Rebuilding Agriculture in Colombia, Piece by Peace

By Maria Paula Gomez and Felipe Amaya

The peace agreement that ends 52 years of conflict in Colombia represents a significant opportunity for economic growth. Agriculture alone can generate close to a 0.6% annual increase in GDP over the next 10 years, but in order for that to happen significant challenges need to be overcome.

The armed conflict in Colombia between the Colombian Government and the Revolutionary Armed Forces of Colombia (FARC, due to their acronym in Spanish) started 52 years ago and ended in August 2016, with the signing of the peace agreement. This agreement covers six main topics focused on the country’s reconstruction – (i) agricultural reform, (ii) political participation, (iii) end of the armed conflict, (iv) eradication of illicit drugs, (v) victim reparation, and (vi) implementation.

The first topic of the agenda is agricultural reform. In Colombia, agriculture has been neglected for decades. The problems stem from an uneven distribution of agricultural lands, where in 2013 less than 1% of landowners held 46.5% of agricultural land; while only two thirds of small holder farmers held 4.2% of agricultural land. This gap creates inefficiencies in uses of land, such as overexploitation from smallholders, underutilization from large landowners, and deficient infrastructure in rural areas. But this is just the tip of the iceberg. Farmers are one of the most affected and marginalized groups in Colombia’s history. More than 83% of farmers’ children don’t attend school, only 1% attain higher levels of education, and over 6 million farmers were displaced as 8 million hectares were taken from them illegally during the conflict. The result: an agricultural sector producing well below its potential. Only 50% of the available agricultural land is being used and 27% of land currently employed for livestock is better suited for cultivation purposes.

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Reconstruir el Campo Colombiano Sembrando Paz

Escrito por: Maria Paula Gomez y Felipe Amaya

El acuerdo de paz que acaba con 52 años de conflicto armado en Colombia representa una oportunidad significativa para el crecimiento económico. El campo puede generar un incremento anual promedio cercano a 0,6% del PIB en los próximos 10 años, pero para lograr esto se tendrán que superar varios desafíos.

El conflicto armado en Colombia entre el Gobierno Colombiano y las Fuerzas Armadas Revolucionarias de Colombia (FARC) empezó hace 52 años y se acabó en agosto de 2016, con la firma del acuerdo de paz. El acuerdo tendrá que ser ratificado por la población colombiana con la votación de un plebiscito el 2 de Octubre. Este acuerdo está compuesto de seis puntos – (i) reforma agrícola, (ii) participación política, (iii) fin del conflicto armado, (iv) erradicación de narcotráfico, (v) reparación a victimas e (vi) implementación – enfocados en la reconstrucción del país.

El primer punto del acuerdo fue la reforma agrícola. En Colombia, el campo fue olvidado durante décadas. Los principales retos nacen de una distribución desigual de tierras agrícolas que sigue hoy en día, por ejemplo, en el 2013 menos del 1% de terratenientes eran dueños del 46,5% de tierras agrícolas, mientras que dos tercios de los campesinos eran dueños de sólo 4,2% de estas tierras. Esta brecha crea ineficiencias en el uso de la tierra, cómo la sobreexplotación de los pequeños agricultores, la subutilización de grandes terratenientes e infraestructura rural deficiente. Sin embargo, esto sólo es una mínima parte de los problemas en el campo. Los campesinos han sido uno de los grupos más afectados y segregados en la historia colombiana. Más del 83% de los hijos de campesinos no van al colegio, tan sólo un 1% llegan a la educación superior, y más de 6 millones fueron desplazados cuando se les despojaron 8 millones de hectáreas ilegalmente durante el conflicto. El resultado es un sector agrícola que produce a niveles inferiores a su potencial: tan solo el 50% de las tierra agrícola disponible son utilizadas y el 27% de la tierra que actualmente se usa para el ganado sería más productiva en cultivos.

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Pequeños Comerciantes, Grandes Oportunidades para la Inclusión Financiera

Escrito por: Tim Carlberg y Maria Paula Gomez 

Existen más de 180 millones de micro y pequeños comercios (MyPCs) en los países en desarrollo – tiendas de barrio, peluquerías, vendedores de periódico y comida. Aunque pequeños de forma individual, estos comercios tienen un impacto significativo en la economía global (+6.5 billones de dólares al año en transacciones) además de contacto diario con sus clientes, en su mayoría de escasos recursos. Por estas razones, el segmento representa un vehículo ideal para promover la inclusión financiera. Sin embargo, más del 50% de los MyPCs carecen de acceso a servicios financieros y dado que la mayoría son informales se sabe muy poco sobre ellos.

Dalberg, con el apoyo de Visa Inc., realizó un estudio global sobre las barreras y oportunidades para aumentar la aceptación de pagos digitales en MyPCs en mercados emergentes. El reporte “Pequeños Comerciantes, Grandes Oportunidades” hace un llamado a la acción paraaumentar la coordinación de esfuerzos entre el sector privado, gobiernos y la sociedad civil.

Los servicios financieros digitales permiten a los consumidores y comerciantes ahorrar y gastar dinero de forma segura y generar un historial para acceder al crédito. Para las instituciones financieras, expandir los pagos digitales al nivel del promedio global, podría generar más de 35 miles de millones de dólares al año en comisiones financieras a nivel global.

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Deals That Can Break Poverty Cycle Afflicting Smallholder Farmers

By Edel Were

It’s one of the most widespread mantras of Africa’s economic development: unlocking smallholder farmer potential will secure Africa’s food production and improve the livelihoods of millions… if only farmers had fool proof ways to increase productivity and turn their small-scale farms into large scale businesses. Tanzania is a model example of this challenge. Often hailed with the potential to be “the breadbasket of East Africa”, the country falls far short in agricultural productivity compared to its potential. In Tanzania, where over 80% of farming is carried out by smallholders, maize production yields an average of 1.4 metric tonnes (MT) per hectare. This pales in comparison to South Africa’s average yields of 4.5 metric tonnes per hectare. Considering that Tanzania has double the amount of land under maize production (5 million hectares to South Africa’s 2.5 million) the capacity for increased productivity is enormous.

Smallholder farmer productivity in Tanzania is constrained by a range of factors, including poor-quality or non-existent inputs, geographic fragmentation and limited access to finance. For many Tanzanian farmers the production and harvest cycle suffer from minimal value addition. Most farmers only access or afford low-quality or even counterfeit seeds. Fertilizers are found in insufficient volumes, incorrect combinations, or not at all. Small-scale rural farms sit at far distances from one another and from important value chain players like wholesale input suppliers and reputable buyers. Roads are sparse and unreliable, and transport is expensive. Moreover, with little to no physical assets to offer as collateral, farmers are often barred access to finance that would enable them to overcome some of these barriers. This is especially true in Tanzania with its history of communal land ownership. Together these factors mean that farmers struggle to sell produce profitably; as a result they are also less able to invest in better quality production and higher productivity.

Forward buying contracts aim to break this cycle by linking farmers with buyers in a stable, planned-out scheme. In these schemes farmers and buyers sign a contract for purchase of a predetermined commodity volume and price, to be executed at a future date. Some more complex schemes involve multiple buyers, input suppliers, and large aggregations of farmers. One coordinated by the WFP in Tanzania, the Patient Procurement Platform (PPP), even provides credit lines for farmers to purchase higher-quality inputs.

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Who Stands to Benefit From the TICAD Summit in Nairobi? Everyone, If We Can Forge the Right Partnerships

By Edwin Macharia and Naoko Koyama

Nairobi recently hosted the 6th Tokyo International Conference of Africa’s Development (TICAD) conference (27th – 28th August 2016). Everyone is curious to see what benefits emerging discussions from the conference will bring the continent and the country. TICAD was launched in 1993 by the Government of Japan, to promote Africa’s development, peace and security, through the strengthening of relations in multilateral cooperation and partnership.

Commitments during the recent summit were impressive with the Japanese government promising $30bn in public and private investment to Africa over the next 3 years focusing on three key pillars, (i) Diversification of the economy and industrialization, (ii) Strengthening health systems and (iii) Building human capacity (on-the-job training for youth, training infectious disease specialists, factory managers etc.).

Few might know this, but this was the first TICAD conference held on the African continent. All previous conferences have been held in Japan. The significance of this geographical shift should not be lost on us. This year it was clear that private sector investment played an important role as evidenced by a large number of Japanese corporates (over 100) that were in Nairobi for the summit, led by Prime Minister Abe.  TICAD, for the first time in its history had a significant series of discussions between private sector players in Japan and in Africa.

The private sector plays a significant part in Africa’s growth. This is evident from the fact that Foreign Direct Investment (FDI) inflows to the continent are almost at par and sometimes surpass Official Development Assistance (ODA) inflow. Private Sector Partnerships (PPPs) are becoming the norm in infrastructure – mostly in power, transport, telecommunications, water and sanitation. Private investment into agriculture, commerce and other industries have been steadily increasing too. Job creation, the biggest agenda for most African countries, is driven by private sector growth.

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Here’s Why Millions of Kids Won’t be Heading to College This Year – And What We Can Do About It

By Emily Moore

This fall, millions of students in the U.S. are preparing to go back to college. Yet young people from certain demographics, especially low-income youth and those whose parents didn’t go to college, are likely to be underrepresented in their ranks. Dalberg has been advising First Lady Michelle Obama’s Reach Higher Initiative to better understand why many students aren’t making it to and through college, and what we can do to change it. Through research and interviews with dozens of stakeholders, including non-profits, academics, and schools, the Dalberg team identified key drivers of college disparities and promising solutions that can address them. When two-thirds of jobs by 2020 are expected to require a post-secondary degree, tackling these inequities is more important than ever.

Here’s the problem: Only a small minority of low-income students will ever earn a college degree. While 77% of high-income adults have a bachelor’s degree by age 24, only 9% of low-income adults do. Plus, among low-income first-generation students who enroll in college, only 11% complete a bachelor’s degree within six years. In part, this is because underrepresented students are more likely to attend non-selective institutions; nearly two-thirds of low-income students attend community colleges and for-profit institutions, which have lower graduation rates and often have fewer academic and financial resources than do more selective institutions.

Yet the vast majority of students of all backgrounds aspire to go to college and most Americans believe that a college degree is essential to future economic security. So where is the system failing? While there are many drivers of these trends, including the high and rising cost of college, and inadequate academic preparedness, we think one of the most important causes has been overlooked:

Underrepresented students have inadequate access to college knowledge and guidance. Specifically, underrepresented students have disproportionately low access to college counselors, at 1,000 students per counselor – twice the national average, and to other mentors, like parents, who went to college. This means these students may not understand the steps required to get to college (like taking the SAT), may not understand the schools for which they are qualified, resulting in ~50% of low-income students attending schools below their academic qualifications. With nearly $3B of financial aid left on the table annually, students also may not understand how to take advantage of financial aid offerings.

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Expandiendo el Uso de Autobuses Híbridos y Eléctricos en América Latina

Escrito por: Mariola Panzuela

 “Una ciudad avanzada no es en la que los pobres pueden moverse en carro, sino una en la que incluso los ricos utilizan el transporte público” – Enrique Peñalosa, Alcalde de Bogotá D.C.

Estas palabras, del actual alcalde de Bogotá, Enrique Peñalosa, acompañaron a nuestro equipo de Dalberg durante las 5 semanas en las que apoyamos a C40 Cities Climate Leadership Group y the Clinton Climate Initiative’s Program (CCI) en su trabajo para implementar sistemas de transporte público más limpios y más eficientes en América Latina.

La transición a sistemas de transporte público de baja emisión de carbono o cero-emisión puede generar crecimiento social y económico sostenible tanto en América Latina como en otras regiones. Introducir alternativas de transporte con baja emisión de carbono en ciudades en crecimiento acelerado, es una prioridad para el C40 y CCI, quienes han trabajado juntos desde el 2012 para acelerar el progreso de la implementación de políticas públicas locales y programas para enfrentar el cambio climático mundial. Actualmente, la alianza C40-CCI está trabajando con fabricantes de vehículos eléctricos en 15 ciudades alrededor del mundo para incrementar la adopción de tecnologías hibridas y eléctricas, las cuales ya han logrado disminuir las emisiones de gases en ciudades en EEUU, China y Canadá. Dalberg apoyó dicha iniciativa al llevar a cabo un estudio de viabilidad que analizó las barreras y oportunidades existentes para el uso de autobuses híbridos y eléctricos en São Paulo, Rio de Janeiro, Buenos Aires y Bogotá.

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List of Events around the UN General Assembly (UNGA) and Clinton Global Initiative (CGI) Annual Meeting

This September, New York City will once again host two major development events: the UN General Assembly (UNGA), and the Clinton Global Initiative (CGI) Annual Meeting. These events provide an important opportunity for global players from across international development to coordinate their efforts and collaborate on the sector’s greatest challenges.

We’ve created a database of the key side events taking place to help the development community come together this month.

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Borrowing and Saving – Not Two Sides of the Same Coin

By Dalberg’s Michael Mori, and ACCION International’s Elisabeth Rhyne

From a mathematical point of view, borrowing and saving are mirror images. In both cases many small payments allow for one or more large payouts. Only the sequence differs. Stuart Rutherford’s classic description involves “saving up” (saving) and “saving down” (borrowing), both for the purpose of assembling “usefully large sums.” When viewed in this way it is clear that saving and borrowing can serve much the same purpose, and at times can even substitute for each other.

This is true, as far as it goes, and it underscores the importance of disciplined payments of small amounts as a path to obtaining the lump sums needed for major purchases.

We recently traveled to India (Mumbai and rural Maharashtra) and Kenya (Nairobi and farming villages outside of Nyahururu) as part of a research project led by the Center for Financial Services Innovation and the Center for Financial Inclusion, and conducted by Dalberg. In speaking with a variety of residents, we were struck by vast differences in the way people make borrowing and savings decisions.

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Yemen Faces Great Challenges if a Peace Agreement is Forged

By Dalberg’s Paul Callan, and Globesight’s Taufiq Rahim

Today, Yemen has three million individuals who have fled conflict, and are displaced both within the country and outside of its borders. Creating the right conditions for their return home is both a humanitarian imperative and critical to regional and global security.

The April 2016 ceasefire in Yemen led to very welcome peace talks. While ceasefire violations and competing agendas have hampered negotiations, the coming months will hopefully see an end to the conflict.

 It is crucial that the international community begins to work together to prepare the way for reconstruction, including the return of refugees. Reconstruction and return will not be an easy task given that post-conflict Yemen will still likely be plagued by extremist groups, endemic poverty and distrust.

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