There are many disputing ideas on whether or not America should continue to invest in foreign aid, especially while in the throes of an economic recession. While spending US funds to support countries and people that most citizens will probably never visit or meet may seem counter-intuitive, foreign aid will be a factor in pulling America out of its recession. Lifting developing countries out of poverty creates more customers to buy American products, which in turn creates jobs in America.

Foreign aid job creation is not merely speculation. Currently almost half of US exports go to developing countries and this number can be expected to increase as these new, developing markets continue to open. This will greatly improve the US economy since one in five American jobs, like cell phone chips and food production, are export-based. American businesses recognize the opportunity to grow by alleviating world poverty. In 2012, over 50 US corporations delivered a letter to Congress in support of continuing funding for foreign investment. These corporations included Google, Cisco, Coca Cola, Johnson & Johnson and Caterpillar.

These corporations are aware of the huge potential payoffs of foreign investment. For example, the US has given Mexico $1.7 billion in aid over the past 45 years and now exports $16.3 billion in goods to their neighbor every year. The US has also seen its investment in Brazil offer an enormous return. America exports $35.4 billion annually to Brazil after giving $2.8 billion in aid from 1960-2005. Given that a majority of the United States’ top trading partners had previously accepted aid from the US, it is obvious that foreign aid is a good investment.

Foreign aid does not have to be strictly a question of moral obligation; it is also financially and developmentally smart. Many Congressmen are now referring to foreign aid as investment for this very reason. It may take many years until US citizens see the financial benefits of foreign investments but the eventually, revenues from these new markets will be well worth the wait. Foreign aid is less than 1% of United States’ budget and has the potential to create jobs to bring the US out of rough economic times. Contact your Congressional representatives and ask them to support funding for foreign aid.

– Mary Penn

Source: Orange County Register
Photo: Soda Head

EcoZoom Provides Accessible Cookstoves
EcoZoom works to empower local work forces, economies, and women throughout the developing world. The company provides accessible cookstoves and has earned B corp status. “B corp certification is to sustainable business what Fair trade certification is to coffee.” This status reinforces EcoZoom’s commitment to social and environmental performance.

The company strives to create “financially sustainable markets.” EcoZoom is more than mere kitchen utensils. Their slew of cookstoves use different types of biomass fuels. From burning wood to corncobs and cow dung, these premium stoves use nearby resources to cook food. The stoves produce 70% less particulate matter and smoke than open-fire cooking. These revolutionary products improve respiratory health and food quality. Individuals in developing countries have reported using the stoves for over 6 hours a day.

The Z+ program is a “buy-one-invest-one program,” much like that made popular by TOMS shoes. For each stove sold, EcoZoom allots a stove for projects in developing countries.  These are the same models sold in the US and Europe.  The company partners with international aid organizations and ships packages to developing countries for every 1,200 stoves sold.

EcoZoom believes that “people of any economic status should have access to beautifully designed cooking products that will improve their health, income, and environment.” The team recommends that people check out the Global Alliance for Clean Cookstoves. The alliance educates people on the need for improved cookstoves. Cookstoves are often overlooked, but everyone has a right to prepare food safely.

– Whitney M. Wyszynski

Source: EcoZoom Stoves

US AID First Forward Progress Report
The U.S. Agency for International Development released a progress report on its signature reform initiative USAID Forward at an event co-hosted by the American Enterprise Institute (AEI) and the Center for American Progress (CAP).
Three years ago, President Obama and former Secretary of State, Hillary Clinton called for the elevation of development as a key part of America’s national security and foreign policy.

Some highlights that need us to focus are listed as follows:

USAID Forward, the mission with renewed capacity, is focused on seven key
 areas: budget management, policy capacity, implementation and procurement reform, monitoring and evaluation, innovation, science and technology, and talent management.

Delivering results on a meaningful scale through a strengthened USAID:
by our missions in close collaboration with partner governments and citizens, our Country Development Cooperation Strategies now guide our development investments. When evaluations failed to meet the standard, the three most common concerns were: (1) evaluation teams received too many questions—especially questions that are too general and ill-defined—relative to the resources available for the evaluation, (2) the data collection and analysis methods were not appropriate to answer the evaluation questions, or (3) evaluation reports did not clearly demonstrate how evidence led to new findings and conclusions. Given these findings, we need to increasingly focus on taking early action to improve the quality of our evaluations.

Promoting sustainable development through high-impact partnerships:
USAID set out to employ the central pillars of aid effectiveness—county ownership, systems strengthening and sustainability—derived from global meetings in Paris, Accra and Busan. Putting these tenets into practice required us to take a hard look at our own systems and our capacity to work with a broader community of diverse partners while holding them accountable for delivering results. Going forward, we will build on the commitment
 to increase direct support to partner country governments, local private sector firms and non- governmental organizations. We will integrate this work more closely into our strategic planning process with the goal of institutionalizing it still further.

Identifying and scaling up innovative, breakthrough solutions to intractable development challenges:
In November 2012, the Higher Education Solutions Network, a groundbreaking partnership with seven top American and foreign universities designed to engage young people in the discovery of new solutions to development challenges, was launched. Each of the seven universities—The College of William and Mary, Texas A&M University, Michigan State University, University of California, Berkeley, Duke University, Massachusetts Institute of Technology, and Makerere University in Uganda—will establish a development laboratory to incubate and scale up new innovations. The large-scale transformation of a federal agency is a long-term and complex endeavor. The transformation will be successful if it not only changes the way we do business but also results in improved results and continued development progress. USAID is committed to continuing our forward progress and calls on all of our partners to join us in our collective efforts to end extreme poverty.

– Caiqing Jin(Kelly)

Source: USAID
Photo Source: ETFTrends

Madagascar's Millennium Village is Independent
Madagascar’s Millennium Village, Sambaina, is functioning independently after five years of support and development from the UN Development Program and the Millennium Villages Project. With a donor investment of $400,000 per year, or just $50 per person per year, living conditions have improved dramatically.

The country of Madagascar has suffered in the last five years as a result of political upheaval. Following a coup in 2009, foreign aid to the country has remained frozen, and the government does not have sufficient funds for social programs or the salaries of civil servants. In the commune of Sambaina, where over 60 percent of the population was living in extreme poverty when the project began, residents say that their lives have improved.

Targeted investments in the areas of agriculture, education, sanitation, health care, infrastructure, technology, and local business have made a world of difference in Madagascar’s Millennium Village. Implementing the System of Rice Intensification (SRI) has helped farmers increase yields to the point of achieving food security for eleven months out of the year. Previously, their harvests only lasted three months. About 70 percent of Sambaina farmers now use the SRI method, and have seen sustainably increased rice production.

Pumps have ensured access to clean drinking water, while health education has encouraged people to maintain good hygiene and utilize the village’s health care facilities. Other investments include computers in classrooms, renovations in schools and infrastructure, and funding to start-up businesses.

Now that initial investments have been made in developing Sambaina’s basic necessities, the villagers will be responsible for maintaining them. To this end, committees have been established, which will collect contributions from residents to fund maintenance projects.

The success of Madagascar’s Millennium Village is undeniable. Even in a country with almost no economic growth and four years of political crisis, targeted investment and development assistance has nearly eliminated extreme poverty in Sambaina within just five years. The country of Madagascar has no hope of achieving the Millennium Development Goals by 2015. But Madagascar’s Millennium Village Project in Sambaina proves that foreign aid, when responsibly managed, is instrumental in improving the lives of the world’s poor.

– Kat Henrichs

Source: IRIN

A Gift from Madrid to Reduce PovertyLast month, 400 International MBA students from the IE Business School in Madrid went to Pakistan to work on the “LettuceBee Kids” project, a “social enterprise aiming to provide a self-sufficient mechanism of survival to street children.” The IE Business program challenges its International MBA class by exposing students to extreme poverty-stricken areas and countries where they get to participate first-hand in poverty projects. Within the program, the Change in Action (CIA) module was formed in 2008 as a part of the International MBA agenda to fight global problems.

It was challenging to take a diverse group of 400 of the top students in the program from Madrid to reduce poverty in Pakistan, having them brainstorm sustainable solutions for street children in Islamabad in just five days while they did not know much about the country in the first place. Professor Todd Lombardo brought to the table the design thinking concept – which is composed of six stages: understand, observe, synthesize, ideate, prototype, and test – to help the students come up with innovative solutions.

The author of the article, Saad Khan, urges “elite institutions” to get their students to be involved in similar projects and programs. Exposure to extreme poverty not only creates awareness among those who are not directly affected by it, but it allows for an acknowledgment of the costs of capitalism, the lack of business models which are value-based, and extreme disparities in income between the haves and have-nots. Additionally, Khan believes that foreign policies should be tweaked to better address problems of poorer nations, which in turn would help prevent and tackle terrorism.

– Leen Abdallah

Source: The Tribune

Dutch Foreign Aid Controversy

The current economic crisis is causing many Western countries to change the way they allocate funds in their budget, mainly regarding development aid. Increased contention has generated attention over the foreign aid topic. And now, the Dutch government is re-thinking their foreign aid plan: they want to shift from direct aid to more focus on trade. A 1 billion euro cut by the Dutch Ministry of International Trade and Development Cooperation (MITDC) generated this uncertainty and controversy over whether entrepreneurs and businesses can wholly be trusted to tackle global poverty. Thus, Dutch foreign aid is on the hinges of drastic change.

There are a few leading opposing arguments: the minister of MITDC Ploumen suggested that despite the cuts, trade can ease up on the damage effects. In another argument, author Linda Polman suggested that international aid can “prolong war, promote corrupt governments and contribute to a culture of dependency.” Ploumen stressed “international [development] cooperation,” now that most countries have moved up the poverty ladder and have become middle-income countries. On the other hand, Linda Polman views this new phenomenon of “international cooperation” as mainly serving Dutch interests. Polman is calling for a revision of European agricultural and economic policy.

A professor at the Radboud University, Henk van Houtum, expressed his thoughts in a Dutch newspaper regarding helping less developed countries; he said that alleviating structural inequalities from the world trade system provides greater help to more people than an aid program would. Bernedine Bos, from Corporate Social Responsibility (MVO), Netherlands, asserted that with those inevitable inequalities aside, investment in less developed countries should not stop. He asserts that causing political change at the structural level is a tough challenge, adding that entrepreneurial endeavors can undoubtedly cause a more effective “bottom-up” change with social responsibility.

Leen Abdallah
Source: Xinhuanet News
Photo: Google

Mozambique Uses New Technology to Fight AIDS
In Mozambique, 11.5% of 15 to 49-year-olds are HIV positive, and half of the untreated children who are HIV positive die before they reach the age of two due to delays in diagnosis and treatment. Now, new technologies to help diagnose and assess rural, poor citizens of Mozambique are being used by three different aid organizations.

UNICEF, along with the Clinton Health Access Initiative and Médecins sans Frontières (Doctors Without Borders), have been administering new tests that will rapidly increase the speed of diagnoses in children and also test other patients’ immunity levels. The new tests do not require a high level of technology, making it easier for health workers to administer the tests in rural areas, and are able to tell workers when a patient needs to switch antiretrovirals.

Normally, the HIV tests used in Mozambique take a spot of dry blood for testing with results taking nearly two months, with some patients never returning to find out the results. In addition to taking much longer, these older testing techniques are much less accurate than the current tests. The new technology takes no longer than an hour to determine if a patient is HIV positive.

Although the new technology helps the speed of return time of diagnoses, determining whether children in Mozambique are HIV positive is still a challenge as two types of tests are needed to determine if the antibodies of a newborn are from the mother or in the child’s blood itself. Aid groups hope to increase health infrastructure in the country to have the ability to offer both types of tests to patients.

Christina Kindlon

Source: The Guardian

Social Enterprise Helping India's Salt Harvesters
Sabras, a social enterprise organization based in India, is using micro-lending to help the country’s poverty-stricken salt workers gain freedom from predatory lenders and non-cooperative banks.

In the state of Gujarat, where nearly 70% of India’s salt is sourced from, self-employed salt pan workers are subject to harsh physical conditions as well as predatory loans leading to little profit. Temperatures reach harsh highs in summer and lows during winter, causing adverse health effects for workers. Since the workers are self-employed, a majority of them need to borrow money from lenders who fix the price of the salt much lower than it normally would be, cutting profits for the salt pan workers down to nearly nothing, most often just 1% of the market value. Most of the banks in the country are not willing to lend to poor people, leaving the workers without options.

Rajesh Shah, the founder of Sabras, recognized these hardships and created an organization that is not only for the poor but mostly owned and operated by the poor as well, with workers holding nearly 74% of shares in the company. Before there was an alternative lender like Sabras, workers were forced to take out loans with interest rates as high as 48%. Sabras’ interest rates are just 12.5% with the ability to purchase advanced solar pumps that allow workers to increase output over the long run.

Sabras has already made a large impact as nearly 70,000 people are employed in the salt industry in Gujarat. Shah contends that the company’s 400 shareholders have seen a profit increase of 400% within the last two years since they used Sabras loans to purchase the solar pumps.

Looking ahead, Sabras hopes to begin including women in the salt industry’s processes in order to increase profits and improve the quality of life for them as well.

Christina Kindlon

Source: The Guardian

Euvin Naidoo TED Talk on Investing in Africa
As president of the South African Chamber of Commerce – America, Euvin Naidoo works with leading corporations and governments to strengthen trans-Atlantic economic ties. In his Ted Talk, Euvin Naidoo focused on “Africa: the next chapter”. To separate the rhetoric from the reality and the fact from the fiction; to go to the actual data and statistics that exist about the actual things happening in Africa that make this continent a realistic investment opportunity and an option for all around the world.

He stated that investing in Africa is a broad term. Africa is not a country; it is made up of 53 different countries. And every country in Africa has a unique value proposition. You can win money here, and you can also lose money here.

Starting the talk about an investment opportunity, as a banker, Euvin Naidoo mentioned some macro-factors. The first sign is that Inflation is coming down across Africa while reaching double-digit figures in many other countries; he called it “Z.E.N. cluster”.

Zambia from 2004 to 2006 has moved from 18 percent in inflation to 9 percent; Egypt from 16 percent to about 8.4 percent; Nigeria from 16 percent to 8 percent – all in single digits. More fascinating, you have other countries, like South Africa, Mauritius, Namibia, which are also in single digits. And this is just part of the story.

Then he gave specific examples from some countries to illustrate his research.

Instead of focusing on South Africa’s gold, minerals, and its first infrastructure, Euvin Naidoo mentioned other important aspects. South Africa was recently voted as the top destination for the top 1000 UK companies for offshore call-centers. They have the same language, timeline, et cetera. Other big names that had reached Africa were Bain Capital and KKR, the big companies of private equity. Bain Capital’s acquisition of Edcon, a large retailer, is testimony to the confidence these famous names are beginning to place in the economy in what is going to be a long-term play.

Nigeria is clearly a hot spot. The new report, issued by Goldman Sachs, highlighted that, by 2020, Nigeria is going to be among the top 10 economies in the world. And also, without any sovereign backing, Nigerian companies are raising capital offshore.

In the oil industry, Africa provides 18 percent of the U.S.’s oil supply, while the Middle East offers just 16 percent. So, Africa can be an important strategic partner to America.

Finally, Naidoo concluded with Africa’s important position in the world economy because of its investment potential.

– Caiqing Jin (Kelly)

source: Ted Talk
Photo: WhiteAfrica

US AID and Nepal Partner to Educate on Agriculture
Nepal Economic, Agriculture, and Trade Activity (NEAT), a 32-month program funded by USAID, aims to “promote economic growth, reduce poverty, increase food security, and improve lives” throughout Nepal. As part of the program, USAID and Nepal have partnered up through the Nepal Ministry of Agriculture Development to distribute educational materials on agricultural practices in the hopes of improving the production of agriculture in the country.

Through the funding provided by USAID, more than 263,000 pamphlets were handed out detailing specific agricultural instructions, both written in Nepali and as visuals in order to aid those citizens who are illiterate. The pamphlets detail “critical agriculture practice” on 13 types of crops and 3 species of livestock.

The NEAT program has improved the agricultural education of 67,510 households throughout 20 districts of Nepal with a regular lack of access to proper food sources. Thus far, the project has already allowed area farmers to see an increased income of $8.5 million collectively. These farmers and households have had increased access to markets and are better educated on agricultural practices such as pest and disease control, use of fertilizer, improved seed, and “post-harvest handling.”

The Director of USAID’s Social, Environmental, and Economic Development Office, John Stamm, maintained that USAID is dedicated to creating sustainable development solutions, including the NEAT program – which will allow Nepalese citizens greater resources for continuing to improve their lives long after the program ends in August of 2013.

Christina Kindlon

Source: USAID