The future of sustainable economic development

The idea that taxpayer money should be spent on non-taxpayers overseas is a difficult one to broach with the electorate in the post-austerity era. That is why the work that we do at Adam Smith International is so important. At our core is the principle that we can transform lives by making economies stronger, and through that help to create societies that are more stable, supported by governments that are more effective. We believe that the key to long-term, sustainable economic development is in building a flourishing private sector as the vehicle for job creation, mutual prosperity and reducing aid dependency.

As we look to the future of international development, we expect to see a continuing shift towards promoting higher productivity sectors as a pathway to economic transformation.  Trade and investment promotion, two mainstays of economic development, are likely to be of increasing importance to the sustainability of development priorities.  There is more emphasis than ever on addressing the specific barriers faced by women, youth, people with disabilities, and other marginalised groups throughout the UK government’s international development policy priorities, and this can only be a good thing for ensuring sustainable economic development.  One of DFID’s flagship poverty reduction projects in the Democratic Republic of Congo (DRC), ÉLAN RDC, managed by Adam Smith International, has been working to develop coffee and other sectors since 2013.  To date it has boosted the incomes of over 840,000 people by taking an ambitious, private-sector driven approach to economic development.

When thinking about the DRC, coffee might not be the first thing that comes to mind. But the combination of rich volcanic soil, pure water and an ideal climate provide the conditions to grow some of the finest quality beans in the world.

Up until the 1980s, coffee production in the DRC was thriving with annual exports of over 100,000 metric tonnes.  By 2003 the sector was in ruins with exports down over 90 per cent from the peak.  Decades of violent conflict, political instability and endemic corruption had destroyed businesses throughout the value chain and limited new investment into the sector.  Coffee wilt disease had reached epidemic proportions, devastating crops.

Across DRC over 250,000 producers rely on coffee for their livelihoods.  Desperate farmers were driven to extreme measures, risking dangerous border crossings to sell unprocessed beans to neighbouring countries at prices far below market value.  Over the years it is estimated that 1,000 people lost their lives attempting to cross Lake Kivu to sell their produce in Rwanda.

The Adam Smith International managed ÉLAN project recognised that multiple market failures must be tackled simultaneously to affect real change.  Furthermore, change will only last if owned and driven by the businesses, government agencies and industry associations that comprise each sector, rather than a temporary development project.

After more than two decades of hardship, the coffee sector is turning a corner, and development partners including DFID and Adam Smith International are playing an important role in the turnaround.  New business leaders and industry associations are emerging, pushing for a better business environment and promoting coordination within the sector. Improved regulation resulted in caps on export taxes and measures to start countering unregulated exports.  As conditions improve, major investors like Starbucks and Olam are beginning to take tentative steps into the market.

The project has backed exporters to support farmers from whom they source coffee with training and extension services, leading to better and more consistent exports and higher prices for growers. ÉLAN has advised nascent industry associations to build trust between players in the sector and represent the views of the coffee industry to government, succeeding in reducing taxes on the export of coffee. We have also worked with exporters to promote Congolese coffee through major local events such as Saveur du Kivu as well as internationally via the African Fine Coffees Association.

Innovation is crucial, as it is with private sector development the world over. The adoption of relatively simple technologies like washing stations and fermentation boxes has driven up coffee bean quality and increased returns for farmers, leading to a virtuous cycle of re-investment in small enterprises.  The Congo Coffee Atlas—a joint initiative between industry actors, ÉLAN and the Eastern Congo Initiative—is the first online resource capturing data on growing zones, certification, cupping scores, flavour profiles, and contact details for growers and exporters to help build market linkages. Technology will play a fundamental role in the future of the agricultural sector worldwide, and the DRC is no different.

But it is imperative that future growth also be inclusive—of women, the poorest and the most marginalised in society. ÉLAN has supported women’s economic empowerment through the formation of l’Initiative des Femmes Congolaises dans le Café & Cacao (IFCCA), a member-led association comprised of women representing individual producers, cooperatives, exporters, agronomists, regulators, and vendors from across the cocoa and coffee value chains. Focused on quality, marketing and advocacy, IFCCA’s activities include training in good agricultural practices, traceability and marketing to drive demand for women-produced coffee (café femme) and cocoa as a means to increase incomes, improve roles and promote empowerment for women in the sectors, as well as ensuring their sustainability through the inclusion, support and development of younger generations.

ÉLAN serves as a good example of how leveraging private sector dynamism and resources can drive sustainable, long-term development to benefit large numbers of poor and marginalised people.  The future of coffee in the DRC is looking bright and, while the next decade will not be without its challenges, the industry is on a firmer footing than it has been in 30 years, and Adam Smith International is proud to be a partner working in support of this.

Achieving results like these across the UK’s international development programme requires enduring and informed support. It is crucial to the future of the UK’s involvement in international development that the positive messages about the importance of sustainable economic development be embraced and supported by all parties. Voters will never support the idea, so often peddled by certain sections of the media, of international development as a source of permanent handouts to the developing world, and a change in narrative about the importance of creating future economic partners, rather than long-term economic beneficiaries of the largesse of the developed world, is long overdue. Adam Smith International looks forward to playing an important role in the creation of that narrative, and in the support of its delivery.

Read the rest of the pieces from our special Future of Aid report here