development & globalisation

Development & Globalisation 2016 | 2017 edition

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TOPIC EYE A-Level Geography

OverviewThe uneven impact of globalisation on economic, social and cultural development.

The MINT countries – new kids on the bloc?David Redfern considers the remarkable economic growth of the latest group of middle-income countries – Mexico, Indonesia, Nigeria and Turkey.

Fracking – economic boon or environmental disaster?While shale energy may be seen as an economic miracle, the process of extraction may be viewed as an environmental disaster. David Holmes examines the complex and emotive arguments surrounding oil and gas fracking.

Living in conflict zones – Gaza and ZaatariDavid Redfern looks at the consequences of conflict and turmoil in the Middle East for the people living in Gaza and on the Syrian/Jordanian border.

Evaluating microfinance schemesMicrofinance is a source of money services for people, entrepreneurs and small businesses lacking access to banking and financial services. David Holmes explores how schemes can work to help alleviate poverty.

For the women of India, a dark and dangerous walk to the toiletDavid Redfern discusses the social factors that may be partly responsible for the incidents of sexual violence in this rapidly developing country.

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TOPIC EYE Licensed to: Development & Globalisation 2016 | 2017 Bridgwater College

As globalisation continues apace, and more and more parts of the world have the desire to raise living standards to a perceived level of expectation, it is apparent that economic development cannot advance smoothly alongside social and cultural development. Furthermore, while it is in everyone’s interest that people live under better conditions, it is also true that the richest amongst us, nations as well as individuals, want to maintain their differential, even if their desire to do so impacts negatively on others. Development can also depend on scale and location; it can be driven by decisions of central government, or it can be down to individuals in small communities. Development geographers are used to using the acronyms BRIC and G8/G20, each associated with a particular group of countries. David Redfern considers the rise of a new grouping – MINT (Mexico, Indonesia, Nigeria and Turkey) – in relation to recent economic growth. These countries illustrate how development is becoming increasingly complex as they demonstrate wider economic and geopolitical factors such as energy resources, demographic trends, and religious and cultural influences. Oil and natural gas have provided the ‘fuel’ for development and globalisation, both literally and metaphorically. It is self-evident that the wealthiest nations, and indeed many individuals, are associated with the production and distribution of these resources. So why is it that the discovery of a ‘new’ way of exploiting oil and gas in shale deposits – fracking – is causing so much controversy? David Holmes examines the economic and environmental issues associated with this activity with particular reference to the USA and Australia, and asks how it might impact on energy security in Europe. Not everyone experiences the benefits of increasing levels of personal wealth resulting from globalisation. In various parts of the world many people still suffer extreme poverty caused by geopolitical issues such as civil war and international strife. Two areas in the Middle East that illustrate this graphically are the regions of Gaza and northern Jordan. David Redfern looks at living conditions in these two areas and observes that while one seems to be spiralling into decline, there are signs of hope in the other. For many people in remote rural areas in Africa and Asia, direct access to banking facilities has been a restricting factor. David Holmes looks at the variety of small-scale finance initiatives, termed ‘microfinance’, that have become prevalent in these locations. In particular he examines the success of microcredit schemes in Morocco and India and asks whether these are the main routes to alleviating poverty as well as impacting on other social factors, such as levels of education and trust within communities. India, a BRIC country, is one of the newly emerging economies on the global scale. Levels of wealth and social conditions for many of its residents are improving rapidly, and yet it seems that some cultural attitudes have remained rooted in the past. This is highlighted by the recent spate of reported rapes on women, particularly in the countryside. David Redfern examines this phenomenon and the associated issues regarding attitudes to women within Indian society. It is apparent that economic development has not gone hand-in-hand with social and cultural development – huge disparities in attitude remain.

Overview

Series contributors

David Redfern (Editor)

David Holmes

Garrett Nagle

Simon Oakes

1TOPIC EYE Licensed to: Development & Globalisation 2016 | 2017 Bridgwater College

evelopment geographers have become familiar with the term ‘BRIC’ – Brazil, Russia, India and China – but now they have a new one: ‘MINT’. This acronym refers to the newly emerging economies on the world stage: Mexico, Indonesia, Nigeria and Turkey (Figure 1). Each has a large, youthful population capable of delivering a demographic dividend (see Topic Eye Population & Health 2014/15 edition). The demographic dividend can deliver a number of benefits. The first is an increased labour supply for use in industry. The second is the increase in savings. As the number of dependants decreases, individuals can save more. Thirdly, decreases in

D fertility rates result in more women taking part in the workforce. Parents can also invest more resources per child, leading to better health and educational outcomes. Finally, the increasing domestic demand brought about by rising GDP per capita and the decreasing dependency ratio leads to economic growth.

The MINT group comprises an interesting set of case study countries. They demonstrate wider economic and geopolitical issues including:• energy – Nigeria’s growth has been based on

oil;• multi-governmental organisations – Mexico’s

growth has been facilitated by its membership of the North American Free Trade Association (NAFTA);

• the offshoring of manufacturing – Indonesia has been a major player throughout the era of global shift of manufacturing from developed to developing countries;

• rising geopolitical tension between the West and the Islamic world – Turkey has a foot in both camps.

Comparative statistics for the MINT countries are presented in Table 1. All four states outperformed the BRIC economies in 2013, with the exception of China (Figure 2). They are the latest in a line

The MINT countriesNew kids on the bloc?

Demographic dividend – a period when a country’s population structure has a surfeit of young adults relative to dependants, which can be a force for economic growth if used wisely.

David Redfern considers the remarkable economic growth of the latest group of middle-income countries – Mexico, Indonesia, Nigeria and Turkey.

TURKEY

NIGERIAMEXICO

INDONESIA

Figure 1 The MINT countries


of medium-income groupings of nations that occupy a growing middle ground between the wealthy developed nations and the world’s least developed countries. They are a symptom of the huge economic and geopolitical shifts taking place in the twenty-first century world. Decades ago, theorists suggested that global power rested in the hands of a relatively small block of developed capitalist nations (called the ‘core’), many of which are in the G8. It can be argued that this view of the world has been overturned by the growing economic and political power of middle-income countries (not to mention new high-income states, such as Qatar and the UAE).

Mexico is the second largest economy in Latin America and some suggest it could become the world’s eighth largest by 2050. One of the major drivers of Mexico’s growth comes from the manufacturing sector, mainly undertaken in its maquiladoras. Manufacturing has grown due in large part to foreign companies setting up operations in Mexico. For example, in October 2013 Chrysler announced that it was investing $1.3 billion to open plants in Mexico, and Audi has also invested over $1 billion to build its luxury cars in San Jose Chiapa. Lower labour and energy costs and a business-friendly government have made Mexico an increasingly attractive place for outside businesses looking to restructure their production.

Much of the recent investment in Mexico’s manufacturing sector comes as a result of rising wages in China, which have made many compa-nies look elsewhere for manufacturing options. China’s share of the American import market has also declined, and Mexico has rushed to claim it; its trade with the USA has grown to over $500 billion annually. The USA and Canada are likely to remain two of the largest export destinations for the foreseeable future, but Chinese demand is also increasing. China is expected to be Mexico’s second largest export market by 2030.

Mexico has also benefited substantially from the North American Free Trade Agreement (NAFTA). Through this, Mexico now exports around $1 billion-worth of goods per day, which is more than ten times the amount exported when the NAFTA was implemented in 1994. NAFTA is not Mexico’s only free trade agreement. It has 44 such agreements with other countries around the world – more than the United States and China combined.

Indonesia is now one of the Asia Pacific region’s most successful economies largely due to political stability, encouraging offshoring activities and a large population. The country’s gross national income per capita has steadily risen from $2200 in 2000 to $3563 in 2012. Its long-term development plan (2005–25) is segmented into five-year medium-term plans, each with different development priorities. The medium-term plan up to 2014 was focused on:• promoting the quality of human resources –

education and training;• development of science and technology;• strengthening economic competitiveness.However, considerable challenges remain. Out of a population of 249 million, more than 29 million Indonesians currently live below the poverty line and approximately half of all households remain clustered around the national poverty line set at $17 per month. Employment growth has been slower than population growth. Public services, such as health, remain inadequate by middle-income standards and, as a result, may fail to reach some Millennium Development Goal (MDG) targets. For example, data from 2013 show that Indonesia still suffers 228 deaths for every 100,000 live births, while the MDG aims to reduce this to 105 deaths by 2015. In addition, despite recent progress, access to improved sanitation facilities currently stands at 68% of the population, which remains significantly short of the MDG target of 86%.

Offshoring – the manufacture or assembly of a product in a developing country using components produced in a developed country.

Table 1 Comparative statistics for the MINT countries

Country Mexico Indonesia Nigeria Turkey

GDP growth rate (%), 2010–13 3.4 6.0 6.8 5.9

Population (millions), 2013 118 249 174 76

Population growth rate (%), 2013 1.5 1.5 2.8 1.2

GDP per capita ($), 2012 16,630 4810 2420 17,500

20132012201120102009200820072006200520042003

15

10

5

0

–5

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GD

P a

nnua

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(%)

MexicoTurkeyWorld

BrazilChinaIndia

IndonesiaRussiaNigeria

Figure 2 GDP growth in BRIC and MINT countries (% annual change), 2003–13

A maquiladora – a manufacturing operation in a Mexican free trade zone, where factories import material and equipment on a duty-free and tariff-free basis for assembly, processing or manufacturing and then export the assembled, processed and/or manufactured products.


With a population of 174 million, Nigeria is the largest country in Africa and accounts for 47% of West Africa’s population. It is also the biggest oil exporter in Africa, with the largest natural gas reserves in the continent. With such reserves of human and natural resources, the country is poised to build a prosperous economy, significantly reduce poverty, and provide health, education and infrastructure services to meet its population needs. However, its strength is also its weakness. Oil accounts for almost 90% of exports and roughly 75% of revenues, which means that any decline in oil revenues squeezes government budgets. Growth has therefore become broader based, oriented primarily toward the domestic market, and concentrating on agriculture, telecommunications and manufacturing. Yet strong economic growth has not translated into higher employment rates.

Employment remains a major issue, with an estimated 50 million underemployed youth.

There are social complications too. Nigeria’s population is made up of about 200 ethnic groups, 500 indigenous languages, and two major religions – Islam and Christianity. The largest ethnic groups are the Hausa-Fulani in the North, the Igbo in the Southeast, and the Yoruba in the Southwest. The fragmentation of Nigeria’s geographical, ethnic and cultural identity has resulted in some political instability across the country. Such instability in the northern parts of the country has come to the fore recently with the activities of the terrorist group Boko Haram.

With a GDP of $786 billion, Turkey is the eighteenth largest economy in the world. Its economy is varied, with strong influences of manufacturing and tourism. In less than a dec-ade, per capita income in the country has nearly tripled and now exceeds $17,000. Although the onset of the global economic crisis in 2008 slowed economic growth, Turkey has neverthe-less remained resilient and provides an example for other countries in the region to follow. As a measure of its economic success, Turkey was the only country in the Organisation for Economic Cooperation and Development (OECD) that did not provide public sector support for the banking sector in the wake of the crisis.

Turkey has a complex relationship with the European Union (EU). The EU remains its largest economic partner, accounting for 46% of Turkish trade in 2012. Turkey wants to become a full member of the EU and accession negotiations began in October 2005 and continue to progress. This is despite a number of political obstacles, the major one being how to deal with the political situation in near-neighbour Cyprus, where the country is split between Greek-speaking and Turkish-speaking populations.

ConclusionSome political commentators consider the pre-viously all-powerful G8 group as an increas-ing ‘irrelevance’ in comparison to the larger, globally representative G20 group that includes every BRIC and MINT member except Nigeria (Figure 3). The growing influence of BRIC and MINT nations, alongside other medium-income countries, has implications for a range of global governance issues – in particular, for the fight against international terrorism and for climate change mitigation. TE

Figure 3 Selected groupings of countries

Middle income

OPEC members

OECD members

Ex-Soviet statesG8

NICs

Nigeria LibyaVenezuela Iran

UK FranceUSA Germany

Italy JapanCanada

ChinaIndia

Turkey

Least developedcountries (LDCs)

SudanEthiopia

Afghanistan

UkraineEstonia

UzbekistanTajikistan

SwedenSpain

Australia

Angola

Indonesia

Saudi ArabiaUAE

South KoreaMexico

Russia

Low incomeHigh income

Note: G8 countries are Canada, France, Germany, Italy, Japan, Russia, UK, USA and the EU.G20 countries are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, UK, USA and the EU.

Access to sanitation facilities still leaves much to be desired – Balinese toddler taking a bath in an old paint can


RESPONSEAssimilation1 Outline the economic benefits for a country arising from the

‘demographic dividend’.

2 Describe the varying memberships of the groupings known as G8, G20,

BRIC and OPEC.

3 Explain how the maquiladoras and membership of NAFTA have assisted

Mexico’s growth.

4 What social issues does Indonesia face, despite its economic growth?

5 Outline the impact that Nigeria’s complex ethnic mix is having on its

development.

6 Why is Turkey’s proposed entry to the EU not straightforward?

Evaluation1 ‘The “demographic dividend” has transformed the economy of several

countries.’ To what extent do you agree with this statement?

ANSWER PLAN

• Define key terms such as ‘demographic dividend’, ‘dependency

ratio’, ‘ageing population’, ‘youthful population’.

• Outline the conditions needed for a demographic dividend – both

demographic and socio-economic.

• Outline the benefits of a demographic dividend using examples of

named countries or groups of countries.

• Discuss examples in which a demographic dividend might not occur

– falling fertility without changes in socio-economic conditions.

• Evaluate the short-term and longer-term impacts of a demographic

dividend.

• Summarise by stating your views on the statement.

2 Study Figure 2. Describe the information shown and comment on what

it tells us about world development.

3 Study Table 1. To what extent are the MINT countries comparable?

4 Compare the main drivers of economic development in the four MINT

countries.

5 ‘Economic development and environmental sustainability are

incompatible goals.’ To what extent do you agree with this statement?

Extension1 Find out more about the demographic dividend and its impact on

nations’ economies at the International Monetary Fund’s (IMF) website:

www.imf.org/external/pubs/ft/fandd/2006/09/basics.htm

2 Learn how Nigeria’s burgeoning film industry (known as ‘Nollywood’)

has helped double its GDP at www.cnbc.com/id/101559433/. This

includes a short video discussion from CNBC.

3 As the MINT countries grow economically, how are their globalisation

scores changing? You could undertake a survey of recent KOF (a Swiss

economic institute) reports and the rankings for the MINT countries:

http://globalization.kof.ethz.ch/

REVIEWKey points• The acronym ‘BRIC’ is in common usage in

development geography, but a new one, ‘MINT’,

is now widely used and refers to Mexico,

Indonesia, Nigeria and Turkey.

• All of these countries share a large youthful

population, decreasing dependency ratios and

rising levels of personal wealth.

• Mexico’s growth is based on manufacturing, and

has been assisted by its proximity to the USA

and its membership of NAFTA.

• Indonesia’s growth is based on offshoring

activities, but much of the wealth generated has

not reached all of its large population.

• Nigeria’s rise is based on oil, which makes it

vulnerable to price fluctuations; it also faces

internal problems resulting from its ethnic mix.

• Turkey’s growth is widely based, ranging from

manufacturing to tourism, and it has a strong

desire to join the European Union.

Pause for thought• Are the benefits of the demographic dividend

just a passing phase? Is it the case that TNCs

are just exploiting such nations over the short

term?

• To what extent do development geographers

focus too much on the economic credentials of

an emerging nation?

• To what extent is there homogeneity between

these four nations, or are they just lumped

together for convenience?

• How useful is it to use acronyms such as ‘BRIC’

and ‘MINT’ for the countries themselves and for

others?

ContextThis article examines the reasons for the growth of

the latest group of middle-income countries and the

issues that have arisen as a result of it. Within this

context there are a number of related aspects:

• whether commonalities exist between the four

countries in terms of their economic growth;

• the wider social and environmental

consequences for the countries involved;

• the usefulness of acronyms such as ‘BRIC’ and

‘MINT’ in describing nations’ economic growth –

are such groupings too simplistic?


racking (hydraulic fracturing) is the high-pressure injection of water, chemicals and sand into shale deposits to release the gas and oil trapped within the rock (Figure 1). In recent years this has been combined with new techniques, such as horizontal drilling, to access stores of gas and oil that were previously infeasible to exploit commercially.

Hydraulic fracturing is used to increase the rate at which fluids, such as petroleum and water, or natural gas can be recovered from subterranean

F

natural reservoirs. Reservoirs are typically porous sandstones, limestones or dolomite rocks, but also include ‘unconventional reservoirs’ such as shale rock or coal beds.

Examining the pros and cons of frackingThe injection of large volumes of fluid into the ground subsurface is not without risk, and recent reports in the media and, to a much lesser extent, in the scientific literature have highlighted the potential for the following:• small and localised earthquakes induced by

slip on nearby faults (induced seismicity);• contamination of ground water, and possibly

even drinking water, with natural gas and other chemicals;

• the leakage of contaminated drilling waste fluid from storage ponds; emissions of volatile components, such as CO2 or methane, into the atmosphere. CO2 and methane are significant greenhouse gases, and some studies have shown that shale gas extraction is likely to have a greater carbon footprint than the extraction of conventional gas and other fossil fuels (Figure 2).

Others also argue that shale gas distracts from encouraging investment in renewable technologies and therefore acts as a distractor in terms of a lower carbon economy. Yet shale gas has transformed America’s energy outlook (see case study below). The country is set to become self-sufficient in natural gas and could become a big exporter, boosting its economy, while gas substituting for coal in electricity generation has decreased carbon emissions. The

Figure 1 Fracking – the process of shale gas extraction

Shale – a rock that is formed by the consolidation of clay, mud or silt, has a finely stratified structure, and is composed of minerals essentially unaltered since deposition.

FissureShale

Gas �ows out

Water, sand and chemicals

Well

Water table Gas

�ows out

Shale

Hydraulicfracturing

Not to scaleFissures

Water, sand andchemicals injectedinto well

FrackingEconomic boon or environmental disaster?

While shale energy may be seen as an economic miracle, the process of extraction may be viewed as an environmental disaster. David Holmes examines the complex and emotive arguments surrounding oil and gas fracking.


gas industry and those in favour of shale gas dismiss most of the environmental impacts as either vastly exaggerated or simply wrong. One of the main arguments cited by those in favour of the technology is that shale gas provides a new opportunity to meet rising global energy requirements. They maintain that energy is very strongly linked to development.

As a result of the controversy, countries in Europe have taken a range of positions when it comes to the shale gas industry (Figure 3). Only a handful of test wells have been sunk in Europe, so it is really too early to see if the shale beds have as much potential as those in America.

CASE STUDY

Fracking in the USASince the mid-2000s the American shale boom has transformed the country’s energy security, and helped to cut natural gas prices by 60% from their 2008 peak. Output from oil fracking in the USA has increased dramatically, from about one million barrels per day in 2010 to around four million barrels per day at the end of 2014. Total American oil production has risen to more than nine million barrels a day, a level close to the historic high of the 1970s and nearly as high as the 9.6 million barrels of daily oil production from Saudi Arabia. The income, employment and tax revenues that the shale revolution has created have regenerated both urban and rural areas, and cut greenhouse gas emissions with a shift away from coal.

Yet for many people, ‘fracking’ is a very dirty word. Aside from the concerns about seismic activity, air and groundwater pollution, some studies have suggested that there are health prob-lems (respiratory and skin irritation) for those individuals who live very close to fracking sites. Research on this, however, is extremely limited and the data are often based on small surveys.

Critics also claim that fracking in the USA has distracted energy firms and the government from investing in renewable sources of energy, actually encouraging a far greater and continued reliance on fossil fuels.

CASE STUDY

A different kind of fracking in Australia?In Australia, coal seam gas (CSG) is extracted from deep underground using a similar fracking technology. It is plentiful, providing 90% of Queensland’s gas and 15% of the state’s electricity

Figure 2 Carbon footprint comparison of shale gas, conventional gas and coal

generation. CSG is beginning to form the basis of a major new liquefied natural gas (LNG) export industry that will deliver substantial economic benefits to Queenslanders and create substantial local employment. Australia is likely to overtake Qatar as the world’s leading LNG exporter by 2020. A total of US$137 billion of private investment is committed to LNG projects in Australia over the next five years.

Supporters of CSG argue that the extraction is different from that used in shale. Shale gas wells are generally a lot deeper, with all the wells requiring hydraulic fracturing which is often more intensive than the process required for CSG (some wells do not need to be ‘fracked’ at all to make gas flow). Coal seam gas is mostly

Carbon footprint – the amount of carbon dioxide released into the atmosphere as a result of the activities of a particular activity, individual or community.

Energy security – the uninterrupted availability of energy sources at an affordable price.

A daunting climate footprintOver 20 years, shale gas is likely to have a greater greenhouse effectthan conventional gas and other fossil fuels

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Indirect CO2

Direct CO2

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estimateShale gas CoalConventional

gas

Highestimate

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PORTUGALSPAIN

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SERBIA**

CZECH REPUBLIC

SLOVAKIAAUSTRIA*

ROMANIA

BULGARIA

TURKEY

UKRAINE

BELARUS

LITHUANIA

LATVIA

ESTONIA

POLAND

NORWAY

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SWEDEN

HUNGARY

Shale-gas basins

Extraction: (2012)

What shale we do?

Banned/moratorium

* Restrictive laws ** Bids for permits invited

Allowed

Allowed &permits issued

Figure 3 Approaches to the shale gas industry in Europe


methane and has much more simplified drilling, production, storage and treatment processes than shale gas, which generally results in the produc-tion of some higher order complex hydrocarbons, including light oils.

However, for all its economic benefits, many Australians are understandably worried about the impact CSG may have on water supply, and they fear scarcity and pollution. Many rural commu-nities depend on water from the Great Artesian Basin, which is Australia’s biggest groundwater reserve and lies deep under the region that cor-porations are anxious to exploit (Figure 4). Water can be lost from aquifers as it seeps into fracked coal seams. Farmers are also worried that CSG extraction on their land reduces its market value

substantially (they do not see much benefit from the extraction since the state owns the ground underneath their soil). It is claimed that some compensation deals have been low. Coal seam gas mining has a poor reputation in some areas for breaking up local communities precisely because it is so controversial.

Sensitive to priceAt the time of writing, global oil prices have fallen by 40% since mid-2014 when the price reached $110 per barrel. This is likely to be worrying for all who make a profit from selling oil and other linked energy products. Researchers suggest that a breakeven price for many fracking companies is around $65–70/barrel; this means there will be less investment in growth and expansion of the technology. The industry’s current economic vulnerability may prevent a more rapid expansion into other locations.

ConclusionA variety of solutions are required to keep the lights on, keep energy bills affordable and, at the same time, manage carbon emissions. Different large-scale energy projects are undoubtedly needed and it is likely that fracking will be part of that new energy mix. Published data suggest that there is a low and probably manageable risk to ground water from fracking, whereas the potential impacts on the atmosphere from associated methane emissions and the risks of increased seismicity are less well known. Having said that, many scientists believe that the real risks of fracking far exceed the evidence, though there is a lack of baseline data. It is certainly widely recognised that the industry needs more transparency, both from the companies themselves and the regulating agencies. Some of the chemicals used, for example, cannot be disclosed because they are ‘trade secrets’.

In truth, the price of oil is likely to be more significant than the demands of anti-fracking campaigners in determining future energy choices and the role of fracking in the UK and elsewhere. At the time of writing, the oil price has recovered slightly and is now around $65 per barrel, but there still seem to be few incentives to develop and expand the energy supply outside of the USA.

The real and immediate challenge for deci-sion makers is to provide the right energy mix in what has become a highly charged political atmosphere. TE

Figure 4 Location of fracking in Australia

0 750km

NORTHERNTERRITORY QUEENSLAND

NEWSOUTHWALES

Bowenbasin

Great Artesian basin

Suratbasin

SOUTHAUSTRALIA

VICTORIA

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Great Barrier Reef(World Heritage Area)

AustralianCapitalTerritory

PACIF ICOCEAN

Roma

Cairns

Sydney

Brisbane

Gladstone

Canberra

Melbourne

Adelaide

Anti-fracking campaigners in Lancashire


RESPONSEAssimilation1 Describe the basic process of hydraulic fracturing.

2 Evaluate the environmental threats associated with fracking.

3 Why are some groups and people so cautious about fracking close to

their homes?

4 Why do some people think that governments are not doing enough to

regulate this industry, and is that a fair criticism?

5 Why does the USA have better energy security and greater resilience to

energy price shocks?

6 Why might future global oil prices have a big influence on the extent of

fracking?

Evaluation1 Examine the social and environmental challenges that fracking presents

to governments and policy makers.

ANSWER PLAN

There are a number of challenges:

• Social issues are particularly centred around NIMBYism – problems

of contaminated water and stress-related illness.

• On the other hand, the benefits of revenues (tax) and local economic

development are tempting for policy makers.

• The increasing pressure on governments to have a more resilient

and secure energy supply works in fracking’s favour, together

with the need to decarbonise our energy mix and move away from

coal.

• In developing economies, fracking provides one solution for

increasing the total amount of energy available.

• Fracking industries are powerful – their ability to generate

employment and take some places out of a spiral of decline is a

major economic driver.

2 To what extent do the economic benefits of fracking outweigh the

environmental concerns?

3 ‘Shale gas provides a new opportunity to meet rising global energy

requirements.’ Discuss.

4 To what extent will a projected drop in demand for energy from

developed world economies affect the long-term viability of the fracking

industry?

Extension1 Find a map that shows the global distribution of fracking locations

and then describe their distribution in a few short but well-worded

sentences.

2 Research a range of websites to see if you can find examples of ‘anti-

fracking hype’. Identify the sources of misinformation.

3 Go to the link http://frack-off.org.uk/ and read about the environmental

harm from fracking. How much is objective?

REVIEWKey points• Fracking for gas and oil is a major new

technology that has delivered considerable

advantages for some people.

• There is huge controversy and misinformation

regarding hydraulic fracturing, making some

groups and governments very wary about

allowing more development.

• In the USA, fracking has been responsible for

an energy transformation, lowering prices and

increasing security.

• Australia has become a world leader in LNG

exports as a result of the new coal gas.

• The potential for fracking in the UK and Europe

is substantial and would mean greater energy

security, allowing a shift away from imported

gas.

• Its effects on people and the environment are

complex, but there is a lack of baseline data to

provide firm scientific foundation for its critics.

Pause for thought• There are complex shorter- and longer-term

impacts of fracking on the environment and,

indirectly, on people.

• Political issues surround the low levels of

regulation in the industry.

• The geopolitical benefits of fracking are said to

have reduced the USA’s reliance on gas.

• Fracking in the USA has made shale gas plentiful

to a degree that was unimaginable just five years

ago.

• Many of us have benefited from a lowering

of global oil prices, which has in part been a

consequence of fracking that has contributed to

an oversupply in the global energy market.

ContextFracking is central to a much larger energy and

climate change debate. There are a number of

overlapping issues:

• Fracking is one way of satisfying the increasing

demand for energy which fuels economic activity.

• It has a significant environmental overhead and

the resulting cheaper energy has encouraged

greater consumption.

• It may have social consequences that impact at a

community level, but it has brought employment.


uring the turmoil that existed in the Middle East during the summer of 2014, two areas of dense population illustrated clearly the varying development problems faced by people in conflict zones. Gaza is predominantly an urban area created over several generations but repeatedly facing pressure from surrounding enemy forces. Zaatari, in northern Jordan, did not exist three years ago. It has been created directly as a result of the ongoing civil war taking place to the north in Syria. How have these two populated areas coped?

CASE STUDY

GazaHome to 1.8 million people, Gaza is a strip of land 40 km long and 10 km wide, bounded by the Mediterranean Sea, Israel and Egypt (Figure 1). Originally occupied by Egypt, the territory was captured by Israel during the 1967 war. In 2005 Israel withdrew its troops and, a year later, the militant Islamist group Hamas won local elections. It has ruled Gaza from 2007 to the present day. When Hamas took over, Israel imposed a blockade on the territory, restricting the movement of goods (including fuel) and people

D

Civil war – a war between citizens of the same country.

Food insecurity – exists when people do not have access to sufficient, safe, nutritious food to maintain a healthy and active life.

in and out. Furthermore, Egypt has restricted movement across Gaza’s southern border.

What are conditions like?Gaza is a densely populated area, consisting of urban areas, refugee camps and desolate land. Its population density is already one of the highest in the world (Figure 2). On average, 4505 people live on every square kilometre in Gaza. That is expected to rise to over 5800 people per square kilometre by 2020 when the population is expected to reach 2.13 million. The UN says there is a shortage of 70,000 housing units. The ratio of young people between the ages of 15 and 29 to the total over-15 population is exceptionally high, at 53%.

Gaza has little rain and no major fresh water source to replenish its underground water sup-plies, which are not large enough to keep up with demand. Only 5.5% of the piped water meets World Health Organisation (WHO) quality standards. Treatment of wastewater and sewage is another headache. Gaza relies on wastewater treatment plants that are either working beyond their intended capacity or were constructed as temporary installations. As a result, about 90 million litres of untreated or partially treated sewage is pumped into the Mediterranean Sea every day.

The level of food insecurity in Gaza is great. 80% of Gaza’s population receive some form

Gaza and ZaatariDavid Redfern looks at the consequences of conflict and turmoil in the Middle East for the people living in Gaza and on the Syrian/Jordanian border.

Living in conflict zones


Refugee – someone who, due to fear of persecution, is outside the country of his/her nationality, and is unable or unwilling to return to that country.

of food aid. Israeli restrictions on access to agricultural land and fishing add to the challenges. Gazans are also not allowed to farm in the Israeli-declared buffer zone – 1.5 km wide on the Gaza side of the border – and this has led to a loss in food production. The fishing limit extends to 6 nautical miles from the coast, but this is often reduced to 3 nautical miles.

Gazans are worse off than in the 1990s: 21% live in deep poverty, living on less than $500 a month. The unemployment rate in the strip is 41%. Of particular concern is the high youth unemployment rate, which stands at more than 50%. The severe shortage of building materials led to a surge in prices and a sharp slowdown in the construction sector, which employs about 10% of the workforce.

Gaza’s school system is under pressure. The UN, which runs many of the schools, says an additional 440 schools are needed by 2020 to cope with the expected growth in the population. Some 463,000 children attend 694 primary and secondary schools. Almost 70% of the schools run on double shifts, limiting instruction time. Classes are also large, often with between 40 to 50 pupils. Having said that, official figures for literacy are high: 93% for women; 98% for men.

The UN says that most health facilities are un-able to provide adequate care. The closure of the Rafah crossing reduced the number of patients travelling to Egypt for treatment to a monthly

average of 300, with only very sick people or special cases allowed to leave. It also disrupted the supply of critical medicines. Frequent and prolonged power cuts strain hospitals’ back-up power sources, affecting medical equipment and leading to interrupted or postponed treatment. Power cuts are an everyday occurrence in Gaza. It gets most of its power from Israel together with further contributions from Gaza’s only power plant (though this was destroyed in August 2014) and a small amount from Egypt. Many homes have their own generators, but fuel is extremely expensive to buy.

In recent years the freedom of access to Gaza from the south has become more restricted, prompting the proliferation of smuggling tunnels. These have been used to import construction materials, livestock, fuel, food, cash and weapons. However, the crackdown on the tunnels that started in June 2013 resulted in an almost total halt in smuggling, triggering further shortages of building materials and fuel, and a surge in the price of food.

CASE STUDY

Zaatari, Jordan Zaatari is a refugee camp in northern Jordan, 15 km from the Syrian border (Figure 3), which is gradually evolving into a permanent settlement. It was first opened on July 2012 to host Syrians fleeing the violence in the ongoing civil war in

Figure 1 Features of Gaza

Figure 2 Characteristics of the population of Gaza

ISRAEL

GAZA

EGYPT

Mediterranean Sea

N

Deir al-Balah

Rafah

Khan Younis

Beit Lahia

Beit Hanoun

ErezCrossing

Shati

Gaza City

6 nauticalmiles

Bureij

Maghazi

0 5km

Source: UN OCHA

Fishing limit since Nov 12(periodically reduced to 3nmi)

Israeli-declared buffer zoneHigh risk areaNo-go zone

Urban areasRefugee campsBorder crossingsSmuggling tunnels

N

Source: UN OCHA, ONS

Deir al-Balah

North Gaza

Gaza City

KhanYounis

Rafah

Population density compared People per km2

Size compared:Gaza and London

0 5km

Source: Global Health Facts

Singapore7751

London5100

Gaza4505

New York City2050

Monaco36,356

Population density km2*Gaza’s population

Gaza City 6708

*Based on the 2007 Census

North Gaza 4430

Deir al-Balah 3543

Rafah 2709

Khan Younis 2509


Syria. In July 2014 the camp population was estimated at 81,000. Zaatari is located in a barren, semi-desert location. Much of the site con-sists of a tent city. The camp features market-like shops along the main street where goods such as vegetables, household equipment and clothes can be purchased – there are even coffee shops in the traditional Arab fashion. Since the opening of the camp, there have been several demonstrations. These have related to the lack of sufficient food supplies and the need for better accommodation.

What are conditions like?Zaatari is rapidly becoming an informal, ‘do-it-yourself’ city with the emergence of neighbourhoods and a growing economy. The development, accelerated by enterprising Syrians, illustrates a basic ‘civilising’ that happens even in the most desperate places – people making the spaces they occupy their own.

Zaatari’s growth also points to a new way of thinking about one of the most pressing problems faced by the world – refugees. In June 2014, the United Nations High Commissioner for Refugees (UNHCR) reported that the number of refugees worldwide in 2013 exceeded 50 million, a figure substantially increased by the Syrian conflict. Such vast forced migrations have led to debates about the need to treat camps as more than tem-porary population centres, and not just human holding pens with tents. A number of aid workers are looking at refugee camps as potential urban ‘incubators’ – places that can grow and develop and even benefit the host countries. Such thinking

is driven by reality: Syrian families, with no clear path to peace and no other choice, find them-selves facing extended exile in places like Zaatari.

Most of the businesses and shops in the camp are unauthorised. The oldest parts of Zaatari now have streets, some paved and some lined with electric poles. The most elaborate houses have been cobbled together from shelters, tents, cinder blocks and shipping containers, with interior courtyards, private toilets and jerry-built sewers. Clusters of satellite dishes and water tanks on the skyline can be reminiscent of favelas in Rio de Janeiro. Like favelas, the camp has grown according to its own ad hoc logic, which includes a degree of social mobility.

There are 14,000 households, 10,000 commu-nal and private toilets, 3000 washing machines and 3500 new businesses and shops. Zaatari has a pet store, a flower shop, a homemade ice cream business, a pizza parlour, a hairdressers and even a travel agency. Fast food takeaways can be found on the main street, called the Champs-Élysées. There is also a sizeable black market. Refugees traffic in camp vouchers and goods, undermin-ing legitimate Jordanian businesses. Electricity that powers their shops and washing machines is stolen to the tune of $750,000 a month – an unsustainable burden for the UN. Shop owners are being persuaded to install circuit breakers so that the system does not collapse, with similar plans to regulate and pay for sewage and water.

There are still problems with water supply, though installing a permanent municipal water system would cost what the UN now spends every year trucking water to the camp. There are even talks with representatives from Google about wiring the camp to enable internet access. This sort of enterprise should also serve the Jordanian economy well. A sign that the Jordanian government may be coming around to this long-term thinking is a recent promise by the Ministry of Environment to deliver several thousand trees to the camp.

ConclusionSo what does the future hold? In Gaza the standoff between Israeli forces and Hamas fighters remains, and it seems unlikely that conditions for the people of Gaza will improve any time soon. On the other hand, in Zaatari there are signs of hope as the people there take more and more control of their destiny. There is a clear contrast between these two areas, both afflicted by conflict. TE

‘Civilising’ Zaatari – hairdressing is just one of many business opportunities

Figure 3 Zaatari camp

ISRAEL

EGYPT

GAZA

WESTBANK

JORDAN SAUDIARABIA

IRAQ

TURKEY

CYPRUS

LEBANONSYRIA

Mediterranean Sea

N

Damascus

Zaatari

0 100km


RESPONSEAssimilation1 Describe the main characteristics of the Gaza area.

2 Outline the main features of the population of Gaza.

3 Explain how the people of Gaza obtain their food and water supplies.

4 Discuss the effects of limited access to and from Gaza on the way of

life there.

5 Summarise the main features of the area occupied by the Zaatari

refugee camp.

6 Discuss the ways in which Zaatari has the characteristics of a normal

city.

7 Discuss the issues faced by the UN and Jordanian government in

managing the Zaatari camp.

Evaluation1 One UN official described Zaatari as ‘the most fascinating project on

earth when it comes to the development of (refugee) camps’. To what

extent do you agree with this statement?

ANSWER PLAN

• Definition of the term ‘refugee camp’.

• An understanding of the background to the creation of refugee

camps in previously unoccupied areas.

• Detail of the characteristics of the Zaatari camp.

• Commentary on and critical understanding of the developments

taking place there.

• A recognition of the importance of values and attitudes, and of the

decisions taken within the camp and by UN workers.

• Evaluative comments on whether this camp is different from others.

2 Study Figure 1. Outline the features that illustrate that Gaza is in a

conflict zone.

3 Study Figure 2. Comment on the information shown.

4 Discuss the view that Zaatari has become a ‘do-it-yourself’ city.

5 ‘Conflict has a significant geographical impact on the area(s) affected.’

To what extent do you agree with this statement?

Extension1 There is a great deal of information, including videos, on the two areas

featured in this article. For further research, start with the following sites:

• An account of life in the Gaza Strip:

www.bbc.co.uk/news/world-middle-east-20415675

• An interesting set of video interviews with four Gazans:

www.bbc.co.uk/news/world-middle-east-29086193

• An account of life, including a slideshow, in Zaatari by the New York

Times: www.nytimes.com/2014/07/05/world/middleeast/zaatari-

refugee-camp-in-jordan-evolves-as-a-do-it-yourself-city.html

• A series of videos showing conditions in Zaatari, produced by the

UNHCR: www.youtube.com/results?q=A+day+in+the+life+zaatari

REVIEWKey points• People continue to live in large numbers in

conflict zones, such as in Gaza and near to

Syria.

• Gaza is one of the most densely populated

areas in the world and has living conditions of a

very low standard.

• Facilities for education, health and power in

Gaza are extremely stretched.

• Zaatari is a refugee camp in the Jordanian

desert which is growing rapidly and becoming

permanent.

• The people of Zaatari have developed a

community that resembles a normal settlement,

with shops and other services.

• The future for Gaza looks bleak as the Israeli

blockade continues, whereas there is some

hope for residents of Zaatari, largely as a result

of their own enterprise and determination.

Pause for thought• Is it usually the case that within conflict

zones, the majority of the people are innocent

bystanders who just want to get on with their

normal lives?

• To what extent do military leaders recognise the

above, or do they assume that all people are

combatants and should be punished?

• What is it that makes people so resilient to the

events around them, and ensures they provide

for their basic needs?

• How should global bodies, such as the UN,

WHO, NGOs and even TNCs, operate in conflict

zones?

In contextThis article looks at the issues faced by people

living in conflict zones, with particular reference

to the conflicts within Gaza and Syria, the latter

resulting in refugees spilling out into neighbouring

Jordan. Within this context there are a number of

related aspects and issues:

• the attitudes of the people themselves, and how

they cope with the stresses and practicalities of

living in a conflict zone;

• the role of global systems and governance

strategies in trying either to end the conflicts or

to provide for the people affected, or both.


https://www.youtube.com/results?q=A+day+in+the+life+zaatari

lobally there are more than 10,000 microfinance institutions (MFI) and these are found in many parts of the world (Figure 1), though they have a heavy concentration in developing areas. Microfinance refers to a large number of different financial products including: • microcredit – the provision of small-scale loans

to the poor, for example by credit unions;• microsavings – for example, voluntary local

savings clubs provided by charities;

G

• microinsurance – especially relevant for people and businesses not traditionally served by commercial insurance businesses, which can act as an important safety net to prevent people from falling back into poverty after a natural hazard event, for example;

• payment management – managing remittance payments sent from one country to another or between individuals. One of the most well-known mobile solutions is M-Pesa, and in many regions there has been substantial growth in the use of other mobile money services.

This article focuses on microcredit as one of the most important aspects of microfinance. Microcredit attempts to reduce poverty and has several key characteristics:• it often provides small loans for the working

capital requirements of the rural poor, especially women;

• there is minimal risk assessment of borrowers compared to commercial banks;

• security is rarely demanded for money linked to microcredit;

• based on the loan repayment history of the members, microfinance institutions extend larger loans to the members repeatedly.

For many people, microfinance and microcredit are essential and produce many benefits for poor and low-income households (Figure 2).

Figure 1 Global microfinance growth areas

Microfinance is a source of money services for people, entrepreneurs and small businesses lacking access to banking and financial services. David Holmes explores how schemes can work to help alleviate poverty.

microfinance schemes Evaluating

26–35% 16–25% 5–15%

Source: reponsAbility Reseach Department


Microfinance can also help to unlock a community’s entrepreneurial potential. One of its most important aspects is that it is more accessible. The number of mobile money services for the ‘unbanked’ has grown significantly since 2001 (Figure 3). Many traditional banks simply will not provide loans to those with little or no assets (a higher risk), and generally do not engage in small-size loans typically associated with microfinance.

However, this type of money lending is not without its critics. There are sometimes problems in terms of maintaining manageable interest rates, gender inequalities (experts agree that women should be the primary focus), and being able to reach those in most need while still covering operational costs. There are also problems of people defaulting on their loans and the scheme losing its assets.

CASE STUDY

Microcredit in Morocco and partnership with the formal banking sectorMorocco is a recognised microcredit champion, serving about 1 million people. By 2008 the country had lent over $700 million and it played host to some of the best performing MFIs in the

world. However, the global financial crisis and the high costs of imports (especially fuel and food) from the euro area in recent years have left Morocco with a large financial deficit. This has resulted in high unemployment (7%), especially affecting young men in urban areas. The Arab Spring and political tensions in the area have also led to a loss of tourism receipts. Microcredit boomed uncontrollably while the poorest tried to access funds at times of hardship. There were a number of large defaults on loans.

Recently, consolidation and better regulation of the MFIs has led to more trust between traditional banks and this sector. MFIs have provided credit information on borrowers from the informal sector, which the banks can then take and lend using normal mechanisms. This transition lays the foundations for a more inclusive finance system with more opportunity for job creation.

Microfinance now represents around 0.5% of Morocco’s GDP and continues to help the infor-mal sector create jobs, develop new products and establish services to support the poorest people. The banks have been encouraged to create spe-cialist products such as ‘low income accounts’. There is a target for 60% of the population to have banking facilities in the near future.

Defaulting – occurs when a debtor is unable to meet the legal obligation of debt repayment.

Arab Spring – a series of anti-government uprisings affecting Arab countries of the Middle East and North Africa (MENA) beginning in 2010.

Figure 2 The range of microfinance used by the world’s poorest people

Figure 3 The number of mobile money services for the ‘unbanked’ by region, 2001–13

Irrigation, transportation, livestock, microenterprise, home renovation, schooling andeducation, etc.

Medium timedeposit

Food security, health treatments, festivals and social obligations, emergencies, etc.

Demand or shorttime deposit

Send money to family at home and away, microenterprise working capital, etc.

Fund transfersand cheques

Meet urgentfamily disasterlike sicknessor crop failure, pay offmoneylender, etc.

Emergency loans

Microenterprise working capital, livestock, sewingmachines,radios, bikes, etc.

Short-termloans

Housing, wells, irrigationsystems, boats, motorbikes, etc.

Longer-termloans

Cost of burials,healthcare,replacementcosts afterhurricanes and�oods, etc.

Various insurance plans

Retirement (forself or parents),migration, farmequipment,wells, homeupgrade, self-insurance, etc.

Pension plan or long time deposit

TYPES OF MICROFINANCE USED BY POOR PEOPLE

Household �nancial goals

Micro�nance products Source: Brett Matthews, Mathwood Consulting Company

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Num

ber

of m

obile

mon

ey s

ervi

ces 250

200

100

150

50

01 2 2 5 6 7 11 16

38

64

116

179

219Europe and Central AsiaMiddle East and North Africa East Asia and Paci�cLatin America and CaribbeanSouth AsiaSub-Saharan Africa


CASE STUDYA tale of success in IndiaIndia has the world’s third largest economy (by purchasing power parity) and has a GDP growth rate of 5%, but more than 500 million people (around 40% of the Indian population) do not have access to normal banking services. The majority of these people live in rural areas, but there are still large numbers of urban and semi-urban poor in India.

Ujjivan Financial Services was established in 2005. The company now has 2.3 million customers, operates in 22 states and is one of the most dominant organisations in Indian microfinancing. Its high loan repayment rate of 99.9% is critical to its success. The scheme uses group lending so that it becomes the collective responsibility of the individuals. As they all may want access to future loans, there is increased awareness that no one individual should default on the loan. This microfinancing scheme has demonstrated that poor urban communities offer a viable financial services market, and that commercial success can be achieved in tandem with measurable social progress. This success has helped spur a new sector of urban MFIs, whose sustainability and innovative business approach has been robust enough to attract private investors. It is an area of key future growth.

The issues of microfinanceThe microfinance movement has been in operation now for around 30 years and some argue that in that time it has failed to provide robust evidence that it is meaningfully associated with sustainable poverty reduction. Many economists and develop-ment specialists are now of the opinion that microfinance may actually undermine the process of sustainable poverty reduction and bottom-up economic and social development. In the words of mathematician and development economist David Roodman: ‘On current evidence, the best estimate of the average impact of microfinance on the poverty of clients is zero’.

Critics also claim that measures of success are often based on anecdotes and stories because the proper quantitative measures of the positive impacts are difficult to gauge. It is very hard to remove the impacts of other variables on a positive outcome that was supported by microfinance. Many studies have looked at the experience of people who have received microloans. The challenge has been to identify a control group,

since it is difficult and expensive to find a truly comparable group that has not received a loan.

Grameen Bank (Bangladesh) is especially well document ed as a model MFI. However, it too has attracted criticism; analysts have pointed out that there was no proper monitoring of how the loans were utilised. Many of the loans provided to women were used largely for consumption rather than for investment purposes. Analysts have also pointed out that the accounting methods used by Grameen Bank were not in accordance with industry standards, and that the bank did not provide full details about its financial and loan repayments position.

ConclusionsDevelopment programmes like primary education and healthcare usually require large, continuing inputs of money, using up scarce tax receipts year after year. Microfinance, however, can use relatively small upfront expenditure to reach many millions of low-income clients. There are no year-on-year costs once the cash has initially been spent.

The latest World Bank Development Report (2014) suggests that microfinance and micro-insurance programmes are increasingly providing new instruments that help people manage risk. Similarly, alongside traditional safety nets, con-ditional cash transfers and other social insurance programmes are a means for the state to transfer resources to help the most vulnerable cope with adverse circumstances.

Microfinancing produces many benefits for poverty stricken or low-income households and is based on the philosophy that even small amounts of credit can help end the cycle of poverty. It also provides important opportunities, such as extending education and jobs. Families receiving microfinancing are less likely to remove their children from school for economic reasons, and people are more likely to open small businesses that will aid the creation of new jobs (causing a positive spiral effect).

Microfinance initiatives do, of course, face many social and financial challenges. Schemes that are badly run, whether intentionally or in-advertently, allow more articulate and better-off community members to cheat poorer or less-educated neighbours. It is certainly clear that these initiatives require a large amount of social capital and trust in order to work effectively for all members. TE

Purchasing power parity (PPP) – a process that estimates the amount of adjustment needed on the exchange rate between countries in order for the exchange to be equivalent to each currency’s purchasing power.

A women’s microfinance meeting in Bihar State, India


RESPONSEAssimilation1 Describe the most important characteristics of microfinancing and what

is meant by the informal sector.

2 How is the microfinance model different from the traditional commercial

banking model?

3 Summarise the main reasons why people need access to microcredit

schemes.

4 Give examples of why some people are sceptical about the whole

microcredit system within the informal sector.

5 Construct a table that classifies the characteristics of microfinance in

terms of the loans and the borrowers.

Evaluation1 Evaluate the impact and success of microfinance schemes.

ANSWER PLAN

There are a number of key ideas that can be discussed:

• What defines ‘success’? Is it that microfinance gets people out of

poverty? Is it that it helps the overall development of a country’s

industry? What is ‘impact’, and is it the same as success?

• The global microfinance industry is worth an estimated $60–$100

billion, with 200 million clients, but results are mixed using a number

of measures. There are concerns about schemes reaching the

poorest people.

• In some places it has transformed households and created an

entrepreneurial spirit.

• Research from the World Bank suggests that very few MFIs are

profitable and therefore this affects their long-term sustainability.

• Microfinance really sits within a broader set of tools for better financial

inclusion of the world’s poorest people in society.

2 ‘Microcredit treats the poor as a resource that produces a return on

investment.’ Discuss.

3 Should microfinance be a development tool in its own right?

4 Evaluate whether microfinance can be a key driver for poverty reduction

(Millennium Development Goal 1).

Extension1 Research the range of financial services provided by Ujjivan at www.

ujjivan.com/html/products_services.php. Create a simplified diagram

to show its portfolio.

2 Review this article from the World Bank: www.worldbank.org/en/news

/feature/2015/03/30/does-microfinance-still-hold-promise-for-

reaching-the-poor. Summarise the key points raised in the evaluation.

3 Using the article at www.theguardian.com/global-development-

professionals-network/2014/oct/08/developing-countries-informal-

economies-microfinance-financial-inclusion, evaluate the strength of

the arguments developed.

REVIEWKey points• Microfinance and microcredit have been around

for about 25 years.

• Microfinance has the extraordinary power to lift

poor people, especially women, out of poverty,

by funding their microenterprises and raising

their incomes and, ultimately, living standards.

• Various types of microcredit exist, operating in

many different parts of the world.

• The global MFI industry is an important part of

global development, especially for the world’s

poorest people.

• It is difficult to establish a robust and quantitative

measure of success using a suitable control

group.

Pause for thought• What is the range of different products that

microfinance and microcredit offer? Are they all

socially equitable?

• How important are MFIs as enablers for women,

especially in terms of positive change in poorer,

remote and rural households?

• To what extent can microfinance and microcredit

produce a positive ripple effect and create

positive role models, particularly for women?

• What should be done (if anything) to control

and manage MFI at a global scale to prevent

claims of exploitation and mismanagement?

Or should it be down to individual countries

and governments to develop their own robust

regulatory frameworks and systems?

In contextThis article examines a range of ideas relating to

how microcredit and MFI can work to help alleviate

poverty in some parts of the world. There are a

number of overlapping issues:

• Many argue that access to money and financial

services is a key component of development.

• MFIs have diversified their portfolios to include

insurance products that may be invaluable, for

example after a natural hazard event.

• Critics argue that financial inclusion dominates

the social investment sector, cutting out

spending on adaptation for climate change and

on other more traditional interventions such as

healthcare and education.


http://www.worldbank.org/en/news/feature/2015/03/30/does-microfinance-still-hold-promise-for-reaching-the-poor



uring May 2014, the dangers faced by women going to the toilet outdoors in rural India were made starkly clear when two teenage girls were ambushed, gang-raped and hanged from a tree. The incident received international media

Dcoverage, with universal horror. In November 2014 another incident took place where a 15-year-old girl was set on fire after she had been molested.

Rape is not a crime unique to India – indeed the numbers of reported rapes are well below those in the USA and most European countries. Figure 1 provides a map of the distribution of this crime in India, based on reported incidents. (This does not include unreported cases of both rape and other forms of female abuse.) Figure 2 illustrates that the reporting of the crime is on the increase. Each of the above cases has caused out-rage within India, with protest marches involving huge numbers of people taking place in Delhi and across the country. A significant amount of pres-sure has been placed upon Indian politicians to deal with the contributory factors, such as low levels of women’s rights and inadequate sanita-tion, especially in rural areas. They have also faced pressure to be more punitive – in March 2014 a new act was passed containing harsher penalties for crimes against women including the death penalty for rapists. Figure 3 illustrates the success rates of convictions between 2001 and 2010.

The daily walkIn many Indian villages the women walk out to the fields twice a day – at dawn and at dusk. The surrounding fields are the only toilet most of them have even known. In most villages across India only 10% have their own private facilities, and almost none has suitable sewerage systems to

… a dark and dangerous walk to the toilet

David Redfern discusses the social factors that may be partly responsible for the incidents of sexual violence in this rapidly developing country.

Below 5050–499500–9991000–19992000 and above

Rape incidence

JAMMU &

KASHMIR

HIMACHALPRADESH

PUNJAB

HARYANA

RAJASTHAN

UTTARAKHAND

UTTARPRADESH

GUJARAT MADHYA PRADESH

CHHATTISGARH

BIHAR

JHARKHAND

ODISHA(ORISSA)

ANDHRAPRADESH

MAHARASHTRA

DAMAN & DIU

DADRA &NAGAR HAVELI

KERALA

GOA

TAMILNADU

KARNATAKA

SIKKIM

MEGHALAVA

ASOM(ASSAM)

ARUNACHALPRADESH

NAGALAND

MANIPUR

MIZORAMTRIPURA

Delhi

WESTBENGAL

SRI LANKA

AFGHANISTAN

PAKISTAN

CHINA

BURMA

0 km

I N D I A

BANGLADESH

BHUTAN

NEPAL

500

N

For the women of India…

Figure 1 Distribution of incidents of rape in India, 2011


remove the waste. The women walk out together in groups, for safety. Once away from the village they separate and space out for a little privacy. Darkness gives the women cover, and a degree of privacy, but in some ways it makes them more vulnerable. The women usually carry a small bottle of water to assist with their cleansing. No toilet paper is used.

In most rural villages there is a convention that the men go to the toilet only at dawn, but boys and young men sometimes break this rule in order to harass or molest the girls and women. There are accounts of women being subject to catcalling and groping (an activity known as ‘eve teasing’), though individuals usually do not admit that it has happened to them (only to others). Girls are brought up to shout and be aggressive if a boy comes near them. After the dawn visit, there is the long wait until the next trip to the open-air toilet after darkness, some 14 to 15 hours later. Women often have no choice but to contain the desire to urinate or defecate for hours on end, and face considerable daily discomfort as a result.

In the fields, it is important to tread carefully. Once the crops are cut and the fields are bare, the whole ground space is open for anyone to use. It is literally an open toilet. During sowing and harvesting, the fields are out of bounds. Then people have to walk for another 15 minutes, to an uncultivated area. The exercise that normally takes 45 minutes to an hour stretches to an hour and 15 minutes, or more.

What are the contributory factors?Poverty is clearly a major driver. More than half a billion Indians lack access to basic sanitation. Most do not have access to flush toilets or other latrines. A recent study by the global health organisation Population Service International (PSI) and Monitor Deloitte stated that Bihar had India’s poorest sanitation indicators, with 85% of rural households having no access to toilets. The police in Bihar state reported 870 cases of rape in 2013, most of them taking place during the early morning and early evening.

The PSI report added that 49% of the house-holds that did not have a toilet wanted one for ‘safety and security’, another 45% wanted a toilet for ‘convenience’, while 4% wanted one for ‘privacy’. Surprisingly, only 1% indicated ‘health’ as a motivator for having a toilet. The Bihar state government says it plans to provide toilets to more than 10 million households in

the state by 2022 under a federal scheme. A law making toilets mandatory has been introduced in several Indian states as part of the ‘sanitation for all’ drive by the Indian government. Special funds are made available for people to construct toilets to promote hygiene and eradicate the practice of faeces collection, which is mainly carried out by low-caste people.

However, another factor is one of attitude. Most villagers possess metal toilet pans within their houses. These tend to be reserved for times of illness, emergency or for older people. Women complain that they are hard to disinfect, and they are often thrown away after they begin to smell. Many people consider open-air toilets as the natural way of defecation. Enclosed toilets are considered to be a product of modern living, and not an expectation or entitlement – they are a preserve of the rich. It has been reported that at the only school in Kurmaali, a village in the state of Uttar Pradesh, where there are 300 day pupils,

Figure 2 Changes in the numbers and rates of rape in India, 2001–12

Figure 3 Changes in the numbers of reported rape incidents, the numbers of convictions and the proportions of convictions, 2001–10

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

30,000Reported rape statistics for India 2001–12

Total number

Rate per 100,000 people

6

Source: Government of India, 2013

25,0005

20,0004

15,0003

10,0002

Rat

e

Tota

l

50001

00

2001

Reported incidents Convicted cases % of convicted cases

2002 2003 2004 2005 2006 2007 2008 2009 2010

25

(%)

25,000

Num

ber

of r

epor

ted

inci

den

ts/

conv

icte

d c

ases

2020,000

1515,000

1010,000

55000

00


the two toilets are generally not used: one had no door; the other was full of bricks and other rubbish. When one of the school governors was asked why this was the case, he questioned why anyone would need a toilet. The school was right next to the fields, he pointed out.

What of the men?Most of the men in rural villages work as daily labourers, drivers or farmworkers, or they are unemployed. The lack of a toilet does not usually bother Indian men – the view is that they can ‘go anywhere’. The provision of a domestic toilet has to be paid for from their wages. A simple toilet with a 10-foot deep pit can cost around 10,000 rupees (£100). Even in the cities, it is common to see men urinating in public against a wall.

Back in Kurmaali it is interesting to note how the families spend their limited incomes. The streets are dotted with motorbikes and the occa-sional car, luxury items mostly acquired as part of a dowry. A key purchase is often a television set and a satellite dish – even though the electricity comes on for only four hours every day at most. Many women consider themselves fortunate if their husbands treat them well and they do not drink alcohol or abuse them physically, so a toilet is not a priority.

A related problemPoor menstrual hygiene in India has a significant impact on health and the environment. According to the charity the Kiawah Trust, supported by the US Agency of International Development (USAID), the incidence of reproductive tract infections is 70% more common amongst women who use unhygienic materials during menstruation. They say the lack of toilets and water at schools has forced 24% of girls to drop out of school as 66% of schools lack functioning

toilets and access to water. A woman in India typically throws away 125–150 kg of mostly non-biodegradable absorbents every year, causing irreversible pollution. The same survey states that 88% of menstruating women do not have access to sanitary napkins and use alternatives such as sand, ash, cloth, dried leaves, hay and plastic. Sadly, for most of them these conditions are just a way of life.

Why is the sanitation problem so great in India?It is a matter for debate as to why India suffers more severely in its incidence of outside defecation than much poorer countries, such as Congo or Afghanistan, or than other South Asian countries, such as Bangladesh (Figure 4). One reason could be political leadership: for too long India’s government failed to make sanitation and the building of latrines a public health priority. India’s new government now plans to build 130 million latrines by 2019. A second and more controversial reason could be the influence of traditional Hindu culture on sanitation habits. Studies of India’s population show strikingly higher rates of open defecation in Hindu-dominated villages compared with Muslim ones, despite the lower incomes, education and worse water supplies of Muslims. Some ancient Hindu texts state that distance should be maintained between faeces and human habitation, so it may be the case that many people take this teaching literally. If so, then a good way to get India’s sanitation closer to global standards would be to begin with an education campaign in order to persuade households to build – and use – their own latrines.

ConclusionThe recent tragic cases of sexual violence in India have brought the issues surrounding women’s rights to the surface. These include attitudes to women by men in a largely male-dominated society, domestic and public health and sanitation provision, and the role of the police and judiciary in protecting women. India is a rapidly emerging economy, generating significant levels of wealth for some of its people who are becoming increasingly sophisticated, with modern ways of thinking and access to modern facilities. However, as this article highlights, huge social disparities continue to exist in such a large and populous country. TE

Figure 4 Global pattern of defecating in the open (people per km2), 2012

Source: Rice Institute

Defecating in the open (people per km2, 2012)

0 0.1 2 20 40 80 160 200


RESPONSEAssimilation1 Describe how individuals and the Indian government have responded in

the short term to the recent attacks on women in India.

2 Explain why in many Indian villages women go in groups to the toilet at

dawn and dusk.

3 Outline the overall provision of toilets within India.

4 Outline the prevailing attitude of men in rural areas to toilet provision.

5 Discuss the impacts of poor menstrual hygiene in India.

Evaluation1 To what extent is the level of adequate sanitation in a country an

indicator of its development?

ANSWER PLAN

• A discussion of the concept of ‘development’.

• An outline of what is meant by adequate sanitation, possibly with

some facts that indicate the variations in provision around the world.

• An understanding of human factors that might influence provision:

national wealth, personal incomes, education, attitudes to sanitation,

cultural factors.

• An understanding of physical factors that might influence provision:

water supply, climate.

• Variations in the capacity to provide – government will, capacity and

competence.

• Critical understanding of differing ways in which development can be

judged: economic, social, cultural.

• Supported with use of case study material/exemplars.

2 Study Figure 1. Describe and comment on the distribution of incidents of

rape in India in 2012.

3 Study Figure 3. Describe and comment on the trends shown.

4 Discuss the influences of tradition and religion on the development of

adequate standards of sanitation within India.

5 ‘Poor levels of sanitation have a significant impact on health, education

and the environment.’ To what extent do you agree with this

statement?

Extension1 Several aspects of women’s rights in India can be examined in more detail

at the website of the philanthropic foundation DASRA: www.dasra.org.

A video featuring Deval Sanghavi, a cofounder of DASRA, explaining

why young women in particular are affected by the lack of toilets, can be

seen at: www.youtube.com/watch?v=nHjxy4KmEHQ#t=99

2 Discussion of aspects of water and sanitation provision in India can be

found at: www.sahanasingh.com

3 Several Indian comedians have attempted to raise the issues associated

with poor sanitation. Their contributions can be seen at:

www.standupplanet.org/2014/03/poopstories/

REVIEWKey points• Crimes of sexual harassment and violence

against women are common in India, and have

featured frequently in the world’s media.

• Protests against such crimes have become

more common, with many people taking to the

streets to force politicians to act.

• In rural areas women feel fear when going to the

toilet in the morning and evening, and often take

the trips into the fields in groups for safety.

• Poverty is cited as one reason for the lack of

adequate sanitation in villages, but another

factor is one of culture and tradition.

• Poor facilities for menstrual hygiene also explain

why many girls do not stay on at secondary

school.

• These issues highlight variations in wealth and

attitudes to women, education and religion in a

rapidly developing country.

Pause for thought• Why are attitudes of men to women so

discriminatory in some developing countries?

• Why is the provision of adequate sanitation so

poor in many developing countries?

• Consider the influence of religion and other

cultural factors on attitudes to women.

• Is development always best measured in terms

of economic wealth and growth? What other

social factors should be considered?

• How can national governments influence social

and cultural development?

In contextThis article examines issues surrounding recent

events in India where a series of sexual assaults on

women have featured in the world’s media. Such

assaults are referred to as ‘eve teasing’. Within this

context there are a number of related issues:

• general attitudes of men to women that are

prevalent within the country;

• provision of adequate sanitation within rural

areas;

• impact of religion and other cultural factors

within the country;

• attitudes of politicians to address and deal with

the problem of sexual violence and the factors

that may contribute to it.


http://sahanasingh.com/

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Changing Cities• Dhaka – traffic capital of the world

• Urban image

• World, global and elite cities

• Connecting places – HS2 and HS3

• Urban air pollution

Development & Globalisation• The MINT countries – new kids on the

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environmental disaster?

• Living in conflict zones – Gaza and

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• Swiss glaciers in retreat

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Population & Health• The new ‘killer’ disease – Ebola

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• Childcare issues in the developing

world

• Obesity in the developing world

• Population growth – can the earth

cope?

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