved for two billion people as dozens of countries climbed the development ladder. Measuring income, life expectancy, and education across 188 countries, Norway leads and Niger lags in the HDI, while Rwanda and China are most improved overall since 1990. Focused on “work for human development,” this year’s report argues for employment’s broader value, offering not only economic but development gains. It also illuminates the still major challenges—the 21 million people in forced labor, 74 million unemployed youth, and the threat to whole categories of workers from technological change.

Emerging Voices highlights new research, thinking, and approaches to development challenges from contributing scholars and practitioners. This post is from Dean Karlan, professor of economics at Yale University, president and founder of Innovations for Poverty Action, and founder of ImpactMatters, a newly-launched organization that helps nonprofits use and create evidence to assess their impact. Earlier this fall the United Nations (UN) ratified the Sustainable Development Goals (SDGs), a new agenda for helping the poor around the world by 2030. Their ratification comes fifteen years after the Millennium Development Goals (MDGs), more than doubling the number of global commitments from eight to seventeen and breaking them down further into 169 targets. The goals include ambitious and noble aspirations, from ending global poverty “in all its forms everywhere” (SDG 1) to ending hunger (SDG 2). But, do the goals matter? Since last summer when the UN released a report on how the MDGs fared, debate has ensued about whether setting defined goals made countries more likely to achieve them. More precisely, did aiming at the MDGs lead politicians and donors to allocate more resources to poverty-fighting, thus leading to improved outcomes? As we turn to the SDGs, here is what we know about how goals may help or hurt, and a modest proposal for applying it. Behavioral economists and psychologists have shown that goal setting can help individuals lose weight, finish annoying work tasks, exercise regularly, save more, and so on. Politicians, being people too, may need a set of goals to help them focus on and invest scarce resources in social problems. Research also shows that while goals help, setting too many of them can deter progress and limit motivation. If one pledges to lose weight, stop drinking coffee, read more books for pleasure, and ignore work e-mails on the weekend—all at the same time—something is going to give. The 169 SDG targets (most likely added to placate various UN constituencies) mean a lot more goal setting than the MDGs. Can politicians and development experts keep track of all these commitments? Unrealistic goals can also be a problem—not only do they not get met, but they may fail to motivate. We know that signing up for a marathon is not the best way to make good on a New Year’s resolution to get into shape. The same goes for pledging to end all global poverty instead of merely reducing it. So when it comes to whether the SDGs matter, I have a proposal to find out: randomize the way the 169 targets are assigned. Many development economists (myself included) have done rigorous studies on goal setting at the household and individual level. In the Philippines, we set up randomized control trials (RCTs) to test whether offering people a commitment “goal savings” account helped them to save more money, and encourage them to spend more of it on large, durable goods. It did. In Uganda, a study we did found that offering children a commitment “goal savings” account led to higher expenditures on school supplies and improved test scores. Why not apply the same rigor to test what motivates the world’s politicians to reduce poverty and inequality? We can allocate each UN member country a number of targets on which to focus, and then track progress over time to learn whether those with particular targets did better on a specific goal than countries without them. Of course, this would be logistically impossible, and would make for a badly-designed randomized trial (with the “control” goals already known). Though my proposal is tongue-in-cheek, it highlights the challenge of measuring the new SDGs. Some ask: how are we going to know if any improvement was made because of the goals? That may be the wrong question. Instead, we should ask whether a particular policy is a good or bad idea. Because while the SDGs motivate us towards aspirational outcomes, they do not tell us what to do. Learning what policies actually work is a much more useful basis for a study, and where we should focus our attention.

This is a guest post by Jameson McBride, an intern for Energy and the Environment at the Council on Foreign Relations Africa Program. He is currently studying Political Science and Sustainable Development at Columbia University. Over the past few months, an energy crisis has been deepening in Zambia: the nation has been generating only 58 percent of its usual electrical capacity. The cause of this energy crisis, however, is not economic or political—it is drought. Like many sub-Saharan states, Zambia is heavily dependent on hydroelectricity, and recent drought has crippled the nation’s power supply. Zambia’s hydropower problems may only be a sign of things to come. Long-range models predict that climate change is likely to cause more droughts throughout much of sub-Saharan Africa. While hydropower is widely billed as sustainable due to its low emissions and high efficiency, the drought-induced Zambian energy crisis suggests that it may not be a reliable solution for African energy in a future marred by climate change. Sub-Saharan Africa is the least electrified region in the world. Nearly 600 million Africans—or three-quarters of the sub-Saharan population—lack reliable access to the grid. Finding energy solutions for Africa that are cheap, reliable, and scalable is thus a priority for the region. Hydropower has traditionally been viewed as one of the best solutions for Africa’s energy needs. After a one-time construction cost, hydroelectric dams run cheaply and produce virtually no waste. Currently, only 7 percent of Africa’s potential hydropower is harnessed, so the prospects seem tremendous. Despite concerns about dams’ impacts on local ecology, their high potential and low cost make them too attractive to ignore. Indeed, in the past few years, financial planning has begun for the massive Grand Inga Dam in the Democratic Republic of the Congo, which at 42,000 MW, would be the largest hydropower plant in the world. Due to climate change, however, much of sub-Saharan Africa will experience considerably more severe and frequent drought in the coming decades. The efficiency of hydroelectric dams depends on consistent rainfall, so droughts quickly cripple energy systems that are heavily reliant on hydropower. This causes serious blackouts in the affected states: during a temporary total dam shutdown in October, Tanzania only produced 105 MW of the 870 MW normally generated. Less than 10 percent of Tanzanian households had electricity. African countries that build more hydropower are likely to be more vulnerable to climate change. Therefore, a tremendous challenge facing Africa’s energy future will be finding a cheap, scalable, and sustainable alternative to hydropower. Solar power is one possible alternative. The potential for solar generation in Africa dwarfs even that of hydropower. In addition, solar does not necessarily depend on major distribution infrastructure. Dams produce electricity in one (often remote) location, which a well-maintained grid system must then distribute to consumers. Solar panels, on the other hand, can be used on roofs or in small arrays to generate power for local consumption, without reliance on a large grid. The impact of “affordable small-scale, off-grid systems” could create an energy revolution in Africa—and one that would help the poorest most. This reasoning has already been incorporated in some development programs: under President Obama’s leadership, the United States Agency for International Development’s (USAID) launched the “Power Africa” program, in 2013. The program includes an explicit focus on solar initiatives and no hydro initiatives. It is hard to ignore the potential of African hydropower in the context of extreme energy scarcity. However, facing increased drought risk due to climate change, many African states will need to look beyond dams to ensure a bright future.

Emerging Voices features contributions from scholars and practitioners highlighting new research, thinking, and approaches to development challenges. This post is from Sarah Labowitz (@SarahLabo), codirector of the NYU Stern Center for Business and Human Rights. Here, she explains why the time is right for improving factory conditions in Bangladesh, and what can be done to protect workers.  A deadly collapse at the Rana Plaza factory just outside Dhaka, Bangladesh killed almost 1,200 garment workers in a single morning in April 2013. The tragedy shone a bright light on the country’s widespread labor rights enforcement failures. Now more than two years later, millions of workers continue to work in unsafe factories. Pressure to improve conditions in Bangladesh’s garment sector has largely come from outside the country–from consumers, international clothing brands, foreign governments, and development organizations. Yet finally a confluence of factors may force Bangladesh’s domestic factory owners to change. Rise of low-cost competitors: Bangladesh lives off of its apparel manufacturing. As the world’s second largest garment producer after China, the industry comprises 18 percent of the nation’s GDP and 80 percent of its exports. But in the last year, Myanmar and Ethiopia have entered the low-wage garment market, and Vietnam will benefit from lower production costs under the newly-agreed-upon Trans-Pacific Partnership. These nations could easily chip away at Bangladesh’s market share, threatening its dominant position. Deteriorating security, driven by Islamic extremism: In the last six months, violent attacks by homegrown extremist groups and the Islamic State killed four atheist bloggers and two foreign aid workers in Bangladesh. After Cesare Tavella, an Italian aid worker, was shot and killed in downtown Dhaka while out for a jog in September, foreign buyers have started to pull their expat staff and are requiring factory owners to provide armed security guards for buying visits. The precautions add costs for suppliers while threats reinforce an image of Bangladesh as an undesirable and unstable place to do business. With increasing demand for “eco” and “slow” fashion, Bangladesh is perceived as an unsustainable sourcing destination: Adding to Bangladesh’s history of anti-union activity, since the 1990s the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) has lodged four separate complaints with the U.S. government about failures to adhere to labor rights standards. Despite millions of dollars of investment after Rana Plaza, the perception remains that workers still face serious threats to their safety and dignity at work, deterring ethically-minded companies from manufacturing there. This combination of domestic instability and external competition threatens the Bangladeshi garment industry and its broader economy unless factory owners push for meaningful reforms. Making Bangladesh’s garment sector safe and sustainable for the long term will require significant effort in three areas: An honest accounting of how many factories are producing for the export market. As it stands, no one is sure how many factories are manufacturing for export. The government says it has inspected “more than 80 percent” of 1,475 export-oriented factories. The Center for Business and Human Rights at NYU Stern estimates that the total number is closer to 7,000. Solutions to making factories safer must be based on a credible understanding of the problem’s scope. An assessment of the true costs of upgrading, relocating, and overseeing an expanded number of factories, many of which are small enterprises. Remediation efforts to date have focused on large factories that tend to have direct relationships with foreign brands. But small factories are an essential part of the industry, and there are a lot of them. A group including international experts and local owners should assess the costs of the resources, support, and oversight that would be required to make these factories safe places to work for the approximately three million workers employed in them. Dividing responsibility for these costs among foreign brands, leading local factories, governments, and development and aid organizations. No single actor can underwrite the significant costs of upgrading Bangladesh’s garment sector. Local and international participants should share the costs. Detroit provides a useful model, in which the public-private Blight Removal Taskforce successfully surveyed the city’s problem, developed a blueprint for addressing it, and raised public and private funds to meet the $800 million price tag of clearing blighted structures. Bangladesh has the potential to be a good-news story about the possibility of globalization delivering benefits to low-wage workers, even in states with weak governance. Yet changes in the way the apparel supply chain works will have to come from within.

In November during a Nairobi, Kenya slum visit, Pope Francis used plain language to express home truths about African elites. According to UK media the Pope ascribed the “injustices” suffered by the slum residents to “wounds inflicted by minorities who cling to power and wealth, who selfishly squander while a growing majority is forced to flee to abandoned, filthy, and rundown peripheries.” He also talked about the unjust distribution of land, a particularly sensitive issue among Kenya’s poor, where the perception is that the elites have helped themselves to the most productive land. The elites, he said, have established “new forms of colonialism.” He urged them to be more responsive to the peoples they rule. Indeed, the indigenous “colonialism” described by the Pope is to be found throughout Africa, not least in Kenya and Uganda, two of the three countries he visited. President Yoweri Museveni of Uganda has ruled for 24 years and estimates of his net worth range from $1.1 to $11 billion. (According to the UN Development Program gross national income in Uganda is $1,335 a year). Uhuru Kenyatta, has been president of Kenya for less than two years. However, he is the son of Jomo Kenyatta, who ruled Kenya from 1964 to 1978. The son’s estimated net worth is $500 million. (Gross national income in Kenya is $2,158 a year). Gross inequality of income, with links between power and money, is to be found elsewhere: by comparison, Donald Trump’s estimated net worth is $4.5 billion according to Forbes. But, the direct relationship between the poverty of most and wealth of the few is particularly stark in Africa. The celebrated Nigerian author, Chinua Achebe, wrote that there is nothing wrong with the Nigerian character. Instead, he wrote, “The Nigerian problem is the unwillingness or inability of its leaders to rise to the responsibility, the challenge of the personal example, which are the hallmarks of true leadership.” In Nairobi, the Pope was describing something of the same reality.

Note: Asia Unbound is reposting this blog today, as it was supposed to be published this week, not last week when this piece was first published. Jill Kosch O’Donnell is an independent researcher and writer. The global climate talks underway in Paris this week, aimed at achieving a successor treaty to the Kyoto Protocol, represent a milestone in an evolving approach to these annual UN-led negotiations. Formerly focused on haggling over developed country targets for emissions reductions, they now emphasize action by all countries, which were supposed to submit national climate change plans ahead of time, known as “intended nationally determined contributions” (INDCs). This new modus operandi presents an opening for Korea to assert itself as a middle power, drawing on its dual identity as a developing country and an OECD member. But it will not be through the country’s INDC. Korea’s INDC, which aims to cut emissions 37 percent below business-as-usual levels by 2030, has garnered criticism. Climate Action Tracker, a consortium of four research organizations analyzing all countries’ INDCs, called it “inadequate.” The INDC does not detail how Korea will reach this target. It also seems to tamp down expectations about how much Korea can really do, citing the county’s heavily industrial economy, major industries that are already energy efficient, and lower public acceptance of nuclear power post-Fukushima as limits on the country’s mitigation potential. Leading by example on domestic mitigation will be hard. So what else can Korea do? Korea’s approach to climate change falls under a broader set of policies known as “green growth,” which considers economic growth and environmental protection as compatible and seeks new drivers of economic growth through investments in clean energy. Current dynamics have created some demand for proof that green growth actually works because developing countries are now expected to rein in emissions, but they do not want to sacrifice economic growth in the process. They are also demanding help from developed countries in financing their efforts. This is where Korea has the opportunity to lead, in at least three ways: Rally for contributions to the Green Climate Fund. Korea is home to the new Green Climate Fund, a UN body based in Songdo. It is meant to be the primary vehicle for channeling the $100 billion per year that developed countries agreed to mobilize for climate change mitigation and adaptation projects in developing countries. GCF had raised $10.2 billion in pledges by the end of 2014; no more have been announced since then. Amid stalled-out pledges, Korea could be rallying for more financial support of the fund at a time when climate finance is the major sticking point between developed and developing countries in climate negotiations. Promote the Global Green Growth Institute (GGGI). Former President Lee Myung-bak created the GGGI to determine whether green growth actually works. The GGGI, though now an international organization and no longer wholly “Korean,” is a powerful expression of Korea’s middle power identity: it is working on the ground in developing countries on green growth plans tailored to their circumstances. It also emphasizes economic growth as a first principle. Korea should continue to promote its homegrown organization and support the institute’s expansion efforts. Lead the debate. Korea’s successful track record as a convener on green growth and status as host of the GCF and GGGI present opportunities to lead the debate over green growth and climate finance—neither of which have settled definitions. Korea can make a sustained effort to build up Songdo as a center for knowledge development on the challenges related to the GCF’s mission, and green growth writ large, by attracting green financial and policy-oriented organizations. Green growth, with its focus on sustainability, poverty reduction, and economic growth, encompasses far more than climate change. The good news for Korea is that some of the most important opportunities to lead are still there, and will continue to be long after the diplomats leave Paris. For more on South Korea and green growth, please see Jill Kosch O’Donnell’s chapter in Middle-Power Korea: Contributions to the Global Agenda.

The following is a guest post by my colleague Yanzhong Huang, senior fellow for global health at the Council on Foreign Relations. This year, the United Nations released a new set of development goals called the Sustainable Development Goals (SDGs) to replace the previous set of Millennium Development Goals (MDGs). One of the goals includes a target that aims to provide universal health coverage across the globe—a much more ambitious and far-reaching goal than the more targeted health-related MDGs. In this podcast, Tony Pipa, U.S. special coordinator for the post-2015 development agenda, and Sara Bennett, associate director and associate professor at the Johns Hopkins Bloomberg School of Public Health, discuss with Yanzhong Huang some lessons learned from the implementation of health-related MDGs and how those can facilitate a greater level of success in the SDG process. They also explore how the SDGs will facilitate future progress toward bringing health coverage to all people, particularly in low- and middle-income countries.

This post features a conversation with Elmira Bayrasli, the co-founder of Foreign Policy Interrupted and a lecturer at New York University. Bayrasli’s recently-published book, From the Other Side of the World: Extraordinary Entrepreneurs, Unlikely Places, profiles seven entrepreneurs from developing countries, deriving insights into obstacles they face as well as their proven potential to solve problems, create value, and draw investment. For her research, Bayrasli traveled to more than two dozen countries meeting with investors, government officials, and entrepreneurs themselves. The Development Channel sat down with Bayrasli to hear what these startups can teach the rest of the world about entrepreneurship—and what can be done globally to encourage it. 1) What are the biggest challenges for entrepreneurs in emerging markets, compared to those that entrepreneurs face in the United States? In the United States only 14 percent of the population is engaged in entrepreneurship. In emerging markets that number can be much higher because there are fewer good jobs available—emerging-market entrepreneurs often start businesses because they have to. Lacking alternative educational or employment opportunities, people’s survival may depend on launching their own endeavors. But we hear fewer success stories of globally-competitive companies coming from developing countries, though I saw tremendously talented people leading interesting companies around the world. I embarked on this project because I wanted to learn more about these individuals and tell their stories. In researching startups and interviewing entrepreneurs from China to Nigeria, I saw that entrepreneurs in each place faced what I call “obstacles,” or barriers to growth in a specific country context. These obstacles include corruption in India, weak rule of law in Russia, monopolies that stifle competition in Mexico, and a lack of collaborative space in Pakistan. Interestingly, I found that the obstacles came into play not at the point when entrepreneurs tried to start their companies, but rather when they wanted to scale them. 2) What are differences between the types of companies entrepreneurs start in emerging markets, compared to what we see coming out of U.S. startup hubs, such as Silicon Valley? Because of the major growth obstacles, entrepreneurs in emerging markets focus on the basics. Instead of creating social apps or developing the self-driving car, they want to solve pressing problems that affect millions of people—starting businesses that fill gaps in society. In Nigeria, for example, an entrepreneur I profiled started a mobile payment company called Paga to overcome the country’s lack of financial framework. Initially, I thought Nigeria’s entrepreneurship obstacle was poor infrastructure, but that was only a symptom of a deeper problem. Nigeria’s weak financial connectivity (66% of Nigerians don’t have access to banking services, according the World Bank) was the main factor preventing reinvestment into infrastructure and other capital-intensive projects. Paga focused on expanding financial access for the poor and middle class by working to create this larger financial connectivity framework for Nigeria. Many of the entrepreneurs I profiled also looked at where they could add the most value in their markets. In Mexico, entrepreneurs who wanted to avoid competing directly with existing monopolies and major U.S. players decided to focus on green technology, alternative energy, and business-to-business (B2B) enterprises. Once entrepreneurs are able to overcome immediate market obstacles, the combination of a problem-solving approach with tapping unfilled niches creates the basis for thriving business models that can scale domestically and beyond. 3) Emerging markets received an influx of capital in recent years (now dwindling due to a slowdown in emerging-market growth). Did any of this capital make its way to entrepreneurs? In several countries I profile—including India, Turkey, and Russia—capital inflows helped to pull up the middle class over the past ten to fifteen years, and where I see entrepreneurship taking off now are markets with real middle-class growth. Because typically, it is not the elite or poor behind globally-competitive startups—it’s the educated middle class. There is also a changing tide in how some emerging-market elites view entrepreneurship. They realize that for their countries to stay competitive in attracting foreign direct investment (FDI), they need to pull entrepreneurs up with them. Family foundations in emerging markets are starting to invest in entrepreneurs, which is a new phenomenon. And in China and Mexico, two other countries with a rising middle class, governments are starting funds for entrepreneurs, guaranteeing investments in new companies. For instance, in Mexico, organizations like The National Entrepreneurship Institute (INADEM) and Nafinsa, a national development bank, encourage investors to lend to startups and local small- and medium-sized enterprises. There is a recognition that: “if we can pull in outside capital to invest in our entrepreneurs, it will ultimately help us grow.” 4) How can U.S. foreign policy support entrepreneurship as a path to economic growth in developing countries? Entrepreneurship is not only about a talented individual with a good idea—it is about networks. Traveling to two dozen countries confirmed how important it is to establish an ecosystem for entrepreneurs. So the best thing the U.S. Department of State and other agencies can do is offer space for entrepreneurs to come together and share ideas—through angel networks or mentoring collaborations, for example. They can also help to connect foreign entrepreneurs to investors and other innovators here in the United States. A crucial element of success for several entrepreneurs I profiled was the networks they formed while studying and working here. However, U.S. foreign policy should ultimately help encourage an emerging market “brain gain,” rather than a brain drain. As one venture capital investor I interviewed for my project said: “where you see a lot of expats going home, that’s a place you should invest.” Another aspect of our foreign policy that affects entrepreneurs globally are U.S. regulations that have extraterritoriality or create ripple effects in other markets. I found most successfully-scaling companies in emerging markets aim to expand to the United States, so they look to our business practices. Because of the U.S. focus on transparency, through the Foreign Corrupt Practices Act (FCPA) and similar laws (as well as U.S. tax filing and IPO requirements), companies that want to do business here follow similar standards. In India, where corruption is the major obstacle to entrepreneurship, the IT company Infosys replicated U.S. practices because they wanted U.S. customers. 5) What is the role of entrepreneurship in the global economy moving forward? The economy of the twenty-first century, whether ’globalized, ’new,’ or ’shared," is unprecedented. The twentieth-century models that made the assembly line and Fortune 500 companies thrive are no longer relevant, and new jobs increasingly come from businesses just five years old. Today’s digital and dynamic economy is not beholden to top-down corporate structures. Instead, it is contingent upon ideas and self-initiative. It is an economy being fueled and powered by entrepreneurs.