Cornelius Hirsch: Digging into foreign investment in agriculture

By Parul Tewari, IIASA Science Communication Fellow 2017

Two things are distinctly noticeable when you meet Cornelius Hirsch—a cheerful smile that rarely leaves his face and the spark in his eyes as he talks about issues close to his heart. The range is quite broad though—from politics and economics to electronic music.

Cornelius Hirsch

After finishing high school, Hirsch decided to travel and explore the world. This paid off quite well. It was during his travels, encompassing Hong Kong, New Zealand, and California, that Hirsch started taking a keen interest in economic and political systems. This sparked his curiosity and helped him decide that he wanted to take up economics for higher studies. Therefore, after completing his masters in agricultural economics, Hirsch applied for a position as a research associate at the Austrian Institute of Economic Research and enrolled in the PhD-program of the Vienna University of Economics and Business to study trade, globalization, and its impact on rural areas. Currently, he is looking at subsidies and tariffs for farmers and the agricultural sector at a global scale.

As part of the 2017 Young Scientists Summer Program at IIASA, Hirsch is digging a little deeper to analyze how foreign direct investments (FDI) in agricultural land operate. “Since 2000, the number of foreign land acquisitions have been growing—governmental or private players buy a lot of land in different countries to produce crops. I was interested in knowing why there are so many of these hotspots in the world— sub-Saharan Africa, Papua New Guinea, Indonesia—why are people investing in these areas?,” says Hirsch.

Farming in one of the large agricultural areas in Indonesia ©CIFOR I Flickr

Increased food demand from a growing world population is leading to an increased rate of investment in agriculture in regions with large stretches of fertile land. That these regions are largely rain-fed make them even more attractive for investors as they save the cost of expensive irrigation services. In fact, Hirsch argues that “the term land-grabbing is misleading. It should actually be water-grabbing as water is the foremost deciding factor—even more important than simply land abundance.”

Some researchers have found an interesting contrast between FDI in traditional sectors, such as manufacturing, and the ones in agricultural land. While investors in the former look for stable institutions and good governmental efficiency, FDI in land deals seems to target regions with less stable institutions. This positive relationship between corruption and FDI is completely counterintuitive. Hirsch says that one reason could be that “sometimes weaker institutions are easier to get through when it comes to such vast amount of lands. A lot of times these deals and contracts are oral and have no written proof—the contracts are not transparent anyway.”

For example in South Sudan, the land and soil conditions seem to be so good that investors aren’t deterred despite conflicts due to corrupt practices or inefficient government agencies.

One of the indigenous communities in Madagascar, a place which is vulnerable to land acquisitions © IamNotUnique I Flickr

One area that often goes unnoticed is the violation of land rights of indigenous communities. If a government body decides to sell land or give out production licenses to investors for leasing the land without consulting the actual community, it is only much later that the affected community finds out that their land has been given away. Left with no land and hence no source of livelihood, these communities are forced to migrate to urban areas.

A strain of concern enters his voice as Hirsch talks about the impact. “Land as big as two times the area of Ecuador has been sold off in the past—but it accounts for a tiny percentage of the global production area.” With rising incomes and greater consumption of meat, a lot of land is used to produce animal feed crops. “This is a very inefficient way of using land,” he says.

During the summer program at IIASA, Hirsch is generating data that will help him look at these deals in detail and analyze the main factors that are taken into consideration before finalizing a land deal. At the moment he is only able to give an overview of land-grabbing at the global level. With more data on the location of the deals he can look at the factors that influence these decisions in the first place such as the proximity between the two countries involved in agricultural investments and the size of their economies.

While there is always huge media coverage when a scandal about these land acquisitions comes out in the open, Hirsch seems determined to dig deeper and uncover the dynamics involved.

About the researcher
Cornelius Hirsch is a research associate at the Austrian Institute of Economics and Research (WIFO). At IIASA he is working under the supervision of Tamas Krisztin and Linda See in the Ecosystems Services and Management Program (ESM).

This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.

Falling fertility rates: Why do wealthier people have fewer children?

By Parul Tewari, IIASA Science Communication Fellow 2017

© KonstantinChristian I Shutterstock

Faced with a sharp decline in the global fertility levels over the last few decades, many countries today are confronted with the problem of an aging population. This could translate into an economic threat: higher health-care costs for the elderly coupled with a shrinking working population will lead to lower income-tax revenues to provide for these rising costs. This can already be seen in countries like Japan, Spain, and Germany. With an increasing number of elderly dependents and not enough workers to replace them, their social support systems have become increasingly strained.

Even though in the last few decades there has been an increase in individual incomes, researchers have observed a negative correlation between the increased wealth and the number of children people choose to have. Sara Loo, as part of the 2017 Young Scientists Summer Program (YSSP), seeks to explore why people are choosing to have fewer children as their social and economic conditions change for the better.

According to a report titled World Fertility Patterns 2015, global fertility levels have gone down from just above five children in 1950 to around 2.5 children per woman in 2015. In the figure below, ‘total fertility rate’ refers to the average number of children that are born to a woman over her lifetime.

It might seem counterintuitive that better living standards would be linked to decreased fertility. One way to explain it is through the lens of cultural evolution. Loo explains that culture is constantly changing – be it beliefs, knowledge, skills, or customs. This change is reflected in people’s day-to-day behaviors and affects their choices, both professional and personal. Importantly, beliefs and customs are acquired not only from people’s parents but are largely influenced by their peers – friends and colleagues.

One of the ways in which cultural evolution has affected fertility rates is resulting from the trade-off between the number of children and the quality of life that parents desire to give each of them, says Loo. As both men and women vie for well-paying jobs to attain a higher standard of living, and as they compete for such jobs based on their education, the resources parents invest into each child’s upbringing, including education and inheritance, are crucial. Even the time parents can give to their children becomes an expensive currency.

This makes for a highly competitive environment in which everyone is trying to achieve a higher status, in order to provide better opportunities for their children. When parents have fewer children, this means giving each of them a greater chance of achieving higher status.

Loo elaborates that as everyone competes to get their children to the top of the socioeconomic ladder, this necessitates a higher investment per child, both monetarily and otherwise. The theory of cultural evolution in this case thus predicts lowered fertility as competition for well-paying jobs intensifies with a country’s development.

However, it is not that such parental strategies apply equally to all segments of a population, says Evolution and Ecology Program Director Ulf Dieckmann, who is supervising Loo’s research at the institute over the summer. He explains that it is therefore helpful to look at fertility in relation to people’s socioeconomic status, instead of just looking at a population’s average fertility rate over time.

This can give telling insights. “In many pre-industrial societies, the rich had greater numbers of children, and if anybody had less than replacement-level fertility, it was the really poor people who could not afford to raise as many children. It was over time that this correlation changed from positive to negative when richer people decided to have fewer children: if they had too many children, they could not afford to invest as much per child as was needed to secure maintaining or raising the children’s socioeconomic status. This has led to a reversal of the traditional pattern: in developed societies, fertility has been shown to drop at high socioeconomic status,” says Dieckmann.

Complementing existing research on the fertility impacts of urbanization and of women’s education and liberation, Loo plans to explore how the aforementioned mechanisms of cultural evolution can explain the observed negative correlation between socioeconomic status and fertility. Her goal is to do so using a mathematical model that can account for both economic trends and cultural trends as two key processes influencing fertility rates.

About the researcher

Sara Loo is currently a third-year PhD candidate at the University of Sydney, Australia, where her research focuses on the evolution of uniquely human behaviors. Loo is working with the Evolution and Ecology Program at IIASA over the summer, with Professor Karl Sigmund and Program Director Ulf Dieckmann as her supervisors for the project.

This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.

 

Learn from the past, prepare for the future

By Roman Hoffmann, Wittgenstein Centre for Demography and Global Human Capital (IIASA, VID/ÖAW and WU), Vienna Institute of Demography, Austrian Academy of Sciences

Flooded street in Meycauayan, Bulacan, Philippines (credit: Kasagana-Ka Development Center Inc., 2016 )

Floods, droughts, and tropical storms have significantly increased, both in frequency and intensity in recent years. The burden of these events—both human and economic—falls in large part on low and middle-income countries with high exposure, such as coastal and island nations. In a recent study, with IIASA researcher Raya Muttarak, we found that education significantly contributes to increasing disaster resilience among poor households in the Philippines and Thailand, two countries which are frequently affected by natural calamities.

In these countries, public disaster risk reduction is important, yet public measures, such as investments in structural mitigation for large buildings or infrastructure, implementation of early warning systems, or planned evacuation routes and shelters, may not be enough to sufficiently protect communities from the devastating impacts of natural calamities. In addition, the undertaking of individual preparedness measures by households, such as stockpiling of food and water, strengthening of house structures, and having a family emergency plan, is crucial. Yet, even in areas which are heavily exposed to disasters, people often do not take any precautionary measures against environmental threats.

How people can be motivated to take precautionary action has been a fundamental question in the field of risk analysis. In the new study, which was based on face-to-face interviews in both Thailand and the Philippines, we found that prior disaster experience, which is influenced by geographical location of the home, is one of the key predictors of disaster preparedness. For those who were affected by a disaster in the recent past, education does not seem to play a significant role—they have already learned by experience.  However, among those who had not previously been affected, educational attainment becomes a key determinant. Even without having experienced a disaster, the educated are more likely to make preparations. In fact, educated people who haven’t experienced a disaster have preparedness levels that are as high as those of households who were only recently affected. Since education improves abstract reasoning and abstraction skills, highly educated individuals may not need to experience a disaster to understand that they can be devastating. This suggests that education, as a channel through which individuals can learn about disaster risks and preventive strategies, may effectively serve as a substitute for (often harmful) disaster experiences as a main trigger of preparedness actions.

In additional analyses, we investigated through which channels education promotes disaster preparedness by looking at the relationship between education and different mediating factors such as income, social capital and risk perception, which are likely to influence preparedness actions. We found that how education promotes disaster preparedness is highly context-specific. In Thailand, we found that the highly educated have higher perceptions of disaster risks that can occur in a community as well as higher social capital (measured by engagement in community activities) which in turn increase disaster resilience. In the Philippines, on the other hand, it appears that none of the studied mediating factors explain the effect of education on preparedness behavior.

Emergency shelter, San Mateo, Rizal, Philippines (credit: Kasagana-Ka Development Center Inc., 2013 )

Certainly, it remains important for national governments to invest in disaster risk reduction measures such as early warning systems or evacuation centers. However, our study suggests that public funding in universal education will also benefit precautionary behavior at the personal and household level. In line with recent efforts of the UN to promote education for sustainable development, our study provides solid empirical evidence confirming the important role of education in building disaster resilience in low and middle-income countries.

Reference
Hoffmann, R. & Muttarak, R (2017). Learn from the past, prepare for the future: Impacts of education and experience on disaster preparedness in the Philippines and Thailand. World Development  [doi:10.1016/j.worlddev.2017.02.016]

This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.

What you probably don’t know about higher education in sub-Saharan Africa

By Anne Goujon, IIASA World Population Program

Less than 6% of the working age population has a post-secondary education in sub-Saharan Africa, according to the Wittgenstein Centre Data Explorer. However, there is a huge diversity of experiences in the region: those countries located in Southern and Western Africa have higher shares of highly educated people compared to those in Eastern and Middle Africa.

The potential for increasing education levels is tremendous as there is a huge demand for higher education, partly driven by rapid population growth. The population in the age of attending higher education—18–23 years—is forecasted to increase by 50% from its 2015 level (110 million) by 2035 (183 million), and will have doubled by 2050 to 235 million. The number of colleges and universities in the region has been burgeoning to fulfill the demand. Those are not always of very good quality, whether they are in the public sector or the private, as most are. While regulatory bodies exist to check whether all education providers meet national and international standards, they are not universal.

A 2015 graduation ceremony for the Open University of Sudan. ©Hamid Abdulsalam, UNAMID via Flickr

The expansion of higher education has led to substantial brain drain to Europe, North America, and Australia, because highly educated find better opportunities there for studying and jobs–and better salaries. Researchers have estimated that in some countries such as Eritrea, Ghana, Kenya, Sierra Leone, Somalia, and Uganda, more than a third of the national high-skilled labor force had migrated to OECD countries in 2000. While remittances that these people send home help compensate and reinforce the education in their countries of origin, they do not compensate for the departed skills and knowledge.

These facts about education in sub-Saharan Africa are well-known to education professionals and researchers in the field. But as we show in a new book Higher Education in Africa: Challenges for Development, Mobility and Cooperation, published in January 2017, there are a lot of other aspects of education in the region that are not so well-known and that could provide interesting avenues for further research.

For instance, you probably did not know that the African Union has a higher education harmonization strategy. The general idea is the same as the Bologna process in Europe:  enhance the mobility of students by making higher education systems more compatible and by strengthening the quality assurance mechanisms. One chapter by Emnet Tadesse Woldegiorgis, which looks at the process of harmonization of higher education in Sub-Saharan Africa, shows that it follows in the footsteps of the Bologna process mostly because of the involvement of international donors and of the strong links between African universities and European ones.

Students in lecture room at St. Augustine University of Tanzania © Max Haller and Bernadette Mueller Kmet 2009

Many chapters of the book look at the mobility of more highly educated people between Europe and sub-Saharan Africa. This is the case of a chapter by Julia Boger who interviewed graduates from Germany returning to their countries of origin: Ghana and Cameroon. The experiences of those graduates from the two West African countries are radically different: because mainly of their networks, the Ghanaian graduates face less difficulties in finding a job upon return to their country than the Cameroonians.

The last part of the book looks at some cooperation programs that are in place between the North and South (also between the South and the South). Lorenz Probst and colleagues, in their chapter, report about the challenges in implementing a transdisciplinary course in Africa within the context of the rather compartmentalized sectors of higher education in Africa.

The development of higher education could push forward change and innovation, just as much as capacity building in sub-Saharan Africa where it is direly needed.

Reference
Goujon, Anne, Max Haller, and Bernadette Müller Kmet. 2017. Higher Education in Africa: Challenges for Development, Mobility and Cooperation. Newcastle upon Tyne, UK: Cambridge Scholars Publishing.

Note: This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.

Interview: The role of education in the future of humanity

In the 21st century the major global divide runs between knowledge societies and those where access to education is hampered or denied, say population experts Reiner Klingholz and Wolfgang Lutz in a new book. In an interview with campus.de they explain what this means. 

Education empowers us to look beyond our own horizon and to consciously choose our lifestyle. Better qualified people are more involved in political decision making processes and foster democratization – this is what your book says. Does this mean in reverse that societies with limited education opportunities are, as a rule, less democratic?
Rainer Klingholz: From antiquity to medieval times, the uneducated masses were dominated by despotic elites. Wherever the first seeds of democracy were observed, for example in ancient Greece or Florence during the Renaissance, at least a certain part of the male population could write and read. They were in a better position to see what was going on and they strived for more influence in decision making. The more educated the population became, the more chance there was for democracy. In the modern world, we see a clear statistical association between the education of broad segments of society and a well-functioning democracy, although education is a precondition and not always a guarantee.

There are direct and indirect reasons why education is good for democracy. Education directly fosters the ability to obtain information, express one’s own opinions, engage oneself in discussions and look for compromise, all prerequisites for a lively democracy. Education works indirectly through economic development as it fosters prosperity, and such societies are in a better position to afford the ‘luxury’ of democracy. Even autocratically governed countries, such as Singapore and China, which have invested massively in education and achieved rapid economic growth, can also be seen as moving in the direction of democracy in a long term.

© Goinyk Volodymyr | Dreamstime.com

Singapore (home of the aquarium pictured here) and other Asian countries have invested heavily in education, with impressive results. © Goinyk Volodymyr | Dreamstime.com

You say that in a context of global competition countries with low educational standards have lower chances to succeed. Could these countries get out of misery by their own strength or does this problem require a global solution?
Wolfgang Lutz: Looking back in history, we see that many countries have made it without outside assistance. In our book we describe the example of Finland, which was one of the poorest regions of Europe before 1900 and later due to massive educational efforts became not only a winner of PISA test but also one of the most innovative industrial countries. Or, let’s look at Mauritius, which as recently as the 1960s presented a textbook example of a country trapped in the vicious cycle of poverty, population growth, and destruction of the environment. Today, thanks to an early boost in education that was followed by fertility decline and economic growth, it is the most successful country in Africa. Similarly, the rise of the “Asian Tigers” has been induced by massive investment of their own modest means into basic education of the broad layers of population.

In many other countries, mostly in Africa and in South and West Asia, this did not happen.  As a consequence, there is still widespread poverty and birth rates have remained high, causing continued rapid population growth and difficulties in finding solutions for existing problems. Under these circumstances, it is not surprising that dissatisfaction results in conflicts which in turn trigger streams of refugees. There are of cause many other reasons for this but lack of education is a root cause.

The most important factor behind decreasing fertility rates is female education. If women complete at least secondary school, they have substantially fewer children, they and their offspring are much healthier, and they become more independent from their husbands, as they are better informed and can obtain their own income. Education is the best and most effective development aid. In order to make this happen, the least developed countries need urgent help from outside. The world cannot wait decades for these countries to later possibly make it on their own. By that time, their population may have multiplied by a factor of 3-5, resulting in higher poverty and possible conflicts. There is good reason why there has been compulsory education and a right to education for all children until the age of 16 for a long time in all developed countries. This must apply equally to all children of the world.

Just a small portion of total development aid expenditures goes into education. Have we still not recognized the problem?
Reiner Klingholz: We have, on paper. The new Sustainable Development Goals (SDGs) of the United Nations postulate exactly this. The problem is that these ambitious education goals are not being implemented. Only 2 to 4 percent of global development aid goes into basic education; this makes it impossible for all children to complete primary school and even less secondary school. Most of the development money goes into big infrastructure projects that satisfy local potentates and promote corruption and exports from the donor countries. Building of a rural school, or education of teachers, in Mali or Pakistan are not attractive in that sense. Since educational efforts only become noticeable in 10-20 years, it is much more attractive for a current president to build a new highway. Despite or perhaps because of this, we point out that investment in basic education is the most important investment for enhancing the ability of people and countries to help themselves and it therefore should become an absolute priority in international development.

In some Arab or African countries there is a youth bulge without adequate occupation or place in the society. What are the long-term consequences of this?
Wolfgang Lutz: The main problem of these countries is that the population grows faster than opportunities are being created, especially job opportunities. Many young people do not see prospects for their lives and at the same time they see through TV or internet that elsewhere people are much better off. Under such conditions, young men in particular have a tendency to become radicalized, or fall victim to religious zealots, who tell that people of different religions are the enemies. This mixture leads to a clash between education cultures that we describe in the book.

Students outside a school in Rwanda © Alangignoux | Dreamstime.com

Who or what impedes education in countries like Pakistan, Egypt, or in Western Africa?
Rainer Klingholz: Until the middle of 20th century, most of those countries were pawns in the hands of colonial powers that did not invest in broad education. They were afraid of a population empowered through mass education. In the majority of these countries with independence, authoritarian governments came to power who pursued the same goal: they wanted to stay in power surrounded by small educated elites and had no intention of empowering their citizens through education. Fortunately, in many of the countries the situation has improved in recent years and younger generations are now better educated than the older ones. But there is a real threat from fundamentalist religious or terroristic groups, such as IS or Boko Haram, that actively fight against modern education. They want to stop the teaching of natural sciences and instead have boys memorize the holy scriptures and exclude the girls from education altogether

What does Martin Luther have to do with your book?
Wolfgang Lutz: Martin Luther was the first person in history who actively and successfully fought for the basic education of all, including girls and the poorest farmers. He wanted every individual to find his/her own way to salvation through being able to read the Bible. To achieve this, Luther had to translate the Bible into a language that people understood. But most of all, he had to do something to enable all people to read themselves. This focus on universal literacy was new in world history and went further than e.g. the rather elitist humanists had gone.

Interestingly, we see today that the protestant countries that first implemented those educational reforms in the course of the next decades and centuries became more economically successful as a consequence. The rise of the Netherlands and Great Britain, the industrial revolution, and the later success of the United States, the improvement of living conditions and declining death rates—all this had as a necessary precondition  the education of broad segments of the  population that ultimately goes back to the Reformation. Luther himself did not have long-term social and economic consequences in mind. Coming from a medieval culture he personally would have been probably unsettled by the following developments towards modernity.

In your book “Who survives?” you describe different scenarios of the future of humanity to the end of the 21st century depending on investments in education in the near future. Can we only survive current and future crises if we indeed prioritize education?
Rainer Klingholz: At the beginning of the 21st century, humanity faces the biggest challenges in its history. It has to abolish poverty, stop population growth, combat climate change, and sustain peace in a world which at the moment may seem to be falling apart. These problems require the best possible brain power and the empowerment through education of everybody. The alternatives to education are high population growth in the poor countries where uneducated women have much higher birth rates together with many other development problems, which likely result in chaos and possibly conflict.

Wolfgang Lutz: The problem is that education needs time to show its positive effects. We have to wait until children come out of school and become active adults. Education is hence not a quick solution to any of the urgent problems that fill today’s newspapers. But in a long run, there are no alternatives to universal education.

Note: This article gives the views of the interviewee, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.