back to article Mobile phones are the greatest poverty-reducing tech EVER

I have mentioned before around here that the mobile phone seems to be, in terms of reducing poverty, the finest invention humanity has ever come up with. Details of exactly how it does so are here, talking about sardine fishermen off Kerala, and my discussion of the overall economic effect is here, just to revisit that overall …

  1. 9Rune5

    BillG vs Zuckerberg

    Tim's article reminds me a bit about the BillG tirade against Zuckerberg a few years back (http://www.theregister.co.uk/2013/11/02/bill_gates_disses_zuckerbergs_world_internet_plans_as_a_joke/)

    BillG postulates that developing a vaccine against malaria takes precedent over providing the poor with Internet access.

    But... It is my understanding that malaria was eradicated from Europe as a consequence of increased wealth. Wealthier people tend not to share a bedroom with a dozen other people. As mosquitoes tend to stay within a small area, any disease it might spread, won't go very far.

    An increase in wealth brings other benefits as well I'm told.

    So BillG's tirade seems counter-intuitive, to say the least.

    Basic infrastructure (and mobile communication is pretty much basic these days) is important.

    1. J.G.Harston Silver badge

      Re: BillG vs Zuckerberg

      "Basic infrastructure is important."

      Perzactly! Sanitation (clean water, removal of wastes) so people stay alive, and communications (it was roads for us 400 years ago, phones now for Africa) so people can trade.

    2. John Hawkins

      Re: BillG vs Zuckerberg

      In my current part of the world (Sweden), the malaria mossies disappeared when the wetlands were drained in order to farm them. The last local case was in 1933.

      Interesting given that wetlands are now being restored in various places.

      1. Mugs

        Re: BillG vs Zuckerberg

        In my mum's part of the world (Dhanbad, India where my grandfather was a mining engineer) malaria disappeared in WW2 when the American army arrived with DDT. Bit late for her sisters unfortunately. As you say, the link is with stagnant water not overcrowding. The Americans treated every non-flowing piece of water in the area and malaria stopped overnight.

    3. JeffyPoooh Silver badge
      Pint

      Re: BillG vs Zuckerberg

      BillG's blog page contains a quiz on your knowledge of the modern world. It's similar to Hans Rosling's similar quiz where random monkeys beat most humans.

      I got 9/10.

    4. silent_count

      Re: BillG vs Zuckerberg

      Ok 9Rune5, just for the sake of it, I'll give you a counter-argument.

      Mobile phones and internet access seem less important when someone you love is dying of malaria. It's not purely an emotive argument either. A sick person decreases a workforce's productivity. And those inconsiderate dead people make no contribution to GDP at all.

      Technology and wealth will benefit a society but only the ones who are alive to enjoy it.

      That all said, access to better medical outcomes and better technology are not mutually exclusive and both together will do more to improve lives than either one alone.

      1. jonathanb Silver badge

        Re: BillG vs Zuckerberg

        If you, or a family member are dying from malaria, it might be quite useful to be able to phone a doctor to get help.

    5. Anonymous Coward
      Anonymous Coward

      Re: BillG vs Zuckerberg

      Well if you can move 0.5% of a family out of a mud hut (year on year) in line with the internet's GDP contribution then good luck to you - but in the meantime, why not address the Malaria deaths happening right now?

      Who knows - maybe fewer orphans and lower birthrates would also dramatically improve per capita wealth, huh?

    6. Tim Worstal

      Re: BillG vs Zuckerberg

      I don't think there's "an answer" here. Sure, if someone's starving, then feed them. Malarial area? Try to kill the malaria of design a treatment for it.

      But in the longer term it's really all about economic development (the weekend piece talks about this as well). Paul Krugman as said that productivity isn't everything but in the long run it's pretty much everything.

      Being able to communicate increases productivity.

      In this specific instance, comms v. malaria, there's actually no conflict. There's plenty of people (both charitable and for profit) willing to fun the best we can do for both.

  2. Anonymous Coward
    Anonymous Coward

    "mobiles" != "mobile money"

    "every 10 per cent of the population which has access to a mobile causes a 0.5 per cent rise in GDP"

    But then it goes on to state that it is M-Pesa (a payments system) which is the cause of the rise, not the mobile per se, although the mobile is required to access it.

    What's the growth rate for countries which have mobiles but no M-Pesa equivalent?

    1. Squander Two

      Re: "mobiles" != "mobile money"

      > But then it goes on to state that it is M-Pesa (a payments system) which is the cause of the rise

      No it doesn't. You're comparing different numbers.

      A 10% increase in mobile phone coverage in a developing country leads to a ~0.5% GDP increase per year.

      M-Pesa generated a 0.5% GDP increase in Kenya over 7 years.

      And M-Pesa is only running in East Africa, not the entire developing world. It's an example of one of the mobile-enabled causes, not the cause.

    2. jonathanb Silver badge

      Re: "mobiles" != "mobile money"

      I guess it depends why those countries don't have an M-Pesa equivalent. We did have equivalents in this country, the likes of O2 Wallet, but they shut down because nobody used them, and nobody used them because we already have banks which do a better job of handling transaction services.

      1. peter_dtm

        Re: "mobiles" != "mobile money"

        But not in a semi corrupt society - where the nearest bank may be several 10s of miles away; where getting a bank account is dependant on having a job in the legal economy and knowing the right people (and belonging to the right tribe). There's also a literacy (and to a lesser extent a numeracy) issue. If you can't write so can't sign your name ......

        The mobile phone revolution also means people get a phone today - not wait for many months to get a dubious quality landline; and that only after paying considerable backshesh. And landline phones don't normally make it into the squatter camps (other wise coyly known as informal settlements to avoid upsetting westerners' sensibilities).

  3. Anonymous Coward
    Anonymous Coward

    They are as they allow the sending of moneys home for great benifits of people.

    Africa has been abused by the EU for decades, you think those farming subsidies are to help EU farmers or to stop farmers in Africa? I'm sorry but Africa isn't a desert no matter how much the TV tries to push this idea on me or anyone else with a brain. Fisherman? What product is produced in Africa that is used in the EU? Unless of course it's sharks caught with dogs in reunion.

    1. JeffyPoooh Silver badge
      Pint

      Sending money home

      Includes from the big city back to the village, saving a couple days travel each time.

      Modern tech obviously has vast benefits, if we're clever.

    2. Steve Davies 3 Silver badge

      African Products used in UK?

      Coffee from Kenya and Ethiopia

      Moroccan Dates

      Salad stuff from Egypt

      Cotton from Egypt

      Sisal, Cloves and Vanilla from Madagascar

      I am sure that others can add more.

      AFAIK, Reunion is not technically Africa. It is part of France and one of the Indian Ocean Islands.

      1. Tom 38 Silver badge

        Re: African Products used in UK?

        A lot of garden veg and salad stuff is grown year round in Kenya and air freighted to Europe. Kenya also grows some of the finest tea you can lay your hands on.

        West Africa, and Ivory Coast in particular, produce over two thirds of the worlds cocoa beans.

      2. jzl

        Re: African Products used in UK?

        Oil from Nigeria? Diamonds from Botswana? Minerals from the DRC? Baby sweetcorn from Kenya?

      3. JeffyPoooh Silver badge
        Pint

        Re: African Products used in UK?

        Flowers. Many of the flowers that pass thru the Dutch flower market come from various countries on Africa.

        Need. More. Trade. But please stop burning Bunker fuels to enable it. Best thing the world could do would be to enable more world wide shipping, while switching the ships to use much cleaner diesel.

    3. Naselus

      "What product is produced in Africa that is used in the EU? "

      Most of the mineral content of your mobile phone is brought to you by the mines of the Democratic Republic of the Congo.

  4. John Hawkins
    Thumb Up

    A *lot* better than most foreign aid...

    This is enabling a market economy as it ought to be done; from below rather than above. I imagine there are a few problems, but it is a heck of a lot better than the von oben solutions.

    It will be fun to see what happens when small-scale solar power becomes a realistic solution in that part of the world. No infrastructure needed and plenty of sunshine.

    1. Tim Worstal

      Re: A *lot* better than most foreign aid...

      "It will be fun to see what happens when small-scale solar power becomes a realistic solution in that part of the world."

      This will indeed be something absolutely fascinating to see. It's going to happen too. Solar is already cheaper than trying to wire up a country for the first time (not for vast factories maybe, but for domestic and light commercial). Akin to leaping straight to mobiles without the landline stage.

      How umm, devolved? granular? dispersed? not really sure of the right word.....can an economy be?

  5. Zog_but_not_the_first Silver badge
    Unhappy

    Extra, extra, thick Zog

    I'm having a no-brain day. What's the one sentence summary of this article? Mobile phones cause growth? New widely available payment systems cause growth? How?

    Sorry.

    1. DaveDaveDave

      Re: Extra, extra, thick Zog

      "What's the one sentence summary of this article?"

      Improved communications encourage growth through allowing actors in an economy to make better informed (and so more efficient) decisions.

      As for how, that's less clear than the empirical observations that this does happen.

      1. Zog_but_not_the_first Silver badge
        Thumb Up

        Re: Extra, extra, thick Zog

        "Improved communications encourage growth through allowing actors in an economy to make better informed (and so more efficient) decisions."

        Thanks Dave^3. I get that. So, (in no particular order), like printing, railways, the telegraph, wireless, TV, t'Internet.

        Not being sarky, just seeking clarification. Increased communications are a good thing.

  6. Chris Miller
    1. JeffyPoooh Silver badge
      Pint

      Extreme poverty is already an endangered species.

      But addressing it should be #1; balanced with environmentalism.

      edit: Hans Rosling again. Guy should get a Nobel prize soon.

      1. andreas koch
        Angel

        @JeffyPoooh -

        Sorry, no Nobel for Rosling, it will go posthumous to Steve Jobs, the inventor of the iPhone the mobile phone the telephone verbal communication.

        Right after his canonization. The pope is already on the way (maybe to bless the second coming of the messiah iPhone6 (S for saint?).

        Coincidence?

      2. Fraggle850

        @ JeffyPoooh re: Rosling lecture on BBC2

        I was struck by the simple conclusion that Rosling reached at the end of his excellent lecture last night: reducing extreme poverty (a clearly defined measure as opposed to a percentage below some median) leads to a reduction in birth rates. It came across as though simply crossing the threshold out of extreme poverty was enough to put average per couple offspring at around 2.

        My understanding of co2 emissions is that they match global population growth so presumably if we can end global extreme poverty then we can approach a point where co2 production is stable rather than growing exponentially in line with the global population. It would be far easier to start to mitigate co2 production with a stable level of emissions.

        I'd suggest that the apparently achievable goal of eradicating extreme poverty would give us the easiest environmental win and get the whole world to a point where we could actually start to do something that doesn't require an economically suicidal green fundamentalist agenda.

        As pointed out by other commenters, less developed countries are exactly the kind of places where locally generated renewable energy sources are likely to make the most inroads due to a lack of existing infrastructure. Imagine: Africa as a new economic powerhouse with stable governance, able to fully realise the inherent potential in its human and natural resources.

    2. Anonymous Coward
      Anonymous Coward

      How to end poverty in 15 years

      It is nice to see that the BBC blurb talks about Extreme Poverty.

      The measurement of poverty is something like...

      someone who has an income that is less than 50% of the average wage.

      That is why some estimates state that 40% of the UK population lives in Poverty.

      Someone has to be at the bottom as well as the top unless we want to live in an egaltarian utopia where everyeone has the same everything.

      IMHO, poverty should apply to the bottom 10% of income earners. Eradicating that is possible.

      Eradicating the poverty that the 50% who are supposedly living in poverty is an impossible dream. As soon at they earn more, the bar goes up bringing more and more of the population into poverty. Soon 90% of the population will be pretty comfortably off but offically living in poverty. Thats the poverty trap.

      1. Anonymous Coward
        Anonymous Coward

        Re: How to end poverty in 15 years

        "The measurement of poverty is something like...someone who has an income that is less than 50% of the average wage"

        I think you are confused. Obviously 50% of incomes are less than the median by definition. The median-based definitions to which you refer (I'm not supporting or defending them) are to people/households earning less than a defined fraction of the median, in other words they are about controlling how much the distribution spreads 'to the left" -- mathematically it is perfectly possible to have a distribution where no point is less than 60% of the median.

        Conversely you state "poverty should apply to the bottom 10% of income earners. Eradicating that is possible." No, of course it's not; any distribution has a bottom decile.

        BTW: even Adam Smith used a relative definition of poverty: "A linen shirt, for example, is, strictly speaking, not a necessary of life. The Greeks and Romans lived, I suppose, very comfortably, though they had no linen. But in the present times, through the greater part of Europe, a creditable day-labourer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty, which, it is presumed, nobody can well fall into without extreme bad conduct. Custom, in the same manner, has rendered leather shoes a necessary of life in England."

        1. Kubla Cant Silver badge

          Re: How to end poverty in 15 years

          The Greeks and Romans lived, I suppose, very comfortably, though they had no linen. - Adam Smith

          It's a bit late in the day to correct Adam Smith, but is that true? The Egyptians were famed for linen that was fine enough to be translucent. It's visible on some ancient paintings. I'd be surprised if the Romans didn't import either the textile or the technology.

      2. graeme leggett

        Re: How to end poverty in 15 years

        In UK, the official measures for determining "poverty" to check whether children are living in an impoverished situation.

        RELATIVE poverty is less than 60% of median HOUSEHOLD income (after tax/benefits), ADJUSTED for household size/composition

        ABSOLUTE poverty is less than 60% of the 2010/11 median income value, adjusted for inflation/household size/composition

        Absolute poverty in this case being a minimum acceptable standard of living, constant over time. Unlike the UN, where "absolute poverty" is when you can't afford food, shelter etc

        Hence due to changes in rates of increase in income versus inflation currently a child might be in "absolute poverty" situation while not also being in a "relative poverty" which seems counter-intuitive

        Full Fact are good for this sort of stuff.

        https://fullfact.org/factchecks/economy/child_poverty_relative_absolute-48033

        https://fullfact.org/economy/whats_happened_to_poverty_parliament-39908

        PS Sorry about the CAPS, forgot how to use bold/italic etc

      3. James Micallef Silver badge
        Facepalm

        Re: How to end poverty in 15 years

        "IMHO, poverty should apply to the bottom 10% of income earners. Eradicating that is possible."

        If 'poverty' is defined as a percentage it can never be eradicated

      4. Anonymous Coward
        Anonymous Coward

        Re: How to end poverty in 15 years

        But what *is* poverty?

        I know what the official measure is (60% of median household income etc), but that's actually a measure of relative wealth.

        Being poor means not having a roof over your head, clothes on your back, food on the table and sufficient heating in winter. It does not mean not having money to spend on the latest 50" HDTV or not being able to go to the cinema every week.

        How many of those classed as being "poor" actually are poor and simply not rich?

  7. This post has been deleted by a moderator

    1. James Micallef Silver badge

      Re: Poverty is caused by...

      "I.Q-wise, sub Saharan Africans have the lowest i.q in the world"

      *citation needed*

      1. Kubla Cant Silver badge

        Re: Poverty is caused by...

        "I.Q-wise, sub Saharan Africans have the lowest i.q in the world"

        *citation needed*

        Even if a citation is produced (which I think highly unlikely), it's almost certain to be a result of cultural bias in the IQ test.

        1. damworker

          Re: Poverty is caused by...

          I don't really care who the lowest is but it has long been documented that those in the west have a higher IQ than less developed parts of the world.

          There is much debate over why this is, particularly in the more distant past as you might imagine.

          The IQ test itself does not show bias and certainly wasn't designed to but it's easy to argue it's is not perfect. Whilst highest IQ people do not run our top companies, government etc, there is a general correlation.

          IQ is also documented as rising over time. We are more intelligent (or higher IQ, anyway) than our ancestors.

          It may be that a more western lifestyle - good and/or adequate nutrition helps.

          It may also be that familiarity with technology and access to information promotes logical thinking and this training affects the result.

          1. James Micallef Silver badge

            Re: Poverty is caused by...

            "IQ" is not meaningful unless you define what you mean by 'Intelligence', since there are many different types of intelligence. As another commenter mentioned above, IQ tests are sometimes culturally biased, but more importantly they generally biased towards several types of intelligence, mostly cognitive/logical types, while ignoring or giving lower weighting to other types such as physical and emotional intelligence.

            For example it takes incredibly high processing power for a sports(wo)man to track multiple moving targets in real time, regulate their own movements accordingly based on these external inputs plus knowledge about game rules and game state/score, and implement that physically to reach the desired outcome.

            There is no objective way to properly score/weight one type of intelligence against another. At best one can say that a person's intelligence is better or worse for a specific task at hand.

          2. Anonymous Coward
            Anonymous Coward

            Re: Poverty is caused by...

            Test devised by Westerners gives higher scores to Westerners. I am so amazed.

          3. Anonymous Coward
            Anonymous Coward

            Re: Poverty is caused by...

            "IQ is also documented as rising over time"

            There are a number of proposed reasons for this.

            First, there is less acute child poverty and better facilities around childbirth, so less stunting and brain damage at the lower end.

            Second, since the development of IQ tests the educational system has increasingly been geared to do well on IQ tests.

            And third, IQ tests abstract reasoning. Modern children have increasing exposure to abstract devices, aka computers, as a result of which they are more comfortable with abstraction.

            Anyone who thinks that IQ tests are not culturally biased needs to understand that the bulk of cognitive psychological research has been carried out on white Western students. My supervisor even got flak for having done research using naval ratings, because their results were different from the "norm". Psychologists not only tended to be very culturally biased, they did not want the bais removed for fear of invalidating their published work.

            1. veti Silver badge

              Re: Poverty is caused by...

              Imagine a world where "poverty", defined as "people having less than 10% of the median income", was eradicated.

              Now, in this world there are still going to be people on or just barely above that 10% threshold. But hurrah, because no-one is below it, so "poverty" is gone, right? Except that on the very same day this victory is announced, one of those "on the line" people has a baby. And now the income per person for their family - assuming 2 parents, no previous children, and no change to earnings - has gone down to 6.67% of the magic median figure, and behold, "poverty" is back.

              The only way to avoid that would be either to pay a substantial government benefit to everyone, from birth, or to redefine your goal as bringing everyone above a substantially higher basic threshold - say, 25% of the median as a stable state, with the goal of never dropping below 10% under any circumstances. Both of these answers introduce significant new challenges of their own.

              I'm not saying it can't be done, or that it shouldn't be done. I'm saying that the simplistic answers and slogans thrown around the subject are just that - simplistic - and should be treated with disdain.

        2. Anonymous Coward
          Anonymous Coward

          Re: Poverty is caused by...

          High IQ doesn't make one as smart as one might think.

          Mensa, the high IQ society, was intended to be for the Top 1% in measured IQ. Unfortunately, the founders messed up and accidentally set their baseline to the Top 2%. Oops. (Ref. book 'Mensa' by Victor Serebriakoff)

          Note: I was once a member. Dropped out. Found them to be a bit boring.

          1. Charles Manning

            Sure there is a cultural bias

            IQ is biassed towards the sort of thing that tend to make a person "successful" in a modern Western setting: the ability to learn, creative problem solving etc.

            Now one can argue that there are different sorts of intelligence. eg. the stuff that makes you successful when being stalked by a lion or when you're in subsistence agriculture, but that's different. Pick a person from that setting and they're probably not going to be successful in a modern Western setting. Take a modern Westerner and toss them out in the savannah and they will struggle.

            Humans, like all organisms, adapt over many generations to their environment. It's called evolution. A brain is an expensive organ to develop and feed. To think that evolutionary effects will give Ethiopians long legs, but would not impact on brain differences is absurd.

  8. DaveDaveDave

    The sole contributor to growth in SSA?

    Possible, seems unlikely to me. Apart from anything else, I'd be very surprised if the extensive transport investments made in the region aren't also having a similar effect - given that they're both improvements in communications infrastructure in the area. There's no reason to think that there aren't brakes on growth too, so while the proliferation of mobile phones might be the same size as the total, it's likely not to be the only contributor.

    Which means, of course, that the governments in the region are _still_ holding their people back.

    1. Anonymous Coward
      Anonymous Coward

      Re: The sole contributor to growth in SSA?

      Yes, it must be M-PESA, rather than China's large investments there made as a means to help get the resources out of central Africa.

      OK, so I'm being a bit cynical, I have no doubt that mobile communications have provided a massive boost, since they help disseminate information rapidly. I remember using the Internet over modem and it was still awesome.

      I remember watching a TED talk by a guy who worked for a census NGO in Indonesia(?) who was looking at improving the IT and found that even text messaging had already had a massive impact in improving the rate of collection and dissemination of information.

  9. Richard Wharram

    Bank Shareholders

    They may not have been wiped out but speaking as an HBOS shareholder they reduced from a 'nice little sum' to 'kids pocket money.'

    As was perfectly correct. The bank failed. Shareholders lost money.

    1. Frenchie Lad

      Re: Bank Shareholders

      I'm certainly in favour of hanging more than a few bankers but keeping in place the "system". These bankers behaved as crooks yet their penalties have been negligible.

      Tim,

      Perhaps you can explain one day why we have a system where robbing a old lady will get you more porridge than bringing down an economy. I'm all in favour of higher risks = higher rewards but so should be the costs of screwing up.

      As an HBOS shareholder I now vote systematically against the board of directors whenever I get a AGM because by and large these directors are rarely fit for purpose.

      1. Anonymous Coward
        Anonymous Coward

        @Frenchie Lad - Re: Bank Shareholders

        Easy pie, my jolly fellow!

        The reason is simple, those who pay the musicians will be choosing the tunes. You don't need Tim for that.

      2. Tim Worstal

        Re: Bank Shareholders

        "Perhaps you can explain one day why we have a system where robbing a old lady will get you more porridge than bringing down an economy."

        Because robbing an old lady is against the law ans screwing up an economy is not. Perhaps it shouldn't be that way but it is the politicians who make the laws....

        "I'm all in favour of higher risks = higher rewards but so should be the costs of screwing up."

        I'm in favour of people who break the law going to jail. N#But not in favour of people who screw up doing so. To err, is, after all, said to be human. Being wrong, foolish, stupid, greedy: these are not and should not be criminal offences.

    2. Quip

      Re: Bank Shareholders

      For many years my Northern Rock shares paid more in dividends than the interest on my deposits. And they were worth a tidy sum in 2006. And then…

    3. Uncle Slacky Silver badge

      Re: Bank Shareholders

      The banks should all have been nationalised, as they clearly demonstrated that they can't be trusted to operate without extremely close supervision. See also: LIBOR.

  10. Amorous Cowherder
    Facepalm

    So in a round-a-bout way this bears out the old adage I was taught about charity at junior school 40 years ago, "Give a man a fish, he eats for a day. Teach a man to fish and he feeds his family for life.".

    With better opportunities being endowed by mobile communication, information and credit systems to name two, people are being more independent and self reliant. As we all know education is the key to a healthier and wealthier society.

    1. Lars Silver badge

      @ Amorous Cowherder

      "education is the key to a healthier and wealthier society". So very true, and the American tragedy is that so many are fooled to believe that affordable education and healthcare for everyone is socialism while it's just common sense.

      1. Anonymous Coward
        Anonymous Coward

        @Lars - Re: @ Amorous Cowherder

        Don't fool yourself, nobody wants a healthy and wealthy society. All everybody wants is that he/she is wealthy and healthy. Any wealthy society needs poor slaves otherwise they would have to wipe their own arse.

        Mr. Tim can confirm that if we would all be stinking rich nobody would need to work to produce wealth. Point here is you must appropriate wealth, not create it.

      2. Charles Manning

        Re: @ Amorous Cowherder

        "education is the key to a healthier and wealthier society".

        It rather depends on what that education is.

        Just following your dick around college to get a degree in French History does not add much value to society.

        1. Anonymous Coward
          Anonymous Coward

          @Charles Manning - Re: @ Amorous Cowherder

          That's right, such a degree will prevent you from becoming a highly paid banker that would undoubtedly add very ( ,very) much value to society.

    2. enormous c word
      Thumb Up

      @ Amorous Cow Herder,

      Hey nice name ;-)

    3. Naselus

      "As we all know education is the key to a healthier and wealthier society."

      Actually, that may not be true. There's been some pretty good work in the social sciences in recent years which shows that the immense investments into education in the third world over the years haven't necessarily paid off, and that the money may have been better spent elsewhere.

      Remember, British education improved AFTER the industrial revolution, not before; British literacy rates in the late 1700s were lower than in many of the continental countries. There comes a point where heavy investment in education becomes necessary to transition an economy up the value chain, but it's not as simple as 'pump cash into schools, profit'. Most third-world countries might do better by investing in infrastructure - road networks, power, sanitation etc - than by pouring cash into schools. A lot of brain-drain happens in the third world - you get huge amounts being spent on training doctors and engineers, who then emigrate to the West because they want a flushing toilet and electric lighting.

  11. Alan1kiwi

    Disruption

    Africa at large has gone from jungle drums to mobile phones in a flash.

    They missed the dragging copper wires all over the place phase.

    And that was the capital intensive part of the communications exercise.

    There are numerous fibre cables linking Africa to the rest of the world.

    Connecting them to a few wireless towers was pretty easy, and with

    cellphones from China being throwaways these days, any African worth

    his salt has global internet access.

    They have made a huge leap in communications for minimal investment.

    In a perverse way, they are taking greater advantage of the technology than

    we are.

    1. Alistair Silver badge
      Windows

      Re: Disruption

      While they didn't have *quite* as much copper dragged around ... they absolutely did drag copper all over. I've an acquaintance that could offer you some tales about just *how much* of it tended to vanish at times.

      1. Charles Manning

        Vanishing copper

        Yes, having lived for 30 years in South Africa - much of that rurally, copper was regularly pilfered.

        We had a holiday shack about 40 km from the nearest town. There was a light house there with a phone. Over the years I never knew that phone to work due to the wire being stolen.

        There were many attempts to restring the wires, but the wire would be stolen long before they got to the end. Being a government operation, they just kept going wiring up the next km of wire even though the previous km was gone.

        These days the gangs wait for rolling blackouts and steal the much more lucrative power grid wiring.

    2. Anonymous Coward
      Anonymous Coward

      @Alan1kiwi - Re: Disruption

      Yeah, all is nice but there is one thing that's puzzling me. Here in the western world, in order to have a shiny phone and all the services, I must have a credit card and some sort of income (hint, paid job) in order to pay the (ridiculously high) amount of money charged monthly by the phone companies.

      How do people in Africa manage to pull this one ? I don't see too many jobs in the African savanna.

      I mean, OK you go into the desert raise towers and hand over phones left and right to anyone who happens to be around. How are they going to pay their bills ?

      1. peter_dtm

        Re: @Alan1kiwi - Disruption

        Pay As You Go

        cheap phone. cheap SIM. pay as you go - sometimes in advance by payments of cash; sometimes monthly for those with some form of simple bank account.

        The whole point is that being able to communicate (and text) allows local entrepaneurs to make money; and keep it in the local economy rather than having some outside skim all the profits off to the nearest bank/corrupt government official/town.

        SInce the money stays in the community (buying services - cleaning/school/taxi) it lifts the local 'GDP'. Which in turn allows for more entrepeneurs (teach a man how to make money and the whole comunity benefits)

        1. Anonymous Coward
          Anonymous Coward

          @peter_dtm - Re: @Alan1kiwi - Disruption

          You mean entrepreneurs are not sending their money in a fiscal paradise ?

          As for teaching someone how to make money, the filthy rich bankers and Wall Street money men are a little bit slow at adding to community benefits, don't you think ?

  12. kmac499

    The Model T Phone..

    Just as the Model 'T' Ford put America on wheels Smartphones are putting Africa on line. In both cases the affordable technology empowers and liberates individuals.

    Commercially, by allowing peer to peer transactions and circumventing the monopolistic middle men and their commissions.

    Socially, by shrinking the world and giving access to cheap communications

    and Educationally, by giving access to health advice, farming advice amongst many other services.

  13. Dan 55 Silver badge
    Trollface

    Mobile phones increase poverty

    They take your time off you. How much is your time worth? How does this affect the nation collectively?

    Discuss.

  14. jzl

    Better than money?

    I'd have thought that money was the greatest poverty reducing tech ever.

    After all, before money, nobody had any money.

  15. Simon Rockman

    The banks are evil. They work with the regulators to slow down the roll-out of mobile money and in doing so keep the poorest people poor.

    I worked in Mobile Money for the GSMA and went to meetings with operators, banks and regulators. They all make noises about "working together" but the truth is that the biggest success, M-Pesa in Kenya happened on the quiet without any grand plan.

    I sat next to the architect for M-pesa at a conference. Someone on the stage was extolling the virtues of mobile money and m-pesa in particular so I asked the chap next to me "is he right", the answer I got was "Yes, but what he's missing is that it worked because the banks didn't see us coming".

    Now they have seen mobile money coming they don't want the telcos eating their lunch. They ignore the fact that due to M-pesa the number of bank accounts in Kenya has tripled and instead take the view that they don't want to do banking for poor people and they don't want anyone else doing it either.

    So they scream "know your customer", "money laundering" and "financing of terrorism" as reasons why the telcos shouldn't be allowed to do it. Many of the poorest people in the world don't even know their date of birth much less have a piece of paper proving it.

    There is a reason for this. Banking is the easiest business in the world. Stock is other people's money. In any other business if you sold the same stock to lots of people you'd be done for fraud. Try to invent the idea of a "liquidity ratio" in any other business you'd go to prison for trading while insolvent.

    It's so easy the telcos can afford to do it for free. They give consumers free money transfer because they know that when the money arrives at the other end the recipient will buy a top-up and that's where they make their money.

    If I want to send £100 from London to Paris, Western Union will charge me £14 to do it. I sat at a fat cats dinner financed by Western Union and thought "I'm being fed by the poorest people in the world".

    Gates is right in "We need banking not banks".

    1. Anonymous Coward
      Anonymous Coward

      > So they scream "know your customer", "money laundering" and "financing of terrorism" as reasons why the telcos shouldn't be allowed to do it.

      These three things all come from governments, not banks. Bankers (certainly not all of them -- they are of course human, so some have more morals than others -- but enough of them) have historically been perfectly willing to provide services to assorted killers and bastards, but it has recently been made clear to them that they'll be fined and jailed if they do. So they've stopped. You imply that banks deliberately conspired with governments to throw away billions of pounds of their own business. What was their motive?

      I agree that ID paperwork can be a nightmare for people in the Third World. But surely that's a reason to relax the laws concerning those countries, not to say that banks have to obey the laws but telcos don't.

      > It's so easy the telcos can afford to do it for free.

      I'm pretty sure the telcos do this using their banks' services. Tell us again how those same banks aren't allowing it to happen.

      1. Simon Rockman

        It may be the "Govenments", setting the rules but in practice it's the regulators who are much, much too cosy with those they regulate - particularly in emerging markets.

        The telcos use the banks services because they have to. They are made to do so by the regulators. Hmm, I wonder why that happens. And it happens in spite of the banks not because of them.

        I've been in meetings where regulators have said "Anyone in our country can have an e-money licence", and an operator from that country said "we applied and didn't get one". The regulator said "That's because we decided that when you said you wanted it you didn't really". It's pathetic, and keeping the poor, poor.

        Everyone hates their bank. I remember I said to someone I was off to a meeting with my bank and his response was "give them hell". I was going there to open an account so that wasn't necessary, but the assumption is that banks will give you shit service and treat your money like it belongs to them.

        1. Squander Two

          > It may be the "Govenments", setting the rules

          Why on Earth have you put "Govenments" in quotes? Genuine question.

          > The telcos use the banks services because they have to. They are made to do so by the regulators.

          To the extent that businesses are forced to use banks for this kind of transaction, there's a reason for that. You obviously don't think much of all those pesky anti-money-laundering and anti-terrorism regulations that the banks have to obey, but they are actually there for a reason. Yes, obeying the regulations makes business harder -- for the banks as well as telcos and anyone else. I have worked in a team who handled compliance with anti-terrorism watchlists for a major insurer. It's a hell of a lot of rather difficult work. But, personally, I still think it's better than handing a couple of million to the IRA or ISIS without asking too many questions.

          > I've been in meetings where regulators have said "Anyone in our country can have an e-money licence", and an operator from that country said "we applied and didn't get one". The regulator said "That's because we decided that when you said you wanted it you didn't really".

          Yes, I've had similar experiences with bureaucracy myself. But I find it interesting that, every time a government does something stupid, you blame banks. Why not blame the government?

          > Everyone hates their bank.

          Not me: I'm with First Direct.

    2. Anonymous Coward
      Anonymous Coward

      And that's another interesting TED talk, where an Indian guy talked about the economic power of remittances, and how money laundering laws and bribery by companies like Western Union mean that massive amounts of money ends up being siphoned off by the banking system.

  16. Richard Taylor 2 Silver badge

    Mobile phones are the greatest poverty-reducing tech EVER

    Nope but they do enable poverty reduction

  17. Henry Wertz 1 Gold badge

    Too much variation

    I don't believe in the "cultural bias" or the "there's all these types of intelligence", I don't believe in "physical intelligence", sorry. That said, there's so much individual variation in IQ, whatever other types of intelligence people want to make up, and all other factors, that comparing by group is not terribly useful IMHO. Someone could be a real genius, and it'd still be hard for them to get anywhere if they have little to no money, everyone they know has little to no money, and if they want to just build something there's little to no natural resources and little to no other materials (for example, there's no scrap material to build something cool out of, or there is scrap but it's already being used for walls and roofs.)

    As for banks... the success of M-Pesa has nothing to do with incompetent western banks, and this in no way indicates some importance of not letting them fail. They should absolutely have been allowed to fail, and the deposits moved to banks that did not take part in this incompetence. Iceland did this; IMF and other banks swore up and down that Iceland MUST prop up these banks, or Icelanders would never be able to have a bank account again, use a bank card, or take place in currency exchanges. Iceland said "nope". None of these bad things happened.

    I must say, I do find this fascinating. 20 years ago, it was considered this big technological disadvantage that these various countries had no significant copper landline networks (and no plans to build out a significant amount of them.) Fast forward to the present, and services are provided via wireless with microwave backhaul, it's may even be an advantage to not have all this "legacy" copper lying about that has to be maintained to some extent.

    But yeah, besides the mobile payments being so helpful, it's obviously helpful in places where it could take all day to drive somewhere and back, to be able to make a phone call first and make sure whoever they're going to visit is actually there first.

    1. graeme leggett

      Re: Too much variation

      The Icelandic government effectively nationalised and restructured the three banks.

      And unemployment tripled, they needed a multibillion dollar loan, and had currency controls for a while.

    2. Squander Two

      Re: Too much variation

      > places where it could take all day to drive somewhere and back

      Is there some other kind of place?

  18. faibistes

    Correlations

    "every 10 per cent of the population which has access to a mobile causes a 0.5 per cent rise in GDP"

    I'd love to know how you figured out that it's not the other way round

  19. YARR

    Re."what the abolition of the entire payment and credit system would do to an already developed economy"

    Yes retail banking is essential, but investment banking isn't - it provides little of value to society, widens inequality, profits from and denies intelligent workers from more worthwhile industries.

    Rather than spend billions of taxpayer's money bailing out the old banks, perhaps the government should have started a national non-profit retail bank, reducing the motive for risk taking and the likelihood of future banking crisis? When all banking is done electronically, the overheads will be minimal, and banking services could effectively be free for all.

    1. Squander Two

      > Yes retail banking is essential, but investment banking isn't - it provides little of value to society

      Personally, when I can't see a thing's purpose, I go and find out. I don't assume that my not knowing its purpose means it has none.

      One example of something investment banking does is crop futures trading, which is a large part of why we don't have starvation in modern societies and also why farmers are now able to live perfectly well when there's a bad harvest. Farmers used to starve to death because of a bit of bad weather, so that's pretty valuable.

      Most people who want to stop working at some point also consider pensions to be quite valuable.

      > Rather than spend billions of taxpayer's money bailing out the old banks, perhaps the government should have started a national non-profit retail bank, reducing the motive for risk taking and the likelihood of future banking crisis?

      You mean like they had in Spain? Yeah, that worked.

      When proposing a solution, look around to see if it's been tried before and, if so, whether it worked.

      What the British Government did as part of the bailout was insist that banks have to ringfence their retail and investment arms from now on, precisely so that in future it will be possible to bail out retail banks (and thus preserve the money supply, which is what was necessary) while letting investment banking fail and fall. That condition is being enforced: the ringfencing really is happening.

      Incidentally, you want to reduce the motive for risk-taking. I understand that there's this popular image of bankers as roulette players, but that's not actually the nature of risk in banking. If you want to start a small business, you need a loan. Giving you that loan is a risk. If you want to expand your small business and hire more staff, you need a bank to take a risk on you. If you want to buy a house to put your family in, you need a bank to take a risk on you. Even tiny investments -- an unemployed person buying a new suit they can't afford for a job interview; a poor immigrant using a friend's credit card to buy a professional-grade sewing machine in order to start work as a seamstress -- require someone to take a risk with some money. It's not always a bank taking that risk, but it usually is. If banks stop taking risks, we're all fucked.

      > When all banking is done electronically, the overheads will be minimal, and banking services could effectively be free for all.

      I assume you want a completely unregulated bank, then?

      Banking services have indeed got much cheaper than they used to be, thanks largely to the electronification of money. But there is a little bit more to banking than just moving money around. Checking people's ability to pay before giving them a mortgage, for instance: takes time and effort and work to do that. And my understanding of the post-2008 environment is that banks are (rightly) expected to do more diligent checking now, not less.

      Avoiding giving huge bank loans to ISIS for them to spend on grenades: again, takes lots of work to check backgrounds thoroughly, because terrorist groups do devious things like using false names and setting up legitimate fronts.

      I'm guessing you dislike tax evasion, too. So do you want banks to look out for it or not?

      Banking costs money because it involves work. No, really. You want it to be cheaper, remove the work requirements.

  20. Charles Manning

    Greatest Ever?

    Nope, agricultural technology was surely more influential.

    200 years ago most of the world - including Europe - lived in dire poverty. Starving during winter was common. Seasonal farm workers would literally lie in their beds in semi-hibernation waiting for spring.

    By 2000, the number of people living in dire poverty has decreased immensely - and cell phones were far from ubiquitous.

    Sure,poverty has reduced since then while cell phone uptake has improved is this not just correlation?

  21. enormous c word

    Android phones are the computing platform of the developing world

    Rather than waste time trying to force PCs into an inappropriate environment - better to just accept that android smart phones are the platform of the developing world and provide tools to expand on that. eg external keyboard / large external screen

  22. a well wisher

    Except for those muppets who take their phone on holiday and forget to turn off roaming,running up and come back complaing of 100s, maybe 1000 pound bills - When they become poverty increasing devices !

  23. Nehmo

    Narrow analysis

    Overpopulation is the largest factor in poverty. Traditional animal evolution theory states that the spices, in order to evolve, will have more offspring than the environment can support. Usually starvation is the culling means, but with humans, the animal doesn't usually starve, but lives in poverty.

    So, with this reasoning, maybe birth control is the most effective poverty reducer. And if not birth control, maybe war.

    1. DaveDaveDave

      Re: Narrow analysis

      "So, with this reasoning, maybe birth control is the most effective poverty reducer. And if not birth control, maybe war."

      As the Dead Kennedys pointed out years ago:

      ---

      Efficiency and progress is ours once more

      Now that we have the Neutron bomb

      It's nice and quick and clean and gets things done

      Away with excess enemy

      But no less value to property

      No sense in war but perfect sense at home:

      The sun beams down on a brand new day

      No more welfare tax to pay

      Unsightly slums gone up in flashing light

      Jobless millions whisked away

      At last we have more room to play

      All systems go to kill the poor tonight

      ---

      Generally, though, we tend to talk about solutions to poverty that don't involve killing all the povs, because that's being overly literal in defining the problem..

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