How are children affected by global influences on the cities they live in?
IHS Director Kees van Rooijen is invited to speak at KidsRights Millennium Development Goals Conference
The conference, chaired by Desmond Tutu and F.W. de Klerk is organised by KidsRights to put the millennium development goals firmly on the global agenda again. The position of children worldwide will be connected to the millennium goals discussing poverty, health and education.
The Institute for Housing and Urban Studies (IHS) is part of the School of Economics and the Faculty of Social Sciences of the Erasmus University Rotterdam. Because of the IHS's global scope and commitment to social, environmental and economic sustainability in cities, IHS director Kees van Rooijen is honored to have been invited to the KidsRights Millennium Development Goals Conference. His presentation will focus on the impact of the global economy on regions and cities, and how this relates to aid and specifically the development of children.
Foreign Direct Investment
Over the past 30 years foreign direct investment (FDI) has taken over trade as the key driver of the global economy. The great majority of FDI in the world is generated by multinationals (MNCs) and represents about 90% of trade and GDP (Rugman 2005). For instance, the investments between the top 100 MNCs and their worldwide subsidiaries, represents 50% of global GDP. Furthermore, 93% of the FDI is between a handful of developed nations, while the majority of the world population is excluded. For instance, Africa claims only 1% of global FDI and almost all goes to Johannesburg. These excluded areas are also the areas with the weakest child development. For instance, it is shown in this presentation that a high correlation exists between FDI and the United Nations Development Program’s “human development index” (HDI). However, because most FDI is only between developed nations it impacts mostly on the quality of life in these fortunate regions (Mayer and Ottaviano 2007).
At the UN General Assembly in 1970, donor governments promised to spend 0.7% of GNP on development aid. Today, the contribution of the developed world to aid is more in the order of 0.2% to 0.4%. Besides being questionable whether this percentage is enough at all, it is also disputable whether aid in its current form is good at all (Moyo 2010). Furthermore, private flows to developing countries are worth three times official aid and it is time to see developing areas e.g. Africa as attractive destinations for investment, not just aid (The Economist 2010). Therefore, instead of continued central planning practices, a more proactive approach may be required to significantly improve human development, which more actively engages people in their own development (Browne 2006). Because areas with a high HDI (high life-expectancy, high education and capital) also tend to attract higher FDI (Wall 2008), it becomes interesting to see how MNCs can start to invest in the improvement of underdeveloped areas - with the shared incentive of contributing to human development and gaining on this investment at a later stage. Ultimately, in the case of this presentation, it means how to engage the corporate world in investing in the development of children of these areas. This does not suggest that the world’s contribution to aid is unnecessary. Instead, it is imaginable that aid is increased and that a part of this is used to develop international policy and projects which encourage a more engaged involvement of MNCs in child development.
A database for investments
At the Institute for Housing and Urban Studies (IHS) we are interested in understanding the relationship between FDI and international aid. We are currently building a database of all the major investments between firms worldwide in which the impact of MNC activity on urban development can be measured (see world map below). More specifically, we are able to pinpoint exactly which global MNCs invest in firms in specific local cities, and the magnitude of the deals taking place between them. Based on this knowledge, we are interested in how new policy, management projects and training programs can be developed that are complimentary to mainstream aid approaches and which encourage a more integrated, proactive relationship between corporate and human development. An example of how this can work is demonstrated through the partnership between the Egyptian community called the Zabbaleen (garbage people). Because multinational companies only manage to recycle roughly 20% of waste in cities, while the Zabbaleen prove to recycle 80% - has led t o and interesting project in which these people are funded by UNESCO and sponsored by Procter and Gamble. Not only does the project create employment, but also has led to a school (Mokattam’s Recycling School) that teaches children safe recycling practices, literacy, and the skills needed to create and grow businesses: how to read maps, use computers, and understand contracts. The school is currently raising funds to secure a permanent space and expand the campus in order to include the education of girls. Although this example is simple, it demonstrates the kind of thinking which may be required to connect global processes to local capacity building. By knowing which multinationals and industries are located in cities worldwide, similar policies and projects can be targeted and developed, which engage and enable local communities and the private sector in mutually beneficial developments. In this light, the IHS is equipped to integrate knowledge of worldwide corporate processes to 50 years of social, economic and environmental expertise at the local level.
Images
1) Geographic Information Systems (GIS) map of major investments between multinationals and their subsidiary firms (Wall, 2009).
2) ‘Zabbaleen’ means ‘people of the rubbish’ in Arabic. Hardly flattering, you might think, but these people are vital to the day-to-day running of the city. Before the 1980s there was no official waste collection service in Cairo; the Zabbaleen did all the work.
See for more information:
More information on the KidsRights Millennium Development Goals Conference can be found at www.kidsrights.nl. Please contact Ronald Wall (wall@ese.eur.nl) for more information.
Friday, 25 June 2010
