But these countries also grapple with a set of multifaceted constraints emanating from international trade dynamics and the overarching international financial architecture.
The Circle Economy and Deloitte’s Circular Gap Report 2024 says, as a result, these economies are often relegated to exporting raw materials or low-value-added products to higher income “Shift” countries.
This not only restricts the low-income “Build” countries from climbing the economic value chain, but also has profound negative environmental and social impacts.
Citing Rwanda as an example, the report says the East African country is experiencing the second highest economic growth rate in sub-Saharan Africa thanks to its booming population, an emerging middle class and increasing urbanisation.
“That being said, this economic upswing has brought unsustainable building practices along with it—currently, standards related to buildings’ design phase do not require criteria for extended life cycles or a safe cycling of materials.
Materials used for construction are largely imported, with only a minority produced locally.
The report says it would serve the industry well to reduce its dependence on foreign imports of steel and cement—both lessening environmental impacts and building resilience.
However, a lack of awareness and acceptance of circularity in the private sector and a lack of legal and financial incentives are preventing this.
To combat this, Rwanda’s Ministry of Environment published a Circular Economy Action Plan and Roadmap in 2023.
This Action Plan provides a clear vision for Rwanda’s construction sector: to design, construct and use buildings in alignment with circular principles and valorise construction and demolition waste (C&DW) in ways that enable high-quality reuse, recycling and recovery.
The report says Build countries including Bangladesh, Ethiopia, Nigeria, Pakistan, the Philippines, and some small island states, account for 18.5% of the global material footprint.
“Their material footprint per capita is just five tonnes per year—less than the estimated sustainable level of eight tonnes per person per year.
“Similarly, they contribute a relatively small share of global emissions: just 17%. As these countries generally struggle to meet basic needs for healthcare and education, their primary objective is to improve living standards.
“This necessitates increased material use to provide the infrastructure, goods and services needed to improve well-being. It will also require uplifting workers in nations with prevalent informal economies, which are especially common in the agricultural, forestry and waste management sectors.”
The report notes that many low-income countries must balance the urgent need to improve living standards and reduce poverty while addressing pressing environmental issues.
“These nations need more resources and face competing demands for investment in critical sectors like healthcare, education and infrastructure.
“With large, and growing, populations, Build countries also face high levels of youth unemployment and underemployment.”
Many workers are employed in the informal economy: on one hand, this is often characterised by necessity-driven value-retaining practices for materials and goods.
But it is also associated with precarious employment, and limited or absent social protection and collective bargaining schemes.
The report says Build countries should leverage circular practices that have long been present in their communities, as well as knowledge rooted in Indigenous groups.
But they will also need to invest in new technologies and practices that allow for sustainable human development, particularly in material-intensive industries like food, energy and construction.
This will require access to technology and know-how, significant financial resources and human capital to ensure proper implementation and scaling.
“This poses an acute risk to Build nations: a debt burden far beyond their ability to shoulder alone.
“With this in mind, the Paris Agreement emphasises the need for global cooperation, with wealthier countries providing support to lower-income Build countries in the form of financial resources, technology transfer and capacity-building.
“This is essential to aid their efforts in mitigating and (crucially) adapting to climate change.”
Middle income or Grow countries include China, Indonesia, Brazil, Mexico, Vietnam, Myanmar and Egypt—need to continue improving their people’s quality of life, but in a way that is much more sensitive to planetary boundaries, says the report.
See the Circle Economy and Deloitte’s Circular Gap Report 2024
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