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Escaping the trap: a new approach.

Ending Global Poverty

A guide to what works

By Stephen Smith*

$20.00 Palgrave MacMillan

ISBN 1-4039-6534-X

Over 800m people worldwide suffer from chronic hunger while over 10m children die each year from preventable causes. These are mind-numbing numbers but, as Stephen Smith shows in this call to arms, global poverty is something that "we can and should solve within our lifetime".

Ending Global Poverty explores the various traps that keep people in poverty--traps such as poor nutrition, illiteracy and lack of access to healthcare--and presents eight avenues of escape. He gives readers the tools they need to determine which approaches are most effective in fighting poverty and eventually overcoming it.

"It is one thing to know people are suffering," says Smith. "But it is another to know that this suffering can go on indefinitely, is largely unnecessary and that we could have done more to help--with potential benefits that could prove very significant for our own future." The book offers several complementary ways to understand poverty and its remedies: Problems pointed to by the poor themselves; the types of poverty traps or vicious cycles of poverty pointed out by poverty researchers and programmes to help solve them; the capabilities needed by the poor and programmes to help develop these capabilities; and the range of actions individuals can take to help end poverty.

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Bookshelves in libraries, NGO repositories, university reference centres, and websites are crammed with well-meaning academic treaties on how to tackle poverty through self-help. Few get down to hands-on level and identify grassroots programmes and organisations that are helping people gain the capabilities they need to escape from poverty. This book highlights many of the most promising of these strategies in some of the poorest countries in the world: Ending global Poverty shows that although the task is daunting, it isn't necessary to be rich or powerful to help pull people out of extreme poverty. It is a valuable contribution to the issue and a heartening insight into what is happening on the ground.

In the process Smith has produced an eminently readable and inspiring compilation of how global poverty might be ended through a guide to what interventions work. Smith identifies eight doors to increasing income and offers keys to open them as the means for building further capabilities, assets and resiliency to the many shocks and risks faced by many people in developing countries. "Only with sufficient capabilities and assets can a person's escape be reasonably secure over the long run," he says.

The eight keys to escaping poverty traps.

Key 1: Health and nutrition for adults to work and children to grow to their potential

Key 2: Basic education to build the foundation for self-reliance

Key 3: Credit and basic insurance for working capital and defence against risk

Key 4: Access to functioning markets for income and opportunities to acquire assets

Key 5: Access to the benefits of new technologies for higher productivity

Key 6: A non-degraded and stable environment to ensure sustainable development

Key 7: Personal empowerment to gain freedom from exploitation and torment

Key 8: Community empowerment to ensure effective participation in the wider world

"The goals and means are often the same in the best poverty alleviation programmes," Smith maintains. "Health, education, environmental sustainability, personal and community empowerment, access to economic opportunity: All these are prerequisites for escaping poverty traps.

Effective poverty programmes don't just deliver services--they build capabilities and sustainable assets.

The following is a small sample of Smith's findings of things that work.

Endeavor (South America/South Africa)

This project started with the coming together of five Latin American entrepreneurs--from Brazil, Mexico, Chile, Argentina and Uruguay, expanding last year to include South Africa.

The group works in middle income countries, but ones with high inequality and a significant number of poor people. The Endeavour project also seeks to close the gap between microfinance and the investment sources for large private and state owned firms in developing countries by providing support for SMME start-ups and expansion.

One of the objectives is to develop a cluster of dynamic role models for other potential entrepreneurs to emulate. The initiative does not invest financially but focuses on screening the most promising entrepreneurs, and then providing them with mentoring, training and opportunities for them to network with potential investors and business partners, as well as with other Endeavour entrepreneurs.

Initially, local Endeavour employees and volunteers nominate candidates to the pool of potential "Endeavour Entrepreneurs". Endeavour then relies on local and international volunteer business specialists through its "Venture Crops" programmes to help screen the best candidates from the pool. In addition to have a place to take the children so she can work, a mother sometimes needs basic education and support services. In response, an innovative, locally designed and managed educational programme for mother and child is taking root in towns and cities around Uganda.

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Mother-Child (Uganda)

Initially the programme was an extension of the National Association of Women's Organisations in the country, whose leaders responded to needs they saw in the community, which would go beyond their traditional lobbying and umbrella activities to directly provide services through an independent NGO. Several of the programme's leaders became active directors and employees in the initiative as it evolved organically.

First providing day-care centres, the founders were soon answering questions about a wide range of matters such as child-rearing, marriage, family nutrition, healthcare, job skills and workplace relationships. As staff did their best to keep up with these needs, the idea of formalising and enriching the process to include a bigger scope of services and programmes around the daycare centres took shape.

Today, as the centres draw the mothers in, they then gain access to other services. As Mother-Child officials say, over time the centres "evolved into sanctuaries where local women can learn, teach and relax". Mother-Child has won outside recognition and competitive prizes and grants, including a World Bank Development Marketplace competitive award and a special UNESCO grant.

Grameen Phone Ladies (Bangladesh)

In Bangladesh, until recently telephones were an unimaginable luxury for most people. Even if you were in an urban area that had been wired, land line connections cost hundreds of dollars-plus the need to pay a sizeable bribe to get a phone at all, all of which put a phone beyond even members of the middle class. Lack of phones meant most business had to be conducted in person.

Valuable time was used up just going to the town or city to talk with someone. The rural poor were simply cut off from the world. The answer came when Bangladeshi professor Muhammed Yunus articulated his plans for extending the activities of Grameen Bank*. In a strikingly original plan, a Grameen telecom subsidiary was established with the participation of Norwegian and Japanese telecommunication companies. The plan was simple: "Provide the poorest woman in each village with a cellular telephone." Said Professor Yunus: "You might wonder what the poorest woman in such a Bangladeshi village would want with a cellular phone? Well, everyone in the village who wants to make a call would have to come to her!"

Grameen established three technology and energy companies, with the double mission of economic development and poverty reduction. Grameen Telecom was established in Bangladesh as a joint venture with a Norwegian investor, and other parties. Grameen Telecom is a not-forprofit information technology company that develops software products and services and provides internet services, hardware and networking services, and IT education.

Grameen Cybernet is the leading ISP in Bangladesh. The companies are expected to be at least self-sufficient, and each has a poverty-reduction mission such as unemployment reduction. The types of products sold, such as small-scale renewable energy devices and telecommunications at the village level, make microenterprises viable such as the Grameen Phone Ladies programme, winner of the 2004 Development Gateway Award.

Today, there are some 25,000 Grameen Phone Ladies in as many villages around the country, each making phone usage possible for more than a thousand fellow villagers, more than a quarter of the rural population overall. Revenue per phone lady is about $140 a month, netting about $60 a month after expenses. This is about double Bangladesh's monthly per capita income.

*Grameen, meaning both "village" and "rural" in Bengali is the brainchild of Bangladeshi academic and philanthropist, Professor Muhammad Yunus, who founded the non-profit microfinance institution in 1976 when he was an economics professor at Chittagong University. It was a project that demonstrated it is possible to lend to the poor without collateral. Today Grameen is an incorporated cooperative bank with over 3m borrowers among the poor. Borrowers own 75% of the bank's stock while the government holds the remainder. Yunus believes "all human beings are born entrepreneurs. A small loan can be a ticket to exploration of personal ability".

*Stephen C. Smith is Professor of Economics at George Washington University, where is he director of The Research Programme on Poverty. His research includes onsite work in developing countries on four continents, and includes Uganda, Egypt, India, Bangladesh, Ecuador and the former Yugoslavia. He is a Fulbright Research Scholar, a Jean Monnet Research Fellow, and a consultant for the World Bank, the International Labour Office, and the UN World Institute for Development Economics Research.
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Title Annotation:Ending Global Poverty : A Guide to What Works
Publication:African Business
Article Type:Book Review
Date:Jan 1, 2006
Words:1540
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