From China to Africa: Lessons on economic transformation

UNIDO ambassador Helen Hai’s personal journey from one continent to the other has led her to believe firmly in the power of economic transformation to fight poverty. She tells Eco-Business why she has now dedicated her time to helping Africa develop, using lessons from China.

Helen Hai
UNIDO Goodwill Ambassador Helen Hai, also CEO of the Made in Africa Initiative speaking at the recently-held Ecosperity conference hosted by Temasek in Singapore. Image: Temasek

Helen Hai was born in China in 1978, when the GDP per capita of the Asian giant was only US$154. In the time since, her generation has seen 600 million people lifted out of poverty and per capita GDP rise dramatically to US$6,896 in 2016 according to World Bank figures.

It was this economic transformation that provided her with the opportunities she needed to succeed, and enabled her to go to England to study to become an actuary, the Goodwill Ambassador for the United Nations Industrial Development Organization shares in a recent interview with Eco-Business.

She then climbed the corporate ladder and was on a path which she says “all Chinese parents expect their children to take” when she hit 30 and realised she wanted to do something dramatically different.

“Our parents’ generation sacrificed themselves so that we enjoyed the benefits of this economic transformation, but what is our generation’s responsibility?” Her personal answer to this question was to take what she had learnt about China’s transformation to Africa and help countries there.

Her conviction led her to set up the Made in Africa Initiative, which advises African governments on industrialisation and investment promotion.

Acknowledging that oftentimes development comes at a social and environmental cost, she says “this is why we must learn the lessons and take them to Africa”.

Citing the late Chinese communist leader Deng Xiaoping’s favourite Chinese saying of “crossing the river by feeling the stones”, Hai says Africa must similarly move forward but feel its way and stay grounded.

She feels the pace of development in Africa is too slow: “Many people spend a lot of time debating ideas without moving into action.”

“We’re currently seeing so many young people in Africa escaping the region to go to Europe, so from a humanitarian, security and global development perspective, we really need to act fast,” she declares.

Hai, who previously served as vice president and chief Actuary for Zurich Financial Services in China, set up the first shoe factory in Ethiopia’s capital, Addis Ababa, in 2012, which within two years employed 3,500 workers.

In 2014, she also set up the first garment factory for export in Rwanda.

At the recently-held Ecosperity conference by Temasek, she tells Eco-Business why she has dedicated her career to helping Africa follow China’s footsteps for economic transformation.

Africa is the final frontier of development; how well do you think the continent has embraced the principles of sustainable development?

Sustainable development can never be achieved if we leave Africa’s 1.3 billion population behind.

In the past 60 years, the countries that have achieved significant economic transformation have been in Asia. Job creation has been the key to poverty reduction in Asian countries, and they were able to do this because they created millions of jobs for the people in the bottom of the pyramid. 

Young people in Africa are desperate for jobs; if we don’t address this, it will become a security issue. I’m optimistic that we can help Africa do this. It cannot follow the traditional path of development. The question is how can we transform Asia’s development model into one for Africa – it’s now the golden opportunity for Africa. 

You went from working in China into setting up businesses in Africa, what lessons do you think the Asian giant can offer the continent? 

When I was born, in 1978, the GDP per capita of China was only US$154. In 2015, that was almost US$7,000. China forecasts that by 2025, this will be doubled, which means China will become a higher-income country. Because of this, intensive manufacturing jobs have already started to relocate out of China, just like what happened in Japan in the 1960s.

But this time, the relocation is far more complicated. Roughly 10 million jobs had to be relocated from Japan, but 85 million jobs are going to be relocated from China. Where will these jobs go? Any country which is able to capture these jobs will enjoy the same economic transformation that China has enjoyed. 

Some of these have started to go to Southeast Asia but the region doesn’t have the population to absorb all of them. If Africa can do it, it will enjoy the same economic transformation. This is the reason why I set up the Made In Africa Initiative. 

In 2011, I decided that I wanted to do something totally different and find a purpose, so I went to Ethiopia to set up the first shoe factory there. It took me three months from investment to production. At the end of the first year, I recruited 2,000 local workers.

By the second year, that figure had doubled. It became the great success story of Africa, because they didn’t believe they were ready to become a manufacturing centre. But that successful example brought them inspiration, confidence and experience. 

In 2013, I left the shoe factory and became the first Chinese advisor to the Ethiopian government, advising them on industrialisation and that’s what led to the Made in Africa initiative, now supported by the UN. 

We are now advising seven African heads of states, advising them on their industrialisation roadmaps and how to learn from Asia to create millions of jobs by policy-making and building hard and soft infrastructure. Now I would say Ethiopia’s success has had a big snowballing effect on other African countries. 

Which Sustainable Development Goals (SDGs) would you say resonates the most with you?

There are 17 goals and development is an ocean of things that are important to people, but what’s close to my heart is the goal on poverty; this mantra ‘leaving no one behind’ and creating a life of dignity for all. Creating decent jobs is the most important thing, it’s changing millions of lives. 

Watch our video interview with Helen Hai on what the SDGs mean to her. Subscribe to Eco-Business TV for more videos.

Economic growth, as we’ve seen in many instances, also results in social and environmental costs. We saw that with China. How do you think Africa should address this?

Yes, there is a lot of criticism of the environmental damage caused by industrialisation, but let’s not underestimate the benefits of economic transformation. Yes, sometimes you have to pay a certain price for development, but that’s why we must learn the lessons and take them to Africa. For example, for the industrial zone in Ethiopia, we have ensured there is zero discharge of hazardous waste into the water. We’re taking all these factors into considerations and we have far more awareness (of these issues) compared with 30 years ago. 

So we’re learning the pitfalls and how we can make things better in this round of industrialiszation. Many people spend a lot of time debating ideas without taking action. I’d like to urge the international development community and also the private sector, to take action.

In two decades, machines are going to replace a lot of jobs. This is the last window of opportunity to bring Africa into the global value chain. 

We’re currently seeing so many young people in Africa escaping the region to go to Europe, so from a humanitarian, security and global development perspective, we really need to act fast.   

Do you think Africa’s business leaders put sustainability on their list of priorities when they have so many other urgent demands? 

It’s very interesting you mentioned priorities. What is the number one priority? Is sustainability and the environment a top priority or is creating jobs? I would say it’s job creation and economic transformation. This is the priority for Africa at this stage. But at the same time, we need to learn the lessons on environmental sustainability. I think the reason why Africa hasn’t been as developed is because there’s a lot of idealism. 

How relevant do you think are the SDGs - and by extension, sustainability - for a region like Africa? 

There’s no one formula that fits all. Sustainability is very important, particularly for Asia at this stage. We need to be educating Africa, while understanding that it has different kinds of needs. Today, I think we can develop without sacrificing the planet and this is the new model that we’re trying to push in Africa. There is a famous Chinese saying that you cross the river by touching the stones. So we don’t have time to wait. We have to do learn by doing.

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