Saturday, April 30, 2011

Guest Voices: White Gold in southern Chad

Next up in our series of guest posts from Concern Worldwide, we look at a great program that helps to provide income to women in Chad. Program Support Officer Francesca Reinhardt describes a cooperative that helps turn the local Shea nut into white butter for the women to sell to market.

I’m based in a small town called Goz Beida in eastern Chad. It’s a dusty corner of the Sahel, where the bulk of the traffic comes in the form of slow-moving donkeys and camels. It’s an unforgiving environment, but I’m learning things here that I don’t think I could learn anywhere else.

Chad is a vast landlocked country, covering several eco-zones, and some of the highest rates of poverty on the planet. The challenges are enormous. Chad has the world’s highest child infant mortality rate, and is in the bottom five countries ranked by the United Nations Human Development Index. Chad has experienced not only natural disasters, but also civil conflict, the internal displacement of populations, refugees fleeing violence in neighboring Central African Republic (C.A.R.) and Sudan, the Sahel food crisis, drought, flooding, and cholera outbreaks.

This is a country of extremes. Forbidding deserts stretch to the north. People scratch out a living in small villages across the Sahel, fed by transient rivers called wadis that sink into the sand. As you move south, the cattle get fatter, the mud-brick houses get sturdier, and the savannah gives way to flood plains and rice paddies. Keep going and you reach the humid, tropical south. That’s where you’ll find the town of Goré, about 30 kilometres from the border with C.A.R.

With its heavy soils and massive trees, the area looks like it should be rich and fertile, but the struggling villages tell a different story. Goré now hosts 35,000 refugees from C.A.R., and the soil is exhausted. The harvest feeds most families for just seven months of the year. After that, they are reduced to foraging, debt, and hunger. Raw materials are scarce, and few goods are produced locally. Everything from farm tools to cooking oil comes from hundreds of miles away, shipped in on treacherous roads, at exorbitant cost. Plastic goods come on overloaded trucks from Nigeria, trundling along the wrong side of the road to their final destinations; soap and plastic shoes make the trek here from as far away as China.


Ask the women in Goré what they want and they’ll tell you simply that they want their own source of income: “We have to spend so much on so many things, why not make something we can keep ourselves?” says Lydie Nadjilem, a member of Mekasna. Mekasna is Goré’s biggest Shea butter collective, and it also wants to be the richest. “We are looking at land to plant an orchard; this would make it faster to collect the Shea nuts. So far, we have saved 50,000 Cefa [about 100 USD]. That’s already a third of the way there,” says Mekasna’s President, Maris Mokodji.

Shea nuts are indigenous to southern Chad, and have been traditionally pressed into a black oil to add to foods. While nutritious, it has an odor that many find unpleasant. Processing the Shea nuts into a white butter gives it all kinds of household and commercial applications, opening up new income streams for local women. This is southern Chad’s “white gold.” “Soap is the best,” says Maris “because everyone has to buy it. Cooking oil is good too. Otherwise we wait for it to come from Cameroon, and the money goes back to them.” Concern supports Mekasna, along with 21 other collectives, with training and management of equipment for Shea butter production. Concern also provides the collectives with vital training, guidance, and support on financial management and running cooperatives.

“With the white Shea butter, we can do so many more things,” says Maris. “But above all we want the money. We want our own money. You can’t just wait for the boss [the husband] to come up with school fees. You can’t just fold your arms and wait for him to give you money.” She laughs, “You know the day you come to him for money he will say he has none.”

With 50 members, Mekasna can produce 10-15 litres of Shea butter a week—weather and resources permitting. Hauling the water, nuts and fuel, and pounding the nuts is a long and laborious process. Ask the members though, and they’ll tell you it’s worth it. Shea butter sells for around $6 per pound, and it saves women buying costly commercial soaps and oils. While it’s normally hard to compete with industrially produced goods on price, not having to pay transport overheads makes Mekasna’s prices more competitive. With Concern’s help, Mekasna has plans to invest in a motorized mill to raise productivity.

After several years of bad harvests, it’s hard to know what each year holds. Now these women have a backup plan. “I feel better knowing there will be a little money if things go wrong,” says Lydie. “We have money in our savings box and we all take our share so nobody can cheat us. If I have to borrow money in the market, I might not be able to pay it back. I like to know that my money is safe.”

Friday, April 29, 2011

Nigeria's post election violence and what to do about it

Nigeria's latest election was met with widespread violence when people didn't like the fact that the incumbent won. Youths began to set fire to buildings from the President's old neighborhood in the north of the country. The death toll from the post-election violence is estimated to be anywhere from 300 to 500 people.

From this commentary that we found at the Economist, the magazine's editors have a suggestion on what can be done to avoid any future riots.

When Nigeria’s presidential election results started trickling in on April 17th, showing that the incumbent, Goodluck Jonathan, was heading for victory, youths in the country’s north started to burn buildings in protest. The election itself was hailed as an improvement on the rigged and violent polls that have kept the ruling People’s Democratic Party in power for a dozen years. But its outcome has widened old divisions in Africa’s most populous country, home to 150m people and over 250 ethnic groups.

But soldiers and curfews are only a temporary solution. The youths are angry not just because of this month’s election results. Northern Nigerians lag behind their southern counterparts on almost every measure of development, even though poverty blights the whole country. The average annual income of $718 per person in the northernmost 19 states is half the figure in the remaining 17 states, according to UN data. Literacy rates and child nutrition are also poor.

Rather than foster industries, successive governments have relied on the oil revenues of Africa’s largest energy producer for their income. Such neglect has hit the north, far away from the coast’s ports and banks, a lot harder. “If those youths were employed, they would have just gone to work on that Monday morning,” says Ismaila Zango, a sociology lecturer in Kano, the north’s biggest city, referring to the day Mr Jonathan’s victory became clear. “What happened then was just the beginning—unless there is development.”

Many northerners hope the president will make the development of their region a priority, now that it seems to pose a security threat. In recent years the PDP has paid off and tried to rehabilitate and retrain insurgents in the delta, because their attacks have threatened the oil industry that provides around 80% of government revenues. Unrest in the north has bothered those in the corridors of power a lot less. If they were wise, they would change tack.

Video: Uganda politician's arrest sparks riots

From Al Jazeera, a video on continued rioting in Uganda after the arrest of the opposition leader.

Thursday, April 28, 2011

New report finds no improvement in sweatshop working conditions

Sweatshops churning out fashionable clothing became a trendy issue about ten years ago. A new report out today says there has been little improvement since then.

The report on current conditions in textile factories in Philippines, Indonesia and Sri Lanka was conducted by the International Textile Garment and Leather Workers' Federation. The clothing brands behind the sweatshops include just about every major brand name in the industry including Adidas, Nike, Ralph Lauren and DKNY.

From the Guardian, writer Madeleine Bunting unpacks the report for us.

Factories in three countries – the Philippines, Indonesia and Sri Lanka – were surveyed, and not one of them paid a living wage to their combined 100,000-strong workforce. Many of them didn't even pay the legal minimum wage. What the report also makes clear is that this is a gender issue: 76% of the surveyed workforce are women. Globalised supply chains exploit predominantly female labour. It's an irony that probably escapes most of the women who do the bulk of high street shopping in the west. Women shopping for products made by other, underpaid, exploited, women.

What's more, things seem to be getting worse, rather than better. Employment is becoming more precarious as more workers are put on to temporary contracts, day labour, on call rather than with permanent jobs. That enables employers to dodge holiday pay, sick pay and written contracts. Employers also imposed compulsory overtime, lower wages and higher production targets on workers on these short-term contracts.

Such precarious employment makes it harder for trade unions to organise and recruit, because contracts are not renewed if the worker has been involved in trade union activity. On average, 25% of workers in Indonesia were short-term or temporary, while in the Philippines it rose to 85% in one factory, 50% at another.

In Sri Lanka, wages were paid on productivity targets – despite such a practice being illegal. At one factory in Girigara, basic pay was cut if targets set by the management were not achieved. At another factory owned by the same company in Katunayake, workers didn't receive any incentive pay unless the entire quota was reached, but workers reported that the targets were impossible to meet so they never got their bonuses, even if they missed toilet breaks and rest periods to try and reach the target. At other factories, workers were forced to work overtime to meet productivity targets.

The report found that excessive overtime was the "norm" in sportswear and leisurewear factories in Indonesia; workers in all the factories surveyed were doing between 10 and 40 hours of overtime a week. There were incidents of mental and physical abuse when workers failed to reach production targets – in one factory, 40 workers were locked in an unventilated room without access to toilet facilities, water and food for over three hours as a punishment.

Video: Children bear brunt of Libyan conflict

From Al Jazeera, a video that looks at how the fighting in Libya has hurt the education of children.

Small development projects funded by middle income countries

The middle income countries of India, South Africa and Brazil have a joint international development fund to help fund projects for even poorer nations. The annual budget for this fund is only three million dollars. Due to the small budget, the IBSA Fund really tries to make the most of it's development dollar. Total budgets for most projects stay right around a half a million dollars. With US Aid and the Gates Foundation doing a lot of talk about funding projects the bring the most value form their money, there might be some lessons found within the IBSA Fund.

From the IPS, writer Marina Penderis gives us a few examples of projects funded by the IBSA.

The neighbourhood of Carrefour Feuilles in Haiti's capital, Port-au-Prince, has a history of violent gang conflict. In 2006 clashing members of that community were brought together through a waste collection and recycling scheme.

The budget for the initial 14-month project – one of the first supported by the IBSA Fund – was only 550,000 dollars, but IBSA is proud of the return on its investment.

The venture generates employment, reduces incidence of disease, prevents flood risk from garbage-clogged canals and, by recycling paper products into cooking bricks, even has a green effect. IBSA says it also has reduced violence in Carrefour Feuilles – and states that as being the main purpose of the project.

"The project provides a structure for people, who are traditionally from rival groups, to work together," explains Fernando Sena from the Brazilian Embassy in South Africa in an interview with IPS. "It employs 385 neighbourhood residents, including 207 women. Now 150,000 people benefit from improved sanitation."

The Carrefour Feuilles solid waste initiative was renewed after its initial run.

"The earthquake (that hit Haiti in 2010) didn't stop the project," says Sena. "And a study has been done to replicate it in East Timor."

Simultaneous to the first phase of the Haiti project, the IBSA Fund also started working with tiny West African state Guinea-Bissau's ministry of agriculture to train over 4,500 farmers (half of them women) in improved techniques of rice cultivation and citrus fruit and mango production, including in the monsoon-like rainy season. The budget for the first phase of this initiative was 498,750 dollars.

"This project is already in phase two and expanding to more villages," says Sena. "The idea is that the project will also provide solar energy equipment to five villages."

Video: Chinese build new pipeline in Western Kenya

From NTV Kenya, this video shows an example of the China Africa development relationship that we talked about in our previous post.

Wednesday, April 27, 2011

A backlash begins against Chinese business in Africa

We often blog about the relationship between Africa and China, an article that we found today points at some backlash in the relationship.

It certainly would be understood if Africans were uneasy about foreigners coming into their land after years of colonial rule. Despite the unease, China has put more money into developing Africa than any other country in the world. Often the development is a part of a deal to allow Chinese companies to build factories, refineries or farms so they can have a share of Africa's minerals, oil or food.

Increasingly there are questions by locals and opportunistic politicians about how effective China's development has been, and if it has sometimes even hurt local economies. Even with all of the concerns there are a few examples where the relationship has worked to everyone's advantage.

From the Economist, a new article tries to answer the question of why there is a growing backlash.

“Look at us,” says Wang Jinfu, a young factory-owner. “We are not slave drivers.” He and his wife came four years ago from Fujian province in southern China with just $3,000. They sleep on a dirty mattress on the factory floor. While their 160 employees work 40 hours a week, the couple pack boxes, check inventory and dispatch orders from first light until midnight every day of the year. “Why do people hate us for that?” says Mr Wang.

Indeed, China has boosted employment in Africa and made basic goods like shoes and radios more affordable. Trade surpassed $120 billion last year (see chart 1). In the past two years China has given more loans to poor countries, mainly in Africa, than the World Bank. The Heritage Foundation, an American think-tank, estimates that in 2005-10 about 14% of China’s investment abroad found its way to sub-Saharan Africa (see chart 2). Most goes in the first place to Hong Kong. The Heritage Foundation has tried to trace its final destination.

One answer to Mr Wang’s question is that competition, especially from foreigners, is rarely popular. Hundreds of textile factories across Nigeria collapsed in recent years because they could not compete with cheap Chinese garments. Many thousands of jobs were lost.

Quite a bit of criticism of China is disguised protectionism. Established businesses try to maintain privileged positions—at the expense of consumers. The recent arrival of Chinese traders in the grimy alleys of Soweto market in Lusaka halved the cost of chicken. Cabbage prices dropped by 65%. Local traders soon marched their wire-mesh cages filled with livestock to the local competition commission to complain. “How dare the Chinese disturb our market,” says Justin Muchindu, a seller. In Dar es Salaam, the commercial capital of Tanzania, Chinese are banned from selling in markets. The government earlier this year said Chinese were welcome as investors but not as “vendors or shoe-shiners”.

Another answer, according to China’s critics, is that the Chinese are bringing bad habits as well as trade, investment, jobs and skills. The mainland economy is riddled with corruption, even by African standards. International rankings of bribe-payers list Chinese managers near the top. When these managers go abroad they carry on bribing and undermine good governance in host countries. The World Bank has banned some mainland companies from bidding for tenders in Africa.

China’s defenders reply that its detrimental impact on governance is limited. African leaders find it surprisingly hard to embezzle development funds. Usually money is put into escrow accounts in Beijing; then a list of infrastructure projects is drawn up, Chinese companies are given contracts to build them and funds are transferred to company accounts. Africa, for better and worse, gets roads and ports but no cash. At least that is the theory.

A third answer is that China is seen as hoarding African resources. China clearly would like to lock up sources of fuel, but for the moment its main concern is increasing global supply. Its state-owned companies often sell oil and ore on spot markets. Furthermore, its interest in Africa is not limited to resources. It is building railways and bridges far from mines and oilfields, because it pays. China is not a conventional aid donor, but nor is it a colonialist interested only in looting the land.

Video: Nigeria votes despite violence

From Al Jazeera, a video that gives us an update on elections in Nigeria, Voter turnout has been low because of election day violence.

WHO warns of a different type of epidemic for poor nations

The World Health Organization has issued a warning about non-communicable diseases such as cancer and heart disease, and the capacity of poor nations to treat such diseases. A new report from the WHO says that NCDs are the leading killer in the world, with 80 percent of those deaths happening poor nations. The occurrence of those deaths are more frequent than those due to diseases such as malaria, tuberculosis or HIV.

The WHO explains in the new report how NCDs have reached epidemic proportions and warn that the health care capacity in poor to mid-income nations may not be able to cope with the rise in ill-health. From Reuters, writer Kate Kelland explains this portion of the report to us.

It said the epidemic was already beyond the capacity of poorer countries to cope, which is why death and disability are rising disproportionately in these countries.

"As the impact of NCDs increases and as populations age, annual NCD deaths are projected to continue to rise worldwide, and the greatest increase is expected to be seen in low- and middle-income regions," it added.

In many developing countries where the health focus is often on infectious diseases, chronic illnesses are often detected late, when patients need extensive and expensive hospital care.

Most of this care is unaffordable or unavailable, or is covered with out-of-pocket payments which can drive patients and their families into poverty, further risking their health.

Nearly 80 percent of NCD deaths occur in low- and middle-income countries and NCDs are the most frequent causes of death in most countries, except in Africa, the WHO said. Even in Africa, NCDs are rising rapidly and are expected to exceed other diseases as the most common killers by 2020.

Video: Govt. response to Kenyan drought inadequate

From NTV Kenya, a video about a prolonged drought in Northern Kenya.

Tuesday, April 26, 2011

WTO free trade negotiations threaten to collapse

The Doha round of free trade talks are at a grave threat of collapse after 10 years of negotiations. The talks conducted by the World Trade Organization had a goal of opening up rich nation markets to the poor nations. The differences between the rich and poor in making that happen seem to great to overcome. TheWTO will make one more attempt this week before signaling the end of talks.

From the Guardian, writers Larry Elliott and Heather Stewart give us the details.

After months of stalemate, the World Trade Organisation has set a deadline of Friday for the leading players to cut a deal in the key area of industrial tariffs. Pascal Lamy, the WTO's director general, described the situation as "grave" after seeing no signs of a breakthrough since the start of 2011.

He had said it was crucial for progress to be made by Easter if there was to be any chance of completing the round by the end of this year. In a clear warning about the state of the talks, Lamy said negotiators should "think hard about the consequences of throwing away 10 years of solid multilateral work".

"This is the diplomats in Geneva raising the white flag," said Jeffrey Schott, a fellow of the Peterson Institute thinktank and a former US trade negotiator. At the G20 summit in Seoul last year, world leaders committed themselves to completing the long-running talks, but Schott said "the G20 leaders have dropped the ball on this".

With little evidence that the leading developing nations – China, India and Brazil – are prepared to bow to US and European Union pressure to make deeper cuts in the protection offered to their manufacturers, the mood at the WTO's Geneva HQ was sombre this weekend. Lamy is expected hold a series of informal "green room" discussions on Thursday before calling trade negotiators together on Friday, but few in Geneva are expecting a breakthrough.

Europe's trade commissioner, Karel de Gucht, said "there is no reason to be optimistic at this moment in time" and that it was time to start thinking about a "plan B" should the talks collapse.

ADB says 64 million could drop below poverty line

A new study from the Asian Development Bank looks at the effects of rising food prices in the region. The ADB says that another 64 million people could be pushed below the poverty line because of the record high food prices. So far in 2011, Asian prices for most basic food staples climbed by an average of 10 percent.

From the Hindustan Times, we find out more about what the ADB says in their report.

"For poor families in developing Asia, who already spend more than 60 per cent of their income on food, higher food prices further reduce their ability to pay for medical care and their children's education," ADB chief economist Changyong Rhee said.

The report said the fast and persistent rise in the cost of many Asian food staples since the middle of last year, coupled with crude oil reaching a 31-month high in March, are a serious setback for the region, which has rebounded rapidly and strongly from the global economic crisis.

As per the report, if the global food and oil price hikes seen in early 2011 persist for the remainder of the year, economic growth in the region could be reduced by up to 1.5 percentage points.

"Left unchecked, the food crisis will badly undermine recent gains in poverty reduction made in Asia," Rhee added.

The short-term outlook looks bleak, as food prices are likely to continue with their upward trend because of factors such as production shortfalls, rising demand for food from more populous and wealthier developing countries and shrinking available agricultural land, the report said.

Video: Rio's poor worried about redevelopment

From Al Jazeera, a video on the planned demolition of shanty towns in Rio de Janeiro to prepare for the World Cup and Olympics.

Monday, April 25, 2011

Bangladesh concludes investigation on Muhammad Yunus

The Bangladeshi government has concluded their probe on Muhammad Yunus and his Grammen Bank. The findings of the investigation contain a mixed bag or results. The probe has cleared Yunus of any allegations of evading taxes. However, they did uphold the central bank order that Yunus must quit his post at Grammen Bank due to advanced age.

From the Guardian, we find the government's statement on concluding the probe.

Yunus denied any wrongdoing and a Norwegian government investigation later also cleared him of any malpractice.

The Bangladeshi finance minister, Abul Maal Abdul Muhith, told reporters on Monday that a committee appointed by the government to investigate Grameen Bank's operations had also found no evidence of financial irregularities.

But officials and experts said the finding would have no impact on the government's decision to fire Yunus as the bank's managing director, because he had overstayed the official retirement age for bank managing directors in Bangladesh of 60 years.

Associates of Yunus say his removal was government retaliation after he briefly considered a political career to challenge the prime minister, Sheikh Hasina.

Guest Voices: Battling Africa’s Number One Killer

Our next installment of guest posts from Concern Worldwide marks the occasion of World Malaria Day. Concern Health Adviser Jennifer Weiss writes about some of the ways that Concern battles malaria infection in children and pregnant women.

According to estimates from the United Nations and the World Health Organization (WHO), nearly one million children do not reach their fifth birthday because they die from malaria each year. Ninety percent of these deaths occur in Africa, where malaria remains the number one killer of young children. An additional 30 million pregnant women and their newborns are also at risk of malaria infection, which may lead to stillbirth, spontaneous abortion, low weight, and neonatal death.

Pregnant women and children die from malaria because they lack access to low-cost, effective solutions to both prevent and treat the disease. Concern is working to change this through our USAID-funded Child Survival programs in Rwanda, Burundi, and Niger, which provide life-saving malaria prevention and control to a total of 1.2 million women and children.

The most obvious way to control malaria is to protect people from being bitten by malaria-carrying mosquitoes in the first place. People are at the highest risk of being bitten at night, while they are sleeping. Therefore, sleeping under a mosquito net, which is treated with a long-lasting insecticide, is a simple solution with dramatic results: at an average cost of about $10, long-lasting insecticide treated bed nets have been shown to reduce malaria transmission by 90 percent.

Concern works with local partner and governments to provide long-lasting insecticide treated nets to the people that need them the most: pregnant women and children under 5 years of age. Concern’s cadre of Community Health Workers then provides one-on-one counseling during household visits to further encourage parents to have their young children sleep under the bed net, and answer any questions or address any challenges the family may be facing in their use.

In Rwanda, Concern’s Child Survival Program is on target to ensure that 85 percent of all households own at least one bed net, and that pregnant women and children under the age of five are sleeping under them each night.

Another life-saving prevention technology recommended by WHO is to provide all pregnant women with at least two preventive treatment doses of an effective anti-malarial drug during routine antenatal clinic visits. Intermittent preventive treatment (IPT), as it is called, has been shown to dramatically reduce maternal anemia and low birth weight, and other adverse effects of malaria during pregnancy. However, many country governments are struggling to provide this service to all pregnant women during their antenatal care visits.

In Niger, Concern’s Community Health Workers are educating mothers about the importance of IPT, and the program is training health facility staff to provide IPT, in order to ensure that 70 percent of all mothers received the recommended two doses of IPT during their last pregnancy.

However, in 2009, only 35 percent of malaria cases were confirmed with a diagnostic test, which requires a skilled laboratory technician and appropriate equipment. Therefore, the majority of malaria diagnoses in sub-Saharan Africa are based on symptoms alone—many of which (fever, difficulty breathing, reduced appetite) are also symptoms of pneumonia. Treatment of pneumonia alone may result in death from malaria, while the unnecessary, ‘presumptive’ treatment of malaria may result in malarial drug resistance.

However, in 2010, the World Health Organization, approved the use of a a new technology, called Rapid Diagnostic Tests (RDTs), which health facility staff may use to make malaria diagnosis without the use of sophisticated laboratory technologies.

In Rwanda, Concern is partnering with the Ministry of Health to conduct the initial roll-out of this ground-breaking tool, and is already seeing improved results: from December 2010-February 2011, Community Health Workers saw a total of 2,944 cases of fever. With the help of RDT, 33 percent were confirmed as cases of malaria and treated accordingly.

For many people, even if a child has been diagnosed with malaria, the nearest health facility is a several hours’ walk away, and parents may not seek treatment until it is too late. Concern’s Child Survival programs bring malaria treatment directly to people who are most vulnerable through an approach called “Community Case Management.” Concern trains Community Health Workers to screen for and treat simple cases of malaria with locally available, effective and safe anti-malarial drugs.

Through the Community Case Management approach in Burundi, Concern is working to increase the percentage of children treated with an effective anti-malaria drug within 24 hours of registering a fever from 26 percent to 60 percent.

Following treatment, the Community Health Worker monitors sick children, and, if they are not improving, ensures that they seek further treatment from the health facility immediately.

Much work remains to be done if we are to significantly reduce the rate of death from malaria worldwide. Concern is contributing to the fight against malaria through the application of proven solutions, as well as new technologies, to reach those most vulnerable to malaria. Preventing the huge numbers of child deaths from malaria that occur each year is no longer an impossible dream.

World Malaria Day is this Monday April 25, 2011. Together, we can save millions of lives.

"Bottom of the pyramid" marketing

Social Businesses that target people at the "bottom of the pyramid" with products and services have a very tricky path ahead of them. The examples of social businesses who have done it successfully are very few.

From the magazine Miller-McCune we are introduced to a University class that has the sole purpose of developing products for the poor. Writer Vince Beiser says the students at this Stanford class conduct a very unique method of market research.

The class, dubbed “Entrepreneurial Design for Extreme Affordability,” is premised on a counterintuitive idea: You can enrich the poor by selling them stuff. It brings together teams of graduate students from business, design, engineering and other disciplines to research a specific problem in developing-world communities, design a product to address it, and then, with the help of local and international organizations, sell that product as cheaply as possible to as many people as possible. The course has yielded some impressive results. Students have designed low-cost solar-powered lanterns, extra-efficient irrigation pumps and other useful products now being used by tens of thousands of people from India to East Africa.

“We are not treating the poor as recipients of charity, but as customers,” says Jim Patell, a professor at the Stanford Graduate School of Business who founded the program. “That means you need to figure out what they really want. That means treating them as equals. Charities don’t have to do that.”

For decades, the main model of Third World aid has been the obvious: Give stuff to poor people – be it hydroelectric dams, surplus food or medical equipment. But Western countries have poured some $1.5 trillion into such efforts over the last 60 years, and more than 1 billion people worldwide still live on less than a dollar a day.

The Extreme Affordability program is an experiment with a dramatically different approach to fighting poverty, one that in recent years has generated tremendous buzz among academics, development workers, entrepreneurs and corporate executives. It’s called “bottom of the pyramid” marketing. The idea is to harness capitalism to solve the problems of the world’s poorest — those at the bottom of the global economic pyramid. If you design a useful product for a market rather than for charity’s sake, the theory goes, the target population is more likely to actually want it and use it. If businesses can turn a profit making that product, it not only creates jobs but will keep getting made even if Western donors lose interest. And there should be colossal profits to be made: The world’s poor don’t have much money individually, but there are billions of them.

Get rich by helping the poor. It’s a powerfully alluring idea. A surge of books, symposia, blogs and corporate annual reports champion it. Major organizations, including the World Bank and the United Nations Development Program, have set up programs that support it. Venture capital funds are giving millions to startup firms trying to implement it. MIT, Penn State, Cornell and other top universities in the U.S. and other countries are teaching MBA students about it. “It’s picking up, big time,” says Luiz Ros, manager of a $250 million Inter-American Development Bank fund dedicated to supporting bottom-of-the-pyramid ventures.

But all of that reasoning holds true only if one major condition is met: The business must actually be profitable. For several reasons, profit is where the bottom-of-the-pyramid principle runs into trouble in practice.

First, it’s hard to make a quality product that’s cheap enough for poor people in the developing world to buy. D.light’s lanterns, for instance, cost from $10 to $45 – a major outlay for someone living on $2 a day. “It’s not yet at a price where most of the people we’re targeting can afford it,” Estrada admits.

Distribution is also a massive challenge. “Companies here can just assume that FedEx or a trucking company will carry their products to wherever they need to go,” Coulson says. But in the developing world, there’s no guarantee that there will be trucks to move your goods — or even roads for the trucks to drive on. Coulson once visited a village in Indonesia that wanted to install a micro-hydropower station to generate electricity from a nearby river. “It was an eight-hour jeep ride from the nearest town and then another mile from the asphalt, and then you had to cross a rope bridge over the river to get to the village,” he says. The generator had to be designed in pieces small enough to be carried by hand over the bridge.

Market research, a key component of any business plan for the Western world, is another hurdle. Bottom-of-the-pyramid consumers often lack the education to answer written surveys, and the marketplace has few comparable products from which to extrapolate potential sales. “Solar technology is a brand-new concept for most of our customers,” says Dorcas Cheng-Tozun, a D.light spokesperson. “Some have never even seen electric light before. Our marketing efforts have to incorporate an extra level of information that helps our customers understand what the product is, how it is used and how it can benefit them.”

As a result, so far, there are precious few major success stories for bottom-of-the-pyramid products. “Only a handful of enterprises in low-income markets are commercially viable and operate at scale,” note the authors of a 2009 study by the Monitor Group, a Cambridge, Mass., corporate consulting outfit. With all that in mind, Aneel Karnani, a professor at the University of Michigan’s Steven M. Ross School of Business, concluded in a 2010 paper that “there is no fortune at the bottom of the pyramid. Marketing socially useful products to the poor offers only limited business opportunities.”

Hart draws a different conclusion: Businesses have been doing it wrong. Most corporations that have tried selling to the bottom of the pyramid have done so simply by making cheaper versions of their existing products, he says. “That doesn’t work well,” he says. “What we’re discovering is we need to move from a mentality of finding the fortune at the bottom of the pyramid to creating the fortune with the bottom of the pyramid.”

To create products the developing world will buy, Hart says, companies must more or less do what Patell does: send their people into urban shantytowns and rural villages so they can connect with locals and figure out what they really want and how it can be made and sold to them — with the help of local entrepreneurs. He has even developed a research protocol to guide companies through this process.

There are at least a few clear-cut cases of corporations doing very well with, while also doing good for, the bottom of the pyramid. The astonishing proliferation of cell phones throughout the developing world is the standout example. Eight million new users sign up for mobile service in India alone every month; more than 60 percent of the population already has one. China’s biggest mobile carrier boasts more than half a billion subscribers.

Video: High food prices dampen Easter mood

From NTV Kenya, a look at how Easter was celebrated in Kenya's slums.

Friday, April 22, 2011

Investigating how Mubarak amassed his wealth

Hundreds of Thousands in Tahrir Square
Image of Egypt's Tahir Square by Ramy Raoof, found at Flickr Creative Commons.

One of the reasons the people of Egypt demanded the ousting of President Hosni Mubarak was because of corruption. They say Mubarak, his family and his close circle of friends become richer and richer, while no one else could. With Mubarak gone, a team of lawyers have begun an investigation into the corruption and hope to recover the riches and return the money to Egypt.

We focus on corruption stories from time to time because it does affect the lives of the poor. Mubarak amassed billions in wealth through kickbacks and awarding government contracts to his friends. All of that money could have been used to further develop Egypt. The less corruption a country has the easier it is for the poor to move up the economic chain. The people who protested in Egypt found that it was impossible to do so.

From the Inter Press Service writer Cam McGrath tells us about the investigation into Mubarak's sources of wealth.

"Mubarak’s wealth is in the billions in a country where over 40 percent of the population live in poverty," says Ahmed Sakr Ashour, a professor of business administration at Alexandria University. "The huge contrast shows that the president abused the authority of his position to enrich himself."

Egypt’s interim government has launched the largest corruption probe in the nation’s history to identify, sequester and – it is hoped – recover Mubarak’s illicit fortune. Investigators are working with local corruption watchdogs to follow the money trail, while foreign governments have been asked to freeze the former ruling family’s overseas assets.

"You can’t imagine the number of people stepping forward with information," says Marghany, who recently joined the Egyptian Legal Group for Redemption of the People’s Wealth (ELGRPW), an ad hoc group of lawyers and jurists seeking restitution of Mubarak’s ill-gotten gains.

ELGRPW is appealing to whistleblowers and using its worldwide network of professional associates to help investigators untangle the complex web of shell companies, anonymous trusts and offshore bank accounts. The group claims to have renowned corruption investigators and "the high priests of corporate law" on its ticket.

Investigations have revealed that Mubarak, a former air force commander, sat at the top of a pyramid of corruption that extended all the way down to the lowest civil servant. But it was the privileged few – family and friends in the top tiers – who benefitted most from their proximity to the "Pharaoh," as he was often called.

"To operate any successful business in Egypt required taking on the Mubaraks or one of their proxies as a partner," a Cairo-based financial expert told IPS. "If you cooperated, you were given a virtual monopoly over your domain; if you refused you were run out of business, or worse."

While relatively little is known about how Mubarak accumulated his personal fortune, a clearer picture has emerged about the illicit dealings of his family.

"The real shock is not the wealth of Mubarak himself, but what his two sons have been able to accumulate over the last 25 years," says Ashour. "From the time they graduated they entered into shady business dealings and exceeded their father in terms of corruption."

Alaa Mubarak, 49, and his younger brother Gamal, 47, are currently being held for investigation in a high-security prison south of Cairo.

According to Ashour, Alaa was the first to wade into business, taking shares and kickbacks in high- profile transport, construction and real estate projects. But his "mafia-style" dealings were soon overshadowed by those of his more financially savvy brother, Gamal, who after working as an investment banker in London, returned to Egypt in the late 1990s to begin a meteoric rise up the political ranks.

In Feb. 2000, Mubarak appointed Gamal and a number of his business associates to the general secretariat of his ruling National Democratic Party (NDP). Gamal was later promoted to head the NDP’s powerful Policies Secretariat, fuelling assumptions that Mubarak was grooming his son as his successor – a charge the family has long denied.

Video: Nigeria violence escalates

From Al Jazeera, a video on the escalating post-election violence in Nigeria and the humanitarian crisis it has caused.

Thursday, April 21, 2011

Has the time come for the Robin Hood Tax?

From Wikimedia Commons

An idea that many advocates for the poor have been campaigning for is the so-called "Robin Hood Tax." The idea should finally see some recognition by the powers in the international community this year. France is now behind the idea and plans to talk about it when they chair the G-20 meetings later this year.

The Robin Hood Tax would tax a small percentage on international finance transactions. This would be the trading and speculating that deals with currencies. The idea is gaining traction with governments because they feel the tax would help the value of their money from being at the mercy of speculators. Current proposals for the tax only call for the rate to be at 0.05%.

From the Guardian comment section, writers Duncan Green from OXFAM and Ha-Joon Chang from the University of Cambridge say that the time has come for the Robin Hood Tax. Green and Chang compare the tax to the establishment of the income tax in Britain during the 18th century.

The same destiny may now await the Financial Transactions Tax (FTT) – or Robin Hood tax, as it is widely known. Although the French government, which chaired meetings of the G20 finance ministers and the IMF/World Bank member states last weekend, supports a global FTT, American opposition means that initial progress is more likely within a smaller "coalition of the willing", including France, Germany, and South Africa. French and German support may ensure that the eurozone is the first international forum that agrees an FTT.

Even a decade ago, when it was doing the rounds under the alias of "Tobin tax" (named after James Tobin, the Nobel laureate economist who first raised the idea), the levy was an absolute taboo in polite society. But after the great financial crash of 2008, the case for it is looking "obvious" to many, as indeed the income tax did in the late 19th century. Its time, too, has come.

This levy on financial transactions, even at the very low level that is currently proposed (0.05%), is expected to slow down the most speculative elements of international capital flows and raise the significant sums needed to provide the newly required global collective goods – especially green technologies and development aid.

Of course, the FTT alone will not achieve much in terms of stabilising our financial system. It needs to be implemented as a part of a comprehensive package.

First, countries that cannot issue "hard currencies" should be allowed to use capital controls. The significant change of position by the IMF in this regard following the 2008 crisis is encouraging, but capital controls should be seen as normal policy tools – rather than a measure of last resort, as the IMF still suggests.

Second, we have to reform the rating agencies. Despite their incompetence and even cynicism, revealed both in the 1997 Asian crisis and in the 2008 crisis, these agencies are still deciding what is a good financial asset and dictating how governments should conduct their policies – not just fiscal policies but also monetary and social welfare policies. They need to be regulated more heavily, and a non-profit public agency should be set up to provide a credible alternative to their ratings.

Third, if we are serious about the revenue implications of our financial policy, tax havens need to be reined in, if not totally abolished. That single act would generate sums on a par with a global FTT.

Last but not least, overly complex financial instruments should simply be banned, unless they can be shown by their inventors to bring significant net benefits in the long run, in a manner similar to the drugs approval procedure. Otherwise our ability to manage the system will be outstripped and we will repeat the crisis of 2008.

Blemishes and blessings in the Nigerian elections

From IRIN, a story that has more details on the latest election in Nigeria and the violence that may still come from it.

Analysts say the initial round of parliamentary elections, which began on 9 April, have been more transparent than the country’s past three elections, which were marred by violence and irregularities, but nonetheless, evidence of candidates in some towns employing desperate measures, including vote-buying, has emerged.

According to Shehu Dalhatu, director of the Centre for Democratic Research and Training (CDRT) in the northern city of Kano, candidates for the 9 April legislative elections recruited agents who hung around a few metres from polling stations offering money for votes. In some cases candidates demanded Muslim voters swear on the Koran that they would not change their mind once in the polling booth.

Akibu Dalhatu of Transition Monitoring Group (TMG), a local group in Jigawa state that has been involved in election monitoring in Nigeria since 1999, told IRIN that when monitoring the polls: “I witnessed politicians [in villages in Jigawa] openly offering money to voters at polling stations to cast their votes in favour of their candidates and many voters took the money with the promise to vote for the politicians’ candidates.”

“Most of the voters approached were women who are mostly illiterate with no voter education and therefore more gullible to such offers,” he told IRIN.

Politicians also went door-to-door offering food, soap, clothes and money to potential voters, residents of the northern city of Kano told IRIN. “I was offered a wax fabric and 500 naira [US$3.3] which I collected, but I voted for the candidate of my choice,” Fatima Musa, a 35-year-old voter in Kano, told IRIN.

In previous elections, voters in northern Nigeria would often wear leaves on their heads to advertise that their vote was for sale, and would openly haggle with candidates’ representatives over the price.

The practice is evidence of disillusionment with the elections’ process. “After voting several times, and their electoral wishes have been flaunted through election rigging, many voters feel their votes do not count and will take money to vote,” TMG director Festus Okoye told IRIN. “Coupled with excruciating poverty and illiteracy, these voters would readily part with their votes for some paltry financial gain.”

Yahaya Badda, a 65-year-old farmer in the northern city of Sokoto, declared his vote was for sale.

“I have been voting since the 1960s during the first republic, but good leaders have deserted Nigeria since then, and now my vote is for sale... I’m ready to give my vote for 2,000 naira [$13] which is better than wasting my time in casting a vote that will not count.”

Nick Dazen, spokesman for Nigeria’s Independent National Electoral Commission, told IRIN: “We are aware that some people do sell their votes, but the electoral law doesn’t empower us to sanction [punish] such people. The best we can do is to appeal to their patriotic instinct not to exchange their votes for money and ensure they vote for the right candidate.”

More transparency

Despite irregularities in some cases, Nigerians are more engaged in this elections’ process than they have been in previous years, said Nasir Abbas, a civil society activist with the Civil Rights Congress in the northern city of Kaduna.

"Procedurally, [elections in Nigeria] used to be an affair of thuggery. Street vagabonds were put in charge of this [rigging and intimidation] and a lot of upper class citizens didn't go out to vote… [But] the ruling People's Democratic Party (PDP) has been unpopular [in recent years] so now a lot of people are voting… Elites, the downtrodden... people are determined to have an upright process,” said Abbas.

Civil society watchdog groups including the Abuja-based coalition known as the Elections Situation Room, say electoral reforms initiated under the leadership of respected elections commission chief Attahiru Jega have enabled greater transparency in the 2011 polls. International observer groups also praised the polls as the most credible since 1999.

One of the new regulations allows voters to remain at the polls after casting their ballots in order to observe the counting procedure, making it more difficult for fraudsters to manipulate the results. In other cases, observers have used SMS technology to report real-time on irregularities.

Presidential race

However, Oladayo Olaide of the Open Society Institute in the capital, Abuja, said victories of opposition candidates in the country's commercial capital Lagos and in some areas of the "core North" could push the ruling PDP to "become more desperate, which could mean [the party] could come out with new tricks" on 16 April when the presidential elections take place.

It is not beyond the ruling party to employ "all manner of tricks” if politicians feel their power could be taken by voters casting ballots against them in the upcoming polls, said Olaide.

Given the simmering Muslim-Christian tensions in many Nigerian cities - including Kaduna in 2002, and more recently, Jos - a spike in conflict related to the outcome of the presidential vote is not out of the question, especially given that many citizens blame their own political leaders for prolonging the crisis in the Middle Belt region.

At least 70 people were killed in political violence in the run-up to the current elections, according to Human Rights Watch, while more than 14,800 have allegedly been killed in inter-communal, political and sectarian violence in the past 12 years.

On 16 April voters will choose between President Goodluck Jonathan from the southern Niger delta region, and his two main rivals, both from the Muslim north - Muhammadu Buhari and Nuhu Ribadu.

A look US charity oversight in light of the Greg Mortenson allegations

From Wikimedia Commons

The story about Greg Mortenson has raised questions into oversight of non-profits in the US. It is alleged that Mortensen printed false tales in his book "Three Cups of Tea" The state of Montanta is about to begin an investigation on Mortenson's charity Central Asia Institute over improper use of funds raised mainly fuel his personal book tour.

When any charity files for tax-exempt status, the IRS usually accepts them without much investigation. So a charity that does little to no actual charitable work can be accepted and begin raising money. Experts say that laws already in place need to be better enforced to prevent any future charitable fraud.

From Reuters, writer Michelle Nichols has this anaylsis of US charity oversight.

U.S. tax authorities grant groups charitable status, which exempts them from taxes, and require most to file annual informational tax returns, but experts say the main source of regulation faced by nonprofit groups is at state level from the attorney-general.

"The problem is that very few states have put the resources they should into this part of the attorney general's activities and the quality of regulation ... varies," said Leslie Lenkowsky, a professor of public affairs and philanthropic studies at Indiana University.

U.S. tax authorities reject very few applications by groups wanting to become charities, but making it more difficult would raise concerns about what criteria would be used to determine a nonprofit and could hinder efforts by groups to do good.

There are several independent charity watchdogs such as Charity Navigator and the American Institute for Philanthropy, where donors can get advice about larger nonprofit groups.

But their views can differ. The institute wrote a critical report about Mortenson's Central Asia Institute, while the Navigator gave it a top four star rating and then added a donor advisory warning when concerns about the group were raised.

"The vast majority of donors are looking for information that is readily available; they don't have a lot of time to do research for their charitable giving," said Ken Berger, chief executive of Charity Navigator.

"We're trying to oversee what is basically a $2 trillion part of the American economy -- one out of every 10 jobs -- 10 percent of GDP, and we are a very small operation," he said. "Creating further regulation would not be viable unless we get serious about enforcing existing law more rigorously."

Video: Fear of further violence in Nigeria

From Al Jazeera, a video that brings us the latest on the political fueled violence in Nigeria.

Wednesday, April 20, 2011

Guest Voices: Putting Food First to Avert a Crisis for the Poor

Next up for our series of guest posts from Concern Worldwide, we have a commentary written by Chief Executive Officer Tom Arnold. After the G-20 finance minister meetings both the World Bank and the IMF made statements about escalating food prices. With prices now at record highs, Arnold warns that time to act is now to prevent another crisis.

Last Friday April 15—as part of the Spring Meetings of the World Bank and IMF in Washington, DC—I was a panelist in a groundbreaking global conversation, the Open Forum. It was a unique opportunity for a small group of experts to engage not only with each other, but with 3,000 participants in a concurrent 24-hour chat, and people from 91 countries who had submitted comments and ideas online before the event. The topic was the food crisis—crippling market volatility whose net effect has been a sustained increase in food prices, wreaking havoc on the world’s poor.

This was no staid academic exercise. It was an invaluable part of a larger conversation that grows more urgent by the day because each day, more lives hang in the balance. As World Bank President Robert Zoellick starkly put it, “we’re one event away from a very serious crisis.”

Some might argue that we’re at that point already: according to the World Bank, since June 2010 another 44 million people have fallen into poverty because of the spike in food costs; every minute another 170 people join the ranks of the extremely poor—those who spend on average 85 cents of their daily budget of $1.25 on food. The Open Forum provided an excellent opportunity to draw the world’s attention to how terribly vulnerable the world’s poor are.

It’s high time for decisive action in rolling out the short-term and longer-term measures called for by the Forum’s panel and online participants.

Right away, we must launch targeted nutrition interventions for the most vulnerable. In this context, both the international Scaling Up Nutrition (SUN) Framework for Action and Roadmap and the “1,000 Days: Change a Life, Change the Future Call to Action” (a joint US-Irish initiative) can point the way. Research shows that proper nutrition in the first 1,000 days of a child’s life—from conception to two-years-old—is crucial in ensuring proper physiological development.

In addition, more social protection schemes must be put in place in those countries and settings with the financial means and technological capacity to do so. Putting cash in the hands of poor families can help keep local food markets alive and avert serious food security crises. Such was our experience last year in Niger, where we used mobile phones to distribute emergency cash after crops fell short in the wake of a prolonged drought.

Long term, there has to be significant investment in agriculture and the entire food process, from harvesting and processing farm products to sale in the marketplace. This means making sure that farmers have the seeds and tools to get ready for the next planting season; and to repair and build roads and bridges so that crops can be brought to market. Along the way, small farmers also need tutoring in the fundamentals of sales practices.

We also need to invest in agricultural research to find ways to boost crop yields—more food has to be grown on the same amount of land. This will require scientific breakthroughs.

At the same time, we must do something to curb the wild fluctuation in food prices, an issue the G20 has agreed to take on in November. Perhaps there needs to be more regulation at the international level with regard to commodity speculation. A number of mechanisms will be considered. Nothing has been decided at this point, but at least we are taking a hard look at the harsh reality of food price volatility.

The G20 will also discuss the fact that many developing countries put a food export ban in place in the wake of the 2008 food price crisis. Such measures were taken to ensure that local populations would have access to food—but it has turned that such protection had an adverse effect on the international market, narrowing the field and actually contributing to rising food prices. Food trading must be kept reasonably open, so it seems, but specifics will come out later in the year.

There won’t be a simple solution. What’s called for is a combination of carefully chosen and calibrated measures. What has become crystal clear, however, is the importance of the participation of civil society—NGOs included—in developing solutions and putting them into practice. These are not issues governments can or should handle on their own. In the run-up to the World Bank’s spring meetings, Mr. Zoellick had said that “our message to our clients, whatever their political system, is that you cannot have successful development without good governance and without the participation of your citizens.”

The World Bank president was speaking in the context of political developments in the Middle East and North Africa, but his words apply across the board. Already back in 2009, coming out of the meeting at L’Aquila, Italy, the G8 launched the Global Partnership for Agriculture and Food Security, which affords civil society a critical role in designing development programs alongside responsibilities in matters of governance.

Now is the time to give this fresh approach concrete shape. Civil society must have a real voice at the table because it represents the very practical needs of ordinary people, especially the very poorest. It is for their sake—and ultimately for the common good of all—that all the stakeholders must genuinely work together.

We must act now, collectively and urgently. If the food riots of 2008 are any indication, failure to do so could have very dire consequences.

Deadly riots in Zambia “send a bad signal”

From IRIN, a story about riots in Zambia that were sparked by rumors about local businessmen.

Three people were burned to death in vicious riots earlier this week in Mansa, provincial capital of northern Zambia's Luapula Province.

Two Zambians and a Congolese national had car tyres and plastic bags hung around their bodies before being set ablaze by irate Mansa residents after a local radio station, Yangeni, broadcast rumours that local business people had hired ritual killers to abduct children and use their body parts to make charms that would boost their wealth.

Police refuted the reports but residents started a manhunt targeting local businesses, some of which were broken into, looted and burned.

"These rich people here have been getting rich because of the blood of our children," said an irate youth wielding a machete. "We don't want them here... We are going to kill all of them and get back all their riches because they are making us poor."

The Congolese man who was burnt to death had owned a number of businesses in Mansa, including one offering high-interest loans, while the Zambians were accused of capturing people and committing the ritual murders for him.

Sanaula Ibrahim, the only Indian businessman in Mansa, was also implicated in the ritual murders and targeted, but managed to escape before protesters broke into and looted his chain of five shops, and set his house on fire.

He later told IRIN: "I am safe now, though with some injuries. I can't say where I am [and] can't comment on those allegations just now."

Francis Kabonde, Inspector General of the Zambia Police Service, dismissed the rumours of ritual killing as unfounded and warned that rioters would be brought to book. The police have since picked up over 70 suspects in connection with the riots.

"This rumour is not true because one of the deceased has been identified as a pupil at one of the schools, while the other is a farmer. What is even sadder is that there is no report of any person murdered for rituals," he told local media.

Real cause unclear

A Mansa-based economic analyst, who declined to be named for fear of being targeted, said the riots had less to do with the rumours of ritual killings and more with the high levels of poverty and unemployment in the region.

"These rumours of ritual murders are just a scapegoat. The people here have been frustrated by years of poverty, the absence of industries, and the lack of jobs,” he told IRIN.

"If the reasons for the riots were genuine, these people would have just been burning these properties... but they are always starting by looting,” the economist noted.

"This thing of saying the richest people are practicing satanism, black magic, killing people and stuff like that is just a façade. People are just desperate for a solution out of their poverty, and this is why they are now targeting the rich."

Luapula is one of the poorest of Zambia's nine provinces, with some of the gloomiest social indicators: the provincial poverty level is 73 percent compared to the national average of 64 percent, and only three percent of its 800,000 people have access to formal jobs, according to the 2008 Labour Force Survey Report by the Central Statistical Office.

One of Mansa's few large industries, a battery factory, closed in the 1990s, leaving thousands of people jobless and deepening poverty.

"The government would do well to come up with deliberate programmes that would empower the people of Luapula Province and create jobs - then we would stop seeing these kinds of economic-based riots," the economist said.

Other analysts IRIN spoke to disagreed that the riots were motivated by poverty. Oliver Saasa, an economic analyst based in the capital, Lilongwe, pointed out that similar incidents had occurred in Mansa before.

"Anything that's associated with suspected ritual killing, the reaction is instant and almost uncontrollable," he said. While it was common for people in rural areas like Mansa to complain of poverty, he added, they rarely reacted violently.

Simon Kabamba, president of the Luapula Chamber of Commerce and Industry, told IRIN the riots could have far-reaching consequences for the regional economy.

"As it is, the town is shut - completely 100 percent shut. The markets are not working, no shops are working, no banks are working; and this is the provincial headquarters,” he said.

"Our biggest businessman [Ibrahim] has had all his properties damaged... Now, which businessman would like to come and do business in Mansa? Every successful person is being suspected, and this is sending a very bad signal to all potential investors."

Video: Living below poverty line in Georgia

From RT, a video about a widespread poverty problem in the Asian country of Georgia.

Video: Greg Mortenson told lies to sell book

From Al Jazeera, their take on the Greg Mortenson story, especially the kidnapping by the Taliban tale.

Tuesday, April 19, 2011

A chance to reform microcredit, if they want to do it

After the Andhra Pradesh suicides, microcredit has a chance to reform itself and continue to spur on positive change. A commentary we found today takes a look at economic crises of the past and how it spurred positive reform. Microcredit has the same opportunity ahead if it does want to reform itself. Writer Oscar Abello from the Center for International Private Enterprise presents the challenge that is ahead.

After the 1997 East Asian Financial Crisis, development finance institutions in East Asia knew that they needed to restore investor confidence and get economies back on the market-oriented growth path that has reduced more poverty than in any other region in the world. Led by the Association of Development Finance Institutions in Asia and the Pacific (ADFIAP), their collective response was to strengthen corporate governance in the region, starting with themselves.

With a collectively-built corporate governance rating system, region-specific training materials and the ADFIAP-housed Institute for Development Financing to support and conduct regular risk management and governance seminars for staff and board members (more info on, development finance institutions got themselves on track to strengthen corporate governance in the region by serving as the standard to which they held their client networks accountable.

After the Andhra Pradesh crisis, its largest to date, can microfinance follow in the footsteps of development finance institutions? Though not inclusive of all microfinance providers, there are about $26.9 billion in deposits and $65 billion in loans on the balance sheets of the 1,933 microfinance institutions reporting to the Microfinance Information Exchange as of writing this post – and those numbers have been growing about 20 percent a year. Microfinance providers are thus emerging as new economic hubs.

By serving as examples of effective corporate governance, microfinance providers could succeed where so many financial institutions have repeatedly failed, and in so doing could ‘infect’ their client and community networks with the ‘disease’ of strong corporate governance. With almost three billion unbanked people still to reach, those are huge potential networks to infect.

Such an epidemic would be good for reducing poverty, as it would serve to attract investment into new and growing businesses. It would be good for financial sectors around the world trying to end the succession of financial scandals and crises. It also would be good for new or struggling democratic states, once more transparent financial sectors within countries take over development financing from international institutions.

If they got their corporate governance act together, microfinance providers could ignite a good governance epidemic. But that’s a big if.

Subsidies not the only answer for Malawi's farmers

From IRIN, a story about some inconsistencies found in the seed and fertilizer subsidy program for Malawi's farmers.

It is almost harvest time in Mzimba district, northern Malawi, but Saliet Nyasulu's maize crop looks dry and stunted and it will be hard to feed herself and her three children this year. "[The maize] won't last until next harvest," she told IRIN. "I'll have to do piece-work and grow some vegetables by the river."

Nyasulu was among the 1.6 million smallholder farmers who received government coupons to buy maize seed and fertilizer for the 2010/11 farming season at a tenth of what they would normally cost.

"The soil is good only if you use fertilizer," she said, but the two 50kg bags of subsidized fertilizer allotted per household were not nearly enough to get a healthy crop of maize from her one hectare of land, especially after a dry start to the year. "I had to use less than recommended."

The government's farm input subsidy programme was first implemented in 2005 after several years of drought and chronic food shortages left nearly a quarter of the population in need of food aid.

Most small-scale farmers, who account for about 80 percent of the country's agricultural production, grow maize, Malawi's main staple crop. President Bingu wa Mutharika hoped to avoid the need for future food handouts by distributing coupons for maize seed and fertilizer to the poorest 50 percent of farmers.

The government has since credited the programme with several years of bumper maize harvests that have given the country a surplus and contributed to strong economic growth. There is little doubt that the subsidies have greatly improved food security and helped reduce the number of Malawians living below the poverty line from 60 percent in 2004 to less than 45 percent in 2009.

However, a number of smallholder farmers IRIN spoke to in Mzimba district said they either did not qualify for the programme, or did not receive enough subsidized fertilizer to make a significant difference to their yields. Several said they received only one 50kg bag this year and had to share it with a neighbour.

As the programme goes into its sixth year, there are also growing concerns about long-term sustainability and the extent to which it has diverted attention and resources from other initiatives that could help farmers like Nyasulu.

"It has really taken people out of hunger," said Elizabeth Sibale, a consultant at the UN Food and Agriculture Organization (FAO) in Malawi, "but it's not a lasting solution."

A costly "band aid"?

The cost of fertilizer and transporting it to farmers all over the country has risen steeply in recent years and by 2008/09 the programme was draining 16 percent of the national budget and nearly 7 percent of GDP.

The government has scaled down the programme in the last two years, but it still cost 23 billion kwacha (US$152.3 million) in 2010/11, according to the UK's Department for International Development (DFID), which is providing 5 percent of funding. In total, about 10 percent of the programme is donor funded.

"Other programmes are not getting as much attention and funding," Sibale told IRIN. "We're forgetting all the other problems that affect farmers and putting a band aid on them."

One of the main problems faced by farmers in Malawi is an increasingly unpredictable climate. Lake Malawi, several other lakes and hundreds of rivers cover a fifth of the country, but only 3 percent of land is irrigated. Most smallholder farmers depend on a good rainy season for their one harvest of the year.

"If the rains are good, I get a good crop," said another farmer in Mzimba district. "If the rains are not good, then it's a disaster."

Sibale said the government had made some efforts to expand irrigation in the last five years by distributing treadle pumps to farmers. However, the Green Belt Initiative, an ambitious plan to irrigate one million hectares along the Shire River in the south of the country has yet to be implemented.

There are other problems too. When Malawi was less densely populated, farmers could leave a field fallow for a year so the soil could recover. But with increasing pressure on land and easier access to fertilizers, “People have completely forgotten how to keep soil healthy," said Sibale. "Now it's so degraded, they have to use more fertilizer every year."

She added that many officials in the Ministry of Agriculture and Food security shared her concerns about soil health.

Looking for alternatives

Victor Mhoni of the Civil Society Agriculture Network (CISANET), a local NGO, said long-term fertilizer use actually contributed to soil degradation by making it dry and acidic unless combined with measures that can restore fertility such as planting nitrogen-fixing trees or growing legume crops.

Programmes promoting agroforestry and growing legumes have already shown impressive results, and farmers eventually need much smaller quantities of fertilizer to produce good yields.

In the last five years, the World Agroforestry Centre, in partnership with government and NGOs, has reached nearly 200,000 farmers with tree seeds and training on how to grow nitrogen-fixing trees, as well as fruit trees and fast-growing trees for firewood.

Mesha Khongolo planted gliricidia, a type of nitrogen-fixing tree, using seed he was given by the Ministry of Agriculture's local Extension Development office. He estimated that incorporating the leaves and branches into his soil had increased his yields by more than 50 percent.

Nyasulu tried planting some tree seeds but they failed to germinate and she is now growing pigeon pea, a tall, leafy legume with a similar effect but quicker results. By 2012 she should see an improvement in her soil and get a healthier crop of maize.

Politically sensitive

DFID's five year commitment to the input subsidy programme ends in June 2011. "We are currently considering options for new support to agriculture in Malawi," wrote Malawi-based Communications Officer Andrew Massa, in an emailed response to questions.

"We believe that Malawi needs a range of programmes that promote economic growth and poverty alleviation," he added.

Attempts to reach the Ministry of Agriculture and Food Security for comment on this story failed. Malawi's input subsidy programme has become politically sensitive, and reports of pockets of food insecurity, especially in the south, have been met by angry denials by Mutharika.

"There's been a lot of rhetoric about food security being solved in Malawi with the input subsidy programme and I just don't think that's true," said Rachel Bezner-Kerr, a Canadian researcher who has worked on a project to promote legume inter-cropping in Mzimba district.

"It's a short-term solution, but in the long term you're really not any further ahead after spending millions of dollars if you haven't found alternative solutions to improving soil fertility."

Canada's indigenous people protest poor education services

We often talk about the need for education services in the under-developed world. In rich nations, there are still segments of the population that are unable to have this basic human right. Not all of the indigenous people in North America have access to schooling. Most of those who can go to school have to put up with broken down facilities.

From their Global Voices column at the Toronto Star, Craig and Marc Kielburger describe one native tribe that went to Canada's capital to gain more awareness for First Nation education.

In 2000, J.R. Nakogee School in the remote Attawapiskat First Nation on James Bay was finally shut down after a diesel spill 20 years earlier contaminated the grounds. Shannen and the village’s 400 elementary students were squeezed into nine makeshift portables on the same fouled land. It was meant to be temporary.

It’s one of 515 reserve schools overseen by Indian and Northern Affairs Canada (INAC), the federal department responsible for provincial and municipal-type services for First Nations.

After eight years of government refusals and a few broken promises, students cancelled their Grade 8 grad trip to Niagara Falls and headed to Ottawa to demand a new school. Shannen led them in a rally on Parliament Hill.

They were told there wasn’t enough money—the government had other priorities.

Shannen and her classmates fought back. Their Education is a Human Right Campaign, launched via Facebook and YouTube, inspired the support of thousands of students, teachers and religious groups across Canada. Attawapiskat students became the face of a generation of forgotten First Nations children. Shannen, their voice.

In December of 2009, the government again promised to rebuild the school.

“Nobody knows how the funding decisions are made in Ottawa,” National Assembly of First Nations Chief Shawn Atleo told us recently.

Despite promissory notes from INAC, he says, there is still no permanent school. The election campaign is cause for delay and even more frustration. And even if party leaders were talking about Attawapiskat, which they aren’t, there are “about 60” First Nations communities that have never had a school, Chief Atleo told us.

Reserve schools receive on average $2,000 less in annual funding per student than provincial schools, according to a study from the Caledon Institute of Social Policy. A fixed funding model covers the basics: teacher salaries and administration. Unlike provincial schools, there’s no money allocated for libraries, science or technology labs, athletic facilities or special education.

Worse, INAC’s regional offices each distribute funds differently, with little consistency and no transparency surrounding the process. And the kids feel the consequences.

More than half of First Nations youth on reserves don’t finish high school; kids in Attawapiskat start dropping out in Grade 5. These communities are often stricken by poverty, crime and high suicide rates.

Chief Atleo calls the policy failings that mire First Nations in poverty the country’s “perfect demographic storm.”

Unsafe water kills 250,000 children a year says the Pakistan government

From IRIN, a story about unsafe water in Pakistan. A new survey finds that 83 percent of the country's water is unsafe to drink.

After several weeks of severe sickness, with unrelenting diarrhoea and high fever, Shamshad Ali, aged five, from a village near the town of Sheikhupura in Punjab Province, finally feels strong enough to venture out of his house again.

“For a few days, when he was really sick and weak and could not even keep liquids down, we thought we might lose him. We were terrified because last year my cousin lost a four-year-old daughter to diarrheoa,” Shamshad’s father, Muhammad Akhtar, 32, told IRIN.

Shamshad, who is now back in school, has been fortunate. According to a new study by the Pakistan Council of Research in Water Resources (PCRWR), a government body, details of which have appeared in the media, 82 percent of water sources tested in 24 (of the country’s more than 100) districts across all four provinces, provided water that is unsafe to drink.

The report, which has yet to be formally released, is based on a five-year study and notes that 250,000 children die in the country each year as a result of diarrhoeal disease originating from impure water.

PCRWR Chairman M. Aslam Tahir told the media the study was “comprehensive” and that he did not need to make further comments. Previous studies have also found poor water quality in urban centres.

“The findings seem to be accurate. Due to policies over past years, there has been widespread contamination of water sources. Poor governance adds to the problem and people are basically helpless,” Khalid Hussain, an Islamabad-based expert on water issues, told IRIN.

Water filtration

He also said the problem could be solved only by “adopting indigenous methods”.

Indigenous methods have been devised and are being used, but on an extremely small scale. Sindh-based NGO Association of Humanitarian Development, has been using a simple filtration system using two clay pots in the province.

Khursheed Bhatti, head of the organization, told IRIN: “We have developed this method as a cheap, indigenous way to filter water. Up to 15 litres of water a day can be cleaned in this way.” Larger NGOs have shown interest in the unique filtration technique, which has been used for over three years in Sindh.

Water boiling

Poverty and a lack of awareness on the part of people add to the issues involved in accessing safe water. “We know we should boil the water we collect from a hand-pump for at least 15 minutes, but how can I manage this when all I have is a tiny kerosene stove with one burner?”, asked Uzma Bibi, who lives in a village 50km from Lahore.

A mother of four, she added: “I must also prepare food daily for a household of nine on the same stove, and fuel prices are rising so sharply we can barely afford to keep the flame burning except when it is essential for cooking.” The prices of petroleum products have risen several times over the last few months triggering angry protests earlier this year.

“Even now there are people who do not boil water because they are unaware it is a principle source of disease. I see people suffering from conditions caused by unsafe water almost every day,” said Rubina Ijaz, a paediatrician in Sheikhupura. She said infants and small children were often the worst sufferers, as mothers who were not breast-feeding frequently “mixed dry formula with water that was not safe” resulting in sickness.

According to experts, growing water scarcity adds to the problems associated with the availability of safe water in the country.

“All my three children suffer from diarrhoea every now and then. Doctors say water is responsible, but it is not easy to locate safe water, or to boil and then cool it in summer. After all, we have no refrigerators,” Shamshad’s mother, Sadiqa Bibi, said.

Monday, April 18, 2011

Greg Mortenson refutes 60 Minutes story

In case you missed "60 Minutes" last night, Steve Kroft filed a story that makes allegations against the charity Central Asia Institute and it's founder Greg Mortenson. The story says that tales from Mortenson's book "Three Cups of Tea" has been fabricated and that much of the money raised by CAI goes to help fund speaking engagements by Mortenson instead of for the charity's stated purpose.

We have been doing this blog since 2005, and in all of that time we have only linked to one story featuring Greg Mortonson. It was an interview that Howard B. Schiffer conducted with both Mortenson and Jeffery Sachs on how to answer the world's biggest problems. Mortenson recites the story that has now been alleged as false in the 60 Minutes story.

The newspaper from Mortenson's hometown, the Bozeman Daily Chronicle received a phone call from the man himself to refute the allegations. However, writer Gail Schontzler says that statement released by CAI does seem to make one retraction.

"I hope these allegations and attacks, the people doing these things, know this could be devastating for tens of thousands of girls, for the sake of Nielsen ratings and Emmys," Mortenson told the Chronicle in a phone interview Friday.

"I stand by the information conveyed in my book," he wrote in a statement, "and by the value of CAI's work in empowering local communities to build and operate schools that have educated more than 60,000 students."

Mortenson said CAI's success in fundraising - last year it raised $23.7 million - means it can build 63 new schools this year, in addition to more than 170 already established.

He denied several "60 Minutes" allegations, and defended his financial dealings, but appeared to concede that one key story in his book was not literally true.

The investigation by correspondent Steve Kroft, to be broadcast Sunday night, quotes "Into Thin Air" author and mountaineer Jon Krakauer as saying he learned from one of Mortenson's companions that the tale of how Mortenson got started was "a beautiful story" but "a lie."

The book told how Mortenson got lost on a 1993 climb of K2, the world's second highest peak, and then stumbled exhausted into the remote village of Korphe, was cared for by villagers, and promised to return and build a school.

"I stand by the story of ‘Three Cups of Tea,'" Mortenson said in a written statement, but added, "The time about our final days on K2 and ongoing journey to Korphe village and Skardu is a compressed version of events that took place in the fall of 1993.

"As the co-author of the book, along with David Oliver Relin, I am responsible for the content in the book. There were many people involved in the story and also those who produced the manuscript. What was done was to simplify the sequence of events for the purposes of telling what was, at times, a complicated story."