“The End of the ‘Developing World,'” New York Times, 1 March 2014.
When it comes to the global economy, a new century requires a new vocabulary.
BILL GATES, in his foundation’s annual letter, declared that “the terms ‘developing countries’ and ‘developed countries’ have outlived their usefulness.” He’s right. If we want to understand the modern global economy, we need a better vocabulary.
Mr. Gates was making a point about improvements in income and gross domestic product; unfortunately, these formal measures generate categories that tend to obscure obvious distinctions. Only when employing a crude “development” binary could anyone lump Mozambique and Mexico together.
It’s tough to pick a satisfying replacement. Talk of first, second and third worlds is passé, and it’s hard to bear the Dickensian awkwardness of “industrialized nations.” Forget, too, the more recent jargon about the “global south” and “global north.” It makes little sense to counterpose poor countries with “the West” when many of the biggest economic success stories in the past few decades have come from the East.
All of these antiquated terms imply that any given country is “developing” toward something, and that there is only one way to get there.
It’s time that we start describing the world as “fat” or “lean.”
“Lean” societies approach consumption and production with scarcity in mind. In the so-called least developed nations of sub-Saharan Africa, where the gross national income averages just $2,232 per capita, populations are young and hungry — at times for food, but mostly for opportunity. Nothing can be taken for granted or wasted. But resource constraints have provoked an astonishing bounty of homegrown solutions to the problems philanthropists like Mr. Gates address with charity. If necessity is the mother of invention, lean economies have a distinct advantage.
In Lagos, Nigeria, a three-story schoolhouse rises above the waters inMakoko, a fishing hamlet floating on the city lagoon. Made from simple recyclable materials, the school embodies climate resilience and appropriate technology — and educates 100 students daily.
In Khayelitsha, a poor township in South Africa, a stack of repurposed shipping containers serves as a health clinic. Lynette Denny, an obstetrician in Cape Town, uses them for cervical cancer screenings. Her staff does “everything but operate” in the containers. Dr. Denny sees 20 to 30 women each afternoon.
Meanwhile, start-ups in Africa measure their seed-funding rounds in comparatively modest figures. M-Pesa, the mobile-phone banking juggernaut now used by 86 percent of households in Kenya, began with investments of about £900,000 (about $1.5 million) from Vodafone and the British government. Despite lacking the resources richer economies take for granted, similarly lean ventures generate billions of dollars south of the Sahara.
So what makes an economy “fat”? The United States is a prime example. Plenty is normal. Gross national income is close to $50,000 per person.
There are downsides. The United States has one of the world’s highest obesity rates and has grappled with other, more figurative “fat” problems: a subprime mortgage epidemic, pay-to-play politics, a dangerous taste for fossil fuels. Other countries are also struggling to pay the wages of wealth. South Korea has declared Internet addiction a public health concern. Aging nations in Europe are scrambling to defuse the time bomb of generous pension programs. The consumption-fueled financial crisis exposed bloat from Iceland to Italy. Subsequent “austerity” measures have put fat economies in jeopardy for decades to come.
By contrast, Africa’s lean economies have more basic concerns. Malaria and childbirth still rank among the top causes of death. Predatory politicians, antique infrastructure, drug shortages and power cuts are all too common. But there are silver linings. Individual Africans waste less food and water, owe less money, and maintain a regional carbon footprint that is the lowest in the world. The energy consumed annually by the 19.5 million people in New York State is equivalent to that of nearly 800 million Africans.
And because the region had been largely excluded from reckless global markets, Africa actually avoided the worst of the financial crisis. With few, if any, mortgages or credit cards to max out, African households are underleveraged. Stingy commercial banks push small businesses to follow a “lean” model for both operations and finance that can be more efficient. If the world is progressively tightening its belt, it should aim for the notch marked “Africa.”
Lean economies have discovered the commercial advantages of trade among themselves. Trillions of dollars now flow between Asia, Latin America and Africa. And it’s not just because of China. Turkish Airlinesnow flies to over 30 African destinations — and Turkey has opened nearly two dozen embassies on the continent since 2009. In 2012, the Brazilian megabank BTG Pactual started a $1 billion fund for Africa. IrokoTV, a service for streaming Nigerian movies, found an unexpectedly engaged fan base in Malaysia. With neither forgiveness nor permission from “the West,” exchange between emerging markets has come to rival the trans-Atlantic trade that dominated the 20th century.
LEAN thinking also drives a different sort of innovation. The story of Toto, a Japanese company that created the Otohime, or “Sound Princess,” illustrates the great divide. Now installed in thousands of restroom stalls across Japan, the device mimics the sound of flushing water. The Sound Princess solved a problem of affluence: women were continuously flushing public toilets to mask the sounds that come with using them. Toto’s innovation saves them the embarrassment. The portable, purse-friendly version is a best-selling consumer product in Japan.
In a lean economy, toilet-related innovation looks a lot different. In the densest areas of African cities, one time-honored form of waste disposal is the “flying toilet”: bundling refuse into a plastic bag and chucking it as far as possible. It’s understandable: Most people in Africa’s informal settlements lack the basic dignity of modern sanitation. Waste-contaminated water breeds disease, and fear of crime keeps many from using public toilets at night. The “flying toilet” is a stopgap solution — with obvious drawbacks.
The Umande Trust, a community organization in Kenya, came up with a better plan. They helped build a massive cylindrical biodigester that composts the output of a fleet of toilets. Umande charges a few pennies per use, making about $400 per month. Better yet, the system doesn’t drain the water supply like traditional flush toilets, and it creates biogas that powers a community center and heats water for the 400 residents who also shower there every day.
The Sound Princess represents a vanity innovation for the top of the pyramid, where you can also find software that will allow you to find a parking spot or a date, to “farm” fake digital crops, to shake your iPhone to simulate the sound of a whip. They solve problems that arise when the basics are taken care of.
But when the status quo is a flying toilet, anything goes. Lean economies — however challenged they might appear — translate minimal resources into maximum social impact.
As the old adjectives about Africa — “hopeless,” “war torn,” “impoverished”— fade, fat economies must stop assuming that poor countries should mimic them and instead embrace their models for social innovation and efficiency. The post-crash ethos of doing more with less is essential in modern Africa. And for philanthropists like Mr. Gates and world leaders who have committed to solving big problems, lean thinking is imperative.