Posts tagged with: poverty

In the German newsmagazine Spiegel, Kenyan economics expert James Shikwati says that foreign aid to Africa is doing more harm than good:

SPIEGEL: Mr. Shikwati, the G8 summit at Gleneagles is about to beef up the development aid for Africa…

Shikwati: … for God’s sake, please just stop.

SPIEGEL: Stop? The industrialized nations of the West want to eliminate hunger and poverty.

Shikwati: Such intentions have been damaging our continent for the past 40 years. If the industrial nations really want to help the Africans, they should finally terminate this awful aid. The countries that have collected the most development aid are also the ones that are in the worst shape. Despite the billions that have poured in to Africa, the continent remains poor.

SPIEGEL: Do you have an explanation for this paradox?

Shikwati: Huge bureaucracies are financed (with the aid money), corruption and complacency are promoted, Africans are taught to be beggars and not to be independent. In addition, development aid weakens the local markets everywhere and dampens the spirit of entrepreneurship that we so desperately need. As absurd as it may sound: Development aid is one of the reasons for Africa’s problems. If the West were to cancel these payments, normal Africans wouldn’t even notice. Only the functionaries would be hard hit. Which is why they maintain that the world would stop turning without this development aid.

Read more . . .

solar light, developing worldOver a billion people are still using kerosene as a primary fuel source, with over 1.5 million dying annually from issues related to indoor air pollution and kerosene fires. For many in the developing world, solar lamps are a new, inexpensive solution to the problem. A recent piece in The Economist hails solar lamps as the next “mobile phone” for the poor, noting that “its spread is sustainable because it is being driven by market forces, not charity.”

In an article for Christianity Today’s This is Our City project, HOPE International‘s Chris Horst interviews two business leaders from the industry who share how their purpose and direction in providing these products stems from a strong missional orientation toward work and a belief in the power of markets.

For Brian Rants, vice president of marketing for Nokero, a leading solar light company, involvement in the industry came after a fundamental transformation in his thinking:

“I am very surprised to find myself in business,” Rants says. “Business seemed to be a backup plan to being a missionary. Or being a pastor like I thought I would be. It seemed like businesspeople were just ‘extras’ in God’s story, rather than lead or even supporting actors.”

Over the past ten years, Rants worked for a number of nonprofits and churches. After going through graduate school, however, he began to discover the ways enterprise is improving the lives of the poor around the world. Rants excitedly joined Nokero, equipped with a restored vision of vocation. Through leveraging his knack for marketing, Rants fights poverty not just through his volunteerism and philanthropy, but inherently through his work in business. (more…)

If you haven’t joined us for this lecture series yet, there’s still time! The final live session for the Globalization, Poverty, and Development AU Online series, Fair Trade vs. Free Trade, has been postponed. This means that you now have a few extra days to catch up on the lectures that we’ve already held before joining us next week for Victor Claar’s lecture on Tuesday, December 18, 2012.

Also, if you’re interested in learning more about topics related to development, trade, globalization, or human flourishing, be sure to check out the recently released DVD Series from our friends at PovertyCure.

Poverty, development, and stewardship tend to be topics both of discussion and personal reflection as we are reminded to count our blessings around this time of year. If similar ideas have been on your mind, you may be interested in Globalization, Poverty, and Development, an AU Online lecture series that explores the theme of human flourishing and its relation to poverty, globalization, and the Church in the developed world. Join Mr. Brett Elder, a director at Acton Institute and creator of the NIV Stewardship Study Bible and Dr. Victor Claar, a professor of economics at Henderson State University, for online sessions scheduled for Tuesday, December 11 and Thursday, December 13 at 6:30 pm EST.

Everyone who registers for the Globalization, Poverty, and Development series (or subscribes for an All Access Membership) has access to the recordings and resources shared on the course page. This means you can still register for the course even if you won’t be able to join us for the live sessions. Visit auonline.acton.org for more information and to register.

The Goldwater Institute has released a new study showing that states with a larger share of entrepreneurs do a better job at reducing poverty than states with fewer entrepreneurs.

There is a strong connection between a state’s rate of entrepreneurship and declines in poverty. Statistical analysis of all 50 states indicates that states with a larger share of entrepreneurs had bigger declines in poverty. In fact, comparing states during the last economic boom—from 2001 to 2007—data show that for every 1 percentage point increase in the rate of entrepreneurship in a state, there is a 2 percent decline in the poverty rate.

To help reduce poverty, policymakers should focus on increasing the number of entrepreneurs in their state. Research shows that one of the most effective ways to increase entrepreneurship is by lowering tax burdens. In particular, this study shows that high tax burdens, measured as a percentage of personal income, drags down the growth rate of entrepreneurship in a state: for every 1 percentage point increase in the tax burden, there’s a corresponding 1 percentage point drop in the entrepreneurship rate. States without income taxes also have higher average rates of entrepreneurship than those with income taxes. The average number of sole proprietors as a percentage of employment in states without an income tax is 21.7. The rate for states with an income tax is 19.6.

You can access a PDF of the report here.

In 1977 a pro-life Jesse Jackson compared the pro-choice position to the case for slavery in the antebellum South:

There are those who argue that the right to privacy is of higher order than the right to life. I do not share that view. I believe that life is not private, but rather it is public and universal. If one accepts the position that life is private, and therefore you have the right to do with it as you please, one must also accept the conclusion of that logic. That was the premise of slavery. You could not protest the existence or treatment of slaves on the plantation because that was private …

When Jackson prepared to run for president as a Democrat, he dispensed with his pro-life position. I’m convinced this was a grave error, but I sympathize with Jackson’s dilemma. When I was in college, I was frustrated at having to choose between politicians who defended the rights of the unborn (usually but not always Republican) and, on the other hand, politicians who supported abortion rights but who seemed ready to do so much more to help the poor.

I eventually came to see a couple of things that resolved the dilemma for me. First, I realized that a prudential judgment to leave more charitable work in the hands of private initiative was not morally equivalent to choosing not to protect the life of the unborn—was not morally equivalent, in other words, to viewing the matter as “above my pay grade,” as President Obama put it. That is, I came to realize that the decision to neglect the government’s core role of protecting the life of some of its citizens (the unborn) was vastly worse than the decision to push for less government involvement in helping the poor.

The other thing that helped me resolve my love-the-poor/love-the-unborn dilemma—and this came into focus only as I began to connect my good intentions with a study of economic history—was this: The well-intended government poverty programs from the 1960s and ‘70s have had many unintended consequences, consequences that have done much to hurt poor communities over the long-term—whether in inner cities or in places like rural Appalachia. If you believe in the sanctity of all human life, including the life of the unborn, but you hold your nose and support pro-choice candidates who support current or even increased government levels of federal spending on welfare programs, I urge you to watch this six-minute video featuring experienced Christian poverty fighters. It’s entitled “How Not to Help the Poor.”

Watch it. Pray about what you see and hear. Then allow whatever you find insightful there to inform and guide you as you discharge your duty as a citizen of a nation dedicated to the proposition that all humans are endowed by their Creator with certain unalienable rights.

Bono, foreign aid, development, capitalismBono, lead singer of U2 and co-founder of charity-group ONE, recently offered some positive words about the role of markets in reducing global poverty and spurring economic development (HT):

The Irish singer and co-founder of ONE, a campaigning group that fights poverty and disease in Africa, said it had been “a humbling thing for me” to realize the importance of capitalism and entrepreneurialism in philanthropy, particularly as someone who “got into this as a righteous anger activist with all the cliches.”

“Job creators and innovators are just the key, and aid is just a bridge,” he told an audience of 200 leading technology entrepreneurs and investors at the F.ounders tech conference in Dublin. “We see it as startup money, investment in new countries. A humbling thing was to learn the role of commerce.”

The remarks have led to relative hype in “pro-market” circles, but I’d remind folks that these are brief statements made to a small group of innovators and entrepreneurs. ONE has plenty of wrinkles in its past, and Bono’s primary legacy in this arena consists of promoting the types of ineffective, top-down social engineering that groups like PovertyCure seek to expose. When Bono continues to claim that foreign aid, as he understands it, is still a “bridge”—even if just a bridge—it’s reasonable to assume that his orientation toward “bridge-building” has been left largely unchanged by his newfound appreciation for markets.

But although I’m not overly confident that Bono’s sudden self-awareness is enough to radically shift his aid efforts away from fostering dependency, this small admission helps illuminate one of our key obstacles to doing good in the world: overzealousness paired with overconfidence.
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Too often, aid for the poor looks like this: A person, organization, or government notices a problem, decides upon a solution for the problem and implements it, with varying degrees of success. One step that is typically missing: no one consults the poor about the problem. No one asks, “Is this really a problem?” or “What do YOU think should be done about this problem?” Instead, an outside entity does it all.

Rose Molokoane, a South African woman, is sick and tired of it. She told an audience in Brazil just that last year: “We are sick and tired of becoming the objects of development. We want to build our own destiny.” With the help of  Slum Dwellers International, she is getting that chance.

With 34 affiliate countries, Slum Dwellers International (SDI) explains its work as this:

In each country where SDI has a presence, affiliate organizations come together at the community, city, and national level rooted in specific methodologies. SDI’s mission is to link urban poor communities from cities across the South that have developed successful mobilisation, advocacy, and problem solving strategies. Since SDI is focused on the localized needs of slum dwellers, it has developed the traction to advance the common agenda of creating “pro-poor” cities that address the pervasive exclusion of the poor from the economies and political structures of 21st century cities. Further, SDI uses its global reach to build a platform for slum dwellers to engage directly with governments and international organizations to try new strategies, change policies, and build understanding about the challenges of urban development.

SDI believes that the only way to manage urban growth and to create inclusive cities is for the urban poor to be at the center of strategies for urban development.

Diana Mitlin, a researcher who has worked with SDI, commented on the model of putting the poor in control, “All successful urban initiatives have been ones that have placed people’s knowledge and people’s action at the centre of the process. That doesn’t mean professionals are not needed, but it means professionals acknowledge the limitations of their role.”

Rather than objectifying “the poor” as a problem to be solved, SDI embodies the notion that the poor have the same capacities to solve problems, tackle issues and influence society in a positive manner. As the Rev. Robert Sirico asserts,

It’s so often the case that when people come from the developed world to the developing world and they see the wretchedness of poverty in such close proximity, they experience a kind of a guilt about their own prosperity and translate that guilt into policies that fail to recognize that these people are made of the same stuff as the people in the first world, that they have the same capacity that enabled the developed world to be so prosperous in the first place.

This article is cross-posted at PovertyCure.org.

On National Review Online, Acton Research Director Samuel Gregg offers an analysis of last night’s debate between President Barack Obama and Gov. Mitt Romney. Gregg begins with the assertion by Melinda Henneberger of the Washington Post that the candidates are ignoring poor and working-class Americans. Gregg responds:

… what’s generally missing from the discussion of poverty in the context of this presidential election — though Romney did obliquely reference it in the second debate — is acknowledgment that: (1) the economic causes of impoverishment are more subtle and less amenable to wealth redistribution than the Left is willing to concede; and (2), with a few exceptions, liberals are generally reluctant to acknowledge some of poverty’s non-economic causes, not least because it throws into relief some of the more destructive effects of their cultural agenda.

If poverty was simply a question of wealth redistribution, the sheer amount of dollars spent since the not-so-Great Society programs of the 1960s should have resolved the problem. In 2011, Peter Ferrara calculated that “total welfare spending [in 2008] . . . amounted to $16,800 per person in poverty, 4 times as much as the Census Bureau estimated was necessary to bring all of the poor up to the poverty level, eliminating all poverty in America. That would be $50,400 per poor family of three.”

The effects in terms of reducing poverty have, however, been underwhelming. As Ferrara observes: “Poverty fell sharply after the Depression, before the War on Poverty, declining from 32% in 1950 to 22.4% in 1959 to 12.1% in 1969, soon after the War on Poverty programs became effective. Progress against poverty as measured by the poverty rate then abruptly stopped.” In short, America’s welfare state, which now easily accounts for the biggest outlays in the federal government’s annual budget, has proved inadequate at realizing one of its central goals.

Read “Who’s Really Forgotten the Poor” by Samuel Gregg on NRO.

Marvin Olasky, a Senior Fellow in Acton’s Research Department, has an article in World Magazine regarding evangelism and effective economic development in Ghana. There is an effort to teach strategic economic skills to budding entrepreneurs incorporating a wholistic approach, combining not only economic lessons, but spiritual ones as well.

The clubs teach about showing love to neighbors in concrete ways. For instance, young Esther Wood received business start-up money that allowed her to buy a small bowl and fill it with plastic containers to sell. When she reported back to the older women, she was discouraged: I’m selling, yet I have no money. They asked what she did with the money she earned, and she said: Whatever my eyes saw, I bought, items like ice cream and meat pies. So the club leaders talked with her about resisting the temptation to fritter away her earnings.

The next time Wood reported to them, she was so successful that she had traded in her small bowl of plastic wares for a big one filled with attractive cooking pots. She gave her small bowl and a few plastic items to another woman starting out. Now, when Dwarko, Teye, or Gyemfi walk through Pokuase, residents come to them with job problems and hear from them messages like those Ampadu vigorously proclaims: “We have no excuse for our poverty. … We will not advance without integrity and compassion.”

Some of the more interesting aspects to come out of the program are noted by Chris Ampadu, coordinator of the Samaritan Strategy ministry in West Africa. He teaches college-level courses that address ethics, corruption and pride in one’s community. He is also quick to point out

…the need for Africans themselves to help their neighbors, and shows schools and wells and other projects produced by the savings and sweat of Ghanians themselves: “Western money will not solve our problem.”

Cross-posted at PovertyCure blog.