Posts tagged with: foreign aid and development

Recently, the World Bank agreed to partner with Nicaragua to give the country 69 million U.S. dollars in aid. This poses the immediate question of whether or not this aid will be effective in producing its stated goal of decreasing poverty and increasing economic productivity. Should the World Bank continue to give money to the government of Nicaragua, which – especially of late – has been showing a decrease in political stability and democratic processes? History shows that international loans provide little help when countries suffer from decreases in stability and equality within their system.

The World Bank justifies the money that Nicaragua receives: “Nicaragua has achieved a real Gross Domestic Product (GDP) growth of 5 percent in 2012 and 4.6 percent in 2013, returning to pre-crisis growth levels.” GDP, however, does not paint a complete picture of the country’s performance. Most of the wealth within Nicaragua is located among the upper class, making the GDP less accurate for the country as a whole. Gross Domestic Product in purchasing power parity (PPP) in 2012 was estimated at $20.04 billion USD, and GDP per capita in PPP at $3,300 USD, making Nicaragua the second poorest country in the Western Hemisphere.
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Ernesto Sirolli says we are failing at helping the developing world, and he should know: he’s been doing this work for a long time. In this fresh, funny and insightful TedX talk, Sirolli says the key to bringing people out of poverty is entrepreneurship. Pointing out that the prevailing attitudes of paternalism and patronization don’t work, Sirolli emphasizes that we must become servants to the local passion before any development can occur. He quotes Peter Drucker: “Planning is actually incompatible with an entrepreneurial society and economy. Planning is the kiss of death of entrepreneurship.”

This is exactly the message of PovertyCure. Sirolli’s approach to development is to “shut up and listen.” In the PovertyCure Statement of Principles, it states, “Development is about more than GDP; it’s about integral human flourishing.” Without addressing local needs, customs, dreams and gifts, development fails. All we do is feed the hippos.