Economic and Social Development

Earlier this week I wrote a post on the social inclusion programs of SENA, the organization here in Colombia for whom I am here this year as an advisor. Social inclusion is an essential component of any sustainable economic development in any country around the world. But that is of course not always obvious to all the stakeholders or to many of the outside observers. Take for example the photo I made today on my way to the SENA offices:

I passed this spot almost every day the past few months and never noticed the wall painting. On the right you see one of my favorite new food discovery restuarants (the famous "patacones"; go back to some of my earlieg posts). To the left of the Patacones restaurant, you see a piece of public art which says "MINERIA" which is the Spanish word for mining. You notice that the N is painted a bit higher and if you look well, you see that under the N there is a S. So you can read "MINERIA = MISERIA" or "mining is misery. The rest of the painting is an artist's impression of some of the misery...

Now think about that. Mining obviously - in all its forms from coal, to oil to minerals - has a clear negative impact on the eco-system where the mining takes place. Mining companies get all the time better and nowadays claim to be able to do "responsible, clean and sustainable" mining. There is a lot of dicussion around that, and I leave it to the experts. I am still a "novice" in the technical field of the mining. The sector of mining offers hundreds of thousands of formal and informal jobs around the world. In general that is seen as a good thing... as long as the work is humane, safe and reasonably paid. Again, a lot of literature on that aspect and its economic impacts. We all want our electricity and we all want cell phones and other products which all would not be available without mining.

So is mining all misery? Is it fair to make such a statement? Mining has - and probably will still continue to - cause lots of human suffering from accidents in mines to environmental side effects. The industry obviously has its two sides of the coin.

CIDA, the Canadian International Development Agency, has a variety of areas where its tries to alocate its limited funds. On the photo below, taken from its 2010-2011 annual report, you can maybe read in what sectors they have invested for social and economic development (if you can't read it, go to the www.acdi-cida.gc.ca website and I am sure they have this report there somewhere.

CIDA spends about 24 % on projects and programs in what they call "sustainable economic growth" in developing countries (bottom right part of the pie chart), almost $800 million per year. Our EFE program in Colombia (Education for Employment) falls under that category. The other sectors are Children & Youth (31 %), Health, Basic Education and Social Services (1 %), Ensuring Security and Stability (1 %), Advancing Democracy (7 %), Food Security (21 %) and "other" (15 %).

For each country (CIDA works in 20 selected focus countries) there is a different reality and each donor country tries to the best of their knowledge (and also keeping its own national and international trade strategies in mind) to respond. Let's have a look at Colombia:

Colombia with its 46 million people and very high economic inequality (see one of my posts of January) ranks number 87 on the international HDI (Human Development Index) list from the 187 countries listed. Despite that the gross national income per capita is one of the highest ones of the 20 countries where CIDA works (just over $9,000/year), they have also one of the highest percentages of its population living on less than $1,25/day (16 %). This is because there are more higher incomes in Colombia compared to most of the other countries where CIDA operates,but also more people who have little to nothing. CIDA spends around $30 million/year in Colombia, and the two main sectors are "sustainable economic growth" and "children & youth" (at some stage I will make a post on youth working in mines; a very complex and challenging topic; need a few more sleeps on that one).

Now let's compare that a bit with another country in South-America: Bolivia

About half of the gross national income per capita as Colombia while the absolute poverty percentage is a bit lower than Bolivia. In general less economic activities in this country. And CIDA spends almost as much money here as in Colombia concentrating on the same two sectors. The EFE program in Bolivia concentrates more on industrial and agri-business training. Mining plays also an important role in Bolivia, but the EFE program can not address all the needs at the same moment.

ACCC and CIDA also are implementing an EFE program in the Anglophone Caribbean region, an area with much less people but with a huge disparity of wealth (compare Barbados # 47 on the HDI and Guayana # 117 on that same list; lower than Bolivia even). CIDA has a focus in this region on security and sustainable economic growth, and spends in total about $10 million more than in a country like Colombia. The EFE program here has a wide variety of focus areas.

Let's move for a moment to another part of the world: Bangladesh. Three times the population of Colombia and ranking way down on the HDI at # 146 (of the 187 countries listed). Almost a shocking 50 % of its population live on less than $1,25/day and CIDA spends about double of the money in Bangladesh as its spends in the Caribbean region....

Mozambique - where I worked & lived for two years in the late eighties during their 30 years of civil war - is one of the seven sub-Saharan countries where CIDA funds programs. This country ranks even lower on the HDI list on # 184, almost at the bottom of the 187 countries. Needless to say that was caused by a terribly devastating civil war in a country which was already having a minimal economy to start with in the sixties shortly after its independence from Portugal. An amazing 60 % of its population live on less than $1,25/day and its gross national income per capita is less than $1,000/year; nine times lower than a country like Colombia. There is simply not much money in the economy of this country which has lived mostly of donor funding for the past decade. Recently the country has discovered large oil & gas reserves. A blesssing or a curse? Will their mining also cause again addditional human and environmental misery? What choice does the government of Mozambique have? Forever depend on the rest of the world or try to develop these natural resources and try to grow a "sustainabble economy"? Mineral resources have caused devastating civil wars in a country like Angola, also a former Portuguese colony. That country is still very instable as is one of its neighbouring country, the Congo (where one of the rare minerals used in cell phones is mined).

I am not supplying any answers here in this post. My objective is to show you how complex this all is. In Canada people argue strongly about "tar sands"and oil pipelines on one hand, and about how to curtail the national debt and at the same time maintain social programs as well as finance the protection of its many sensational national parks. Economic and Social development - in the ideal world - go hand in hand. However, we have seen that lack of ethics, greed and sheer ignorance has time upon time caused serious and devastating negative side-effects. Collateral damage for the good for all: the economy. As an eternal optimist and a avid reader of history books, I am convinced that over the whole we have become better at finding the balance, but I am sure many people would love to have a lively argument with me about that conclusion. Well, any time really.... let's meet!

I hope this post gave you some new insights and "food for thought" :-)