Tag Archives: poverty

The human right to agency

Posted on 13 October, 2009 by | Comments Off

On average outside the OECD, it takes 36 days, eight procedures, and fees adding up to over three times average annual income per capita just to register a business, according to the World Bank’s Doing Business 2010 Report. In India, average registration takes thirteen procedures, 30 days, and nine times annual income per capita – to say nothing of bribes. Fortunately, the human spirit’s resiliency isn’t keen on surrendering to such prohibitive barriers. Unregistered enterprises have long been ubiquitous in emerging markets such as India. It should come as no surprise then, that despite India’s accolades for growth and development, according to an International Labor Organization (ILO) report 93 percent of India’s workforce remains in the informal sector.

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Posted in South Asia

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Teaching new dogs old tricks

Posted on 29 September, 2009 by | Comments Off

With headlines coming daily about an apparent Taliban resurgence in Afghanistan, raising comparisons to past conflicts with terrorist movements, it’s worth remembering how such movements were successfully undermined in the past:

In 1966, Roy Prosterman, then a professor of property law at the University of Washington, published a paper called “How to Have a Revolution Without a Revolution.” It proposed small-plot land reforms to help the rural poor. At that time, U.S. policymakers were watching how easily the Viet Cong was able to recruit landless peasants. They tapped Prosterman and brought him to Vietnam, where he drafted legislation that provided land ownership to 1 million tenant farmers. Implemented between 1970 and 1973, the “land to the tiller” program came too late to stop the war–but it cut Viet Cong recruitment by 80% (emphasis added)….read the complete article from Forbes.com

The same strategy worked to undermine the Shining Path Movement in Peru, as documented in The Other Path. People aren’t born violent, but too often they’re born into conditions that leave them no other choice to voice opinions and satisfy needs. Property rights and markets are a gateway to choices beyond violence, through which former terrorist foot soldiers have marched en masse before. Will they get the chance to do it again?

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Turning Indonesia’s waste into wealth

Posted on 16 September, 2009 by | Comments Off

This week, The Jakarta Post posted a story about Indonesia’s trash. Thanks to Indonesia’s entrepreneurs, much of that waste quickly turns into wealth for Indonesia’s blossoming recycling sector. As the story reports, Indonesian manufacturers produce 2.1 million tons of raw virgin polymers per year while producing 3.8 million tons of plastic final products per year. The remaining tonnage of raw polymers for production come from two sources: imports priced according to exchange rates and the global price of oil, and recycled polymers from local producers. Much like most developing markets, formal institutions haven’t caught up with the people they govern, leaving the all the action to the informal sector:

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The 2009 CIPE International Youth Essay Winners, Part Two of Three

Posted on 15 September, 2009 by | Comments Off

Entrepreneurs and leaders are a special breed of people who by the virtue of their existence, keep our world going round. Since I discovered the nature of entrepreneurship some ten years ago, I have been fascinated by entrepreneurs and entrepreneurship….There are certain attributes of entrepreneurs that can never be taught. The entrepreneur acquires it along the way. These traits are confidence, courage, tenacity, risk taking, hard work, honesty and determination. No one can teach you these traits. You learn them along the way. And only those who get them succeed.

The words above come from Saeed Mahmoud Jajah of Ghana, out of his first place winning essay in the category of “Entrepreneurship and leadership,” in CIPE’s 2009 International Youth Essay Contest. When the 2009-2010 academic year is complete, Mahmoud will have a B.S. in management studies from Central University in Accra, Ghana. When the 2009-2010 academic year is complete, Mahmoud will continue to live out the challenges he puts forth to his fellow Ghanaian youth, through his winning essay.

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CIPE’s Tashabos on Sky News

Posted on 28 August, 2009 by | Comments Off

At a project cost of less than $20 per student (including administrative overhead), the Tashabos program reached 9,500 students throughout 24 high schools in 2008. In 2009 the program is slated to reach over 22,000 more students in 44 high schools in Kabul and neighboring provinces. A majority of these students are female.

Oftentimes the Tashabos textbooks are the only ones that Afghan students can keep for themselves—although they certainly don’t keep the knowledge and skills they’ve acquired to themselves. Students return home to help family businesses or start new ones, putting their classroom experience immediately to use in the real world, again and again.

Tashabos exemplifies CIPE’s model of putting skills and tools at the hands of people in developing and conflict-ridden countries, helping to unleash their own ideas and solutions to development and reconstruction. And, as you can tell by the feature story below from Britain’s Sky News daily newscasts, women and girls are not backing down despite the unique obstacles they face.

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Posted in South Asia

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Unbankable?

Posted on 8 June, 2009 by | Comments Off

For many households around the world, living paycheck-to-paycheck is a luxury out of reach. When household income is $2 a day or less, very rarely does it come in regular increments. Such households must be creative in how they manage to put food on the table every night and pay for other assorted necessities. A glimpse of their balance sheets or assets won’t provide sense of their financial creativity. The turnover in cash flows from savings to loans and back again doesn’t register; there are far more transactions per day that don’t ultimately end up on a balance sheet. Not that anyone has time to write things down – until recently.

A quartet of co-authors actually did manage to write everything down—every wage earned, every payment, every deposit, every loan, every financial transaction. Using interviews with over 250 households twice a month for about a year each, the quartet constructed detailed financial diaries documenting what life is like on $2 day. The first and most important conclusion was that when these households do receive income, very rarely is it ever spent as soon as it is earned. Human creativity reaches a high watermark in how these households use mostly informal financing to smooth out consumption for daily needs, insure against risk, and save for major expenses.

….even for the poorest households, a surprising amount of income gets managed in this way–diverted into savings or used to pay down loans. In the process, a host of different methods are pressed into use: storing savings at home, with others, and with banking institutions; joining savings clubs, savings-and-loan clubs, and insurance clubs; and borrowing from neighbors, relatives, employers, moneylenders, or financial institutions. At any one time, the average poor household has a fistful of financial relationships on the go. (Collins, D., Morduch, J., Rutherford, S., Ruthven, O. Portfolios of the Poor: How the World’s Poor Live on $2 a Day. Princeton: Princeton University Press, 2009.)

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Eradicating the poverty of property rights

Posted on 1 May, 2009 by | Comments Off

If you can get yourself past the swine flu media frenzy, you might just find a few headlines about the marathon elections going on in the world’s largest democracy, India. The third of five stages ended on April 30, and like many elections in democracies of various developmental stages, the competing parties have completely ignored one of the most important issues facing the vast majority of voters – in this case, the lack of respect for property rights across India’s rural areas, home to 70 percent of its 1.1 billion people.

In this election, the issue of land acquisition for SEZs is a priority for the voters of the Raigad and Maval constituencies, where several are planned. However, most political parties have not made it a part of their manifesto and as a result the election atmosphere is low key.

About 22 villages in Raigad stand to lose 5,700 acres of land for an SEZ proposed by Reliance industries. Read the rest of the story from the BBC….

The government has offered to compensate the farmers at rates they estimate to be one-tenth of the market value, according to the story. Ironically the government is also already building a nearby dam to provide power and irrigation for the very farmers it now threatens to disenfranchise. The promise of the dam led over 80 percent of the farmers to oppose the new SEZ, in a rare public referendum last September that has since been disregarded by government officials.

The poor face this same problem all around the world, as most of them are rural entrepreneurs of some kind, with a variety of informal businesses that governments consistently disregard. All across sub-Saharan Africa, elected officials are taking advantage of growing biofuel markets and scarcity leading to higher food prices by striking land deals with foreign investors.

A rural entrepreneur in Africa

A rural entrepreneur in Africa

While the investment will bring jobs and productive capacity, these governments are granting property rights to foreigners without regard or compensation for rural entrepreneurs that have lived and worked the land for generations.

In Ghana, rural entrepreneurs are gaining presence as a political constituency. The Private Enterprise Foundation (PEF), a CIPE Partner, is an umbrella group of private sector organizations that has several programs designed to bring rural entrepreneurs into the political process. Anna Nadgrodkiewicz details PEF’s efforts in the latest Economic Reform Feature Service article, “Private Sector Associations as the Engine of Reforms in Ghana.” With a greater political voice for rural entrepreneurs, the people in poverty can lead the charge to eradicate poverty.

Article at a Glance:

  • With proper resources and training, farmer-based associations can become an effective voice for rural entrepreneurs.
  • Engaging the private sector in the legislative advisory process provides a vital opportunity for dialogue on reform issues with policymakers.
  • Private sector associations are important for improving Ghana’s business climate and making the broader business community a part of democratic decision-making.

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