U.S. Electrification "Partnershiph" with Tanzania

While browsing NPR, I came upon this audio news recording titled "Obama Promises Billions to Double Africa's Electricity Access" (listen here: http://www.npr.org/player/v2/mediaPlayer.html?action=1&t=1&islist=false&id=197713640&m=197713651). Since my practice experience this summer will be with the Maasai Women's Development Organisation health clinic, I thought that this provoked many questions, especially since my organization serves the distant pastoral villages in Northern Tanzania.

Quite simply, Obama's campaign called "Power Africa" aims to invest $7 billion dollars to Africa in order to increase local's and businesses access to electricity, and to ultimately unleash Africa's economic potential. The reasons offered by NPR's Greg Warner are the following: 1) the "tremendous need in Africa" for street lights, keeping medicines cold, etc, 2) an advantage for the U.S. economy as the administration sees Africa as an untapped resource for businesses, and 3) to encourage green technology to be tried and implemented for clean power.

Now, don't get me wrong. I love electricity. I love being able to study on my laptop at night and have the leisure to learn about international conditions at the click of a button; to be able to connect to internet; charge my phone; use light when cooking; and everything else. And I do believe that anyone anywhere can benefit from electricity if they choose, especially entire economies in terms of the marginal increase in the possibilities for entrepreneurs and increasing internal businesses. But, just like any technology being introduced, how will this be received? How will locals feel about having to pay a utility bill for the first time? Do they even want it? Will they have a choice? What locations will be selected for electrification? Will the neglected/outskirting regions all over Africa be reached? Whether or not the concept of electrification is going to be a positive change (short and long run) can be debated by African politicians and locals, U.S. tax payers, businesses, and even students.

What I am curious to know, is which U.S. entities have an interest in this, and to whose benefit? According to Obama, this is not charity. This is business. Whose business? Well, $7 billion will be coming from the U.S. government and $9 billion will be from the private sector. The private sector including big names like General Electric and even smaller U.S. companies, all in the hope that they can expand their businesses and make money investing in Africa by including it in the global economy. The idea of imperialism is hard to avoid as I wonder how these businesses will be conducted, and if African countries' benefits will be converted to positive action to improvement or to embezzlement/corruption. Transnational business will undoubtedly seek to exploit local employees to maximize profits. So who is going to regulate conduct and actually enforce it? Will these businesses moving result in shared fortune? Or will the margin of inequality widen?

Stock Exchange and Coffee in Viet Nam

These last few weeks, I have been gathering a lot of information on and learning about Viet Nam and its political economy.

Here are some trends on its market:

• “Vietnam’s stock market has been among the world’s leaders year-to-date.” The Vietnam Stock Exchange Index (VNI) has increased by 10.3% in January 2014.
• The reason that is attributed to this growth is due to a high level of foreign direct investment (FDI).  According to Andy Ho, Managing Director and Chief Investment Officer of VinaCapital, many countries are investing in Viet Nam is because it seems to be relatively more stable than many emerging markets. "Vietnam has basically shined above other emerging markets in terms of economic and political stability which has attracted a lot of investors to look at Vietnam," he says.
• The stability has lasted for 2 to 3 years now and is an indicator that Viet Nam is not such a risky invesmtment.
• International investors are looking for business in emerging markets, but there are only a few viable choices because of a lot of currency volatility in the emerging economies. “Vietnam, with a stable Vietnamese Dong against the U.S. dollar and no political unrest coupled with a steady and growing GDP and a large population becomes awfully interesting at this time,” Andy explains.

It seems that on the macro-level, in the perspective of one stock exchange fund, Vietnam seems to be doing well.  It has been receiving foreign investments, which increases capital into the country.

Source: Vietnam's Market Emerging Again With Vietnam Opportunity Fund's Andy Ho

Furthermore, I wanted to analyze Viet Nam on a micro-level too, on a related note to the stock exchange and my practice experience.  I decided to read an article about Viet Nam’s  coffee.  Who doesn’t love a cup of cà phê sữa đá (Vietnamese iced coffee)?  The price of coffee in the world comes from the New York and London Stock Exchange.  Within the past few decades, Viet Nam has become a large participant in the global coffee market, being behind only Brazil in exports.

An article from Business Recorder stated that “Vietnam coffee prices climbed about 2 percent to 38,500-38,600 dong ($1.83) per kg on Tuesday (February 24^th, 2014), the highest since August last year … ”  The increase in price is probably due to the drought and water damage that is occurring in other coffee-growing places in the world.

From what I learned from GPP 115 and “Black Gold,” the price of coffee is low, but still volatile.  Right now, Vietnamese growers and exporters are playing a game of when to best sell their coffee beans.  Should they wait to see if the price of coffee increases?  If they do that, there is always a risk that they will decrease.  But, as of now, the trend of coffee price seems to be positive.  However, they are hopeful that the price of coffee will continue to rise, maybe up to 45,000 dong.

Source: Vietnam’s Coffee Prices Jump

The following is a video of the role of coffee farming in Viet Nam.

The video demonstrates strong faith in the coffee industry in Viet Nam.  Trung Nguyen Coffee plans to dominate the coffee industry.  In addition, despite the Starbucks that opened in Saigon last year, the Vietnamese locals still prefer Vietnamese style coffee (individual drip coffees).

Overall, it seems that there are positive trends in Viet Nam.  The dollar is stable, as pegged to the United States dollar. There is strong foreign investment, which means that there is something about the country that seems to be viable in getting returns on investments.  However, these are just two aspects of a very complex society.  This is something that I must careful and critical about because even though these parts seem to be good, there are many parts in Viet Nam that may be disadvantaged.