I just returned from Addis Ababa. It is a few years since I was last in Ethiopia. Addis has certainly changed. Construction everywhere, a growing middle class, and a sense of purpose and confidence that sustained economic growth can bring (the new 5 year Growth and Transformation Plan sets 11% as a minimum annual growth objective!). I did not have a chance to visit areas outside Addis, but colleagues who live in Ethiopia assure me that this growing prosperity is not confined to Addis, nor to urban areas.
What has two thumbs and doesn't give a crap?
Browsing the web today, I've come across two things that Friday-me is pretty unimpressed with, but lacks the time and patience to attack fully.
The first is Larry Elliot in the Guardian's Poverty Matters blog, talking about the expectation that developing countries will grow much faster than developed countries in the foreseeable future:
…there are also colossal longer-term risks. Growth rates of the sort envisaged for developing countries by the World Bank and PwC will put massive pressures on commodity prices and the environment. After two centuries of economic and political hegemony, rich countries may not take kindly to being challenged by China and India. And if, as looks highly probable, clashes over resources and currencies are a proxy for a deeper political struggle between the emerging east and the declining west, the world will need a robust and effective system of global governance to manage the tensions. And, as the failures to conclude a trade deal or make progress on a climate change accord have shown quite clearly, there isn't one.
This is all probably more or less accurate. Commodity prices and the environment are going to be under severe pressure in the foreseeable future, but the biggest culprits are still the developed countries which are consuming more and more from a much higher starting point. A little more growth won't affect this significantly. His point about increasing conflict between East and West might also be true, but the dominant narrative of international tension right now remains national security. Economic tensions are there but all the players see that there are as many opportunities as there are threats in the rise of the two most populous countries in the world.
New growth estimates do not make either of these issues more pressing than they already are. Linking them to growth is counter-productive because as soon as you tell a country or a people, especially a poor one, that it needs to grow less, you lose your audience.
The second thing I'm dubious about is DfID's proposal to allow the public to essentially vote on what it spends its money on, through a matching scheme. I've blogged numerous times in the past about why certain kinds of spending are popular with the public. This kind of approach will just increase the skew of development financing away from the economy and towards social development, and reduce the use of General Budget Support, the option that most respects the idea of country ownership of the development process. Still, it's a consultation, so whether you agree with me or not, let them know.
Tell us which blogs should be highlighted in our Global development blogosphere
Our Global Development blogosphere, collated for the launch of the Global development site in September 2010, offers a brilliant array of news and views from development blogs. We want to add a few more, and we want to offer you the opportunity to nominate any great blogs you read.
Is there a great in-country blogger getting to the heart of a region or city from a personal perspective, adding colour to the mainstream version of events? Or clearly relaying the on-the-ground experience of a particular situation, people or group in a humanising way? Do any groups or individuals convey the progress and questions of a discipline or project brilliantly? Or analyse, deconstruct or create arguments that have shaped your views on development? If so, please let us know.
Of course, we'll need to contact them to ask if they agree to join. Being in our blogosphere means their blog posts will appear in full on the blogosphere page, and potentially be picked as a favourite to appear on the Global development homepage daily. Complemented by our Partner Network, they contribute a fresh mix of stories and perspectives to the pieces generated by us at the Guardian.
So check out who's already in our blogosphere, and let us know below who you think is great and why, and we'll consider them for our blogosphere refresh over the next few weeks.
A move from industrial farming towards local food projects is our healthiest, most sustainable choice, says Worldwatch Institute
The key to alleviating world hunger, poverty and combating climate change may lie in fresh, small-scale approaches to agriculture, according to a report from the Worldwatch Institute.
The US-based institute's annual State of the World report, published yesterday, calls for a move away from industrial agriculture and discusses small-scale initiatives in sub-Saharan Africa that work towards poverty and hunger relief in an environmentally sustainable way.
The authors suggest that instead of producing more food to meet the world's growing population needs, a more effective way to address food security issues and climate change would be to encourage self-sufficiency and waste reduction, in wealthier and poorer nations alike.
"If we shift just some of our attention away from production to consumption issues and reducing food waste, we might actually get quite a big bang for our buck, because that ground has been neglected," said Brian Halweil, co-director of the project.
"The majority of incentives that governments give to farmers are still tied to the production mindset. The farmers are rewarded for sheer production quantity, with very little guidance for the quality they produce and the impact of their farming practices on the environment and on human health and nutrition ... It is necessary to change these incentives," he said.
The projects explored in the report include community-based initiatives in urban farming, school gardening and feeding programmes, and indigenous livestock preservation.
In Kenya's largest slum, in Nairobi, local women are growing vertical gardens in sacks, providing them with a source of income but also an element of food security for their families.
"They sell their produce and also consume part of what they grow," said Danielle Nierenberg, Halweil's co-director.
"As we talk about all these innovations, it's important to remember that farmers aren't just farmers: they're businesswomen and -men, they're stewards of their land and they're educators passing on their knowledge to others in their communities," she said.
In another programme in Uganda, Developing Innovations in School Cultivation (Disc), children are being taught about nutrition, food preparation and growing local vegetables. Pilot programmes are also being run in Mali and Sudan to feed children in schools and educate them on food production and consumption.
Anna Lappé, the author of a chapter in the report entitled Coping with Climate Change and Building Resilience, said: "We have really emphasised a set of policies over the past half a century that have prioritised an agricultural system that is incredibly fuel-intensive and emissions-based."
Emma Hockridge, head of policy at the UK Soil Association, said the report supports the case for the expansion of organic farming.
"Organic farming systems benefit biodiversity, are resilient in the face of climate change, and have been shown to improve yields and the ability of poor communities in the global south to feed themselves," she said.
Although Halweil says national governments should lead the way in implementing change, the report suggests that international attitudes towards agricultural development need to shift if the lessons from these case studies are to bring about results on a larger scale.
"I think the African Union is a natural starting point, an organising body for all these initiatives, to share between members the experience in these initiatives, but also in setting themselves goals," said Halweil.
He suggests that international aid policies on food need an overhaul to better serve the long-term interests of those on the ground.
"Food aid is a short-term fix, a Band-Aid rather than an opportunity to infuse money into the local economy and an incentive to process and distribute food locally," he said.
By Amanda Glassman, Director of Global Health Policy at the Center for Global Development, and Miriam Temin, co-author of Start With A Girl
In her blog post on Aid Watch last week, Anna Carella took on the "Girl Effect," using some faulty logic and evidence oversights. Marketing may have over-simplified the message in the translation of research to advocacy in the campaign, but let's take the post point-by-point:
[The campaign…] relies…on the view that women are innately more nurturing than men, and that women's natural strengths lie in the home as the "chore doer" and "caretaker."
The point is that investment in women directly benefits their children and to a larger extent than if benefits were provided to men. For example, Ben Davis' paper The Lure of Tequila or Motherly Love: Does It Matter Whether Public Cash Transfers Are Given to Women or Men?. There is also the huge literature on the positive effects of female education and income on child health and nutrition outcomes (here).
Anna suggests that we instead focus on "structural factors that underlie men's apparent disinterest in the health and education of their children." Good luck with that. In the meantime, we'd like to see aid agencies put more money into proven cost-effective strategies: girls' education, delaying age at marriage, providing greater access to family planning and supporting cash transfers for poor mothers of young children.
The "Girl Effect" is about the community-wide and intergenerational benefits of investing in girls during their adolescence; based on the premise that there are high costs to the counterfactual. In India, for example, adolescent pregnancy generates $100 billion of lost potential income, equal to almost two decades' worth of aid (Chaaban et al 2009).
This approach does not preclude work with men and boys. In Brazil, for example, Promundo influenced young men's gender role attitudes, leading to healthier relationships, fewer sexually transmitted infections, and more condom use.
What poor countries need to stimulate sustainable growth are not women taking out loans to buy cows, but better governance and better terms of trade with rich countries.
There is impact evaluation evidence that microfinance –like insurance and cash transfers- increases the accumulation of productive assets and smoothes consumption, both of which are good for helping poor households escape poverty. Better governance and reduction of trade barriers helps with economic growth, which is good for poverty reduction. But there is no automatic reason why donor policies and activities related to governance and terms of trade would benefit poor adolescent girls in the near-term or be more effective than the better-studied policy options described above.
…women in developing countries already make up a larger proportion of the workforce on average than women in industrialized countries, and yet development is stalled.
Leaving aside the difficulty of defining what work and workforce means, according to 2010 UN estimates, women's labor force participation as a share of total employment remains below 30 percent in Northern Africa and Western Asia; below 40 percent in Southern Asia; and below 50 percent in the Caribbean and Central America. The gap between participation rates of women and men has narrowed slightly worldwide in the last 20 years but remains considerable. In OECD countries, 60-80 percent of women participate in the labor market. If you want to make a link between the share of female labor force participation and economic growth, this would be a better approach. And according to that study, greater female labor market participation is positively associated with growth. Finally, other research shows that greater female labor market participation improves child schooling attainment and health, probably via income effects.
Increases in domestic violence have been observed among some female microloan recipients.
While this may be anecdotally true, there is research demonstrating that microcredit, when combined with training on gender, reproductive health and violence, can reduce domestic violence and other social ills. Examples are the IMAGE project, BRAC, etc. In the Latin American evaluations of conditional cash transfers to women, there has been no evidence that transfers increased domestic violence. Instead, there is evidence that women enjoy new respect and negotiating power in their domestic relationships.
The girl effect has nothing to say about domestic violence, rape, the wage gap, or the many other systemic problems underlying and reinforcing gender discrimination in poor countries…
This is inaccurate. Not in the video, but in the motivating report Start with a Girl.
This message gives more agency to Westerners than to the girls it claims to be empowering.
I don't know who the "Westerners" are, but if you are a "Westerner" reading this blog, know that if you give some of your hard-earned money to your government or to NGOs that are investing in adolescent girls in partnership with developing countries, it could be a good thing. Just don't get all "arrogant white man" about it.
The government's role and the international community's capacity to deliver aid effectively are being tested
The 20 cholera patients lie in the rickety wooden beds of Port-au-Prince general hospital, their bodies writhing, twisting their bones and skin. Makeshift toilets in the form of buckets stand underneath their beds.
Dr Vital Hervé shakes his head as he looks around his ward.
"Here we have to manage however we can," he says. "We are relying on a tiny state budget and on aid agencies that do not seem to talk to each other. We get antibiotics from some, but sometimes we have to chip in just to get bleach.
"It is still a problem of recovery, but it's entering a phase of being a problem of development, something I fear will never happen."
Outside the ward, in the hospital's corridors, the debris from the earthquake that 12 months ago sent Haiti spiralling into darkness is still piled all around. The smashed concrete and garbage are symbols of a dysfunctional reconstruction system. The government's role and the international community's capacity to deliver and sustain aid effectively are being severely tested. The country is in tatters and there are accusations that billions of dollars in aid languishes in banks, unspent, leaving reconstruction in limbo.
"There's a lack of leadership from the government and lack of efficiency, transparency and capacity from the international partners," says Karl Jean-Louis, who heads the Haiti Aid Watchdog. "Today's situation highlights the lack of co-ordination between the two."
Since the minute the goudou-goudou (the onomatopoeic name locals give to the earthquake) made the ground shake and groan, more than 230,000 people have died and about 1.5 million have lost their homes in Port-au-Prince and the nearby cities of Léogâne, Jacmel and Petit-Goâve. A cholera outbreak that began in mid-October added to the toll – leaving 170,000 people ill and a further 3,600 dead.
Despite nearly £10bn of donations and aid pledges raised for Haiti, today thousands of people still live in the displacement camps and "tent cities" that pockmark the landscape. Many people survive under nothing more than tarpaulins hanging from wooden posts surrounded by piles of rubble. Innumerable white 4x4s sporting various NGO and aid agency logos weave through the debris.
"We need the international aid because it has two things Haitians do not have: the know-how and the money," says Jean-Louis. "If the money is there, they should prove they could do better, but they haven't proven it yet."
But the "nightmare republic", as Graham Greene called it, has long been one of the most divided and impoverished countries in the world. Even before the earthquake life was not easy: ever-present were risks of disease, starvation, hurricanes or gunshots. Now residents have to deal with the raging cholera epidemic as well as rapes and lynchings, which have grown in number. A run-off for the presidential election could bring fresh turmoil.
For many Haitians, the near future looks gloomy, marked by the prospect of more suffering, economic uncertainty and political instability.
"I lost my husband and my house during the earthquake," says Asenie Sinois, who lives among the narrow corridors of a tent city in the Carrefour area of the capital. "Last week I lost my son to cholera. I might have to live like a rabid animal in this tent for God knows how long. I see a lot of people around, local and foreign politicians, aid workers, troops from the Minustah [UN mission].
"Are they really helping? I cannot see that. Sometimes I still have to eat garbage or whatever I can find around," she adds, her voice rising.
Incumbent president René Préval is blamed for fostering the situation. "If I get elected, I won't let this country be run by the international aid agencies as they wish, as it has been so far," says Mirlande Manigat, a candidate in the presidential election run-off, which is expected to be held next month.
On a cement wall opposite the gate of a Médecins Sans Frontières cholera centre, a red rash of graffiti reads: "We want to denounce the NGOs stealing this country."
"It's understandable", says Stefano Zannini, who heads MSF's Haitian operation. "Before the earthquake NGOs and aid agencies were synonymous with white people having the time of their life, corruption, poor transparency, neo-colonialism, and the images of the Minustah as an occupation force."
"Now no one knows how many agencies and NGOs are operating here; a lot of people call themselves that. And it is easy to criticise the ones who are at the forefront and show their faces.
"But maybe we have made the Haitians accustomed to NGOs and aid agencies delivering everything."
Zannini says MSF has spent every penny of the £86m they raised for the Haiti earthquake campaign. "What I do not get is how some organisations that call themselves 'humanitarian' still have money in their pockets," he adds. "Recovery is done, we have to look for longer- and medium-term actions now."
In the Saint André area of Port-au-Prince, not far from the general hospital, a man known in the neighbourhood as "Rubble Jean-Marc" embodies what is now a long-term tragedy.
He was pulled out from the rubble three days after the earthquake only to find out that his wife and both his daughters were dead. Immediately after, neighbours say, Jean-Marc lost his senses.
Like the city, 12 months on he is still tattooed in dust. In a ritual only he can understand, he covers himself with debris from the nearby piles of rubble he finds. For a year, only two words have come out of Jean-Marc's mouth, repeated like a constant tremor: "goudou-goudou".
Charity Navigator is America's largest and most influential charity rater. We serve over 3.3 million unique visitors and impact approximately $10 billion of charitable donations each year. This makes Charity Navigator far and away the largest and most utilized charity rating service that exists anywhere.
Up until recently, our rating system was solely focused on a financial analysis of charity's performance. However, we are now revamping the rating system methodology (the new system is called CN 2.0) from a one to a three dimensional rating system. We recently expanded our rating criteria from our traditional one dimension - financial health, to a second dimension - accountability & transparency. We are now testing a third dimension - results. The results dimension will count for the largest portion of the total rating score once it goes live.
There are two significant features to this enhancement of our rating methodology. First, in order to deepen our methodology and break out of the trap of self-reporting that has constrained the nonprofit sector; we are embedding "constituency voice" as a core part of the three-dimensional rating criteria. Initially, this will mean that charities that publish rigorously collected feedback from their beneficiaries will earn a significant number of rating points. Second, in order to expand our ratings beyond the 5,500 charities currently covered, we are creating a web platform through which we can train, certify, and guide an army of volunteer Charity Navigator raters. Our goal is to be able to annually evaluate the roughly 20,000 charities that garner ~85% of the revenue that comes into the nonprofit sector each year. With seed support from the Hewlett Foundation, we are piloting both of these features now with graduate students in seven universities. Provided we can secure additional funding, we plan to expand the pilot group to other volunteer pools in early 2011 and continue the development of CN 2.0. Ultimately, we intend to train individuals throughout the country to conduct the ratings and CN central staff will focus on quality control.
In addition to strengthening Charity Navigator's existing rating method of applying a single set of rating questions, CN 2.0 is integrating the evaluative insights of other providers. Our two current partners are the bookends on the constituency voice spectrum – Great Nonprofits and Keystone Accountability. Great Nonprofits channels feedback on nonprofits performance through an open system. Keystone proactively builds benchmarked feedback data sets through systematic data collection. As these and other providers of evaluative data prove the value of their data (such as Philanthropedia and Give Well), they will be factored into the overall Charity Navigator ratings. In addition, CN is also working right now with GreatNonprofits to convert the comment section of our web site to a user review section, powered by GreatNonprofits. We hope to add this feature on the site by February of 2011.
How quickly CN can fully implement CN 2.0 will be determined by the resources available to us. Charity Navigator is itself a charity and we do not charge a fee for our services to users, nor do we charge the charities to be rated or to use our analysis in their fundraising and marketing endeavors. Instead, CN relies on the voluntary donations of our Board members and our users, as well as advertising revenue, data sales and grants.
In conclusion, we believe that our revised rating system has the potential to completely transform the landscape of charitable giving. We foresee that, through this effort, there will be an increase in the number of social investors that use our services which will lead to a sizable increase in giving to higher performing nonprofits. Ultimately we believe this will lead to a measurable improvement in human welfare and acceleration in solutions to our world's most persistent problems.
De rol van het bedrijfsleven is een nieuw speerpunt van het Nederlands ontwikkelingsbeleid. Maar volgens Harm van Oudenhoven, die een chocoladefabriek in Nicaragua heeft en die winnaar was van de eerste BID-challenge voor het beste businessplan om via economische bedrijvigheid de armoede te bestrijden, zijn er een hoop vraagtekens te plaatsen bij dit nieuwe speerpunt. Hebben ontwikkelingsorganisaties überhaupt wel expertise op dit terrein en hoe integer zijn multinationals eigenlijk? Van Oudenhoven laat zien hoe het nu in de praktijk misgaat en hoe het naar zijn mening wél zou moeten.
Het staat nogal in het nieuws: het ondersteunen van bedrijven die willen investeren in ontwikkelingslanden om zo de armoede de wereld uit te helpen. Er wordt veel gesproken over investeren in eerlijke handel, samenwerking tussen de publieke sector en bedrijven, en het belang van duurzaam ondernemen. Er is bijna geen ontwikkelingsorganisatie die dit soort ideeën niet naar voren brengt en ook multinationals hebben het over duurzaamheid en maatschappelijk verantwoord ondernemen. Men zou bijna het idee krijgen dat dit het enige antwoord is voor de problemen waar honderden miljoenen mensen dagelijks mee leven.
Op het eerste gezicht lijkt het allemaal erg mooi. Door te investeren in duurzame bedrijven kan het milieu worden gered. Maatschappelijk verantwoorde ondernemingen helpen arme mensen aan een waardige baan. Hierbij zou dan het fameuze "trickle down" effect ontstaan, waar de armste mensen ook meeprofiteren van de economische groei; de middenklassen worden sterker en zo ook de democratie. Het hoeft ook niet veel te kosten, want uiteindelijk maken bedrijven winst en zijn donor landen af van de eindeloze subsidies die uiteindelijk alleen maar afhankelijkheid scheppen.
Trotse folders
Massaal veranderen ontwikkelingsorganisaties hun strategieën en gaan ze mee met deze algemene veronderstelling. Ze analyseren productie en marktketens en proberen de export uit ontwikkelingslanden te vergroten. Ze werken samen met multinationals om hen te helpen de duurzaamheid van hun productiesystemen te verbeteren. Ze praten trots over "matching funds" waar de multinational een deel van de projectkosten op zich neemt en laten in hun bladen en folders zien hoe kleine boeren erop vooruitgaan wanneer ze onder een eerlijke handelsmerknaam hun waren exporteren.
Steeds vaker zijn er ook voorbeelden van bedrijven die een bedrag beschikbaar stellen voor een goed doel om te laten zien hoe maatschappelijk verantwoord ze zijn. Ze stoppen geld en tijd in een bedrijf in Afrika die dan hogere kwaliteitsproducten kan verkopen op de Europese markt. Een bekend oliebedrijf reikt prijzen uit voor de beste duurzame bedrijfsplannen. Het bedrijfslogo staat dan naast die van een vertrouwde kinderhulporganisatie of bosbeheerproject.
Het is natuurlijk prachtig dat wij in het westen steeds bewuster worden van de schade die onze massaconsumptie aanricht in de wereld en dat we bijna allemaal, als we het kunnen betalen, kiezen voor eerlijke producten zodat boeren in arme landen wat centen meer verdienen voor hun koffie of katoen. En, het is zeker waar, dat als we doorgaan zoals we nu bezig zijn, de wereld langzaam maar zeker naar de knoppen gaat en dat mijn kleinkinderen (onze oudste zoon is nu 13) waarschijnlijk nooit een oerwoud zien en zonder zorgen tropische kikkers vangen zoals ik en mijn kinderen dat ooit hebben gedaan.
Vreemde smaak
Echter, als ik de artikelen lees en redeneringen volg, blijft er bij mij altijd een vreemde smaak hangen. Zijn de huidige modellen voor duurzame handel nu echt de oplossing voor armoedebestrijding of zijn we gewoon bezig met mooie woorden elkaar wat wijs te maken? Praten ontwikkelingsorganisaties alleen mee met de politiek omdat die op het moment niks liever hoort dan makkelijke, korte termijn oplossingen? En zijn de multinationals echt uit op armoedebestrijding en duurzaamheid, of blijft het bij winstmaximalisering: als de klant maar blijft kopen?
Niemand houdt van armoede, en iedereen wil een goede wereld voor hun kinderen. Maar het lijkt dat de strategieën vooral worden beïnvloed door het gevecht om overheidsubsidies (hoe krijgt men geld voor een project) en niet zo zeer door wat er werkelijk nodig voor duurzame armoedebestrijding.
Er zijn drie centrale punten waar ik over val. De concepten duurzaam ondernemen en eerlijke handel zijn erg eurocentrisch of, beter gezegd, erg gericht op onszelf. Ten tweede zie ik ontwikkelingsorganisaties investeren in bedrijvigheid vaak zonder praktijk ervaring: ze hebben zelf nooit een bedrijf opgezet in een dergelijk land en weten en kennen noch de moeilijkheden noch de realiteit die lokale ondernemers ondervinden. Een derde punt is het vertrouwen in de multinationals, en een zekere trots die men heeft als zo'n bedrijf meedoet aan een duurzaam project.
Prachtige concepten
Eerlijke handel en duurzaam ondernemen zijn prachtige concepten. Echter waar het bijna altijd om gaat is het verbeteren van een productie keten van boer naar export product. Eerlijke koffie kennen we allemaal. De boer is gegarandeerd van een vaste prijs, heeft vaak toegang tot een voorschot en krijgt een prijs boven de wereldmarktprijs van gewone koffie. De koffie wordt als groene boon geëxporteerd naar het westen en daar betaald men iets meer voor een pak in Nederland geroosterde koffie in de supermarkt. Dit is het verhaal van de meeste "eerlijke"producten: cacao, hout, katoen en pindas. Wij betalen een kleine premie en de arme boer verdient wat meer.
Maar wat hier in mijn ogen mist is een duidelijke impuls voor ontwikkeling van de lokale markt. Er zijn niet alleen boeren in ontwikkelingslanden. Er zijn ook consumenten, en net zoals bij ons, heel veel mensen die er baat bij hebben als een product lokaal verwerkt, verhandeld, verkocht en geconsumeerd zou worden. Bij standaard eerlijke handel ontstaat er in het land van herkomst een waardeketen van kleine boer, transporteur en exporteur naar exportland.
Echter, bij lokale productie kan men praten over een heel waardenetwerk. Niet alleen de kleine boer verdient meer, ook de verwerkingsindustrie heeft mensen in dienst, lokale distributiebedrijven verdienen er aan, en de winkeltjes en supermarkten maken een grotere omzet. Hiernaast vergroot het de inkomsten voor lokale dienstverleners: de elektricien en ingenieur die de machines onderhouden en het lokale reclamebureau dat nieuwe opdrachten krijgt. Dan zijn er de nationale energie bedrijven die meer kunnen leveren en niet te vergeten de overheid, die door de meerwaarde en banen gecreëerd op lokale bodem, meer belasting binnen krijgt.
Weinig begrip
In analyses en methodes van ontwikkelingsorganisaties is er weinig begrip voor lokale marktontwikkelingsprocessen. Door het vasthouden aan waardeketens van bepaalde producten verliest men het overzicht van de grotere werkelijkheid: het waardenetwerk of productienetwerk dat veel complexer is dan een uni-lineaire waardeketen.
Ik ben er van overtuigd dat, zonder een meer holistisch besef, er zelfs schade wordt aangericht door gesubsidieerde investeringen van het soort die nu vaak worden gepromoot. Zo kan het ondersteunen van boeren coöperatieven (gratis trainingen, goedkope leningen, betaalde certificering, gemakkelijke toegang tot onze markt etc) lokale privé bedrijven weg concurreren. Deze moeten namelijk zonder enige subsidies en met hun eigen kapitaal en mankracht stand houden in de agressieve markt.
Geselecteerde privé bedrijven in ontwikkelingslanden die grote subsidies krijgen vormen eveneens valse concurrentie op de lokale markt. Een bloemkweekbedrijf dat een investerings 'gift' van een paar ton krijgt omdat het exporteert naar Nederland en met een consultant een mooi plan heeft ingediend, heeft natuurlijk een duidelijke voorsprong op welk ander ongesubsidieerde privé onderneming.
Free money
Dan zijn er de allianties tussen multinationals en ontwikkelingsorganisaties: samen delen ze de kosten om duurzame producten te ontwikkelen. De ontwikkelingsorganisatie geeft aan hoe het kan en de multinational zorgt dat de producten op de markt komen. Zou een meubelbedrijf of voedselhandelsfirma die de hele wereld heeft veroverd niet weten hoe ze duurzaam moeten produceren of zelf daar de expertise niet voor in huis kunnen halen? Ik heb zelf, met de pet op van ondernemer, vaak andere ondernemers horen lachen over hoe makkelijk er geld is te krijgen uit ontwikkelingsorganisaties: "free money" zo wordt het genoemd. Moet hier nu ons zwaar gekort ontwikkelingsgeld heen gaan?
Begrijp mij niet verkeerd. Ik probeer hier niet de ontwikkelingsector onderuit te halen. Die doen vaak fantastisch werk met heel concrete resultaten. Bedrijven zijn natuurlijk ook een essentieel deel van het ontwikkelingsproces. Maar het subsidiëren van het bedrijfsleven uit ontwikkelingshulpgeld en dat te presenteren als oplossing voor de armoede is te simplistisch. Uit eigen ervaring zie ik dat het niet werkt.
Gelijk speelveld
Dus wat dan wel? Ik pleit altijd voor het creëren van een 'vlak economisch speelveld' waar iedereen zoveel mogelijk gelijke kansen krijgt, in plaats van het voortrekken van willekeurige actoren. In ons eigen land doen we dit prima. Wij werken er hard aan om een goed ondernemersklimaat te ontwikkelen, door veiligheid te garanderen, corruptie te bevechten en onze investering en spaargelden veilig te stellen in tijden van crisis. Wij subsidiëren onderwijs, gezondheidszorg, sociale zorg, onderhouden een prachtige infrastructuur en denken en investeren voor de lange termijn. Wij geven belastingssubsidies aan bedrijven die dingen ondernemen waar we achterstaan en heffen toeslagen op diegenen die ons schade aandoen. Wij bekijken ons land ook als een systeem, een samenhangend geheel, en niet als een verzameling losse ketens.
Dit "systeem denken" zou ook van toepassing moeten worden in de strategieën voor armoede bestrijding met een holistische analyse van de factoren die invloed hebben. Want uiteindelijk is een land wat arm is, maar veilig, met een goede infrastructuur, met mensen die een goed onderwijs hebben genoten en gezond zijn, waar corruptie minimaal is en de lokale economie zich autonoom ontwikkeld, niet alleen beter voor de mensen daar, maar uiteindelijk veel aantrekkelijker voor (onze) bedrijven en individuen die daar willen investeren.
En mochten we toch iets willen doen om duurzame bedrijven te bevorderen, gooi dan de btw omhoog voor niet duurzame producten. Multinationals zullen dan ineens wel doorhebben hoe het moet.
Over de auteur:
Harm van Oudenhoven studeerde antropologie in Leiden. Tijdens zijn studie beheerde hij een eenmanszaak en importeerde kunstnijverheid uit Azië en Afrika. Na zijn studie werkte hij tijdelijk in een Nederlands ontwikkelingsproject in Sri Lanka. Vanuit dit project begon hij Hansa Coffee, een klein koffiefabriek in Sri Lanka. Hierna werkte hij voor de Verenigde Naties in Ethiopië en El Salvador. In 2004 stichtte hij El Castillo del Cacao, de eerste chocolade fabriek in Nicaragua. In 2005 won hij met zijn businessplan de eerste prijs van de Bid Challenge. Sinds een jaar woont hij weer in Nederland, beheert weer zijn eigen bedrijf en geeft hij advies aan ondernemers die zaken willen doen in ontwikkelingslanden.
When I was in Ethiopia, one thing that struck me immediately was how big and visible the Chinese presence there is these days. While my travels were mainly restricted to the north of the country, virtually every road I came across that was under construction (and there were a lot of these) had Chinese staff overseeing the work. There were entire camps for workers in the road building trade, proudly flying a much larger Chinese flag alongside the Ethiopian one.
China scares a lot of people in development. Over the last two or three years, increasing attention has turned to the role of 'new' or 'non-traditional' donors. These labels are generally applied by what we would think of as the establishment donors: the US, UK, Scandinavian countries and the major multilaterals. They consider the 'non-traditionals' to be those donors who come from outside their cabal of policy voice: South Korea, India, China and Brazil being the most prominent. Given that some of the 'establishment' donors are relatively recent additions to the group of large-scale donors, and some of the 'non-traditionals' have long-standing bonds of mutual support with other developing countries I don't think these labels really work. I find it more accurate to group donors along the lines of when they themselves developed. The first set of donors, centring around Europe and America, are the 'first-generation' of developers while the rest can broadly be classed as 'second-generation' developers. These two sets have different approaches to development.
China is the big one among the second generation donors, and just as China's policy approach to increasing the power and wealth of its economy has a lot of Western policy makers and economists worried, so has its approach to its relatively new role in Africa begun worrying Western aid agencies. Generally, Chinese aid to Africa draws three major critiques from the first-generation donors. These are:
Having worked for a few Governments that receive aid from China, and seen up close the good and bad of all donors' practices, I'm beginning to feel that the first-generation donors are wrong about China. Not only are the some of the criticisms they make of China's modus operandi either incorrect or hypocritical, it also seems that China's presence as a donor has a positive consequences that are insufficiently remarked.
China's aid is largely (though not entirely) disbursed in the form of loans. Many Western observers take the position that China are giving out loans without due consideration of the human rights and economic management record of the Governments who are accepting these loans. This criticism strikes me as very hollow indeed. Firstly, it's immensely hypocritical. I do not understand how Jeffrey Sachs gets to thank Meles Zenawi in his book and first-generation donors get to so much money into their Millennium Village Project, but China can be criticised for building roads there. Yes, Ethiopia's governance leaves much to be desired, but building roads there is as obvious a win for a country with high internal transportation costs as running a bednets campaign. Of course, other donors can argue that they advocate for better governance alongside provision of support, but to my mind this is simply another reason for new donors not to replicate these efforts.
What's more, it's fallacious to assume that China is just financing any old thing that is requested as long as it gets access to minerals and gets to build roads. I've come across a few instances where requests for loan support have been turned down because the project made no sense or was too politicised. In one country, the President wanted to build a University on his private land using a Chinese loan. He was refused. Other vanity projects, such as a new football stadium, may get the go-ahead – but other donors also fund cultural activities. The money for all these activities might be better used to improve education, but it's hardly the greatest crime in development practice nor a unique one.
Arguments about the motivation of Chinese support in Africa also strike me as off the mark. They do build roads and provide support in order to get access to natural resources, though this is not the motivation for all of their projects. Yet most donors started out this way, using aid as a method of pursuing mutual gain with developing countries. This is where the common practice of tying aid originated from, and while most donors have technically untied aid, it's still striking how often contracts funded by a bilateral donor go to firms from that donor's country. The extent of self-interest as a motivating factor in aid often changes as a donor extends its practice and develops further itself.
The idea of purely altruistic aid is a myth. Every single donor knows it is engaged in a multifaceted relationship with developing countries, some aspects of which are charitable or developmental and others of which are designed to meet their own interests. If China is extracting resources in exchange for cut-price road building projects, how does Europe have the moral high ground when it supports agricultural development on the one hand and the Common Agricultural Policy on the other? Or when the first-developed nations continue to impose a global trading regime which they know limits the possibilities for African countries to develop local industry with a measure of protection? I see no problem with aid being mutually beneficial to all parties – and with Chinese aid, it seems clear that most Governments believe it to be. African Governments do not sign away their natural resources without a bit of thought.
The final criticism is easily the strongest. There is no doubt that Chinese aid is too shadowy. In at least two countries where I've worked, information on the agreements signed with China was incredibly hard to come by – and this was while I was working in the External Finance departments of the Governments in question! Loan agreements can be found, but in-depth M&E and centrally collected information on the extent and distribution of support was much scarcer. When these projects run into problems, it can be much harder to see why these problems have arisen and what can be done about them. One of the roads under construction I drove on in Ethiopia was blocked by the workers, who claimed that they hadn't been paid by their Chinese overseers. This is exactly the kind of incident that we need transparency about – if they really weren't paid, why not? That should not be happening on any donor funded project.
Despite these criticisms, China's modes of interaction with developing countries holds lessons for the West. In all of the countries I've worked in, people want more aid from China, not less. This is understood and acknowledged by the first-generation donors, who responded to pressure from developing countries in the Accra Agenda for Action:
South-South co-operation on development aims to observe the principle of non-interference in internal affairs, equality among developing partners and respect for their independence, national sovereignty, cultural diversity and identity and local content. It plays an important role in international development co-operation and is a valuable complement to North-South co-operation.
There is one major message here: most second-generation donors are far behind the first set in terms of many of the Paris principles, most notably failing to untie aid with sufficient speed and failing to use local Government systems of financial management. But they are way ahead on one of the most important ones: Ownership. While the first-generation donors talk about ownership incessantly while all the time trying to change and influence local policy, second generation donors simply assess the feasibility of a project and then fund it or refuse to fund it. These donors do not try and influence national development strategies, or impose conditions on what proportion of funding should be spent in which sectors (which is a very common General Budget Support conditionality) – they simply fund what is requested for, if it's considered to be viable.
Developing country Governments appreciate this. It means they feel empowered to pursue their own vision of development, and thus it gives a stronger line of accountability to domestic stakeholders, since they can't play the 'donors made us do it' card. It also means that it's much simpler to engage with these donors than others: they will be assessed on the bottom line in development by their constituents, rather than their input and process indicators by foreign donors.
This is the single biggest lesson the desire to engage with China teaches us. Developing countries want simple aid that follows their desires, and want it so much that they will give access to their resources in exchange for it. That's a really strong message that simply doesn't seem to be getting through, and first-generation donors will find their influence waning fast if they don't learn it before China and India expand even further into the aid landscape.
This week, The Economist turns its attention to the secret of M-PESA's mobile money success. As David Roodman, FAI's Jonathan Morduch and others recently observed on a Gates-Foundation sponsored visit to Kenya, when it comes to mobile banking, an awful lot of on-the-ground physical activity goes into enabling the technology side of mobile banking. For all its promise as a "cashless" solution, The Economist highlights the fact that there's still an awful lot of money that has to be moved around to keep the system going.
*See our "before and after" series on a recent Gates Foundation-sponsored visit to Kenya to observe the development of mobile banking at M-PESA.
IN the run-up to a referendum in South Sudan which is very likely to create Africa's 54th state, our sister company, the Economist Intelligence Unit, has published a report examining the trend towards democratisation on the continent since 2000—an apt subject for review, with a slew of elections due over the next couple of years, and with current events in Côte d'Ivoire demonstrating how far some countries have to go before the wheels of the polling process turn smoothly. As the report's introduction puts it:
Every year the electoral calendar in Sub-Saharan Africa becomes more crowded, and every year most posts, from the presidency to seats in the National Assembly and town mayorships, are competed for rather than seized or bestowed. The number of elections held annually in recent years has increased; since 2000 between 15 and 20 elections have been held each year. African democracy appears to have flourished and the holding of elections has become commonplace, but not all ballots pass the test of being "free and fair" and many have been charades held by regimes clinging on to power. Similarly, coups d'état have become more infrequent, although conflict, failed governments and human-rights abuses remain widespread. For every two steps forward over the past 20 years there has been at least one step back, but the overall trend appears to be in the right direction.
Click here to read the full report.