I recently received an unexpected letter in the mail…from myself. In 2011, I authored this letter as part of a conference activity I participated in. The message was simple, “If you can dream it, you can do it. Change the world.” Naturally, this note necessitated a…
Time is our only real currency. The menu of life is vast, offering innumerable options of how to spend, invest, or donate our time. Each of us possess a limited, mostly unpredictable supply, but stewardship and discretion remain our own. How we use our finite supply of time is one of the few facets of life we actually control, and control it we must, for if we fail to prioritize our time we will fall victim to the priorities of others.
How we spend our money is a reflection of our hearts. In the same vein, how we spend our time is a reflection of our hearts. Time does equal money, does it not?
“For where your treasure is, there your heart will be also” (Matthew 6:21)
What stirs your soul? What frustrates you about the world? What would you like to see different?
Ask yourself these questions. Know yourself and know your priorities, because you can’t afford not to. Ponder these things and consider your role in creating change. Pursue the longings of your heart. Nothing is more discouraging to me than the feeling that I’m wasting time, doing something less than that which I’m called to.
When’s the last time you had a reality check?
On March 5th I turned 23. Age 22 was a year of change for me. Fortunately, I believe change is good, as it offers new opportunities to step beyond one’s comfort zone and gain new perspectives. Quite frankly, change is a full-contact sport and allows us to engage the world from the playing field instead of the sidelines. With that said, here is a glance at the change I embraced this past year and some of the key lessons learned. March 2012 – May 2012
: My home and community
of the past 4 years gave me final preparation for the “real world”. I experienced life as an entrepreneur
, forcing me to set my own priorities, schedule, and workload. Simultaneously, I enjoyed freedom from homework and classes that fought to consume my time. In the midst of these changes, I realized the joy of working for a purpose
) you’re deeply passionate about, and how that joy surpasses all other desires. I guess that’s why they say if you do what you love, you’ll never work a day in your life. For me, these months provided a vision of what the ideal life could/should look like—some may refer to this as retirement, others just a different lifestyle design
. May 2012 – July 2012
: A beautiful country
in the Caribbean beckoned me. I learned that many people want to support individuals pursuing their passions, especially when it’s meant to create positive change
in the world
was reached and the car is still used regularly in the community). In a brief 6 weeks, I realized first-hand that the greatest changemakers
in the world aren’t always the ones getting covered by the press. I met people who struggle daily due to variables outside of their control, and others that have committed their lives to creating opportunities
for those disadvantaged. Furthermore, a dear friend taught me (by evidence of my own tears) the harmony of living in a community that loves and appreciates you deeply. July 2012 – March 2013
: Change taught me that it’s not always an easy partner. Alumni status began to embrace meaning for me. I experienced life in a suitcase as I traveled
for work nearly weekly, and encountered the perks and drawbacks of such a lifestyle. My idea(s) of Corporate America started to rest on experiences rather than hypotheses, including the pros, the cons, and everything in-between. The effort required to keep meaningful relationships, the challenges
in maintaining long-distance relationships (not romantic), and the importance of family/community became increasingly apparent. In all of this, I’ve been learning how to balance patience with passion, while exploring ways to satisfy the longings of my heart and the advice of my mind in unison.
Out of the pond and into the ocean, age 23 should be a year of continued growth and development, along with adaptation. I’m excited to continue exploring this mostly unchartered territory.
A question to my readers: in what ways have you changed this past year and what lessons have you learned
A couple dozen internationally acclaimed speakers
, 150 humanitarian organizations
, and musical guests such as Michael Gungor
, proved enough to attract 5000 attendees to the Pennsylvania Convention Center for 2 days this past weekend. The Justice Conference
jumped from Portland to Philadelphia in 2013, as thousands gathered to consider how we can appropriately address issues such as poverty, disease, human trafficking, slavery, and human rights violations. While the main sessions addressed nearly every social justice issue affecting society today, I viewed most of the dialogue through the lens of my experiences in Haiti
, where I focused primarily on sustainable economic development in the lesser developed areas.
While drinking from the firehouse of information provided this weekend and navigating through crowds of change-seekers, I managed to capture some key highlights that helped reshape my view of the world. Below are 3 of those key themes that struck a chord with me, along with some supporting thoughts: 1) Poor or rich, we are all created equal in the image of God. (Reference Genesis 1:27; Proverbs 22:2)
– Thought credit for this section goes to Dr. John Perkins
and Eugene Cho
· The poor don't need more money or materialism. They need education, support, training, etc. If the rich decided to equalize the wealth distribution in society by giving to the poor, the rich would have it back the next day. – Dr. John Perkins
· The concept of “teach a man to fish and he eats for a lifetime” is not true. Whoever owns the pond is the real winner. We need to create more opportunities for the poor to climb out of poverty – including improved education, workforce and healthcare. – Dr. John Perkins
· The vast majority of immigrants have never entered an American home. We must reach out to those in our communities, become friends and invite them into our lives. Both parties will benefit. – Dr. John Perkins
· It is sinful, yes sinful, to use images of poor and suffering people to promote our own work, even if charitable in nature. Would you want someone flocking to your community, photographing your children and then selling that to the world? We must be responsible in our story telling. Not all of Africa is poor and destitute, but our modern-day perceptions say that it is because of our own miscommunication. It is not good for us to dehumanize the poor. – Eugene Cho 2) We CAN make a difference and the labor of justice is worth the fight.
Thought credit for this section goes to Ken Wytsma
, Gary Haugen
, Brenda Salter McNeil
, and Eugene Cho
· When we aren’t the victim, questions of whether or not freedom for a few is worth the cost and sacrifice required may seem like a reasonable question, in light of how much work there is to be done for what may seem like a small benefit to us. But once you know and befriend someone who is oppressed or neglected, this question becomes incredibly offensive. Perhaps we aren’t qualified to answer those questions, but instead we should be asking the men and women who were brought out of slavery as a result of that labor for justice, whether or not it made a difference. – Ken Wytsma & Gary Haugen
· The idea that we can't make change is what usually causes us to avoid the brokenness, but that lie is simply false. We must get involved in the brokenness in our world and lean into it. Compassion isn't something fuzzy, it's something gut wrenching. We can't do everything, but we can do something. Jesus' instruction isn't theoretical, it's meant to be acted upon. We are supposed to live out the story of the Good Samaritan – Brenda Salter McNeil
· If the grass is greener on the other side, maybe God is telling you through the Spirit to water the grass you are standing on. – Eugene Cho 3) We must dig deep beneath the surface level of justice issues.
Thought credit for this section goes to Ken Wytsma
, Eugene Cho
, and Gary Haugen
· The temptation of this age is to look good without being good. – Ken Wytsma
· Our generation is obsessed with having a platform to be seen, but we often stay at the surface level. The work of justice is hard; it requires tenacity. We need people who are committed to justice for the long haul. We may be the most overrated generation of all time. Our generation has incredible creativity and idea potential, but we seem to buckle at the face of trials, we fail to persevere. – Eugene Cho
· Everyone wants to change humanity, but no one wants to change themself. It’s common to desire change in the world, but we often pass by brokenness in our own communities to get there. – Ken Wytsma
· Love overcomes fear, but it also overcomes monotony, boredom and tedium. Justice is long and tedious work, which no one ever sees. No one will ever make a movie about the long and boring grind it took to create this change. The power is in perseverance. We must persevere like Paul. People are worthy of a love that persists, a love that does not go away. – Gary Hauger
I would like to give a special thanks to the Justice Conference organizers and volunteers for committing their passion, energy, and time into coordinating such a smoothly-run event that changed so many lives. God is working through this movement in big ways and I’m committed to fighting the long haul with you! Readers
: Please use this comment thread to engage in conversation about what you learned at the Justice Conference or pose any questions you have about the conference, my takeaways, or the Justice movement at large.
As many of you already know, I will be helping the Haitian Partners for Christian Development (HPCD
) for 6 weeks this summer, alongside 5 other interns and 4-6 other friends for various periods of time. While on the ground, our team will be teaching accounting and financial skills, business management and leadership skills, computer skills, and English, while helping HPCD improve their visibility and revamp their website
. Beyond that, I also plan to work with a local church, Partenaires Chretiens, a vibrant group of Haitians that spawned in the aftermath of the devastating earthquake in 2010 and has grown to include over 300 members in just two years.
A few days ago, while preparing for my upcoming trip, an exciting idea struck me of how we can improve our potential impact during our time in Haiti this summer. As I let the idea resonate in my head this week, I felt compelled to act upon it and was thus inspired to create a fund raising campaign
last night. My idea is to raise $3500
to purchase a used car in Port-au-Prince, Haiti, which would be available for use by me and other interns/friends for the summer. This car will offer us flexibility with transportation timing and location, thereby reducing our reliance on public transportation and lightening the chauffeuring burden carried by our host family. After this summer, the car would remain in the hands of Ernso Jean-Louis, Executive Director of HPCD and Pastor of Partenaires Chretiens, and could be available for HPCD, Partenaires Chretiens, and/or for rent to guests traveling to Haiti and staying at the Eucalyptus Guest House
(my Haitian residence).
Ultimately, this car would enable us to more efficiently achieve the mission of HPCD, which is to encourage entrepreneurship that is based on foundational values, ethics, and social sharing. Our efforts with HPCD are meant to help Haitians create businesses and jobs, which revitalizes poor neighborhoods, stimulates economic growth, and improves standards of living. HPCD achieves these goals by offering business training & mentorship, a shared & fully functional business incubator facility, and improved access to financing. This commitment to sustainable economic development in Haiti resulted in the incubation of 37 entrepreneurs and the creation of over 600 jobs by HPCD from 2010-2011.
I leave for Haiti on May 19th, just 9 days from now. My goal is to raise $3500
before I board my plane. My “ask” is for your support, whatever that might look like. Contribute financially
, tweet about it, post to facebook, tell your friends and family, make a video, write a song, design a cool image, propose a partnership, etc. Whatever you choose, please do it with the goal of building up the Haitian economy in a sustainable fashion, because that is what the country really needs to get back on its feet.
If you choose to contribute
, you will be notified of specifically how the money is spent and receive a picture of the car we purchase. Any excess funds collected will be used to support the work of HPCD. Be aware that money used for the car will not be considered a tax deductible donation, however you will receive Haitian coffee, a Haitian-made T-shirt, your name signed on the car, and a personalized thank you from Ernso according to the level of your contribution. These will be distributed upon my return in July.
Additional details are available here
Please direct any questions to me at email@example.com and learn more about HPCD
and the Eucalyptus Guest House
by clicking on the links.
p.s. if you’re interested in visiting Haiti in the month of June, please reach out to me. 1-2 week trips cost roughly $750-$1000, which includes flights ($450 round trip), accommodations (internet, electricity, bed, showers, food, entertainment, comfort), and a perspective-altering experience.
Upon arriving in the Newark airport after my most recent trip to Haiti, I sought out a Qdoba to satisfy a burrito craving I’d been feeling for two weeks. Ecstatic upon finding my stomach’s longing, I struck up a conversation with the gentlemen preparing my food to explain how I’d been craving a burrito during my 18-day stay in Haiti. With eyebrows raised, he questioned “what was it like down there?” having just passed the two-year anniversary of the devastating earthquake in 2010. I explained that half the rubble
was cleared, two-thirds
of the 1.5 million displaced Haitians have moved out of tent camps, and that President Michel Martelly seems to be moving the country in the right direction
, but there is still a ton of work to be done
Wanting more details, the Qdoba employee piqued “Were you scared? Did you sleep in a tent or a hut? Were you able to shower?” Without downplaying the meager conditions that much of the country endures, I quickly began to deconstruct his narrow concept of Haiti by sharing my experiences working with small businesses
, traveling alone on public transportation, and living in a well constructed home
with a Haitian family
and community that I whole-heartedly trust. With a surprised look on his face, my new friend confessed that his perception of Haiti was no different than that of chaos in Syria, where locals would be “running wild with guns and lighting things on fire.” Calmly, I reassured him that while I can only speak from my experiences, my view of Haiti was not of violence, but rather of contradictions
- an intersection of beauty and poverty. Truth be told, the Haitians I met were friendly, passionate, hardworking, big dreaming people with a strong desire to learn, but severely deprived of opportunity.
These types of questions are just a few of the popular ones I receive when speaking of my time spent in Haiti. However, I am never surprised by these questions since the typical US perspective of Haiti is that the country is utterly destitute, which would be accurate of much of the country, but certainly not comprehensive. The truth is that real economic development is taking place too, but largely goes unnoticed by the international community. For example, since Martelly took office just under one year ago, there has already been $450 million
invested in tourism in the country, including the construction of a 173-room Marriott in Port-au-Prince. According to Martelly
, he’s “tried to change the perception [the world] has of Haiti as a place where nothing works…that Haiti is just about bad news.”
I never hold fault against my peers for the negative opinions they may hold, since their opinions are simply a product of what they’ve heard and seen. Instead, I try to reframe their perspectives, just as I did with my friend at Qdoba. However, when the only news reported about Haiti is of corruption
, and suffering
, it is to be expected that their visualized image of Haiti is exclusively negative. One blogger suggests that Cite Soleil
is the third worst place to visit in the world in 2012. This collectively adverse public image generates further distrust for the country, which prolongs vicious cycles and increases the difficulty to obtain investment in the Haitian private sector.
The media is not the only group that seems to be laser-focused on the disaster images, as many organizations working in Haiti also solicit donations by using photographs of poverty to connect emotionally with potential donors. This is another example of an unfortunate side effect resulting from positive intentions, in that a solely negative perception of Haiti is developed. Put simply, input (the things heard and seen) determines output (public perceptions). The only way to change the global perception of Haiti from exclusively hopeless to one of investment potential is to change the input, the story that is communicated to the world beyond Haiti’s borders.
When people ask me to describe Haiti, I usually answer “a country of contradictions.” This is in fact a direct quote from my friend Christina, who was born and raised in Haiti and graduated Penn State two years before me. Similarly to Puerto Rico, Jamaica, the Dominican Republic and many other popular tourist destinations in the Caribbean, Haiti enjoys beautiful weather that shines brightly over its beaches and mountains. However, as most people realize, amidst that beauty remains significant suffering and poverty
, where 80 percent of the population lives below the poverty line (<$2 US per day) and 54 percent live in abject poverty (<$1 US per day).
Most people are aware of Haiti’s struggles with poverty and corruption since these are the topics that frequently get reported. For those who were previously unfamiliar with Haiti, the crippling earthquake in January 2010 put the country on the radar (one poll suggests half
of US households donated to relief efforts). I too can attest to observing the pain, suffering, and overall low standard of living that exists throughout the majority of the country. It was these struggles that originally attracted me to get involved in helping develop the country.
However, most people are unaware that true development actually exists in Haiti as well. While most of Haiti remains poor and undeveloped, there is another side to the story, which offers hope and a building block as the country looks to grow and develop. Today, the positive side of Haiti is what I would like to shed light on:
1) Check out Magic Haiti
, a useful and entertaining publication that answers questions of what to do and where to go for all short and long term visitors
2) See Haiti’s beautiful development and landscape in Jacmel
, and more
3) There are grocery stores
, guest houses
, and more that would rival similar operations in more-developed countries
4) In addition to big business and informal traders, there are real SME
entrepreneurship success stories too, such as Enersa
, a Haitian solar-powered streetlight producer
5) The creative, artistic
capabilities of Haitians is stunning
6) President Michel Martelly insists that “Haiti is open for business
7) While the international communities’ aid attempts are not without fault
, here is a glance at some of the bright spots
of the development in Haiti over the past two years8) See pictures from my most recent trip below
The opportunity to alleviate poverty and make a difference in the world is a powerful motivator, one that actually hooked me into studying poverty
while at Penn State and traveling to Haiti to volunteer with HPCD
. Millions of people are similarly inspired every year, responding with mission trips, volunteer work, financial contributions, and changed perspectives on life. I (along with most others) would definitively proclaim that this inspiration is good. It calls people to take action in helping others, live for something greater than themselves, bridge international gaps of interaction and understanding, and more. However, I would also argue that this inspiration is not sufficient and can sometimes actually turn sour.
The untold story surrounding a poverty alleviation mindset is that of long-term effects and nation building. Despite benevolent intentions of people and organizations seeking to help, many aid efforts that sound rational at face value actually harm the recipient country’s long term economic self-sufficiency prospects. For example, consider free handouts of bottled water and rice by non-governmental organizations (NGOs) in Haiti. In the immediate after-effects of the earthquake
, these handouts were vital since production and distribution of such goods was disrupted. However, continued handouts began to destroy local markets by forcing water and rice producers out of business. In March 2010, even Haiti’s president René Préval asked the United States to “stop sending food aid
”. Think about it, Haitian companies producing water or rice are unable to compete with free goods, and therefore cannot sell their products or make money. The end result is the creation of a state of dependency
, in which the NGOs assume the companies’ role of providing food and water. This replacement effectively reduces the Haitians’ self-sufficiency, eliminates jobs, and increases the country’s reliance upon the donor country.
Catherine Lainé of the Appropriate Infrastructure Development Group (AIDG
) business incubator in Haiti articulates the underlying problem of handouts very well in the excerpt below:
“When the NGO community talks about aid to developing countries, the focus is primarily on alleviating poverty…the future of Haiti cannot be built by focusing on poverty alleviation alone. Compare the language we use in the United States as the nation struggles through the current economic crisis: job creation, economic stimulation, higher education, job training, innovation and market growth…However, most money spent by the NGO community has primarily focused only on securing people’s short-term, basic needs. The aid community must turn greater attention to longer-term wealth creation. They need to strongly support and finance the development of [small and medium enterprises], the same types of businesses that are the economic engines of developed countries.” (2010 – full article
So if we need to take a nation building approach instead of purely a poverty alleviation approach, what should we do?
To expand upon the earlier example of water and rice handouts, a viable alternative would be for NGOs to purchase rice from Haitian farmers or purify and distribute water produce in Haiti, rather than importing goods from Miami. This effort would enable the NGOs to provide food and drink for the masses and build up Haitian businesses in the process, allowing them to achieve the short-term goals they’re already targeting, as well as the long-term goals of restoring the country. The Inter-American Development Bank showed how this can be done
through their work with a Haitian water company (DINEPA) after the earthquake in January 2010.
Amidst a busy schedule, shifted priorities, and a perpetually changing world, my blog remained inactive for the last nine months. To some degree, I regret not sharing all the excitement in my life this past year, a year that included growth in entrepreneurial wisdom with Innoblue
, three weeks of on-the-ground research on sustainable economic development in Haiti
, closure to my academic career
at Penn State, and the end of an elongated struggle to determine the appropriate next step
in my life. On the other hand, I’m glad to have separated myself from the blogosphere (for a short stint) to focus on gaining clarity during this pivotal time. But most importantly, I’m happy to reengage with my followers and share snippets of what I’ve learned and where I am headed.
So this is my official announcement that I am resurrecting my blog with a redesigned website, structure, and intent. My original purpose in blogging was to share some random thoughts
spewing from my 20 year old mind while improving my writing skills. However, this second surge of blogging is meant to encourage each of my readers to be an “always learner
”, a term I use to describe the learning state of mind in which every person, place, thing, event, circumstance, conversation, etc. presents a unique learning opportunity. Specifically, I will focus on allowing people to join me as an “always learner
” through the context of 1) sustainable economic development in Haiti
and 2) the entrepreneurial mindset. While these two topics will represent the crux of my writing, I must confess ahead of time that I may occasionally deviate beyond my proposed concentration when inspired to share something different.
My only request is that you keep an open mind and challenge me to do the same. Closely consider the thoughts I share, form an opinion on them and apply that finding to your life, whether you agree, disagree, or are somewhere in-between. Engage with me to help me learn as well, by posting questions, comments or links to other relevant articles of interest. My desire is for this blog to be a give and take relationship where we can have fun learning together.
With that said, let the learning journey begin!
In Spring 2011, I took ECON 413W: The Challenge of World Poverty, taught by Professor Bee Roberts. I thoroughly enjoyed the course and learned significantly. For our final paper, we were asked to synthesize the information from the course into 5 areas and list our key takeaways. My goal in making this available is to share the knowledge I gained in this course and inspire the same passion I've experienced in others. Enjoy!
I have always understood that there are poor people all around the world with less food, possessions and comfort than I. My parents trained me not to be wasteful at an early age by encouraging me to eat everything I put on my dinner plate. However, I never understood the lifestyle of these less privileged people. All I was exposed to were pictures of malnourished children asking for money. So my first key takeaway from this course was a greater understanding and appreciation for the attitudes and habits of poor people in developing countries.
From some of the early readings in the course, such as The Economic Lives of the Poor, by Banerjee and Duflo, I gained a lot of this insight. Their research revealed that 56-78% of spending for the poor is on food and consumption. It made sense that this much money was spent on food; however I was surprised to learn that this food was not always bought for the most calories per dollar, but rather the poor often valued taste and purchased sugary foods. In my mind, they should buy the most calories they can per dollar so that they will not go hungry and malnourished; however studies showed that they like to enjoy their food just as we do here in America. Additionally, the poor spend money on alcohol and tobacco, as well as festivals. In fact, sometimes they would skip meals in order to save money towards entertainment.
Sometimes people declare that the poor should do a better job of saving their money to invest in durable goods or in education and health, rather than immediate consumption. I would typically nod my head in agreement until I learned some of the reasons the poor do not save. One reason is a lack of credit markets in which the poor can place their money to earn interest or keep it safe. In fact, in some parts of the developing world, entities have opened that require the poor to pay money to save it in a safe location, and they do it! This is because they have nowhere else to store their money. There is constant threat that it could be stolen, that war could come sweeping through their town, and that family members or friends will relentlessly beg for it. These factors lead to a never-ending temptation to spend the money immediately, rather than save.
I also learned why micro-entrepreneurship is so common in the developing world. Quite frankly it is the only option for many people. There are minimal jobs in the formal sector and what is available is generally only for men. This is why women entrepreneurs rule the microfinance market. With huge unemployment ratios, the poor often work in spurts selling food or other goods at market stands, which is known as micro-entrepreneurship. When people hear about the poor earning $1 per day, it is not really a steady $1 salary per day for most, but rather $5 one day and $2 a couple days later. This constant uncertainty weighs as a heavy burden on the poor.
I also assumed that people in other countries are simply less happy than those in the states because of their lower quality of life. I was surprised to learn that studies suggest that people in the developing world are at a very similar level of happiness as us in the United States. This reveals that happiness is very relative and depends on how one compares himself/herself to their surrounding community.
2) Foreign Aid
My understanding of need in the developing world was that the poor simply needed more money for food, clothes, education, etc. and that if we donated more money then everything would be fair. I learned in this class that foreign aid is much more complex than massive monetary donations, and there are many issues inhibiting the effectiveness of foreign aid.
One problem of foreign aid stems from the corruption within the governing bodies of many poor nations. The issue is that foreign aid to these governments is often unrestricted, leaving the countries free to do with it as they please. This money is sliced and diced by intermediaries so that by the time it reaches the intended cause it is merely a portion of what it was initially. In Chad, for example, only 1% of a donation in the early 2000s meant for health clinics actually reached those clinics. Studies show that 11% of aid to Africa ends up supplying the military, accounting for 40% of Africa’s total military budget. Because of these results, many donors become discouraged and shy away from giving more. Also, the donated money rarely reach the extreme poor who need it the most, but is more typically allocated to middle-income countries.
Another major consideration is the type of aid given. Often times we see aid given in relief work after natural disasters such as those recently experienced in Japan and Haiti. While this aid may be perceived as important and may add some significant benefits, it hardly ever leads to economic growth. In some circumstances, it actually hurts the countries because it puts people out of jobs. In the instance of Haiti, the US brought in tons of medicine, clean water and food for the poor, all the while putting nurses, groceries and food vendors out of business. Free handouts are more attractive to the poor than goods that cost money, but they hurt the country economically. Aid that tends to see a more direct benefit is early impact aid, which is focused on countries that are beginning to show improvements, stability and growth. Floods of money at this point, spent on infrastructure, machinery, roads, land, buildings, etc. can significantly impact a developing country. Research shows that aid exhibits diminishing returns, so this early impact aid can be significantly helpful.
My other major takeaway regarding aid was the idea of performance based aid. Contrary to the traditional altruistic model of aid, people like Bill Gates, Warren Buffet, Jacqueline Novogratz and others are pursuing more of a business model where they invest in countries and areas of need that show effort and promise. Rather than throw money around aimlessly, they invest the money in markets and locations where they see potential for growth and societal change. This is commonly referred to as ex post conditionality or recently ‘cash on delivery’. If governments comply by injecting iodine into all their salt, for example, they would be rewarded with aid money if they can prove their efforts.
Before taking this course I understood microfinance to be Mohammad Yunus’ flawless brainchild that is consistently eliminating poverty worldwide. However, upon further study within this course I noticed that the microfinance industry is not squeaky clean across the board. Because of widespread illiteracy amongst adults in many developing countries, for-profit microfinance firms have monopolized many markets and profited at the expense of the poor. These firms do not utilize the training tactics of Grameen Bank, but rather award credit generously and charge usurious rates that the poor are often unable to pay. At the extreme is Compartamos, with hidden rates producing an effective interest rate over 100%.
The three main issues are a lack of transparency, absurdly high interest rates, and improper loan recovery practices. These microfinance firms often go unregulated and therefore enjoy gross profits and high salaries due to the lack of transparency. The microfinance industry currently has 5% of firms charging over 50% interest and a market average effective interest rate of 28%, which is 13% higher than the rate Yunus suggested as appropriate. In many instances, these rates are worse than the loan sharks. Also, anecdotal evidence suggests that MFIs are strict, scary and insulting during their loan recovery process. There are reports of suicides as well as MFIs taking land, animals and machines from families that are unable to repay. This is ridiculous considering the whole idea of microfinance in the first place is to help the poor that do not have collateral.
Despite a lot of recent criticism of the microfinance industry, there still remains a world of potential if some of this corruption can be rectified. MIT Poverty Labs conducted studies to assess the effectiveness of microfinance loans. After studying 52 slums in their sample and 52 slums not, MIT concluded that over 18 months there was no noticeable difference in average household income, but there was a shift in spending from alcohol and tobacco to durable goods. This suggests that microfinance may create a positive impact in the long term.
I always recognized the importance of feeding the hungry a greater quantity so that they would not starve, but this class taught me that quality is equally important.
Nutrients such as iron, zinc, iodine and vitamin A are essential to the wellbeing of the poor. The greatest effect of these nutrients takes place in the first 1000 days of a child’s life. If a child does not get the proper nutrients, there is a great risk of blindness, organ failure, malnourishment and ultimately death. Sometimes these malnourished children make it through alive, but their growth is stunted and their brains never develop properly. Not only are nutrients a key ingredient, but they are very inexpensive as well. Commonly eaten foods like rice, beans and salt can be ‘biofortified’ to include these nutrients for minimal costs. In fact, many top PhD’s studying economic development list nutrients as the number one place they would invest their money in order to end world poverty.
Other cheap solutions to better health exist as well, including malaria nets, deworming, aids prevention, etc. Keeping the poor healthy is essential to economic development because without their health they cannot be productive students or laborers. Studies reveal that for every 1 year increase in the life expectancy of a nation, GDP increases by 4%. If some additional focus was given to supplying proper nutrients and medications, we could drastically increase the GDP of many developing countries.
Before this class I never even considered that education was an issue in the developing world. It made sense to me that people were hungry and that would affect their learning, but I had no concept of the quality issues of absenteeism from students and teachers alike, as well as the lack of supply of qualified, interested teachers to train the children.
Public school systems in the developing world are often times free due to government funding; however they do not provide children with environments conducive to learning. Sometimes, the public schools will have over 80 children in a single classroom. These terrible learning environments reflect in the test scores of the students and the continuing rates of illiteracy and delayed learning.
Since the public school system is so unsuccessful, parents commonly pull students out of school to work for the family or they spend money to send their kids to private school. The opportunity cost for parents to put their kids in the public school is too great when they can be helping the family with food or by raising their younger siblings. Parents with money, though not much, send children to private schools, which represent as high as 70% of the schools in some of the slums. This costs merely 10 cents per day per child, which can turn into a sacrifice for the extremely poor, who do not have much money to start with. However, it appears that parents do recognize the benefits of a private education. Privately educated children consistently score higher than publicly educated children in math and language. Honestly, parents would not spend the money to send their kids to private school if they didn’t see the value in it.
Education is crucial to the overall economic development of a country. It trains citizens on proper nutrition and health practices, how to read and write, and many other basic skills that are necessary to grow an economy.
One Proposed Solution: Conditional Cash Transfer Programs
The ultimate thing that I learned from this course is that there is currently no single solution that can eradicate poverty around the world. However, there are tons of ideas that can alleviate poverty if planned and executed properly. My suggestion for the first step towards alleviating poverty is replication of the conditional cash transfer programs. Both the Bolsa Familia in Brazil and Oportunidades in Mexico are evidence that such programs can reduce extreme poverty effectively. By providing the extreme poor with cash stipends of approximately one-fifth of minimum wage, these programs increase school attendance, medical checkups and vaccinations, all of which are necessary to improve the quality of life for the poor.
Conditional cash transfer programs focus on the most essential aspect of economics: Incentives. By incentivizing the poor with minute allotments of cash, equal to no more than 0.5% of a country’s GDP, significant social change can ensue. These programs also reduce the improper distribution of funds, since they are focused on the extreme poor who need it the most. I think these programs can be replicated on an individual basis in other countries. The first countries to implement these programs in should be those that are already willing to comply with external assistance. While the change needs to be internal, external support will be necessary to properly implement the program.
While I see conditional cash transfer programs as the first step to alleviate poverty, I recognize that it needs to be supplemented by simultaneous efforts in other areas of need. Mass distribution of proper nutrients, improved healthcare, access to clean water and improved education systems are all examples of needs that require this simultaneous improvement. It is ultimately important that countries learn how to help themselves. While support, training and assistance from external countries will be necessary to replicate these programs successfully, local citizens and governments need to be trained to do the work themselves.
I first encountered the idea that happiness is relative when a fellow student suggested it during my World Poverty class this past semester. The general thought process is that acquiring more and more “stuff” through increases of wealth does not necessarily make an individual happier, but rather their amount of “stuff” or wealth relative to those they compare themselves with is what determines one’s happiness. In fact, the principle can be applied not just with money but also in other areas of life such as power, relationships, ability, personal security or whatever else people may compare themselves to others with (these can be inserted into any part of this blog where I reference possessions and wealth). In the last few years there have apparently been studies conducted that confirm the happiness is relative theory.
This theory seems to hold weight for people with much, people with little and all the people in between. During a breakout seminar at the Jubilee conference this past February, I heard a story about a CEO that complained because his private jet was not as luxurious as some other CEOs’ private jets. The key to an individual’s happiness lies in who they compare themselves to. If the first CEO were to routinely compare himself to the average citizen of the US, he would likely feel confident and very happy about his lifestyle. Instead, he compares himself to other CEOs and sees that his treasured possessions are not up to par, leading him to believe he needs a nicer jet to obtain happiness.
People usually compare themselves with those they interact with on a daily basis, be that people within their jobs, communities, country, etc. Generally speaking, the majority of people in the world could swing either way on this happiness pendulum. On the one hand, there is almost always someone doing something better than you or someone who owns more “toys” than the rest. When comparing oneself to the best, there is always room for someone to feel unhappy because they don’t have as much as those on the top. On the other hand, there is almost always someone doing something worse than you or someone who owns less “toys” than the rest. In fact, some people in the world don’t own hardly any “toys” and rather are fighting day to day for their survival. Though comparing to these people should not make one feel happy by nature (since the others may be suffering), it should create an appreciation for the blessings one does have in terms of possessions, wealth, etc.
The most typical comparison by a long shot is with those in one’s immediately surrounding life community. This is what I observed in Haiti. Though the majority of people I met in Haiti have so little in terms of possessions, especially compared to the life I know in the US, they seem to be as happy with their lives as anyone else that I have met. I will re-emphasize the point that I did not interact with anyone in utter suffering (disease, starvation, slavery, etc.), but the people I dealt with were genuinely happy people for the most part. I was surprised by this finding as I expected most people to be unhappy with their lack of “stuff” and their poor living standards, but these factors truly did not seem to affect their level of happiness.
Taking it one step further I would argue that true happiness that is satisfying and fulfilling comes from the intangibles much more so than the tangibles. For many people this is found in family, friendships and love relationships, although this can be extended to other areas of life as individuals prioritize and love different things. And even one step further, the very happiest people I meet are those with a real, genuine faith. I saw this in Haiti for sure. The Christian Haitians I met cried tears of joy while singing worship and displayed attitudes that communicated inner peace. Despite the poor physical circumstances in the world around them, many find their peace and purpose in Jesus. Though I would agree that the happiest people I know in the US are usually also those with strong faith, I believe that it is not as evident because the average person is more easily consumed by the possessions and “stuff” of the world.
Either way, my key takeaway was that just because someone lives in dire conditions does not mean that they are unhappy and vice versa. Happiness is relative and comes from a) comparing oneself to others and b) finding joy in the more meaningful aspects of life, notably faith.
“We tend to forget that happiness doesn't come as a result of getting something we don't have, but rather of recognizing and appreciating what we do have.”
- Frederick Keonig