Arabia and Iran could make peace and bring stability to the Middle East

Arabia and Iran could make peace and bring stability to the Middle East

How Saudi Arabia and Iran could make peace and bring stability to the Middle East, if it were up to them only, would not be an impossibility as clearly demonstrated here by Samira Nasirzadeh, Lancaster University and Eyad Alrefai, Lancaster University. It would in our opinion, be made even more reachable if both countries manage to transition off their hydrocarbon-based economies and into more diversified ones.

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Saudi and Iran: how our two countries could make peace and bring stability to the Middle East

Relations between the Kingdom of Saudi Arabia and the Islamic Republic of Iran have rarely been worse, regarding the attacks on the oil tankers in the Gulf of Oman – for which both sides blame each other. Nevertheless, in the history of relations between the two countries, there have been regular shifts between tension and rapprochement – and things can change for the better once again.

As an Iranian and a Saudi, working as research fellows for peace studies, we believe it is time that our two countries seek to manage the conflict, improve their dialogue and begin the peacebuilding process. And we are hopeful that this could happen.

But how? Peace cannot be achieved overnight; it requires a range of factors to strengthen diplomatic ties and decrease the level of enmity between the two states. First, we suggest both states’ politicians soften the language in their speeches, altering the hostile rhetoric to a more moderate one. This would open new paths towards a direct and constructive dialogue, reducing the tensions that are affecting the two countries, the region and, potentially, the world.

Sabre-rattling

Direct dialogue between the two regional actors could launch negotiations that may lead to more stability in the region. The existing regional turmoil has had a detrimental impact on relations between Saudi Arabia and Iran over Syria, Iraq, Lebanon, Bahrain and Yemen. The [Yemen war], which has caused a [dramatic humanitarian crisis], remains one of the main areas of conflict between Saudi Arabia and Iran, but it also offers ground for talks between the two states.

Both Saudi Arabia and Iran agree that the conflicts in Yemen and Syria can only be ended through the implementation of political, rather than military, solutions. If Saudi Arabia and Iran can take steps toward political compromises in Syria and Yemen, this subsequently will reflect positively on the trust building process.

Finding a peaceful solution in the region requires Iran and Saudi to start talking positively. Shutterstock

While Saudi Arabia relies on its strategic Western allies and its ever-increasing military expenditure, Iran, which has been isolated by the US, prefers a more regional approach. Indeed, Saudi Arabia may have to ignore US protests to sit down at the negotiating table with Iran.

But the will for closer ties is, perhaps, there. Indeed, Iran’s foreign minister, Mohammad Javad Zarif, declared on March 13, 2018:

We believe that security of our neighbours is our security and stability within our neighbourhood is our stability. I hope they [Saudi Arabia] have the same feeling and I hope that they come to talks with us for resolving these problems. There is no reason for hostility between Iran and Saudi Arabia. However, we tell the Saudis that you cannot provide security from outside of the region.

Adel Al-Jubeir, the Saudi minister of state for foreign affairs, also recently stated in an interview that his country “does not want war with Iran, but will not tolerate what it considers hostile Iranian activity in the Middle East”.

Suspicions clearly remain, but such pronouncements could be viewed as a pause in hostilities, a turning point that could bring both sides closer together to resolve tensions.

There are also domestic reasons for a reduction in tensions, with both states building strategic plans for the future. Since 2015, Saudi Arabia has embarked on an ambitious socioeconomic plan to diversify the country’s economy by curbing its historic dependency on oil and challenging conservative social constructs and norms by unshackling society from some past constraints. In a state where most of the population is under the age of 30, Vision 2030 serves as a mega project that will lead the country to modernise economically and socially.

The same goes for Iran. The country has adopted a promising strategic plan called the 20-Year National Vision of the Islamic Republic of Iran which has social, economic, and political objectives. But to be successfully implemented, both countries’ strategies will need stable societies and vibrant economies which cannot be attained in a hostile neighbourhood. Integration and cooperation will be essential.

Diplomacy is the solution

It is evident that Saudi Arabia and Iran will benefit more from direct dialogue than hostile rhetoric. Through discussing and working together on domestic, regional and international issues, it is in the interests of both states – and the wider region – to reduce conflict and increase cooperation through diplomatic ties.

The gradual shift from hostile to inclusive rhetoric by politicians is a helpful first step, but it is also necessary for Saudi and Iran to take practical action in their bilateral relationship.

It is expected for states to compete in their sphere of influence, but pragmatism must prevail if both countries want to put an end to their conflicts in the region.

Samira Nasirzadeh, PhD Research Fellow, Lancaster University and Eyad Alrefai, PhD Research Fellow, Lancaster University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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How countries can learn from Jordan’s renewable energy pivot

How countries can learn from Jordan’s renewable energy pivot

By 2021 the country is aiming to have well over half of its power generated by wind or solar energy In the meantime, how countries can learn from Jordan’s renewable energy pivot is elaborated on by Robin Mills, CEO of Qamar Energy and published on The National of June 10, 2019.

How countries can learn from Jordan’s renewable energy pivot
Jordan is using the vast expanse of sunny and windy Wadi Rum to harness its renewable ambitions.

On the road from Wadi Rum to Petra in Jordan, where signs point to the Sheikh Zayed solar complex, wind turbines turn languidly in a steady breeze. At Petra, even Bedouin encampments have solar panels and many homes in Amman use solar tubes to heat water. The UAE made headlines with its world-record solar installations, but in all the Middle East, the impact of the renewable revolution is most visible in the Jordanian landscape.

By last year, the Hashemite kingdom had installed 285 megawatts of wind and 771MW of solar power, a significant chunk of its total generation of about 4 gigawatts. By 2021, it wants to have 2.7GW of renewable capacity. Over the next decade, Jordan’s efforts could really take off – providing half of all electricity output, in our analysis at Qamar Energy. It is only a small market, but it is an important trailblazer for the region’s aspirations in renewables.

Jordan’s success has been built on good resources, solid policy and the imperatives of an energy crisis. Like most Middle East countries, the kingdom has abundant sunny desert land and, similar to Egypt and northern Saudi Arabia, it’s also quite windy in places.

The country started early on encouraging renewables with the Tafila wind farm, a joint venture with Masdar, built in 2015. It offers investors a reasonable return and gives smaller users such as hospitals and universities the chance to build solar panels on vacant land and transmit the power through a grid.

The biggest impetus to alternative energy was the cut-off from Egyptian gas supplies following the 2011 revolution, because of repeated militant attacks on the Sinai pipeline. Jordan’s budget deficit widened because the country, which imports more than 90 per cent of its energy needs and has historically financed its deficits through grants and soft loans, had to burn expensive oil for electricity. Jordan, which already hosted thousands of Iraqi refugees, had to accommodate an increasing power demand due to an influx of 1.3 million Syrians escaping the conflict in their country.

In response, the kingdom opened a liquefied natural gas import terminal at Aqaba, and negotiated supplies from the American company Noble, which produces from offshore Israel. Jordan has large resources of oil shale, effectively an immature form of petroleum source rocks, which can be cooked into oil. A Chinese-led consortium is developing a power plant based on burning this dirty material.

Jordan’s success has been built on good resources, solid policy and the imperatives of an energy crisis.

Efforts to construct a nuclear power plant have been hampered by a lack of cooling water, public opposition and the high costs of financing. Instead, Amman may opt for smaller, modular nuclear reactors that could be fabricated off-site.

To cover the higher costs of fuel, energy subsidies had to be cut back, putting a heavy burden on citizens at a time of sharp economic slowdown. But this had the positive effect of making individual rooftop solar installations attractive for small businesses and householders.

Local Jordanian companies, such as Kawar Energy and Shamsuna Power, along with Dubai-based companies including Yellow Door Energy, have created viable businesses and high-skilled employment. By the early 2020s, Jordan will have the Middle East’s lowest carbon output electricity grid, despite the carbon-heavy oil shale facility.

Success will soon bring its own challenges. Renewable output will exceed total demand at times, while the country still needs to provide for high-consumption and night-time periods. Hydropower, which could be used to store excess renewables, is minimal in the desert country.

The Red-Dead Sea project is intended to bring water to the Dead Sea, which is fast drying up due to climate change and the overuse of the Jordan River. On the way, the water would generate power for desalination. But the expensive venture faces environmental concerns and political hurdles in co-operating with Israel.

Philadelphia Solar, a local company, has announced plans for a solar plant with battery storage. Concentrated solar thermal plants (CSP), like the one under construction in Dubai, can save the Sun’s heat to generate power overnight. These do not seem to be part of Jordan’s plans yet, but the country has excellent conditions for CSP.

Electricity interconnections with Egypt, Saudi Arabia, Iraq and the West Bank are also underway, which could boost the resilience and renewable share of the whole area’s power grid. It could also send power to help rebuild war-torn Syria.

Jordan’s consumers will have to consider the benefits from the country’s renewable expansion, particularly industries which have complained of high electricity prices. Prices are high during peak demand hours, but this scheme will have to become more flexible to lower prices when there is an excess of solar.

Jordan’s small market and head start in renewable energy means it will reach these hurdles to solar deployment probably before any other country in the region. Its success in devising policies to continue attracting capital, boosting its renewable generation, local employment and electricity exports, while reducing consumer bills, will be an important signal for its neighbours.

This is particularly true for countries in the Arabian Gulf – whose utility companies are thinking about how to overcome similar barriers to their bold renewable plans. Such complementary resources and opportunities open the space for co-operation between these two regional allies.

Robin Mills is CEO of Qamar Energy and author of The Myth of the Oil Crisis.

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Solar panels all over the Sahara desert?

Solar panels all over the Sahara desert?

– Imagine newsletter #2

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Solar panels all over the Sahara desert? Asked Will de Freitas, Environment + Energy Editor, The Conversation, starting with:

You may have seen a variant of this meme before. A map of North Africa is shown, with a surprisingly small box somewhere in Libya or Algeria shaded in. An area of the Sahara this size, the caption will say, could power the entire world through solar energy:

Over the years various different schemes have been proposed for making this idea a reality. Though a company called Desertec caused a splash with some bold ideas a decade ago, it collapsed in 2014 and none of the other proposals to export serious amounts of electricity from the Sahara to Europe and beyond are anywhere close to being realised.

It’s still hard to store and transport that much electricity from such a remote place, for one thing, while those people who do live in the Sahara may object to their homeland being transformed into a solar superpower. In any case, turning one particular region into a global energy hub risks all sorts of geopolitical problems.

The Imagine newsletter aims to tackle these big “what if” questions, so we asked a number of academics to weigh in on the challenges of exploiting the cheapest form of electricity from perhaps the cheapest and best spot on Earth.


Sahara has huge energy potential

Amin Al-Habaibeh is an engineer at Nottingham Trent University who has researched various options for Saharan solar.


Read more: Should we turn the Sahara Desert into a huge solar farm?


He points to the sheer size and amount of sunshine the Sahara desert receives:

  • It’s larger than Brazil and slightly smaller than the US.
  • If every drop of sunshine that hits the Sahara was converted into energy, the desert would produce enough electricity over any given period to power Europe 7,000 times over.
Solar panels all over the Sahara desert?
Global horizontal irradiation, a measure of how much solar power is received per year. Global Solar Atlas/World Bank

So even a small chunk of the desert could indeed power much of the world, in theory. But how would this be achieved?

Al-Habaibeh points to two main technologies. Both have their pros and cons.

  • Concentrated solar power uses lenses or mirrors to focus the sun’s energy in one spot, which becomes incredibly hot. This heat then generates electricity through a steam turbine.
  • In this image the tower in the middle is the “receiver” which then feeds heat to a generator:
Solar panels all over the Sahara desert?
Aerial view of a large concentrated solar power plant. Novikov Aleksey/Shutterstock
  • Some systems store the heat in the form of molten salt. This means they can release energy overnight, when the sun isn’t shining, providing a 24h supply of electricity.
  • Concentrated solar power is very efficient in hot, dry environments, but the steam generators use lots of water.
  • Then there are regular photovoltaic solar panels. These are much more flexible and easier to set up, but less efficient in the very hottest weather.

Overall, Al-Habaibeh is positive:

Just a small portion of the Sahara could produce as much energy as the entire continent of Africa does at present. As solar technology improves, things will only get cheaper and more efficient. The Sahara may be inhospitable for most plants and animals, but it could bring sustainable energy to life across North Africa – and beyond.


Solar panels could have remarkable impact on the desert though

Installing mass amounts of solar panels in the Sahara could also have a remarkable impact on the desert itself.

The Sahara hasn’t always been dry and sandy. Indeed, archaeologists have found traces of human societies in the middle of the desert, along with prehistoric cave paintings of Savannah animals. Along with climate records, this suggests that just a few thousand years ago the “desert” was far greener than today.

Solar panels all over the Sahara desert?
Long-extinct elephants still remain carved into rocks in southern Algeria. Dmitry Pichugin / shutterstock

Alona Armstrong, an environmental science lecturer at Lancaster University, wrote about a fascinating study in 2018 that suggested massive renewable energy farms could make the Sahara green again.


Read more: Massive solar and wind farms could bring vegetation back to the Sahara


A team of scientists imagined building truly vast solar and wind farms, far larger than most countries, and simulated the impact they would have on the desert around them. They found that:

  • Solar panels reflect less heat back into space compared to sand.
  • This means the surface would warm, causing air to rise and form clouds.
  • This would mean more rainfall, especially in the Sahel region at the southern edge of the desert.
  • And more vegetation would grow, which would absorb more heat, drive more precipitation, and so on
  • It’s an example of a climate feedback.
Solar panels all over the Sahara desert?
Large-scale wind and solar would mean more new rain in some areas than others. Eviatar Bach, CC BY-SA

This may be a nice side effect of a huge Saharan solar plant, but it doesn’t necessarily mean it should happen. As Armstrong points out:

These areas may be sparsely populated but people do live there, their livelihoods are there, and the landscapes are of cultural value to them. Can the land really be “grabbed” to supply energy to Europe and the Middle East?


Solar panels all over the Sahara desert?
Ghardaia, Algeria. Even in the middle of the Sahara, there are settlements. Sergey-73/Shutterstock

Is this climate colonialism?

If we want to deploy millions of solar panels in the Sahara, then who is “we”? Who pays for it, who runs it and, crucially, who gets the cheap electricity?

This is what worries Olúfẹ́mi Táíwò, a philosopher who researches climate justice at Georgetown University. He mentions Saharan solar power as one of the possible policies involved in a Green New Deal, a wide-ranging plan to enact a “green transition” over the next decade.


Read more: How a Green New Deal could exploit developing countries


He points out that exports of solar power could: “Exacerbate what scholars like sociologist Doreen Martinez call climate colonialism – the domination of less powerful countries and peoples through initiatives meant to slow the pace of global warming.”

  • While Africa may have abundant energy resources, the continent is also home to the people who are the least connected to the grid.
  • Solar exports risk “bolstering European energy security … while millions of sub-Saharan Africans have no energy of their own.”

What if we’re looking at the wrong desert?

All of this will be moot if Saharan solar never actually happens. And Denes Csala, a lecturer in energy systems at Lancaster University, is sceptical.


Read more: Why the new ‘solar superpowers’ will probably be petro-states in the Gulf


It’s true that much of the world’s best solar resources are found in the desert. Here’s a graph from his PhD research which shows how Saharan nations dominate:

Solar panels all over the Sahara desert?
The sunniest tenth of the world is mostly Saharan countries … and Saudi Arabia. Denes Csala / NREL, Author provided

But Denes says that we’re looking at the wrong desert. In fact, the countries of the Arabian peninsula are better placed to exploit the sun. He argues several factors work in favour of Saudi Arabia, the UAE and co:

  • They have a history of exporting oil.
  • In the energy market, worries over security of supply means countries tend to do business with the same partners over time.
  • Ports, pipes and other infrastructure that have been built to ship oil and gas could be repurposed to ship solar energy as hydrogen.

[Energy security] would be the Achilles heel of a northern African energy project: the connections to Europe would likely be the continent’s single most important critical infrastructure and, considering the stability of the region, it is unlikely that European countries would take on such a risk.

It would be fair to say academics have mixed views about the idea of mass Saharan solar. While the energy potential is obvious, and most of the necessary technology already exists, in the long run it may prove too complicated politically.


Still think this is all fantasy?

Maybe Europeans should look closer to home. The UK Planning Inspectorate is currently examining the Cleve Hill solar farm proposal in Kent, which would involve installing nearly a million solar panels across a marshland site the size of 600 football pitches. To protect against flooding, the panels would be mounted several metres in the air. If built, despite opposition from locals and conservationists, Cleve Hill would be by far the country’s largest solar farm and about the same size as Europe’s largest, near Bordeaux.

Alastair Buckley from the University of Sheffield points out the project would be groundbreaking as, unlike other ventures of this kind, it doesn’t rely on subsidies. With solar power getting ever cheaper, Cleve Hill – if it happens – seems to mark the moment when solar may start paying for itself – even far from the world’s deserts.

Further reading


What is Imagine?

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Imagine is a newsletter from The Conversation that presents a vision of a world acting on climate change. Drawing on the collective wisdom of academics in fields from anthropology and zoology to technology and psychology, it investigates the many ways life on Earth could be made fairer and more fulfilling by taking radical action on climate change. You are currently reading the web version of the newsletter.

Here’s the more elegant email-optimised version subscribers receive. To get Imagine delivered straight to your inbox, subscribe now.

Click here to subscribe to Imagine. Climate change is inevitable. Our response to it isn’t.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Trash: A major Environmental Issue in Libya

Trash: A major Environmental Issue in Libya

Trash: A major Environmental Issue in Libya published by YaLa Press is meant to obviously shed some light on the disastrous situation of the Libyan environment all within the geopolitical context. Here is that article with our thanks to the author and courtesy to Yala Press.

World Environment Day

5th June is a platform for action environment day every year. This day reminds us of the urge to protect our environment. In order to encourage worldwide awareness to save our beautiful and green planet, on this day, hundreds of organizations and millions of civilians will urge governments, industries, communities, and individuals to come together and raise awareness to keep our planet safe place.

Planet Earth is a beautiful place. It’s also the only planet we have, and we want to make sure that we do what needs to be done to keep it safe, healthy, cared for, and respected.

Humans are the only creatures on Earth that will cut down a tree, turn it into paper, then write “save the trees “on it. Imagine if the trees would give off WiFi signals, we would be planting so many trees and we’d probably save the planet too. It’s not your personal toy, nor mine. It is ours! So, protect the mother who nourishes you. Plants can survive without humans, but humans can not survive without plants. Environment day means to protect all the natural sources, plants, water, forests etc…

We never know the worth of water till the well is dry, the water in your toilet is cleaner than what nearly a billion people have to drink elsewhere on the same Earth.

Try to keep this blessing safe from pollution. Think green, stay healthy, and save this wealth. To live in a beautiful and clean environment.

Happy Environment day!

Trash: A major Environmental Issue in Libya

    One of the most annoying and serious environmental issues in Libya is the crisis trash. The clean environment brings fresh air and saves nature.  Our nature needs to be protected for a healthy life, and for us and for the animals. The ignorance of such an issue will always increase the danger that we give to our country and with no doubts will enhance the cause of diseases. No one ever wants to walk down the streets and passes trashes. No one wants to kick cans and plastics bottles while walking on shores.   For years now, neither the government nor the people, or even the waste companies could find an ending solution for this trouble. The streets in the capital are almost full of trashes. The roads, pavements, in front of schools and near the blocks of flats all have piles of trash. The scenery cannot be bearable anymore and it does not show the area in an urban view.

     Despite the individual attempts to fix this issue in the capital; Tripoli, this trouble has no end. People do not have any ideas about where to put their garbage, as a result, the waste solids are thrown everywhere. I have noticed while I was walking in the streets that those who live in houses they put their garbage near their houses with hope the waste companies come and collect it. Others who live in flats they throw it down the building or near the streets. Some they are just satisfied with throwing the trash wherever they could put it- on the pavements, near the beaches or wherever they can put trashes.

     Consequently, the government does not try to recycle or export plastic or paper waste, so they are starting to pile up randomly. And for sure, this is not a pretension to put the trash anywhere but there is no another way.  This scene we see every day at our streets, in front of our schools, universities, near our gardens, in the highways, on beaches and almost at every single step we take. We see cans, papers and plastic rubbish are thrown with no care about nature, the heath, or even showing any ethical value for doing such a horrible thing. The serious solution should be taken before making this trouble more dangerous. This is a dangerous threat of many living species on our land. Not all of us know how this trash we throw ends up. Plastic needs a long time to be mouldered. Plastic can float on the surface of the sea for centuries! Plastic can be eaten by any animals accidentally and animals cannot digest plastic which it stays in their stomach and intestines for years until it causes for their death.

    Although we need to use these materials; paper, plastic, iron cans … etc. for our daily life, using such materials improperly will lead to damage the environmental balance. We create these materials, we need them and we are responsible for any harm we cause. Our nature and animals do not need the paper or plastic, so we must not throw them randomly everywhere and ask nature to just simply use them or let the animals eat them. In other words, humans need nature very much, without it we cannot succeed to keep our life on the planet. Ignorance or contributing of throwing the trash at inappropriate places is a crime against our nature, our lands and our health.

    To sum up, we are destroying our nature with no worries. In Libya, trash is estimated to kills our environment and we help to damage it. It is not an excuse that we cannot find a solution. We can have special places to collect the whole trash at. Or we can start to export it to other countries where we can recycle it and use it for other things. Recycling is one of the perfect solutions and the most protective one. On the other hand, we need to take a series of action towards this and help our environment.

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12 priorities for sustainable urbanization in MENA

12 priorities for sustainable urbanization in MENA

UAE identifies 12 priorities for sustainable urbanization in MENA posted by Saudi Gazette on June 1, 2019, is worthwhile going through to get to know what is meant by the MENA would perhaps be more specific and therefore more relevant to the Gulf area than to the rest of the MENA region.

Delegates at the UN-Habitat assembly in the Kenyan capital Nairobi on May 27-30

ABU DHABI — The United Arab Emirates has successfully delivered its central objectives for the first UN-Habitat assembly in the Kenyan capital Nairobi on May 27-30 and convened all UN Member States, as the world’s highest-level decision-making body on sustainable urbanization.

A delegation headed by Mohamed Al Khadar, Executive Director Strategic Affairs of the Department of Urban Planning and Municipalities (DPM), outlined 12 priorities identified for sustainable urbanization in the MENA region to United Nations Member States. These priorities were crowdsourced from the recent Pan-Arab Urban Development Symposium (PAUDS) held in Abu Dhabi. Classified in three categories corresponding to each of the four pillars – Economy, Environment, Society and Culture, these will form the basis for the UAE program at the 10th World Urban Forum (WUF10), which will be conducted in Abu Dhabi in February 2020.

Al Khadar said “the UN-Habitat Assembly provided a unique opportunity for Abu Dhabi to advance the UAE’s agenda for the upcoming World Urban Forum. Through our work at this event, we aimed to underpin WUF10’s goal to be an open platform for partnerships and new initiatives in representation of our best minds. To advance to more sustainable urban models we are convinced that we need to identify new ways of working together, breaking down silo mindsets, and promoting transformative working methods. What better way to do that than to open up the conversation to fresh and creative thinking as we did at PAUDS, and we are happy to have continued this momentum with the brilliant collection of minds at UN-Habitat.”

Also carried out was a reception event which promoted WUF2020 within UN Family and Ambassadors. This included a gala dinner and outlined WUF10 in greater detail to interested delegates.

The UAE Ambassador to Kenya Khalid Khalifa Abdullah Rashid Al Mu’alla said “the UAE global leadership in international diplomacy finds its manifestation in the implementation of the 2030 agenda and our success in leading global implementation of SDGs and assisting others in doing so. WUF10 is an opportunity for the UAE to develop methodologies that can be shared and replicated in other countries in the region”.

The UN-Habitat Assembly carried the theme ‘Innovation for a Better Quality of Life in Cities and Communities – Accelerated Implementation of the New Urban Agenda towards achievement of the Sustainable Development Goals’. The event will bring together urban practitioners and experts, national, regional and local governments, academia, civil society and the private sector. All are brought together with a shared focus on innovative urbanization and to provide solutions for a better quality of life in cities and communities.

The UN-Habitat Assembly is the United Nations’ focal point for sustainable urbanization and human settlements development. This event will adopt global norms and policies that will guide how cities and communities are planned, managed and governed. It will also determine the strategic priorities for accelerating implementation of the New Urban Agenda to achieve the Sustainable Development Goals for the next six years, through UN-Habitat’s Strategic Plan (2020-2025).

WUF10 will take place in Abu Dhabi in February 2020, convened by UN-Habitat and jointly organized with the Abu Dhabi Department of Urban Planning and Municipalities. The Forum will provide a platform to discuss 21st century city planning within a context of rapid development with specific cultural and demographic considerations. WUF10 will showcase the Abu Dhabi Plan, through which the city aims to realize its long-term sustainable development vision. This blueprint will advance concrete achievements that position the Emirate as a benchmark, in a region with one of the fastest urbanization rates on the globe.

Established in 2001, WUF is the world’s premier gathering on urban issues. The Forum examines the impact of rapid urbanization and its implications for social, economic and environmental policies in communities, cities and towns. — SG

A new kind of company is revolutionising Africa’s gig economy

A new kind of company is revolutionising Africa’s gig economy

The World Economic Forum article dated 28 May 2019, could well be applied to most of the countries of the MENA region. Apart from the oil exporting ones, all the others’ informal economy appears to the naked eye as undergoing the same phenomenon but perhaps at a lesser density. In effect, very much like in the neighbouring sub-Saharan regions, the MENA’s informal markets seem to be pushing towards a new kind of business structure. A new kind of company is revolutionising Africa’s gig economy? Aubrey Hruby, Senior advisor to Fortune 500 companies replies.

For more than 30 years, governments and international development organizations have followed the same recipe for formalising the world’s informal economy; enacting new legislation and regulations or abolishing those that get in the way of the process.

Yet despite their efforts, 93% of the world’s informal employment is still found in emerging and developing countries, with 85.8% of employment in Africa considered informal. In Kenya, sub-Saharan Africa’s fifth-largest economy, the informal sector – commonly referred to as Jua Kali – is the country’s main job creator. According to the 2019 Economic Survey by the Kenya National Bureau of Statistics, Jua Kali was responsible for 762,100 of the 840,600 new jobs created last year. The ‘gig economy’, a new concept in developed markets, has been the norm in developing economies for decades.

A man waits for M-Pesa customers at his shop in Kibera in Kenya's capital Nairobi December 31, 2014. Safaricom, Kenya's biggest telecoms firm, is a model of how technology can be used to financially include millions of people with mobile telephones but without access to traditional infrastructure such as the banks that are available to the wealthy or those living in cities. Safaricom in 2007 pioneered its M-Pesa mobile money transfer technology, now used across Africa, Asia and Europe. It proved that money can be made from people who earn a few dollars a day.
Can ‘bridge companies’ like M-Pesa forge links between Africa’s formal and informal economies? Image: REUTERS/Noor Khamis

By 2035, Africa will contribute more people to the workforce each year than the rest of the world combined. By 2050, the continent will be home to 1.25 billion people of working age. In order to absorb these new entrants, Africa needs to create more than 18 million new jobs each year. Given the urgent need to provide jobs and livelihoods to Africans, it is time to examine the conventional wisdom that informal markets must transition into formal markets. Development finance institutions (DFIs) and private investors in African markets can play a critical role in both advancing Africa’s gig economy and changing the narrative that growth in informal markets is incompatible with sustainable development.

Across African markets, companies are pioneering business models that bridge the formal and informal sectors; in these models, each company is a formal entity but can mobilise large numbers of informal actors in their supply chains or service delivery. While this has been done in dairies in Kenya and at coffee and cocoa outgrowers across the continent and in other sectors for nearly a century, the penetration of mobile phones has enabled a new breed of African companies to monetise their ability to organize and inject trust into fragmented informal markets. However, unlike Uber or Airbnb, which disrupted largely formal sectors, many of Africa’s new ‘gig economy’ firms are writing the rules for whole new industries in local markets.

Perhaps the most high-profile example is Safaricom’s M-PESA. Since its launch in 2007, M-PESA, a mobile payments system developed by Kenya’s largest telecoms operator, has enabled millions of informal sector workers to move money at a lower cost, which has provided a significant boost to the Kenyan and Tanzanian economies. Another, more recent example, is Nigeria’s Cars45, operated by Frontier Car Group. Nigeria’s $12 billion used car industry is largely informal and characterised by distrust, a lack of standardisation and the absence of a structured dealer network. Cars45 facilitates the buying and selling of used cars by pricing and rating their condition transparently and conducting online auctions. Many sectors throughout the continent remain highly informal and would benefit from these types of bridges into formality. These ‘bridge companies’ are going to define the future of employment in African countries.

DFIs are ideally placed to invest in bridge companies in African markets, given their long presence and in-depth engagement with local financing environments. The International Finance Corporation (IFC) and the UK’s CDC Group already invest in technology-enabled start-ups, and others, including OPIC, are adapting their strategies to be able to do so. Many of the continent’s most promising technology-enabled bridge companies are starting to raise funding large enough to attract the attention of DFIs. Frontier Car Group recently raised $89 million, Kenya’s Twiga Foods raised $10 million, and Nigeria’s Kobo365 has raised $6 million. Overcoming a dearth of funding remains one of the highest barriers for African entrepreneurs, and the development impact of investing in those that improve employment is enormous.

The gig economy comes with limitations. Lack of legal rights, limited career progression, stagnant pay and a lack of benefits are just some of the issues that will need to be addressed in an ‘Uberised’ world. These challenges, plus the day-to-day economic uncertainty, make the informal sector far worse in many ways than the formal. Bridge companies – because they are registered, and have a public brand and centralised management – can be pressured into addressing issues around workers’ wellbeing. Studies into the financial behaviours and needs of low-income families by BFA, a consulting firm specialising in financial inclusion policies, found that workers often aspired to ‘gig economy’ jobs but hated casual labour (such as waiting on a corner to be hired for the day) because of the lack of reliability and predictability.

The future of work is changing and the mass job creators of today will not be able to meet the needs of tomorrow’s workforce in the same way. Bridge companies are pioneering new ways of injecting efficiency and higher productivity into traditional informal markets. Investing in this trend is critical to solving Africa’s pressing job creation need.

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