Posts tagged with: aid

Blog author: KHanby
Wednesday, November 30, 2016
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“An underlying theme in basic economics says, ‘offering a product for free can destroy the local economy’” writes Luis Miranda.  Miranda recently watched Poverty, Inc and since seeing the award winning Acton Institute documentary he has shared some of its lessons in an article at The Indian Economist.  He begins by explaining how often times aid can harm its recipient more than help them.

A farmer in Rwanda goes out of business because he cannot compete against an American church sending free eggs to feed starving Rwandans. A rice grower in Haiti stops growing rice because he is unable to compete against very cheap rice coming from rich farmers in the US who receive huge subsidies. A local cobbler goes out of business in Africa when TOMS shoes land up in the village and are distributed for free.

In all these cases, the donors had honest intentions. The American church wanted to feed starving people in Rwanda. The US government wanted to feed the disaster-stricken Haitians. Blake Mycoskie, the founder of TOMS, genuinely wanted to help Africans who did not have proper footwear.

Miranda continues to share key takeaways from Poverty, Inc.  Next he shares how although aid can appear to be effective in the short term, it can create negative effects in the long term. (more…)

Photo courtesy of Flickr

Photo courtesy of Flickr

It’s a common misconception in public discourse that the global poor are trapped in poverty because of globalization.  We frequently hear things from our public leaders about how markets are crushing the poor.  “The reality is that the poor aren’t dominated by markets. They are excluded from them.” says Michael Matheson Miller in an article for The Stream.

Miller hits on four different problems and misconceptions of how international economic development is currently addressed.  He starts out by explaining how the current system benefits the wealthy and well-connected.

Many of the powerful and wealthy don’t have an economic incentive to build institutions of justice like clear title to land or broad access to the formal economy. They are doing well under the status quo and many of them are actually benefiting from the current situation through connections, access to special privileges, bribes and sweetheart deals on things like mineral rights.

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hannington1 - CopyBishop Hannington longed to see an awakening to generosity in his town of Bundibugyo, Uganda, where many viewed giving more as a matter of duty than heartfelt joy.

Yet what at first seemed like a significant challenge soon grew even steeper. After fleeing their town for two years due to the chaos of civil war, the community returned to Bundibugyo to find their homes completely destroyed.

“The houses had been torn down, the farms had nothing in them, churches had been demolished, schools had been devastated,” Hannington explains. “So we started from scratch.” With no money, shelter, aid, or resources, the people didn’t know what to do, and surely the temptation to look inward and “protect my own” pulled stronger than ever.

But then Hannington remembered: They did indeed have resources.

Rather than turn to the West or others outside their community for aid and assistance, Hannington encouraged his neighbors to look in their own hearts and hands. God had already given them what they need, and that, too, was designed to be poured out yet again.

Hear their remarkable story:

As Hannington explains, he encouraged them to connect and apply their God-given gifts to the God-given spheres of culture and creation that surrounded them:

I asked, “How soon can my people raise to the challenge of funding, not only their immediate needs, but their futures as well. I told the people at that time that God has given us everything we need to rebuild our community. And what he needed was for others to make themselves available to him and he was going to use us. And those of us who are mechanics, and those of us who are business people, they can use their gifts and trade they have to build their community.

Slowly and steadily, transformation happened. Churches and schools were rebuilt, generosity continued to spread, skills and resources were shared and invested, wealth was created, and the community began to revive.
It’s a powerful example of how transformational our stewardship can be when it’s rooted not in self-interest or self-preservation – the wisdom and pleasures of which shall surely wither and fade – but in the divine generosity of a heavenly father who so loved the world that he gave.

If war and destruction could not stop the servanthood and generosity of Bundibugyo, what’s stopping us?

Sacks of American wheat destined for Afghanistan being unloaded in Peshawar, Pakistan.There are ten vital foundational lessons that should be taught in any introductory course on economics, says Don Boudreaux, a professor of economics at George Mason University. The first three lessons on his list are,

(1) [T]he world is full of both desirable and undesirable unintended consequences – consequences that are largely invisible but that even a course in ‘mere’ principles of economics gives us great vision that enables us to “see,” (2) intentions are not results; (3) our world is unavoidably one of trade-offs and not “solutions,” …

While these lessons can be easily understood in theory, applying them to the real world can often be surprisingly difficult. Consider, for instance, the issue of providing humanitarian relief, such as emergency food assistance, in active conflict zones. As Cullen Hendrix notes, “there is virtually unanimous consensus and a body of international law that commits the international community to address humanitarian disasters with emergency food aid.” Yet there are, he notes, unintended consequences to such relief efforts:
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316853_288803591143707_552690558_nIn a recent episode of EconTalk, Russell Roberts chats with Acton Institute’s Michael Mattheson Miller about Poverty, Inc., the award-winning documentary on the challenges of poverty alleviation in the developing world.

The entire conversation is rich and varied, ranging from the ill effects of Western do-gooderism to the  dignity of work to the need for institutions of justice.

You can listen to the whole thing below:

Later in the episode, Miller discusses the need for us to reach beyond mere humanitarianism to a fuller expression of love, recognizing the dignity and capacity of every human person, as well as the full scope of human needs — material, social, spiritual, and otherwise: (more…)

ffd3_356x140A new stage is set for an old conversation. This week marks the Third International Conference on Financing for Development (FFD3) held in Addis Ababa, Ethiopia. Bringing in representatives of almost 200 countries, it has drawn attention from the anti-poverty crowd across the globe. Whether they are members of NGOs, churches, celebrities, or politicians, many concerned about the developing world have their ears turned to Ethiopia.

FFD3 isn’t the first conference of its kind. The original summit took place in Monterrey, Mexico, in 2002. It led to what was called “The Monterrey Consensus,” a companion to the frequently referenced “Millennium Development Goals.” The second summit was held in Doha, Qatar, in 2008, where some of the vague agreements of the first conference were made more explicit.

The Millennium Development Goals, commissioned in 2002, were the start of a massive surge of foreign aid to the developing world. The success of this top-down approach has been mixed at best, and, as Anielka Münkel of PovertyCure explains, is based on a fundamentally faulty view of the human person. While clarifying old objectives once again, FFD3 is also trying to refine its focus. If global leaders are willing to commit, there will be an opportunity to set in motion the revised “Sustainable Development Goals.” (more…)

470380_368492526508146_880858769_oMichael Matheson Miller, research fellow at the Acton Institute, presented a course at Acton University a few weeks ago titled, “Poverty in the Developing World.”

The purpose of the lecture was to demonstrate the root cause of global poverty and to analyze the impact of attempts to alleviate poverty through economic aid. Miller was able to draw from the insights he gained during his extensive travels across the globe, and his conclusion was that aid often harms local economies because it crowed out small businesses by under-cutting their prices. He also found that aid often encourages dependency on foreign assistance which prevents long term economic development. However, he went on to clarify that “this lecture is not a critique of aid but a critique of a flawed system and its underlying assumptions of which aid is the main symptom.” (more…)