Tag Archives: emerging markets

My New China: Global E-Commerce Record Ushers in Fresh Economic Era!


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New Kids on the Block: Rankings of Universities Under Fifty Years Old Reveals Emerging Markets Shock!

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Filed under Education, Media

We Could Be Twins: Algeria-Malaysia #Education Agreement ‘Will Boost #University Rankings’!


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Show Me the Subsidy! M-Pesa, Vodafone and the Entrepreneurial State

Screen Shot 2014-04-12 at 13.21.52Scanning the back pages of London’s Financial Times is not something that we at Mediolana do nearly enough of, but a recent spare five minutes yielded exactly this activity – and in one respect at least we were genuinely shocked at what we found. And the surprise didn’t come in the news that Vodafone are planning to launch a version of M-Pesa – a mobile payments system that has proven phenomenally successful in Kenya and Tanzania – in Europe: as living standards continue to stagnate or decline in much of the eurozone and beyond, a new generation which is less tied into conventional financial structures such as the traditional bank account needs to be catered for.

The stupefaction came in the detail. M-Pesa originally began as a humble pilot project in 2006. The value of this project? A mere £2m – not bad for software than handles an estimated 33% of Kenya’s gross domestic product per month in SMS-ed cash. But what is arguably the bigger revelation is the fact that of that initial £2m, half of the investment was not put up by Vodafone, but contributed by the UK government’s Department for International Development (‘DFID’).

Of course, this sum of money was only the beginning: Vodafone and its East African subsidiary Safaricom have pumped in significant volumes of capital since to build up the M-Pesa network – as well as attempting to export the model to other emerging markets with varying levels of success. But the fact remains that without the DFID subsidy, M-Pesa as we know it today would have been nothing more than just another idea which never made it beyond the conceptual stage. As the inimitable Mariana Mazzucato copiously illustrates in her excellent and provocative thesis The Entrepreneurial State, there is a definite pattern of corporations riding off the coattails of government subsidy in ‘risky’ investment areas such as high technology: companies only allocate resources to sectors in which the state has already tested the water.

Yet as Vodafone prepares to roll out M-Pesa in the Old Continent, the urgency of reexamining the equity and expectations of this type of financial aid has perhaps never been greater. As the FT rhetorically poses: ‘…should taxpayers have shared in M-Pesa’s long-run upside…?’ Should citizens demand much, much more from both their governments and state agencies in determining exactly how their money is risked – and in securing an apposite financial return commensurate to the risk involved? And should there be a much greater reconceptualisation of the state as entrepreneur than has thus far been envisaged?

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Filed under Economic Development

Slamming on the Brakes: Brazil Growth Figures Cap Sobering Times for Original BRIC Nations!

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Doom and Boom: Five Reasons Why the Rise of the Global Middle Class is Being Ignored

Screen Shot 2014-02-09 at 12.09.18In her most recent column for the Financial Times (Which middle class, which squeeze?, 8th-9th February 2014), the always-readable Gillian Tett makes an important observation: notwithstanding the declining numbers of people in the United States and the West more generally who regard themselves as economically middle-class – and the rising number who consciously define themselves as lower class – the global middle class is expanding at a furious pace. Citing a 2013 report from EY (formerly Ernst & Young) entitled Hitting the Sweet Spot, Tett notes that over the next two decades this segment is expected to increase by three billion people; even in today’s Asia, 525m people can already count themselves as middle-class consumers, those with ‘disposable incomes that will allow them to buy the cars, televisions and other goods’.

Reading this prompts one obvious question: if this is the case, then why – the odd acronym aside – do we hear and know so little about this phenomenon in much of the developed world? After some contemplation, we at Mediolana think there may be five key reasons behind this silence:

1. A West-centric Media. What happens in New York City, London and Paris is still deemed to be more important than occurrences in Beijing, Rio de Janeiro and Jakarta. This is as understandable as it is ultimately untenable.

2. A Media-centric Media. Most of the world’s most prominent journalists are from or based in Western countries. They are human, too – and their anxieties are reflected in much of their coverage.

3. Hegemony. At the time of the Asian Financial Crisis of the late 1990s, it became clear that there were some in Western policymaking circles who were deeply hesitant about the rise of Japan and did not wish to see its model replicated. Have we moved on from this mindset?

4. Uncertainty. Many in Europe still struggle with Middle America and the idea that its values are in many ways very different from their own; the same is true vice-versa. Are we ready to comprehend and contend with the values of Middle Malaysia?

5. Not My Problem. With Peak Oil and resource crunches looming over the horizon, it is becoming increasingly clear that the middle-class dream is not necessarily sustainable – at least as it is currently constituted. Through largely ignoring the immense shifts taking place in today’s world, are we deferring this debate to the next generation?

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World in Motion: Hundreds of Millions ‘Lifted Out of Poverty’!


Filed under Economic Development, Economics