This is the second blogpost of a 5-piece series that will elaborate on different perspectives of creating strategic impact.
“The Sustainable Development Goals (SDGs) are a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity.”.
The SDGs including its 169 targets were the outcome ofa UN conference held in 2015, succeeding the Millennium Development Goals (MDG). Unlike the MDGs, the SDGs received broad support from many NGOs because of the more holistic approach to social and environmental challenges. The SDGs took a big step by paying special attention the causes and interconnectedness of all problems instead of a siloed approach to the effects of problems.
This is a huge achievement besides being one of the most significant negotiations and global policy agendas of this century. That said, the SDGs still received criticism, one point being that it contains competing goals.
This article will elaborate on this point by taking a look on Ethiopia that aims to become a lower middle-income economy by 2025. This, by all means, doesn’t mean to diminish the achievements of this important agenda.
Throughout the agenda, there is a call for more and less at the same time.
Most obviously, the contradiction is mirrored amidst the index of goals, headlined in #8 and #12. Clearly, “sustainable economic growth” (SDG 8) and “sustainable consumption and production patterns” (SDG 12) are hardly compatible.
Goal 8 calls for “sustainable economic growth”, “full and productive employment” and a paradigm shift where “economic growth is decoupled from environmental degradation”.
At the same time, it also says that economic growth in the least developed countries should amount to “at least 7 % gross domestic product (GDP) growth per annum”.
This sentence precisely reveals that the underlying parameter for sustainable economic growth is the GDP. In times, where we ask ourselves if an ever increasing economic growth is even possible without environmental degradation, the SDGs unfortunately don’t provide the answer.
To make this point of clashing sustainability goals more tangible, let us take a look at Ethiopia and its development from one of the poorest countries towards the fastest growing economy of the world.
In light of the short period of time, the change from an agrarian nation to being Africa’s industrial powerhouse is radical. Speaking in GDP numbers again, Ethiopia’s GDP per capita will continue to rise at an annual pace of 6,2 % through 2022 (compared to Germany’s GDP per capita projected to fall from 2,5 % in 2018 down to 1,3 % in 2022).
What is happening in the background is Ethiopia’s government enforcement of cheap industrial production and manufacturing and the provision of a conducive policy environment, making it one of the most attractive investment destinations in Africa. This is the result of an elaborate Growth and Transformation Plan. It seems that now, Ethiopia is adapting China’s former strategy to induce rapid development by deploying cheap labour for the production of goods and textiles outsourced by the Western world.
This policy has successfully attracted foreign contractors and, ironically enough, China provides much of Ethiopia’s foreign direct investment, namely $10.7 billion in loans from 2010 to 2015.
That is the high-level perspective. Zooming in, we see that the money is flowing into building important infrastructure, like dams, roads and cellular networks — basic requirements for a nation that strives to join the global middle class.
Furthermore investments are taken onto the construction of industrial parks. In 2016, Ethiopia has inaugurated Hawassa Industrial Park, of which Prime Minister Hailemariam Desalegn has said to be the “foundation of Ethiopia’s ambition to be the manufacturing hub of the African continent”.
To get a feeling of the size and ambitions towards that goal — this is Hawassa Industrial Park in facts and numbers:
- 275 kilometers south of capital city Addis Ababa
- built by a state-owned Chinese construction company in 9 months
- for $250 million
- consists of 56 hangar-sized buildings
- currently 1.400 locals at work, projected to reach 20.000 by 2019
- base salary of the workers is $25 per month
- home to fast fashion companies
And this is only the beginning.
Ethiopia plans to have built 12 such industrial parks by 2020 and to create a total of 2 million jobs in manufacturing by 2025.
So the reason why a high GDP growth rate is possible, is because Ethiopia’s government allows for heavy foreign investments to help build a new economy.
The outcome of this development is drastic. Poverty declined from 44 percent in 2000 to 25.6 percent in 2016, while in urban areas, it even fell to 14.8 percent.
In regard to the Sustainable Development Goals, Ethiopia eagerly demonstrates how to reduce (and possibly end) poverty, the #1 Sustainable Development Goal.
Indeed, industrialization raises people out of poverty and history in former developing countries like China, India and Bangladesh has shown that the best way to start is to ally with the apparel industry.
But this rapid industrialization that builds on the fast fashion industry comes at a price. Although Hawassa Industrial Park itself claims to operate eco-friendly and uses state-of-the-art infrastructure and facilities, it only addresses a fraction of the impact fast fashion causes in regard to the environment.
The fundamental problem — the growing fast fashion industry — does not get smaller, on the contrary, it gets bigger.
The demand for fast fashion is further increasing because of the growing world population AND the evolving middle classes in (again, ironically) the former developing countries.
Ethiopia’s Growth and Transition Plan is an example for the dilemma of the Sustainable Development Goals and why its impact will be limited. Because we cannot pursue competing goals and therefore have to allow trade-offs.
We have to prioritize.
In this case, the question of creating strategic impact is a question of timing and interests.
Ethiopia decided to create immediate strategic impact by committing to SDG #1 and #8 through alleviating poverty and promoting sustainable economic growth successfully.
But striving for endless industrial growth strains on the planet’s limited resources on the long run.
This year, earth’s overshoot day will be reached in August already. And the big misconception is that, in the end, economic growth is not the solution to poverty.
If we look at the income generated by global GDP growth between 1999 and 2008, the poorest 60% of humanity received only 5% of it.
To sum it up: the crux if the matter is that SDGs are constituted on capitalism that depends on growth and the ever-increasing production and consumption. But changing the system, is that even possible?
It seems that the authors of the agenda were fully aware of this daunting perspective, all the more there is this one sentence, the only hint to the solution in a 36-page document, lingering all along. SDG 8.4 says we have to decouple economic growth from environmental degradation.
This is probably the strongest message of the whole document. It is the solution to the core of the problem and the greatest challenge at the same time.
But, how do we do that?
If you like to discuss this question, please get in touch or leave a comment. In one of the next posts, we will give an outlook on possible solutions.
Thanks for reading!
by Karry Schwettmann