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Figure 2.3 Between 2000 and 2010, Internet use grew more than 30% a year in around 60 developing countries Internet users, 2000 (per 100 people) 4.0 3.5 Dominican Republic 3.0 2.5 2.0 Peru Tunisia Colombia Belarus Brazil Saudi Arabia Russian Federation 1.5 Ecuador China Pakistan 1.0 Bosnia and Herzegovina Ukraine Sri Lanka Morocco 0.5 Egypt Kazakhstan India Uzbekistan Malawi Libya Tanzania Syrian Arab Viet Nam 0 Angola Azerbaijan Yemen Republic 0 10 20 30 40 50 60 Internet users, 2010 (per 100 people) Note: Bubble size is proportional to total Internet subscriptions in 2010 (320,000 in Angola and 6.7 million in Viet Nam, for reference). Only developing countries exceeding the 75th percentile of compound annual growth in Internet users are shown. Source: ITU 2012; World Bank 2012a. Human development is vital for participating in global supply chains; an abundance of low-wage and low-skill labour is not enough resource-poor Ethiopia and Tanzania are noteworthy for their large increase in nonincome HDI value between 2000 and 2010 and for their above-average FDI over the same period. Human development is also vital for participating in global supply chains. Contrary to popular perception, an abundance of lowwage and low-skill labour is not enough. Even assembling components made elsewhere can be complex, requiring individual skills and social competencies to coordinate and organize on a large scale. People can learn such skills with appropriate education, training and policy support. Basic human capabilities are also crucial. 40 China, Malaysia, the Philippines and Thailand in East Asia; Brazil, Costa Rica and Mexico in Latin America and the Caribbean; and Morocco and Tunisia in the Arab States have some of the highest trade shares in parts and components. Widespread benefits accrue only when activities are scaled up (box 2.6). However, it should also be noted that in trade of parts and components, the share of value added by any one country is generally low. In countries where production takes place almost entirely in enclaves connected to overseas supply chains, with limited ties to the domestic economy, the benefits to the rest of the economy are limited. 41 Helping other countries catch up All developing countries are not yet participating fully in the rise of the South. The pace of change is slower, for instance, in the majority of the 49 least developed countries, especially those that are landlocked or far from world markets. Nevertheless, many of these countries have also begun to benefit from South–South 50 | HUMAN DevELOPMENT REPORT 2013
Box 2.4 Mobile phones and the Palapa Ring: connecting Indonesia Indonesia used telecommunications technology to connect its large cluster of far-flung islands and to open the country to the outside world in ways unimaginable a generation ago. This transformation was not spontaneous: it required extensive private and public investment and prescient policy guidance from the state-run information and communications technology council, Dewan Teknologi Informasi dan Komunikasi Nasional (DETIKNAS). With a diverse population stretched across a vast archipelago of nearly a thousand inhabited islands, Indonesia faced formidable obstacles in its transition to the digital age. Communications between islands was limited. Landline telephones were few, available to most ordinary Indonesians only in major cities and at high cost. By 2010, however, 220 million mobile phones were registered in a country of 240 million people. An estimated 85% of adults owned phones, as state encouragement and market competition slashed the prices of handsets and phone service alike. The number of Indonesian Internet users has also grown exponentially. As recently as 2008, just an estimated 13 million had regular Internet access. By late 2011, more than 55 million people did, according to industry surveys. The majority of young Indonesians in urban areas now enjoy Internet access, mostly through mobile phones, but also through the country’s 260,000 Internet cafes (warnets). Through DETIKNAS the government has made Internet access a national priority, building what it calls a Palapa Ring of fibre-optic cables throughout the archipelago. It is closing in on its goal of wiring schools in a thousand remote rural villages with Internet service and has introduced e-budgeting and e-procurement systems for its own business operations. Perhaps most striking is the explosion of social media. In July 2012, there were 7.4 million registered Facebook users in greater Jakarta alone—the second most of any city in the world, after Bangkok’s 8.7 million. In all of Indonesia, there were 44 million Facebook accounts—almost as many as India’s 49 million. Indonesia has become a country where cabinet ministers send daily tweets to constituents. It has the third most Twitter subscribers in the world, and environmentalists use online databases and Google Earth mapping tools to publicize deforestation. The human development benefits of this digital revolution are apparent, Indonesian analysts say, with mobile phones giving rural communities access to public health information, banking services and agricultural market information. Civic engagement has benefited, with online public information services expanding since the 2010 passage of a far-ranging access to information law. The economy is profiting too. A December 2011 study by Deloitte Access Economics calculated that the Internet economy already accounts for 1.6% of Indonesia’s GDP, greater than the value of natural gas exports and comparable to the share in Brazil (1.5%) and the Russian Federation (1.6%), though still less than in China (2.6%) and India (3.2%). Deloitte projects an increase to at least 2.5% of GDP in five years, a substantial contributor to Indonesia’s International Monetary Fund–predicted annual GDP growth rate of 6%–7% through 2016. Source: Karimuddin 2011; Deloitte 2011. trade, investment, finance and technology transfer. A recent study of trends over 1988–2007 finds positive growth spillovers from China to other developing countries, particularly close trading partners. 42 These benefits have to some extent offset slackening demand from developed countries. Growth in low-income countries would have been an estimated 0.3–1.1 percentage points lower in 2007–2010 had growth fallen at the same rate in China and India as in developed economies. 43 FDI from a single source country, China, was credited with contributing substantially to growth rates in several African countries, including in 2008– 2009 when other growth impulses were dissipating. Between 2003 and 2009, the estimated contribution to growth from Chinese FDI ranged from 0.04 percentage point in South Africa to 1.9 percentage points in Zambia. The contribution was also high in the Democratic Republic of the Congo (1.0 percentage point), Nigeria (0.9), Madagascar (0.5), Niger (0.5) and Sudan (0.3). 44 Commodity producers in Sub-Saharan Africa and elsewhere have benefited from a prolonged commodity boom arising in East and South Asia. Cheap imports also increase the purchasing power of low-income consumers and the competitiveness of export- oriented producers. Some African countries may, however, be hampered by the enclave character of extractive industries, which reduces the potential gains from South–South trade and exposes economies to the risk of Dutch disease. Nevertheless, the primary sector can generate sizeable backward and forward links, as Brazil, Chile, Indonesia, Malaysia, and Trinidad and Tobago have shown. Possibilities include agroindustry and logistics infrastructure, as well as demand for services (in food processing and distribution, construction, repair and maintenance), all of which create jobs, income and learning and can enable entrepreneurs to begin new cycles of innovation and investment. Several encouraging signs are evident. The more recent investments from East and Chapter 2 A more global South | 51
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W N S E Human Development Report 20
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Human Development Report 2013 The R
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Human Development Report 2013 Team
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Finally, the Report also calls for
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Musa, Thangaval Palanivel, Anuradha
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Page 13 and 14: Overview One of the most heartening
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Page 19 and 20: two scenarios for 2010-2050: a base
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Page 23 and 24: Introduction When developed economi
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Page 36 and 37: Box 1.3 Amartya Sen, Nobel Laureate
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Page 42 and 43: Figure 1.4 There is notable variati
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Page 82 and 83: Box 3.5 Eastern Europe and Central
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Box 4.2 China and Ghana: who benefi
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Figure 4.8 countries thus converge
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“Let us join hands to try to crea
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Areas of global international conce
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Addressing climate change requires
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International governance is increas
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Box 5.2 Jo Leinen, Member of the Eu
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facilitates reserve investments and
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esponsible sovereignty takes the lo
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Figure 5.1 Under the accelerated pr
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Good policymaking requires greater
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a fair and less unequal world requi
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Notes Overview 1 Atsmon and others
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25 Blinder 2006. 26 UNIDO 2009. 27
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which is 61.7 deaths per 1,000 live
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References Abdurazakov, A., A. Mins
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urban_world_cities_and_the_rise_of_
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Kamau, P., D. McCormick, and N. Pin
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Labor Administration. Geneva: Inter
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Statistical acknowledgements The Re
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Key to HDI countries and ranks, 201
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Statistical references ADB (Asian D
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Core features of the model pertinen
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Countries and HDI ranks in 2012 and
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