by Michael Clemens and Gabriel Demombynes
The Millennium Villages Project (MVP) is an experimental anti-poverty interventionin villages across Africa. In October, we released evidence that the Project's official publications were overstating its real effects, and we offered suggestions on improving its impact evaluation. On Tuesday the MVP, whose leadership and staff are aware of our work, continued to greatly overstate its impact.
Number 1- Mohammed Al Amoudi
Ethiopia's richest man as well as the richest black person in the world Mohammed Al Amoudi is worth $10 billion.
His broad portfolio of businesses include oil, mining, agriculture, hotels, hospitals, finance, operations and maintenance.
He also owns Swedish refinery Preem and Svenska Petroleum, which made big plays in Guinea-Bissau, Nigeria and Angola in 2008.
Al Amoudi has invested more than $1 billion in Ethiopia. He controls his vast business conglomerate through two holding and operating companies, Corral Petroleum Holdings and MIDROC. He employs over 40,000 people through these companies.
Al Amoudi holds an honorary doctorate in Philosophy from Ethiopia's Addis Ababa University.
Number 2 - Nassef Sawiris
Estimated to be worth $5.9 billion, Nassef Sawiris has been a director and the CEO of OCI since its incorporation in 1998 and assumed chairmanship in 2010.
Sawiris has overseen the construction activities of Orascom since 1990. He is also director on board as well as one of the largest shareholders in Lafarge S.A., the world's leading building materials conglomerate.
In addition, he is also the director of the Dubai International Financial Exchange (Nasdaq DIFC) and of NNS Holding, a privately-owned investment group.
Sawiris holds a BA in Economics from the University of Chicago. He was born in 1961 and is an Egyptian citizen, son of Onsi and brother of Naguib, who are also on the list.
Number 3 – Nicky Oppenheimer & Family
Nicky Oppenheimer is chairman of the De Beers Group and as such chairman of De Beers sa, De Beers Consolidated Mines and De Beers Centenary AG. He is also a non-executive director of Anglo American Plc.
Educated at Harrow School and Christ Church, Oxford, Oppenheimer read Politics, Philosophy and Economics.
He joined the Anglo American Corporation in 1968 as the personal assistant to the chairman, and worked subsequently in the gold and diamond divisions of the Corporation. He spent 18 months in the London office of De Beers before returning to Johannesburg in 1975 to join the Gold Division.
He is estimated to be worth $5 billion dollars.
Number 4 - Naguib Sawiris
Naguib Sawiris heads Orascom Telecom Holding (OTH), one of the largest mobile providers in the Middle East, Africa and South Asia.
Holding a Masters in Technical Administration from the Swiss Institute of Technology he is a charismatic, flamboyant, consummate dealmaker. His wealth is an estimated $2.5 billion.
Number 5 - Onsi Sawiris
Egyptian businessman Onsi Sawiris is one of the richest men in Africa. Alongwith his family, he is estimated to be worth approximately $5 billion by Forbes magazine.
Through his Orascom Construction, a joint-venture with Swiss cement giant Holderbank, Sawairis controls 25% of the Egyptian cement market.
Sawiris expanded his telecommunications business last year by acquiring the third largest telecommunications company, Wind Hella Telecommunications, in a multibillion dollar deal, 51% of which went to Orascom Telecom.
The simplest most reliable way to help the world's poor a lot would be for rich nations to accept more poor immigrants. While doing so would lower the price of many goods and services that poor immigrants provide, it should also lower the wages of natives who compete for similar jobs. If rich nations completely opened their borders, how big might this reduction be? It seems that even if 90% of the workforce were immigrants, average native wages wouldn't fall by more than ~10%. From a new NBER immigration lit review:
Their survey of the earlier literature found that a 10% increase in the immigrant share of the labor force reduced native wages by about 1%. Recent meta-surveys … found comparable, small effects across many studies. … The large majority of studies suggest that immigration does not exert significant effects on native labor market outcomes. Even large, sudden inflows of immigrants were not found to reduce native wages or employment significantly. Effects that do exist tend to be relatively small and concentrated among natives or past immigrants that are close substitutes. … Research on the role of immigrants in the labor market mostly yields consistent findings across countries and experiences: recent migrants have lower earnings than natives, there is partial convergence with duration of stay, displacement effects tend to be small, the most affected groups are close substitutes, etc. (more)
That seems to me a reasonable price to pay for such huge assistance to the world's poor.
by Ed Carr, Associate Professor in the Department of Geography at the University of South Carolina
A growing volume of critical writing on the Millennium Villages project (MVP) includes blog posts, journalistic pieces, scholarly works, and, recently, one partial social impact study. Nearly all point to project outcomes that could have been avoided had the project seriously engaged with the long history of field-based experiences in development.
Here, I will focus on just one example: Because the MVP did not critically evaluate the effect of its own assumptions about what works in development, a conflict between project goals and the needs of the villagers has emerged in at least one site.
The MVP is part of Millennium Promise, an effort to make progress towards the Millennium Development Goals (MDGs). As a result, the MVP framed its interventions around the MDGs. For example, in 2005 the MVP website described community participation in this MDG-centric manner:
An open dialogue [between MDG-trained teams and villagers] will cover topics such as local problems as related to the MDGs, constraints and opportunities for achieving the MDGs at their village level, initial discussions on possible solutions and approaches for achieving the MDGs, and general impressions/consensus on being included as a Millennium Villages Project site.
The project's founders have stated that the MVP was built on the "core truth" that there are "known packages of effective and generally low-cost interventions" that can address poverty. A review of the MVP described it as a pilot project seeking to "provide successful evidence of how to achieve the Millennium Development Goals". The project's focus on finding "successful evidence" for the efficacy of these packages of interventions suggests that the project has an interest in validating the importance of the problems identified in the MDGs and justifying the interventions of the MVP.
This creates a conflict of interest for the field staff of the MVP: What if the evidence does not show success? And what to do when the local community's concerns do not align with either these solutions or the MDGs?
Those familiar with the history of development work know that such conflicts of interest are chronic. Take the classic by Robert Chambers: Whose Reality Counts. He describes what happened when he examined a consultant's glowing report on a World Bank irrigation scheme and found evidence that the conclusions were wrong:
My points were more or less accepted, but then the matter was consigned to an indeterminate limbo. Nothing was done. Far from being rejected or modified, the consultant's conclusions were published unchanged, and without reference to the criticisms….The consultants knew that the World Bank, which had commissioned the study, was keen to justify the new approach. They knew what result was wanted. Supported by the consultants' unchanged report, the new approach was implemented on a large scale. So, even if bad news is reported, it may be avoided, rejected or finessed out of sight. (p.82)
Another disconnect appeared in a UNDP/OECD evaluation of a project in Mali: "it has to be asked how the largely positive findings of the evaluations can be reconciled with the poor development outcomes (1985-1995) and the unfavorable views of local people." (1999)
Similarly, a classic work by James Ferguson (1994) recounts a World Bank project to teach better farming techniques in a mountainous region of Lesotho, out of touch with local people who had long ago learned to abandon the poor soils of that region and work as migrants in South African mines.
There are the same significant pressures on the MVP field staff to press participants to conform to project assumptions and expectations, and to reject or finesse evidence and feedback that does not. Those designing and implementing the MVP should have addressed possible conflicts between their goals and those of the communities. They did not. As a result, I was not surprised to see this quote from a woman living in a Rwandan Millennium Village, from a recent study:
The MV has to meet with local community to learn more about what people really want because sometimes the MV brings things that the community doesn't need or want.
This and several other issues with the MVP were easy to see from the outset (see here and here). But to recognize them required a familiarity with the history of development and a self-awareness that the Millennium Village Project itself has never shown.
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Ed Carr is an associate professor in the Department of Geography at the University of South Carolina. His book Delivering Development: Globalization's Shoreline and the Road to a Sustainable Future was released by Palgrave Macmillan on February 1, 2011. He blogs at Open the Echo Chamber.
Read all Aid Watch posts on the Millennium Villages project here.
Zimbabwean government rejects concern that Beijing cash could prop up Mugabe, and says investment can turn economy around
Zimbabwe could be in line for a windfall of up to $10bn (£6.19bn) from China, a potentially huge boost to its ailing economy, its ministers have claimed.
But such an investment would be likely to heighten concerns about president Robert Mugabe's increasingly warm relationship with China, which has been accused of turning a blind eye to human rights violations across Africa.
Zimbabwe's coalition government is putting up a united front on the issue, however, insisting that Chinese investment in mining and agriculture could help turn the economy around.
Tapiwa Mashakada, a government minister and member of the Movement for Democratic Change (MDC), told Reuters on Monday: "We have met with officials from China Development Bank and they have said they are willing to invest up to $10bn in Zimbabwe."
The sum would dwarf Zimbabwe's gross domestic product, expected to be about $6bn (£3.72bn) this year.
Mashakada, the minister of economic planning and investment promotion, told a conference in Harare that he expected Zimbabwe to produce about 1.5m tonnes of maize in 2011, up from 1.3m last year. He saw gold production hitting 13 tonnes in 2011, up from 8.3 tonnes in 2010.
Zimbabwe also has the world's second biggest platinum reserves and hugely controversial deposits of alluvial diamonds.
China is "looking into mining development, that is exploration and exploitation, agriculture, infrastructure development and information communication technology", Mashakada said. "The Chinese are now moving towards strict due diligence, accountability and transparency. At the end of the day this really depends on us, how we position ourselves as a destination for investment. China is coming in a very big way." The announcement could be aimed at trying to prod western investors to sink more money into Zimbabwe out of fear they will lose ground to China.
Trevor Ncube, an entrepreneur who attended the conference, said he was sceptical about the headline figure. "That number looks a bit too big for me," he said. "It sounds a rather extravagant claim."
Ncube, publisher of the Zimbabwean newspaper NewsDay, said he understood the lines of credit were aimed at the private sector. "We shouldn't overplay the political dimension. The Chinese are streetwise. We expect them to conduct themselves in a businesslike manner. We know it's not humanitarian; they will earn a bit of interest."
China said recently its two-way trade with Africa had increased by nearly 45% in a year to hit a record $114.8bn (£75bn). Its investment in Zimbabwe has been growing steadily over the last decade but still lags behind that in neighbouring Mozambique, Zambia and Angola.
The unity government formed between Mugabe and prime minister Morgan Tsvangirai in 2009 brought stability to an economy crippled by hyperinflation. But it has failed to attract foreign investment, especially from western companies who want more political reforms and are anxious about a law that says 51% of firms worth over $500,000 should be owned by black Zimbabweans.
Last year the Chinese embassy in Harare threw an 86th birthday party for Mugabe. Such gestures have fuelled speculation that China is content to prop up Mugabe and could even bankroll his next election campaign. It has refused to join America, Britain and the EU in imposing sanctions against the president and his allies. But the MDC hesitates to criticise a potential cashcow. Tsvangirai told Fox News last week: "Whatever you can say about the Chinese, they are not missionaries. They have business interests, they have their own national interests, especially when it comes to resources."
Chinese investors have snapped up commercial and residential properties in Zimbabwe's capital, Harare, over the past few years. The influx of cheap Chinese goods, known locally as "zhing-zhong", has caused widespread annoyance.
William Bango, a veteran former journalist, said: "China is just taking advantage of a basket case. If you're a donor's burden, you have all kinds of thieves and crooks and people bringing you all kinds of trinkets.
"Once we restore this society to normalcy, with all standards maintained, China will fall away."
$114.81 billion: Value of trade between China and Africa (2010)
43.5%: Year-on-year growth in two-way trade (2010)
45: Number of African countries China has signed bilateral trade agreements with
$9.33 billion: Amount of Chinese direct investment in Africa by the end of 2009
5,000: Number of scholarships the Chinese government offers to students from African countries each year
4,700: Number of taxable items which China has exempted from tariffs if they come from the least-developed countries in Africa (as of July 2010)
500: Number of infrastructure projects China has provided assistance for in Africa. (By the end of 2009)
$10 billion: Amount China has promised in preferential loans to Africa (2010-2012)
Sources: China's Information Office of the State Council
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In my last post, I posited a bright future for microfinance —a future I'm still hopeful will emerge. But since I wrote that post, a couple of troubling developments have left me a bit deflated.
One is the release of the Malegam commission report in India. The Malegam commission was set up by the Reserve Bank of India to review microfinance regulations and propose any needed changes. The positive intent of many of the Malegam recommendations are clear. But the likely, though unintended, consequences of many of these recommendations is deeply concerning.
There are a number of excellent detailed reviews (with varying opinions) of the Malegam commission so I'll skip over the details while encouraging you to read David Roodman's , IFMR's and Rajan Alexander's take. My concern is that the net effect of many of these recommendations will be to calcify the microfinance industry in India. That's a huge concern because, as I noted in my last post, we are finally learning not just that the traditional microcredit product has little net impact (positive or negative) but how that traditional product might be tweaked to maximize benefits. The report recommends banning individual liability in favor of group lending. That's a problem because there is little evidence that group liability benefits anyone while it drives up costs and limits the attractiveness and usefulness of the product to most borrowers. Borrowers clearly only tolerate group liability because they have few alternatives. A bright future for microfinance is dependent on serving client needs, not on retreating to misinformed dogma.
Another set of concerning recommendations of the committee are hard caps on both the total debt per household and the spread between the cost of funds and loan rates. The former is problematic because there is no proposed mechanism for accurately measuring household indebtedness—and as Portfolios of the Poor shows us, most households borrow from many informal sources. The hard cap on indebtedness is likely to have two effects: 1) cause MFIs to turn a blind eye to the informal financial services clients are using (because its too expensive to examine and will put too many clients off limits) thereby missing an opportunity to learn about and serve client needs better, and 2) push clients to even greater reliance on expensive, risky and inconvenient informal financial services. The latter cap is a problem because it will be a major limit to expansion and innovation. The explosive growth of microfinance has primarily been in urban and semi-urban areas with dense populations where each loan officer can serve more clients. Serving rural areas where the poor need financial services every bit as much as urbanites is more expensive and always will be—the hard cap is a strong incentive for MFIs to cancel rural expansion. But the hard cap is also a strong disincentive to innovation—offering more flexible products that might better meet client needs but are more risky for banks to offer. If MFIs can't charge appropriately to risk then those innovative and risky, but highly beneficial, products simply won't be offered.
Limiting innovation in microfinance in India is a global concern. Indian MFIs have historically been on the leading edge of the evolution of the microfinance industry. If Malegam closes the door on innovation in India, will others step up? Where else are there MFIs of sufficient capitalization and scale to fund major innovations? Innovation remains a particular concern in microfinance because of the strong conservative streak in the industry—embodied by Mohammed Yunus' recent Op-Ed in the New York Times where he essentially said that any MFI that doesn't slavishly follow his model is a creature of darkness. It's taken 30 years for microfinance to begin to get beyond Yunus's limited and limiting vision. The last thing the industry needs now is to get dragged back there.
Another area where I'm newly concerned is the hints of government intervention in Grameen Bank of Bangladesh. Again, there are excellent reviews of the details elsewhere (see Kristof, Bishop/Green, and Roodman). The concern here is the continuation of a trend of political manipulation of microfinance. While there are causes other than politics of the crisis in Andhra Pradesh, politics certainly played a role. Politics was also a major player in the "I Won't Pay" movement in Nicaragua in 2009 that led to the insolvency of one of the major MFIs there. Finance for the poor has always been a favorite tool of false populists and political opportunists. But until recently microfinance had largely been able to steer clear of overt political manipulation. That no longer seems to be the case—indeed political risk should probably rise to the top of the agenda of any funder of microfinance whether for-profit or non-profit. If this trend continues, and microfinance becomes just another tool of power politics, the future for the industry will be much darker.
Troubling signs on many fronts indeed. I still believe there are sunny days ahead from microfinance, but I'm far more sanguine than I was just a few months ago.
Tim Ogden is Executive Partner at Sona Partners, a thought leadership communications firm. He has edited 4 books on the intersection of business strategy and technology published by Harvard Business School Press and co-authored or ghostwritten several articles for Harvard Business Review. He is frequently quoted in the Wall Street Journal, New York Times, and Financial Times. You can follow him on Twitter: @philaction or @timothyogden.
There's a clothing drop box down the street that says, "The American Red Cross of Massachusetts is a humanitarian organization, led by volunteers, that provides relief to victims of disasters and helps people prevent, prepare for, and respond to emergencies." Good enough, so far. But adjacent to those words, in a font four times the size, and in bold, mind you, are the words, "Mission Statement." Which made me wonder, is this Red Cross's mission, or its mission statement? I don't want to go off on the Red Cross — the messaging on the drop box could just be some junior graphic designer's idea, and not an organizational mandate. But it spoke volumes about what was in the mind of the person who put it there. It gave away the context in which that person's work occurs: public relations. See, if you're on a mission, the box says something like, "Red Cross Emergency Clothing Drop Box!" in gigantic reflective lettering, and not a damned thing else. Because you're on a mission to get as much clothing as you can. But if the goal is to satisfy a contemporary set of communications and public relations standards, then it says trendy things like "Mission Statement."
A person or organization on a mission is inspiring. A mission statement is an abstraction. Add to this disadvantage the fact that most mission-statement writing is an exercise in compromise and equivocation, and now you've really depressed people.
The world is full of examples:
"At IBM, we strive to lead in the invention, development and manufacture of the industry's most advanced information technologies, including computer systems, software, storage systems and microelectronics. We translate these advanced technologies into value for our customers through our professional solutions, services and consulting businesses worldwide."Cancel my Ambien prescription. There's nothing less exciting than careful jargon. Is it any wonder Apple's market cap has left IBM's in the dust? "Strive?" Did no one watch Star Wars? Remember what Yoda said? "Do. Or do not. There is no trying."
"The primary mission of the Annie E. Casey Foundation is to foster public policies, human-service reforms, and community supports that more effectively meet the needs of today's vulnerable children and families."The wiggle room gets in the way of any power in the message. There's "fostering" instead of "achieving." And the fostering is aimed at doing things "more" effectively instead of just plain effectively.
"The MacArthur Foundation supports creative people and effective institutions committed to building a more just, verdant, and peaceful world."Well, that pretty much covers everything. And in trying to cover everything it starts to sound like it's committed to nothing. Slap the title "Mission Statement" on any of those and you've really communicated a sense of missionlessness. Think about people and things that really are, or have been, on a mission — and then consider how silly it would be for them to have externally-focused, committee-written mission statements:
Steve Jobs is famous for having said, "I want to make a ding in the universe." Walt Disney, for having said of Disneyland, "I just want it to look like nothing else in the world." Springsteen said, "More than anything else — more than fame or wealth or even happiness — I just wanted to be great." Now these are mission statements. They yearn. They cry. They're unequivocal. And they're the product of the soul — the product of a passion for living and building and creating. They're not the product of a writing exercise. And the mission is not dependent on their being broadcast to the world, because the statements are not the source of the mission. The commitment is the source of the mission. The statements are merely the byproduct of the commitment. A mission statement can't create a commitment. And a commitment can't be thwarted by lack of a mission statement. Nelson Mandela didn't have a mission statement for creating a free South Africa. But man, was he on a mission.
The point is, don't put mission statements first. Get on a mission, and the other things will follow. Including the mission statement. On Apple's site map, you can't even find a "mission statement" link. But listen to how they talk about what they do: "Apple designs Macs, the best personal computers in the world...Apple leads the digital music revolution...Apple is reinventing the mobile phone with its revolutionary iPhone and App Store, and has recently introduced its magical iPad which is defining the future of mobile media and computing devices."
Don't waste your advertising space on your mission statement. Use the space to tell people what you've accomplished, or what amazing thing your product will do — use it to show them what mission you're actually on.
And if you notice that you or your organization spends an inordinate amount of time talking about how to talk about what it does, then maybe it isn't sure what it does — and some serious soul-searching is in order. Maybe "messaging" has become a distraction. Perhaps there's some daring goal out there with your name on it that you're avoiding for fear of failure. But better to fail — mission-statement-less — at some audacious mission, than to have your mission statement all in order while risking nothing.
Oh, and that clothing drop box. It was blocked by a mound of snow that made it difficult to approach. An organization on a mission would have had that thing shoveled out as the last snowflake was falling, and put a little red carpet out there leading up to it. Isn't it after a snowstorm that people need warm clothing the most?
I've heard rumors that Kenya's mobile money system–cash by cell phone–has grown so big it holds more influence over the money supply than the central bank. Not sure if it's true, but Billy Jack and Tavneet Suri tell us many interesting M-PESA facts in this new paper.
we report initial results of two rounds of a large survey of households in Kenya, the country that has seen perhaps the most rapid and widespread growth of a mobile money product – known locally as M‐PESA – in the developing world. We first summarize the mechanics of M-PESA, and review its potential economic impacts. We then document the sequencing of adoption across households according to income and wealth, location, gender, and other socio‐economic characteristics, as well as the purposes for which the technology is used, including saving, sending and receiving remittances, and direct purchases of goods and services. In addition, we report findings from a survey of M‐PESA agents, who provide cash‐in and cash‐out services, and highlight the inventory management problems they face.
In Mayange, a cluster of villages about an hour's drive south of Kigali, Rwanda, interventions by the Millennium Village Project across all sectors (in seeds, fertilizer, malaria nets, health clinics, vaccines, ambulances, water sources, classrooms, computers, cell towers, microloans and lots more) aim to lift villagers out of poverty within five to ten years.
What do we know about the effects of such ambitious projects on the lives of the people living in these impoverished, rural communities? A qualitative study by Elisabeth King, a post-doctoral fellow with Columbia's Earth Institute, produces a fascinating if limited* "snapshot" of social impacts of the Millennium Village Project in Mayange. A few observations:
The villagers King talked to were reluctant to bare all to a foreigner asking questions about delicate social topics. Her questions about quality of life, trust, and social exclusion elicited some contradictory and evasive answers: "Life in Mayange…In general it is not bad, it is not good, it's in between." "I know people well. But then, people are private and one only knows one's own problems." "There are no problems. But there are always some small problems between people though." King explained that in her previous research she found that Rwandans "downplayed negative aspects of social life and tended to embed negative reflections within positive pro-government 'bookends.'"
MVP has good brand recognition and outreach; cooperatives sometimes increase cooperation. King found that the project was well-known among villagers, and almost all could name a change that had resulted from the project. Most were members of some kind of cooperative (farming, basket-weaving, bee-keeping) created by the project, and some described these groups as strengthening social bonds in the community or increasing women's confidence by helping them provide income for their families.
Villagers thought that benefits from the project were unevenly distributed. In response to "Who gained the most from the project?" villagers answered most frequently "MV staff," followed by "local leaders," as well as villagers most willing to adopt new practices suggested by the project.
MVP may not be doing so well on the most basic thing – letting people say what THEY want. The most common suggestion was that the project should consult more with people in the community about what they want. One woman told King: "The MV has to meet with local community to learn more about what people really want because sometimes the MV brings things that the community doesn't need or want. People may have good ideas."
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*King's study is limited in several ways beyond lack of statistical significance (she spoke with 35 individuals and 8 focus groups in a population of 25,000 people). One, as a visiting Westerner asking questions about MVP, she can't avoid being seen as tied with the project. Whether this makes her interviewees more timid in voicing complaints (for fear of losing some project benefit or subsidy), or more bold (in the hopes of gaining resources to address their troubles) is hard to say. Two, the Rwandan ban on talking about ethnic divisions prevents people from speaking candidly about this obvious issue in a place where resettled genocide survivors and released prisoners now live side by side. Three, King has no baseline data, so she can't talk about changes in quality of life or social cohesion based on statements from before the project vs. during/after the project (see also: Clemens and Demombynes).
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Thanks to Michael Clemens for the tweet that sent this study our way.
Read previous posts on the Millennium Villages here.