- 27 Oct, 2023

- 25 Oct, 2023

27 Oct, 2023

- Digital Nomadism: Transnational Economic Relations in the Emerging Economies

Digital Nomadism: Transnational Economic Relations in the Emerging Economies

Isabela De los Rios Hernández  1:00PM, 27 Oct, 2023

The International Monetary Fund affirms that as countries become more globalized, their economies will benefit from more job openings, trade between growing markets, and knowledge and culture transmission. The internet has been one of the most significant contributors to expanding globalization. You can now easily invest in foreign companies from your phone or have multiple cuisines in a food court next to your home. Most importantly, it has helped expand the reach of the job market. Now, companies recruit through their websites or specialized pages like LinkedIn or Indeed. Thanks to the web, one can work for a Canadian company and live in Italy. Different from the traditional 9-5 corporate job offices, remote workers perform on their schedules and in co-working spaces. According to Merriam-Webster Dictionary,  depending on their lifestyles, some remote workers fall into a category denominated digital nomads –  “someone who performs their occupation entirely over the Internet while traveling.”

Digital Nomadism was born of the possibility that remote jobs offer. If one has a quiet space and a good internet connection, one can work from almost anywhere in the world. Unlike remote workers, digital nomads usually don't have “a permanent home address.” They are constantly changing their location, searching for new places every couple of years or even months. One can argue that digital nomads have become actors of transnational money moments. Many keep their savings in US dollars or euros, currencies with stable market values – 60 percent of world foreign reserves are in USD. Yet, in 2023, nomads are looking to spend more time outside of their countries of origin by exploring places that are trending in social media. Most of these countries do not have US dollars as their main currency, offering an opportunity for good living standards but lower living costs. Put differently, these unstable currencies offer travelers a beneficial exchange rate.

However, while reaping the personal benefits offered by this lifestyle, digital nomads also contribute to the economic transformation of developing countries. Digital nomadism might become the new way to invest resources into “emerging” economies. Highly skilled workers moving to Asia and Latin America bring with them salaries that can push for more development but also put at risk the daily economic development of locals. In the short run, local housing markets are impacted as digital nomads rent longer-term lodgings that would otherwise be occupied by locals. The increment of capital entering the developing markets might push investment and popularity in the tourism and industry sectors. However, it can also increase the disparity between the social gaps in developing countries and set back a generation that has just arrived at the bracket of the middle class.

The Parents of Digital Nomadism: the COVID-19 Pandemic and the Rising Prices

Digital nomadism surged dramatically after the COVID-19 pandemic – “digital nomads from the US have quadrupled in the last 4 years.” As of 2023, 35 million people worldwide have reported being digital nomads with an average age of 32 years. As the New York Times explains, recent graduates prefer to have more stable jobs in the early years of their careers, building a reputation for themselves and receiving steady incomes to pay for college debt. However, younger people with more years of experience feel like they can explore further away from corporate jobs. Thanks to the pandemic, they also experienced studying and working remotely, increasing the appeal of virtual employment as compared to pre-Covid. Furthermore, support for digital nomads like special visas and co-living spaces has increased in the last year. As working online has become more common, younger people feel more prepared to leave their corporate jobs and embark on this lifestyle while still having the energy to move every six months on average.

Inflation has been another significant push factor to search for these types of jobs. Housing prices have increased 326.1 percent in the US since 1950. In 2007, the average federal debt of a US college student was around US$18,200. Today, it is around US$37,600. Younger generations see digital nomadism as a chance to reduce their living costs while affording more expensive lifestyles. They can keep their jobs at US companies while enjoying the comparatively lower cost of living in developing countries. This allows younger generations to pay back their debts and even save.

What Does Digital Nomadism Mean for Emerging Economies?

An emerging economy refers to the market and financial system of a developing country that progressively integrates itself into the global market as it experiences growth. These emerging economies have raised people's quality of life while keeping their currencies afloat. The tourism sector has often been a critical factor in the growth of these economies. For example in the Philippines, the World Bank released a statement in 2022  that by the following year, tourism would go back to pre-pandemic levels and that this increase (5.8 percent) would double the growth of the country’s GDP (2.7 percent). These emerging economies have seen growth in their amenities like Wi-Fi access, which draws digital nomads because they have the opportunity to live with lower living costs while having stable connections to the web and a digital-nomad community that supports them in their journeys.

Countries with these types of economies have taken advantage of digital norms offering visas for remote workers. These visas help boost economies because they attract people who are going to spend money within the country, while “facilitating collaboration and spurring innovation.” In other words, these short-term stays help to mobilize ideas and promote new projects. Digital nomads “contribute a global economic value of US$787 billion per year,” playing a role in transnational money transactions across the developing world.

However, digital nomads also pose essential challenges to developing countries like an increase in housing prices or a lack of availability of services to locals. Columnist Mike Elgan argues that digital nomads have nothing to do with this phenomenon. He explains that digital nomads are a minority compared to the number of people who move into Mexico City each year. In the last 5 years, 700,000 Mexicans have moved to the capital, which he suggests would explain the need for more housing and the drive of housing prices upward.

Even though it is important to point out that prices have skyrocketed due to inflation – Latin America’s average inflation in 2022 reached almost 10 percent – the prices in apartments in well-off neighborhoods have increased at a higher pace because landlords have learned that digital nomads can afford higher prices through platforms like Airbnb. The precarious situation of these economies has led to general discontent, which has only magnified with the arrival of foreigners who can afford to pay these prices. According to Forbes, alongside a study made by Restart, an estimated 90,000 people live in Mexico under the term digital nomads. The New York Times reported that locals in wealthier neighborhoods of Mexico City had not received extensions in their contracts because the landlords placed their apartments on Airbnb for digital nomads who could pay four times more in rent. People who have lived all their lives in specific neighborhoods must move because the increase in renting or buying is not affordable with their local jobs.

Hypntic Data, run by Victor Dépré, calculated a cost of living index in 578 cities around the world based on the cost of living of New York City, which is thought to be the most expensive city in the world. The New York City index was 100, so if a city has an index of 30 that means that its cost of living is 70 percent cheaper than New York City. They also account for the purchasing power of the locals in each city. This gives a better understanding to see if a town is well-off based on its living costs compared to New York City and if the locals can live comfortably due to the purchasing power. If the local purchasing power is lower than the living costs then it can be assigned as an expensive city for its local population.

The cost of living against the local purchasing power compared to New York City. Graphic from Hypnic Data.

In this data, we can see that most of the cities considered to be hubs for digital nomads, identified in blue, have a high cost of living compared to the purchasing powers of locals. For example, the local purchasing power of someone who lives in Los Angeles suggests that they will believe Medellin or Lisbon is cheaper, as they have a higher purchasing power than many locals in those cities This has created a huge wave of discontent from natives towards foreigners because their desire for housing in wealthier neighborhoods only drives the prices further up.

Ultimately, digital nomadism has appeared both as an option for younger generations to create the jobs that they want and as an opportunity for the developing world to bring workers who can invest more of their income into their economies. Yet, it has also created essential questions on how these emerging economies can accommodate an incoming migration of highly paid workers who can buy at higher prices than the local population. The discontent will likely keep growing as inflation keeps up and locals see that housing and food prices keep increasing. It now raises the question of how the economy might change in the developing world to guarantee the survival of the locals and the opening of doors to digital nomads when their movement into their societies is just beginning.

25 Oct, 2023

- Sall's Senegal: A Slippery Slope for Democracy

Sall's Senegal: A Slippery Slope for Democracy

Sydney Black  1:00PM, 25 Oct, 2023

On an early morning in May, residents of Dakar gazed upon an increasingly familiar sight: rocks flung by protestors at police, blocked roads, and lit fires in residential areas. The protestor’s dissidence did not go unnoticed. Police employed tear gas swiftly and detained others. The police’s confrontations quickly led to at least 16 deaths and 250 arrests across Senegal. These tensions are the aftermath of politicized prosecutions and electoral laws dampening political resistance throughout the nation. As the youth population of Senegal became increasingly disillusioned by the restrictive and repressive regime of President Macky Sall, opposition movements successfully called for Sall not to seek a third term. Yet, this outcome raises some fundamental questions: What will be the fate of Senegal? Will it regress further, as other states such as Guinea have? Will free elections be maintained and inequities addressed? And ultimately, will Senegal return to a complete democracy?

While Senegal has acted as a beacon of stability for the surrounding post-colonial West Africa, new challenges to democracy raise new questions, whose indefinite answers have both regional and global implications. In Senegal, new and largely unprecedented challenges to its elections, judicial process, and institutional success have disrupted, but importantly not derailed or destroyed, the norms of democracy that have the potential to echo into surrounding West African nations. More generally, however, this Senegalese conflict, if taken further, could present a dangerous forecast not just for West Africa, but for many nations where political rhetoric can undermine fundamentally democratic principles, and even more dangerously, institutions.

A Democratic Anomaly

Though peaceful transfers of power in Senegal have occurred since 2000, the policies of Senegal’s officials underscore a more ruptured and consistent struggle toward democracy. The last decade has been marked by mismanagement of public resources, embezzlement of taxpayers’ money at state-owned companies, and the undue influence of business people upon governmental activities. This corruption, ranging from the management of petroleum contracts to COVID-19 aid, has compounded over time to create widespread distrust among youth (a demographic that is decisively relevant due to three-quarters of the population being under 35), giving way to opposition movements based on promises of economic opportunity.

What has historically set Senegal apart as more democratic than its neighbors is its comparatively high levels of independent media, free expression, and social rights, particularly in contrast to nearby countries like Mali. This progress too has recently faced its own setbacks in the form of defamation laws. In June 2022, Abdou Bara Dolly, a parliament member, was arrested after remarks criticizing the President and charged under an article of the penal code for the offense of insulting the head of state. A month later, Dolly was granted temporary freedom, awaiting trial. In August, Papito Kara, a prominent activist, was arrested for a similar offense of disseminating false news. In September, Abdou Karim Gueye and Cheik Oumar Deiagne were placed in custody after making remarks against the state on television. Most recently, the opposition party was dissolved entirely. The propensity of Senegalese authorities to suppress dissent directly contradicts the principles the nation has set forth since its decolonization. Perhaps even more worryingly, the tools used by the government to muzzle criticism are almost entirely legal and exist within the nation’s penal law, thus weaponizing the very laws that also founded democracy.

Further detracting from Senegal’s democratic norms are its improving but imperfect rights for women and lack of rights for members of the LGBTQ+ community. Despite women contributing to over 50.3 percent of the nation’s GDP, composing 42.68 percent of parliament, and the country electing two female prime ministers, 27 percent of women aged 15 to 49 have reportedly experienced physical violence and 68 percent of these violence survivors never spoke out or sought help. LGBTQ+ rights in Senegal have also followed a winding trajectory, as “unnatural acts” of sex between same-sex individuals are criminalized with a penalty of up to five years in prison. If not reported, LGBTQ+ people are often forced into hiding, subjected to violence, or pursued asylum.

These factors come together to paint a picture of a nation and region stagnant in its progress toward democracy. In 2019, five of the twelve countries with the largest declines in democratic measures around the world were in West Africa - Benin, Burkina Faso, Guinea, Mali, and Nigeria. In Freedom House’s Freedom in the World report, Senegal moved from being categorized as free to partly free, leaving Ghana and Cabo Verde as the only free countries in the region.  In many ways, then, Senegal is still a democratic anomaly. Soldiers run Burkina Faso, Guinea, and Mali. In the Ivory Coast, another former French Colony, President Alasane Ouattara is serving a third term, in a dubious, if not entirely incorrect reading of the constitution. In a region where democracy is hard to come by, Senegal could be a pillar of free elections and constitutional government. The question stands: will Senegal’s elections withstand both domestic and regional challenges to democracy?

Electoral Laws: The Final Frontier in Backsliding

Yet, these challenges are accompanied by simultaneous and frequently contradictory changes to bolster democracy. In 2016, Sall introduced a series of electoral reforms “anchoring constitutional stability” and “reinforcing the rule of law.” The measures ranged from reestablishing a five-year term for the presidency and limiting terms to two, to extending the National Assembly’s oversight abilities. Unsurprisingly, of the 38 percent of Senegalese voters who participated in this constitutional referendum, 63 percent approved the proposed amendments.

In the wake of this widespread support, Sall began to question, if not misinterpret, the application of these amendments as they began to limit his own power. In an interview earlier this year, he argued that the Constitutional Council agreed with his interpretation that his first term would not be included in the rules set forth by reforms. Sall noted, “Legally speaking, the debate has been settled for a long time. Now, should I run for a third term or not? It's a political debate, I admit it.” By pushing back on the system by which he was fairly elected, whether with malicious intentions or not, Sall calls into question the rule of law that Senegal has long fought to maintain since their independence.

A Caravan of Freedom or a Hindrance of Justice?

These electoral concerns are also followed by a series of judicial proceedings that continue to cast doubt on Senegal’s governmental authority. After placing third in Senegal’s 2019 presidential election, Ousmane Sonko emerged as Sall’s main source of opposition, appealing to youth. Quickly, Sonko was accused of corrupting young people, punishable by up to five years in prison, a fine of up to more than $6,000, and being barred from running in the presidential election the following year. Separately, charges of rape were also brought against Sonko.

Senegal’s government began walking a tightrope between searching for the truth and unduly targeting political opposition. As Sonko’s alleged victim told the press that, “the judiciary needs to do its work” and she is “in a hurry for it to do so because I am not free,” courts eventually acquitted Sonko of rape but did charge him with corrupting youth. Sonko called for a “caravan of freedom,” or protests challenging authorities upon his return to Dakar. Sonko’s fight against the government came with weighty costs: at least one person was killed and several were injured during this series of protests. Beyond the physical impacts of the protests, judicial independence was irrevocably threatened, with Sonko’s supporters describing the trials as a “farce,” led by a “cabal.” As businesses burned down and tear gas was deployed, Sall asked protestors to avoid confrontation. What did he not tell the public? If he would be running for reelection.

What’s Next?

As Sall submitted to increasing civic pressure and declared that he would not run for a third term, Senegal’s future has only become more hazy. Sonko was recently arrested, consequently disqualifying him from the 2024 election and setting off a new round of protests. This creates a tally of three of Sall’s political opponents being convicted of crimes during his rule. All of these events can be set against the context of broader unrest and institutional distrust to construct a nation at a decisive crossroads between democracy and its alternatives. And, at the nexus of these challenges - civic unrest, judicial independence, and transfer of power - lies a nation with a hunger for democracy and a difficulty maintaining one.

More broadly, Senegal’s struggles mimic the story of an entire region, and countries beyond Africa, grappling with colonial legacies and creating their own independent identities. Scholarship on democratic backsliding tells us that the “drift into authoritarianism doesn’t always set off alarm bells.” Oftentimes, we focus on the most visible form of democratic decay. In a world where Nigerian soldiers carried out a coup on television, a junta in Myanmar bombed those calling for a return to civilian rule, and the President of Peru sought to dissolve the Congress, it is easy to see what is happening in Senegal as unconcerning. But, just because it is subtle does not mean the changes are not serious: these shifts happen as institutions are delegitimized and constitutions are ignored. And, while we cannot know Senegal’s democratic fate, we can choose to look beyond the alarm bells to also view the “door knocks” that often precede them.

Cover Photo: "His Excellency President Macky Sall of Senegal, speaking at the UK-Africa Investment Summit in London" by DFID - UK Department for International Development, licensed under CC BY 2.0 via Wikimedia Commons.

Table of Contents

Harvard International Review: 27 Oct, 2023

27 Oct, 2023

Digital Nomadism: Transnational Economic Relations in the Emerging Economies

25 Oct, 2023

Sall's Senegal: A Slippery Slope for Democracy