"Africa is, indeed, coming into fashion." - Horace Walpole (1774)

12.08.2006

always with us

The World Bank finds that its programs are not helping to really end extreme poverty overseas.

Sigh. What the World Bank and many other well-intentioned groups and individuals are learning is that helping to end extreme poverty (defined as living on less than $1 per day, adjusted for purchasing power parity) is just really difficult. We learned in the 1980's that strategies that only focus on one aspect of development don't really work, and we learned that development needs to be sustainable by local communities if it's going to work.

What's amazing about the history of development is how trends come and go and none of them really make a difference in the long-haul. Microcredit has been the hot trend for the last decade or so, and is likely to remain popular in the west, with its emphasis on self-improvement and hard work.

In college, I interned at a microcredit agency in Nairobi. Their microcredit system was patterend on the Grameen Bank model, which won the Nobel Peace Prize earlier this year. It was amazing to see how little money could make a difference to a family's small business.

But microcredit isn't perfect, and it doesn't solve all the problems of the poor. I read an interesting critique of microcredit programs a couple of weeks ago. I can't remember where the exact article was, but it had to do with this analysis by Thomas Dichter. The point of the article is that microcredit programs are at best an imperfect solution to the problem of grinding poverty. The tragic thing about microcredit, Dichter argues, is that it doesn't improve people's lives in such a way as to give them a chance at getting out of grinding poverty. In other words, it may make their economic situation slightly better, but microcredit alone won't get a family out of poverty and away from the risk of food insecurity.

Moreover, the article pointed out, there's a disturbing trend of the development of for-profit microcredit agencies. There may be some upsides to this trend, but I find the notion of outsiders making money through a poverty alleviation scheme to be inherently disturbing. As my friend Travis pointed out, there's also a question of the morality of encouraging people to pursue market capitalism. This can occur at the expense of longstanding village insurance systems that provide for community members' emergencies.

How do we help the poor? Certainly the poor have to help themselves to create wealth. Certainly wealthy countries need to provide financial support and debt relief to countries that won't escape from poverty without outside assistance. Certainly it would be helpful if the Senate would renew the AGOA act that makes it easier for African countries to trade with the United States today.

Certainly it isn't a bad thing to sponsor a child overseas, or to donate money to a charity that feeds the hungry, or to build a bridge over a raging stream that prevents children from getting to school. Certainly it's not a bad thing for the ONE campaign to raise public awareness. And I guess there's nothing inherently wrong about buying a (red) shirt at the Gap to help the poor, although I do have some issues with the tactic of spending money to donate money.

But none of these things alone will work. Comprehensive poverty reduction requires a full-scale assault on all of the problems - disease, food insecurity, corruption, land tenure disputes, environmental degradation, conflict, and so much more - that cause poverty in the first place. It requires money, and lots of it. More importantly, it requires patience and a sustained commitment that lasts longer than a news cycle or the popularity of a trend.

1 Comments:

Anonymous Anonymous said...

Hi! I work with the ONE Campaign and I just came across your blog, and I wanted to say I really enjoyed reading your post on poverty and the issues at hand-you had a lot of great insights. I also wanted to see if it might be possible for ONE to add your blog to our list of supporters? We're currently in the process of updating and restructuring our blog page,in an effort to build up the poverty/AIDS blogoshpere, and we would love to add yours to our supporters list. Please feel free to contact me with any questions or concerns you might have, at: meagan@data.org. Thanks again for your support, and I look forward to hearing from you soon!

Meagan McManus
The ONE Campaign
meagan@data.org

Tuesday, December 12, 2006 11:23:00 AM

 

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