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To preserve Earth, we first must help the poor.

The Rio Conference on Environment and Development exposed the huge gap between the environmental concerns of the industrial nations and the needs of developing countries. The industrial countries worried about global warming and ozone holes. The developing countries expressed the need to produce food for growing populations.

Sarawak is a good case study that received a lot of attention at Rio. One group estimated that the rain forest in Sarawak would be logged out within eight years. A ban was proposed on the import of logs into any industrial country from Sarawak.

The Sarawak government is concerned about creating jobs and economic growth and earning foreign exchange. Half of its exports are raw logs, most to Japan. The economy depends on downstream woodworking activities such as lumber, plywood and furniture. More agricultural land is needed to produce food for a growing population. There is an official policy to convert rain forest to farmland, usually by the rather unproductive slash-and-burn technique.

There are other complicating factors. Corruption is widespread. Concessions to cut trees and licenses to export logs are obtained through payoffs to politicians or are given to family members. Short-term profit is the goal.

Another practical problem is that economic growth is needed to maintain political stability because of the uneasy racial mix between Malaysians and ethnic Chinese. Calm continues as long as the economy grows and there are opportunities for everyone.

Throughout the Third World, nations have damaged their own environments, exploited their resources, slashed and burned their forests, plowed steep slopes, overgrazed rangelands and cut the few remaining trees for firewood. The situation keeps getting worse. Current short-term economic pressures in these developing countries overwhelm long-term environmental concerns of the industrial countries.

How do we reconcile the conflict between economic needs and environmental needs? The core problem, poverty, must be solved before other problems, including the environment, can be adequately addressed.

Another case history is the Santa River Valley in Peru, a land-reform project started in 1970. The farmers, who had been field hands on large estates, were formed into cooperatives. These cooperatives were not successful. The farmers had no training in business management and lacked technical agricultural skills. The co-op profits were neither adequate nor equitably distributed.

In 1982, new legislation was passed allowing the co-ops to parcel out the land to members, averaging about 10 acres each. Some members formed new service-oriented co-ops. But still there was not economic success. The Ministry of Agriculture adviser thought the farmers were lazy and incapable.

Technoserve, a U.S.-based nonprofit organization specializing in rural agricultural development, was called in. The co-op members were trained to work more closely together for their own mutual benefit. An organizational structure was devised through which the water-user could monitor and control the use of this precious resource and proper fees could be charged and collected. Yields increased. The use of pesticides and fertilizers was controlled. Alternative and more profitable crops were encouraged. Farmer income increased 50 percent.

A study was done on the Santa Valley project five years later. That was a period in Peru when the Shining Path terrorized and paralyzed the country. Inflation rates grew to 300 percent a year. Government was approaching anarchy. Despite all those negative factors, the project continued to be an economic success.

Success breeds success. The people of the Santa Valley found that small was not beautiful. When working together, forming a critical mass, things could be accomplished. People were better dressed than they had been five years before. Housing had improved. A health-care clinic had expanded and more preventive care was available. The spread of cholera, a serious problem in Peru, was controlled. The school and teaching staff were improved. More young people were staying in the valley and not moving to the slums of the large cities.

I recently traveled to West Africa to assess the performance of Technoserve. In Ghana, I observed a cooperative of about 50 members who were processing palm oil.

With Technoserve's help, a simple locally made grinder and press produced palm oil in six minutes. Using the traditional and unsanitary pit method of foot-stomping, the process used to take six hours.

A key to agricultural development in these poor countries is to get people to work together and pool their efforts in food-processing or marketing enterprises. With the help of Technoserve advisers, a group of small farmers combines its savings to buy simple machinery. They then organize a structure to maintain the machinery. The enterprise must be profitable to survive, so there is a charge for processing the palm oil.

Also, the group must decide whether to divide its profits or reinvest them in the enterprise. Controls must be established so the money is not stolen or embezzled. Investment decisions require analytical skills and payback studies. That requires bookkeeping and simple accounting skills. Technoserve teaches all of those.

Across the street was a corn-grinding mill given to the community by one of the well-known charities that use pictures of starving children in their campaigns to raise money. The corn mill was inoperative because organizational training had been superficial. There was no sense of ownership because the building and equipment had been given to the community. Giving away money is easy to do, but it usually doesn't work. Technoserve advisers stay with a project two, three or four years, as long as it takes to transfer the skills necessary to run an enterprise.

In Nigeria, a women's farmer group, with Technoserve training, is processing cassava into gari, the staple food, again using simple locally made grinders and presses. The women have learned organizational, accounting and analytical skills needed to run a business.

Even with all those examples of increased productivity, the question remains: How can these poor African countries compete in world markets? The solution, some people say, is to forgive their debts. Others say the world must pay higher prices for Third World products. Let's explore those proposals.

Forgiving debt doesn't solve the basic problem of government corruption and mismanagement. Nigeria is oil-rich, but other than a limited highway system and some high-rise buildings in Lagos, there is little to show for the years of high oil prices. Corruption is endemic. Multimillionaires live lavishly, but their wealth comes from corruption. One government contract can make a person a millionaire. Yet the vast majority of the people are just as poor as people in other African countries. Even if debt is forgiven, unless corruption and mismanagement is solved, the debt will increase again.

How can corruption and mismanagement be solved? The entrenched establishments that benefit from the corruption are unlikely to reform themselves. Occasionally a benevolent dictator, such as Flight Lt. Jerry Rawlings of Ghana, recently elected president, can be honest and competent. But he is an exception. The Catholic church in Zaire, Kenya and Zimbabwe is becoming a force for reform. Western countries can influence policy by withholding aid until reforms are initiated, as happened in Kenya.

The International Monetary Fund also can influence the economic policy of a country, but the IMF often has been pictured as a villain forcing austerity upon a country before it can receive more money. Unless a country stops corruption and nonproductive spending, not much can be done. The IMF is one of the few outside forces that can influence Third World governments.

The other proposal, striving for higher prices, can be unrealistic. Most of the Third World exports are commodities that are subject to the law of supply and demand. Prices go down when supplies go up. A good example is cocoa. For years, world production was dominated by Ghana and the Ivory Coast. Both countries had marketing boards that bought the cocoa from the farmers and then resold it on the world market. The supply to the market was controlled to increase the price. The high-price umbrella attracted competition, primarily from Malaysia, which is now the world's low-cost producer. Now Malaysia dominates the cocoa market.

The bad news is it is hard to identify comparative advantages for these poor West African countries. Nigeria and some other African countries have oil, a relatively scarce commodity. The sub-Saharan countries have very low wages that have been the stepping stones to increased standards of living for many South Asian countries. But in West Africa, educational levels are low and government corruption and mismanagement hinder economic growth. Also, infrastructure, such as transportation and communications, is poor.

The good news is that rural incomes significantly improve as productivity improves, as has been demonstrated in many projects aided by Technoserve. Pressure, both from within, by the Catholic church for example, and from outside by the IMF and the industrial world, can influence government corruption and mismanagement. If progress is made, debt will be forgiven to help these countries get back on their feet. There is hope for these poverty-stricken African countries.

The point is, once progress is made toward solving the problem of poverty, all other concerns start falling into place - environment, population control, health, education. The lesson is, one can't put the cart before the horse. The problem of poverty must be solved before significant inroads can be made on the other problems, including the environment.
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Author:Caron, John
Publication:National Catholic Reporter
Date:Dec 18, 1992
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