Thursday, December 16, 2010

Creative industries doing good during the crisis

The latest UNCTAD publication Creative Economy Report 2010 argues that the demand for some "creative industry" products -- particularly those which are domestically consumed, such as videos, music, video games, and new formats for TV programmes -- remained stable during the global recession, and this economic sector, especially if supported by enlightened government policies, may help national economies, including those of developing countries, to recover from the downturn. Here is UNCTAD’s database on creative industries.

Global exports of creative goods and services -- products such as arts and crafts, audiovisuals, books, design work, films, music, new media, printed media, visual and performing arts, and creative services -- more than doubled between 2002 and 2008, the report notes. The total value of these exports reached US $592 billion in 2008, and the growth rate of the industry over that six-year period averaged 14%.

The report says that the creative industries hold great potential for developing countries seeking to diversify their economies and participate in one of the most dynamic sectors of world commerce. The global market already had been boosted by increases in South-South trade in creative products before the recession set it in. The South’s exports of creative goods to the world reached $176 billion in 2008, or 43% of total creative-industries trade.

One of the key recommendations of the report is that developing countries should include creative goods in their lists of products, and should conclude their negotiations under the Global System of Trade Preferences so that they give more impetus to the expansion of South-South trade in this sector. The rate of growth in such trade of creative goods – from $7.8 billion in 2002 to $21 billion in 2008 – is an opportunity that should be fully realized, the report says.

South Asia and creative industries’ goods trade

In South Asia, Bangladesh, Bhutan and Nepal have less emphasis on creative-industry development, but craft industries, furniture making and handloom industries have traditionally been widespread.

In total, Nepal’s exports of creative industries’ goods were US$14.52 million and imports from South Asia were US$37.79 million in 2003. The figures are of the latest year available. Nepal exported US$ 79.50 million and imported US$ 58.75 million worth of creative industries’ goods from the world. So, in terms of trade of creative industries’ goods, Nepal has trade surplus with the world but a deficit with South Asia.

Trade of creative industries’ goods within South Asia was US$ 275.59 million of exports and US$ 255.68 million of imports in 2008. The corresponding figures for 2002 were US$ 19.98 million and US$ 28.30 million, respectively.

South Asia’s exports of creative industries’ goods to the world were US$ 11160.56 and imports were US$3481.86 million in 2008. The corresponding figures for 2002 were US$250.28 million and US$ 430.92 million, respectively. The 2008 figures represent 2.74 percent and 0.83 percent of South Asia’s exports and imports as a share of world export and imports.

Creativity, knowledge and access to information are increasingly recognized as powerful engines driving economic growth and promoting development in a globalizing world.

LDCs fact sheet on climate change

[A draft version of a short article I wrote for Trade Insight magazine, vol.6, No.3-4, 2010. Here is the published version, p.4]

The 49 Least Developing Countries (LDCs) will suffer disproportionately from the impact of climate change. Given the level of contribution to inducing climate change relative to the size of economies and the level of fossil fuels used by LDCs, they will suffer relatively more than larger economies, which are also high emitters of green house gases. While some LDCs will experience extreme temperature patterns, affecting not only human habitat but also altering fundamentals of ecosystems, others will be exposed to the risk of inundation, loss of livelihoods, and erratic rainfalls. It is expected to affect weather pattern, health, agriculture and fisheries, ecosystem and biodiversity, and coastal zones among others. Since the LDCs lack adequate resources to cope with negative impacts of climate change, they should be assisted with adequate adaptive capacity.

Typically, LDCs have a three-year average per capita GNI of less than US$ 905; low levels of capital, human and technological development; and high economic vulnerability. They have a combined population of around 785 million. At least 470 million are projected to live in extreme poverty by 2015.[1] On top of the existing economic and social vulnerabilities, LDCs also face increasing level of climate-related incidents such as droughts, floods, declining agricultural productivity, and unusual weather patterns. A substantial portion of LDCs population who depend on agriculture and forestry for livelihood will experience higher level of vulnerability.

Most of the LDC’s consumption, production and exports are not well diversified, exposing them to greater risk from global economic shocks associated with climate change. It will affect growth and development related sectors such as health, water supply and sanitation, energy, transport, mining, construction, trade, tourism, agriculture, forestry, fisheries, environment protection and disaster management.

The IPCC’s 2007 4th Assessment Report states that global temperature rise of 4 degree Celsius would raise sea level to such an extent that it would submerge low-lying island states (and also LDC) like Tuvalu, Kiribati, and the Maldives. The LDCs in Africa and Asia would see flooding of low-lying coastal areas, scarcity of water, decline in agriculture production and fisheries, and a loss of biological resources. The IPCC estimates that yields from rain-fed agriculture in Africa could be reduced by as much as 50 percent by the next decade. Water shortages and shrinking of arable land would not only reduce production but could trigger social and political disruption.

It notes that Africa is the most vulnerable continent to climate change. Agricultural production and food security is most likely to be severely compromised, and water stress heightened. The available stock of productive land is decreasing.[2] Note that over 70 percent of LDC’s population resides in rural areas and depend on agriculture, which employ 68.8 percent of the economically active population, for living. This sector alone contributes 28 percent of the LDCs’ GDP.

One-third of African people live in drought-prone areas. Add the miseries associated with drought and floods to the impact of water-borne diseases such as malaria, cholera and diarrhea, the final outcome could be devastating. Furthermore, as a result of climate change, the geographic distribution of malaria is likely to alter, as the existing favorable malaria regions might be unfavorable and vice versa. For instance, relatively malaria-free areas in Ethiopia, Rwanda, Somalia and the Angolan highlands might experience malaria incidences by 2050. This could reach epidemic scale as communities in these relatively malaria-free areas lack immunity to newly intruded communicable diseases.[3]

As much as 75 to 250 million people will be exposed to increasing water stress in Africa by 2020. Africa is also expected to experience a reduction in soil moisture in the sub-humid zones. Southern Africa will see a decrease in rainfall. It will affect natural water reservoirs. For instance, Lake Chad has already lost 50 percent water in the last four decades. The LDCs along the Niger River Basin such as Benin, Guinea, Mali and Niger are expected to experience a ten percent change in precipitation, evaporation and runoffs. Similar, or even worse, trend is expected in LDCs along the Zambezi River and the Gambia River.

The IPCC report has predicted that South Asia will experience temperatures above the global average. The melting of snow and glaciers in the Himalayas will likely increase flooding and avalanches by 2030. Nepal and Bangladesh are at risk of increasing flood disasters and are expected to be hit by flash floods. Meanwhile, rainfall is expected to increase during summer as well. The increasing frequency of heat waves in Asia might increase elderly mortality, especially among the urban poor population. Arid and semi-arid, and tropical Asian regions will see an increase in patients with respiratory and cardiovascular diseases. As in the case with Africa, communicable water-borne diseases might cause water-related stress in LDCs in Asia.

Irrigation-fed agriculture in Asia will be impacted as well. Rice growing areas will see a decline in production, severely impacting economic growth and development goals. It will also impact agricultural production and access to food, exacerbating malnutrition and hunger in some LDCs. By 2020, there might be a reduction of up to 50 percent of rain-fed agriculture. [4]The West and Central African countries might see production decline to the tune of 2-4 percent of GDP. That said, production of certain crops that flourish under relatively higher temperature (such as millet) than normal might increase. Unfortunately, it does not include major staple crops like rice, wheat, corn, bean and potato.

Climate change will also impact land, water ecosystems, and biodiversity. Coral reefs in costal Africa and Asia will be affected. It will also alter the migration of birds, increasing risk of their extinction. By 2080, 25-40 percent of African mammals might fall under the World Conservation Union’s list of critically endangered or extinct categories, assuming that there is no migration of mammals. Similarly, in Asia, climate change will affect the distribution, productivity and health of forests and its inhabitants. It is estimated that with one meter rise in sea level, Bengal tigers, estuarine crocodiles and mud crabs might be extinct. With high temperatures and increasing number of forest fires, Nepal might lose red pandas, leopards, monkeys and other wild animals. Additionally, temperature increase of about 2-3 degree Celsius and a decrease in rainfall might diminish grassland productivity in Asia by 40-90 percent.

Meanwhile, it is projected that the costal zones in the Gulf of Guinea will face destruction due to rising sea levels. Massawa, one of Eritrea’s port cities, could see inundation of infrastructure and economic installations from a one meter rise in sea level, resulting in cost of over US$ 250 million. In Asia, Bangladesh, Myanmar and Cambodia would be hit hard by rise in sea level, which will affect not only the coastal infrastructure but also fishery industry and livelihoods.

The damage to the environment is already done. We have to live up with the impact of excessive emissions even if it is scaled down to 1990 levels. This warrants the necessity of building adaptation capacities of LDCs to help them cope with and mitigate the negative impacts of climate change. For adaptation measures, the LDCs will require substantial funding, both financial and technological. Innovative and novel water management strategies are required to help South Asia cope with rising incidence and intensity of floods during monsoon and decrease in water level during dry season.

Adaptation practices such as diversification of livelihood activities, institutional reforms like rules and governance structures that are geared to address emerging concerns about climate change, adjustment in farming operations, and greater flexibility in labor migration for income purposes, among others will be helpful to LDCs. Other adaptation measures include early warning system, malaria research, promotion of biotechnology especially of seeds that are drought- and insect-resistant crops, creation of national and regional grain stock/food bank, better and affordable crop insurance mechanism, conditional/unconditional cash transfers, and food price subsidies. Furthermore, to give increased momentum and weight to adaptation, climate change agenda has to be incorporated into development priorities at the national and regional levels in LDCs.


[2] LDC Report 2009, UNTCAD:

[3] The Impact of Climate Change on the Development Prospects of the Least Developed Countries and Small Islands Developing States, UN-OHRLLS 2009. Unless cited otherwise, most of the statistics mentioned in this article are sourced from this paper.

[4] IPCC 2007, Climate Change Impact, Vulnerability and Adaptation, Summary for Policymakers.