Archive for the ‘Uncategorized’ category

The man who brought light to thousands

February 15th, 2010

rattermanWalt Ratterman died during the earthquake in Haiti.

He has personally brought light to thousands of people around the world.”

Read about his work and see pictures

Haiti doesn’t need more donations

January 24th, 2010

Haiti-quakeWith well over $1B donated so far to Haiti relief, the issue is not more donations, but effective deployment of existing donations.  If the Indian Ocean tsunami of Dec 2004 is any lesson, nine months after well-meaning intentions, just 39% of the money promised had been spent.  It was just not possible to spend the donations faster in any reasonably helpful way.  It is even more likely this will be the case in the devastation of Haiti.

What’s Next?

Paul Collier, an economist at Oxford University and author of The Bottom Billion, believes that a temporary new administration (instead of the current Haiti government) is required to administer proper allocation and investment of donor monies.  The emphasis is on investment, not just unaccountable hand-outs which Collier knows have been a complete boondoogle in Haiti and other poor countries.

There is enthusiasm from folks like Jeff Sachs for donors to commit $10-15B to Haiti for a grand 5 year rebuild.  While this sounds all wonderful and hopeful and exciting, this has been tried many times in situations like Haiti and has not worked.  Easterly, a former World Banker, has de-mystified this failed approach with data.  Calderisi, another World Banker has documented the failure of this strategy in Africa.

Bottoms Up, Not Top Down

Status quo approaches to aid are fundamentally flawed because they focus on a top-down “planner” approach where the giver assumes to know the formula which will work.  The real world doesn’t work this way.  This contrasts with the bottoms-up “searcher” approach where ownership is taken locally to experiment to find local solutions which actually work on the ground.

From a previous blog post:

The main issue, [Easterly] argues, is that our international aid agencies … are run by planners, not the entrepreneurial, finding-what-works “searchers”. We in the West are very utopian with a grand plan to eliminate poverty always the goal and what the politicians like to talk about.

If we really care about prosperity for Haitians

In the short-term, many Haitians need help to survive.  Most of this must come from foreign charity.   Let’s not confuse this with what Haitians need longer-term to thrive.

I believe Haitians deserve the opportunity for a better future, not another failed attempt of utopian charity.  To increase their own prosperity, Haitians must attract foreign private capital and generate an export economy which leverages its key competitive advantages … low cost of labor and proximity to the USA export market … to grow its economy.  A purely super-sized continuation of what some have called Haiti, “The Republic of NGOs” is recipe for continued human misery for most Haitians.

Top DefeatPoverty.com reads in 2009

January 10th, 2010

Here’s what readers were most interested in reading on DefeatPoverty.com in 2009:

1. The Caste System in India Lives

2. Globalization Good or Bad?

3. Social Business Model

4. Does Microfinance Impact Poverty?

5. Microfinance in the USA

6. For Profit Microfinance

7. Critiquing Microfinance

8. Is the World Getting Better?

9. Slavery by Phule

10. Microfranchising


And the top 5 most read new posts in 2009:

1. Slavery by Phule

2. Kiva provides Microfinance Loans in USA

3. Microfinance Heats Up in East Africa

4. Urban Housing for the World’s Poor

5. India Microfinance and Tightening Credit Markets

1,000,000 books for Myanmar libraries

January 6th, 2010
Bogalay book donation ceremony in March 2009

Bogalay book donation ceremony in March 2009

Last summer, I officially joined as a founding board member of a new start-up non-profit called Nargis Library Recovery (NRL). This NGO was started last year in response to the devastating 2008 Nargis cyclone (hurricane) which wiped out large portions of the Irrawaddy Delta leaving an estimated 135,000 people dead, 800,000 homeless, destroying much of the infrastructure … including about 2,000 libraries.

I want to do this until I die

In late 2007, I first met NRL’s founder, Dr. John Badgley, a well-known grassroots activist who started the Institute of the Rockies in the 1970’s and has had a distinguished career in the academic world with specialties in Asia Studies and libraries. Dr. Badgley is a Burmese speaker (Myanmar was previously known as Burma) and has extensive relationships in Myanmar with scholars, monks, librarians, business leaders and more. Dr. Badgley retired a number of years ago, but like most activist leaders, that just provided him more opportunity to focus on changing the world! At our inaugural board meeting, when we asked John how much compensation he would like/expect for being Executive Director, he responded by saying that it really didn’t matter as he was committed to supporting the recovery of the Myanmar libraries until he died.

2009 Accomplishments

In our recent board meeting, we walked through the humbling list of 2009 accomplishments we were able to make … all on a bootstrap budget of ~$40,000 plus LOTS of volunteer time and in-kind donations.  Here is a sampling:

  • Our “Green Card”. In Jan 2009, we received (very rare) special permission from the US Treasury to export books, computers and other materials needed to rebuild libraries in Myanmar (currently on US blacklist)
  • Two Significant Corporate Sponsorships. 1,000,000 books from Thrift Books and 6 shipping containers (50,000 each) of books from USA to Myanmar from American President Lines.
  • Books Actually Delivered to Libraries. We shipped and distributed more than 200,000 English & Burmese language books to more than 150 hand selected libraries in Myanmar.  Estimated value of books and shipping cost of $625,000!
  • A Scalable Book Delivery System. Now have refined an end-to-end scaled book delivery logistics system which includes: (a) sourcing books in USA; (b) selection, organization and packing of books into a shipping container; (c) transportation to ship; (d) ship transport to Singapore; (e) ship transport onwards to Yangon; (f) sorting and repackaging for delivery to targeted libraries in Yangon; (g) fundraising sales of some books for purchase of Burmese language books; (h) delivery of books to appropriate libraries.
  • Public Charity Application. We applied for IRS 501c3 public charity status (currently operating as a project of Institute of the Rockies)
  • Amazingly Generous Volunteers. Significant personal volunteer time received from many people in USA and Myanmar, but with special recognition to John Badgley (NLR Executive Director), Thant Thaw Kaung (NLR director, Myanmar-based partner) and his wife, May.

For 2010, we have some additional exciting plans including rebuilding our first libraries in addition to delivering at least 300,000 books in libraries in Myanmar.

Read more and see photos at Nargis Library Recovery

A Smarter Approach to Global Warming

December 15th, 2009

copenhagen_consensusI thought that the change I voted for was going to prioritize a more rational and facts-based approach to addressing the major issues of our times.  I thought that we actually were going to start to abandon our top-down, failed-from-the-start approaches to helping the poorest and to start “exploring” new approaches that might actually work.

Bjorn Lomborg leads the Copenhagen Consensus Center (Facebook page), a think-tank that recommends to governments and philanthropists around the world about the best ways to spend aid and development money … based on primary research and the consensus opinion of a lot of smart people who look at the data.  Bjorn thinks that climate change is a major issue and he thinks we’re thinking about it all the wrong way.

In an op-ed piece today, he argues “Investing in energy R&D might work.  Mandated emissions cuts (haven’t and) won’t.”

What is an example of a better investment?

Focusing on investments to reduce the at-risk malaria population (mosquito nets, environmentally safe indoor DDT sprays and new therapies) would save 78,000 times more lives than the same money spent on climate change.

Some more Bang for the Buck recommendations.

If you have an open mind to hear a perspective not getting the media attention in Copenhagen this week, I highly recommend that you read Bjorn’s article.

Please post your thoughts in comments about what you think of Bjorn’s thoughts and reasonings.

What poor people really want

October 23rd, 2009

Vanuatu-BoyBjorn Lomborg of the Copenhagen Consensus (see my previous post on Priorities for helping the world’s poor), posted an OpEd in today’s WSJ entitled “The View from Vanuatu on Climate Change“.  Vanuatu politicians have been some of the most vocal proponents of carbon cuts to prevent global warming destructive impacts on his country.

Rather than theorizing a lot about what the poor really want (which is essentially the approach of the Copenhagen Consensus), he decided to visit the tiny island nation of Vanuatu and ask some locals about how they would prioritize things.

Here’s what one woman said: “Having a boat in the village to use for fishing, transporting goods to sell, and to get to hospital in emergencies.  She doesn’t want more aid money because ‘there is too much corruption in the government and it goes in people’s pockets,’ but she would like microfinance schemes instead. ‘Give money directly to the people for businesses so we can support ourselves without having to rely on government.’”

I won’t comment here on the extreme disconnect between her country’s president and her situation.

Microfinance is very effective in getting cash to the poor

One of the lesser told benefits of microfinance is that money actually does get into the hands of the poor.  Every penny of every $50 loan is accounted for in financial records which are then audited regularly.  Every borrower has a pass book which details what they’ve received and paid.  And I know from first hand experience that even illiterate borrowers understand very clearly exactly what they’ve received, paid back and their outstanding balances.  It is much more difficult for governments and other middlemen to get in between the transactions and fraudulently steal money designated for the poor like what happens in most other charitable schemes.

As Mother Teresa would say (in paraphrase), “We talk a lot about the poor when we need to be talking to the poor.”

The man who saved 1 billion lives

September 16th, 2009

borlaug-wheatNorman Borlaug, aged 95, died this past Saturday.   In 1999, the Atlantic Monthly estimated that his efforts (along with the people he trained and institutes he founded) had saved more than one billion lives … almost all in developing countries.  [Thanks to Gregg Easterbrook who posted op-ed piece today.]

You’re probably asking … what the heck did he do to have such an impact?

Borlaug was a key innovator in agriculture productivity.  He developed higher yield crops which required less water, less pesticides, were more disease resistant and thrived under much more varied and adverse conditions than previous cereal breeds.  He is often referred to as the father of the Green Revolution.

A few big picture stats:

  • In 1950, world grain production was 692 million tons for 2.2 billion people.
  • In 1992, production rose to 1.9 billion tons for 5.6 billion people.
  • Grain yields doubled from < 0.5 ton per acre to 1.1 tons per acre.
  • From 1965 to 2005, global per capita food consumption rose to 2,798 daily calories from 2,063 … mostly in developing countries.

Changing history in India and Pakistan

In the 1965 India/Pakistan famine, Borlaug traveled with 35 truck loads of high-yield seeds to the Indian subcontinent.  In the midst of a famine (and a war), he (and his Mexican assistants) sowed the first crop with these seeds.  Within 3 years, Pakistan was self-sufficient in wheat production and within 6 years, India was self-sufficient in all cereal production.  There hasn’t been a shortage of food since then in those countries.  He appropriately received the Nobel Peace Prize.

Backlash from people who have never gone hungry

As he ventured into seeking to provide similar cereal crop benefits to Africa, he was denounced by critics because his techniques require some pesticides as well as fertilizers.  Here’s some of his responses:

“[Most Western environmentalists] have never experienced the physical sensation of hunger.  They do their lobbying from comfortable office suites in Washington or Brussels.  If they lived just one month amid the misery of the developing world, as I have for 50 years, they’d be crying out for tractors and fertilizers and irrigation canals and be outraged that fashionable elitists in wealthy nations were trying to deny them these things.”

“Without high-yield agriculture, increases in food output would have been realized through drastic expansion of acres under cultivation, losses of pristine land a hundred times greater than all losses to urban and suburban expansion.”

In nations which have adopted his techniques, population growth as slowed as less workers are needed to produce food.

On behalf of the billions of people who have benefited from Borlaug’s pioneering work, I say “thank you.”

Vidagas raised $1.4M for social business

September 1st, 2009

vidagas truckCongratulations to VillageReach for leading the successful fundraise of $1.4M from Oasis Capital, a European social venture fund to expand their African social business, Vidagas.

I have previously written about Vidagas and how they have innovatively developed a commercial business to become the largest distributor of propane gas in northern (mostly rural) Mozambique.

Seattle Times has more details.

Microcredit helps the entrepreneurial poor

August 12th, 2009

india community meeting

The Economist published an article called, A partial marvel, last month which summarizes the results of various research which evaluates the value of microcredit in helping the poor.  The Net:  Not everything (as expected) is rosy.

Here are a few highlights:

  • Funds still subsidized. 53% of the $11.7B committed to microfinance industry came at rates below-market levels.
    • COMMENT: This is a HUGE change as just 5 years ago that number was probably closer to 90%.  Also, in countries like India, the government mandates that banks lend at a lower rate to those serving the poor, which isn’t all bad.
  • Measuring impact is complicated.  Traditional approaches of having control groups (similar people who are denied loans) and comparing those to those receiving the opportunity (borrowers) are very difficult to implement.  Some also wonder if microcredit is inproportionately allocated to those who are entrepreneurial.
    • COMMENT:  This is all true.  It is very difficult to find comparable groups and then it’s expensive to monitor effects over a long period of time … and deny them the opportunity.  And why is it unfair that those who demonstrate more entrepreneurial skills shouldn’t be trusted with more credit?
  • Few new businesses started. The majority of microcredit loans are used to finance an existing business and not for starting a new business.  Study in Hyderabad showed only 20% of loans funded a new business.
    • COMMENT:  This is my experience as well.  Microcredit loans generally have a standard bell curve distribution where a small % of borrowers are incredibly successful (including starting new businesses), a small % of borrowers actually become worse off and most borrowers do OK.  This is the real world.
  • Functions as seed capital.  “Microcredit clearly allowed more people to overcome the barrier posed by start-up costs [to start or expand a business]” and “By being willing to take a risk on entrepreneurial sorts who lack any other way to start a business, microcredit may help reduce poverty in the longer run.”
    • COMMENT:  I think this is right.  As an entrepreneur myself, I know the huge value of seed capital to get a new business off the ground.  Wealth is built over time, not instantly.

Rechargeable batteries as a social business

January 18th, 2009

I met up recently with Whit Alexander, a co-founder of board game company Cranium which they sold last year to Hasbro. He has provided the seed funding for a new social business venture called Burro.

Whit believes that there is a huge opportunity to develop quality branded products and a distribution channel optimized for the bottom of the pyramid (4B+ people who live on < $2/day). His goal is to deliver products at reduced cost to these customers which also improve their lives.

Their first business line is renting rechargeable batteries starting in Ghana. Why, you might ask?

  • Long-term cheaper. Rechargeable batteries are cheaper to operate over their life-time than the traditional non-rechargeable disposable batteries.
  • Multiple benefits. Batteries can power lights which lets a shop stay open longer and kids to perform homework when it’s dark. Also, mobile phones and radio … important communication tools … all require batteries. Batteries are a regular budget item for most families globally.
  • Better for environment. Growing issues created by disposed non-rechargeable batteries.

Here’s how their model works:

  • Burro purchases rechargeable batteries from low-cost Chinese manufacturers.
  • Burro sets up centrally located branch offices to store and recharge batteries.
  • Burro hires independent battery rental reps who signup customers to monthly rental agreements which cost the equivalent of 3 non-rechargeable batteries each. Customers are provided unlimited recharging of their AA batteries along with an adaptor case (see photo) to allow batteries to operate as popular D-size batteries.

Currently they are operating a pilot in Ghana to demonstrate the business model and get the kinks figured out. Once they’ve got the model figured out, they plan to expand their branch network plus to offer additional products through their growing distribution channel.

Going the last mile to save lives

January 5th, 2009

I was introduced recently to VillageReach, an innovative non-profit headquartered in Seattle which is focused on addressing one of the largest issues in healthcare delivery systems in emerging countries … delivery to the local clinic.

Most of us in developed countries just assume that the pharmacy/clinic will have the medicine when you need it. You don’t realize the sophisticated logistics that work behind the scenes to get the right quantities of medicines to the right pharmacies when they are needed. The same process is used to get food and toilet paper to your local shop. And if it’s food that requires refrigeration, you trust that someone has kept it cold (and the at the right temperature) from its source to where you buy it so you don’t get sick when you eat it.
VillageReach was created in partnership with the government of Mozambique to develop a system for distributing medicines to rural clinics which were facing ongoing issues. One of the key metrics that demonstrated the brokenness of the system was the vaccination coverage. Despite ample supply of vaccines at the regional level, there were large groups of the population who were not receiving vaccinations creating an ongoing significant public health issue.
As VillageReach visited the rural clinics in northern Mozambique they were to supply, they learned about some major problems including:
  • no system for recording and reporting vaccine inventories
  • no system for forecasting vaccine demand needs
  • no system for ensuring cold chain to ensure vaccines were still effective
  • oversupply stocking of some vaccines (essentially hoarding)
  • many regular stock outs for many vaccines
  • no confidence in the upstream system for delivering vaccine supplies
“Cold chain” is the technical term used to describe the process by which a product needs to be kept consistently at a certain cool temperature to protect it from spoiling. Like certain foods, many vaccines require consistent cold storage and lose their effectiveness if the temperature is not maintained. The only thing worse than not getting a needed vaccine is getting one that is no longer effective and thinking you’re protected.
Since many of these clinics did not have electricity, the only option for refrigeration was to use propane-powered refrigeration units. The issue … there was no reliable supply of propane to these remote clinics. With no other option, VillageReach raised money to start a commercial business called Vidagas to order to deliver propane tanks to the clinics. I’ll write a separate post later about Vidagas.
VillageReach then built a paper and software system to manage the logistics of vaccine delivery from regional warehouses to the government clinics. A trained staff person visited each clinic on a regular basis to take delivery vaccine inventory, record the status of refrigeration equipment, provide updates/training to clinic staff, gather details on expected demand in order to better plan for the next vaccine delivery and pickup any other details which are essential in order to address special issues.
The result … the vaccination coverage rate for DTP3 went from 69% to 92% (developed world levels) and > 90% coverage for almost all other vaccines. In global health circles, this is as close to a miracle breakthrough as you get! The Mozambique government, the World Health Organization, PATH and many other organizations have all expressed sincere excitement about these results.
Why does this matter?
First there is an immediate opportunity to deliver existing vaccines in order to eliminate dehabilitating and fatal preventable diseases in markets with poor infrastructure. Additionally, there are new vaccines in the works, like the malaria vaccine, which have huge potential to save/improve millions of lives but currently have no delivery system to many of the most vulnerable populations.
Effective logistics isn’t as sexy as a new amazing vaccine, but it’s essential to fulfill the value of delivering these life-saving treatments.

Priorities for helping the world’s poor

November 9th, 2008

There was an interesting article in this weekend’s Wall Street Journal’s Weekend Journal called “A New Dawn” which featured too very different perspectives on climate change. One article by Ian McEwan focuses on how developed countries should focus our budgets on climate change and the second article by Bjorn Lomborg focuses on how we need to focus our budgets on doing things which will have the broadest impact for humanity and the world.

I think both articles are a good read and both articulate very strong perspectives and arguments. I am most intrigued though by the arguments made by Bjorn Lomborg as they are more global in nature, so I’m going to focus more on his ideas in this article. Lomborg is a professor at Copenhagen Business School and the organizer of the Copenhagen Consensus, an interesting gathering of some of the world’s smartest scientists and economists which attempts to gain a “consensus” on the priorities for doing the most good with our investments. I wrote about this process earlier.

Here are a few of Lomborg’s facts/observation of climate change forecasts:

  • The UN science consensus expects temperature increases of 3 to 7 degrees Fahrenheit by 2100, leading to sea-level increases of 0.5 to 2 feet. This is similar to the 1.5 feet of sea-level rise experienced in the past 150 years.
  • Warming in this time-frame will mean about 400,000 more heat-related deaths globally and 1.8M fewer cold-related deaths according to Ecological Economics publication.
  • Economic models estimate a decrease in global GDP of about 3% by 2100. The UN expects that in this same timeframe the average person will be 1400% richer.
  • Kyoto compliance requires spending of ~$180B per year through 2100 with an eventual reduction of global temperature of an eventual estimated 0.3 degrees Fahrenheit.

He points out that these climate change-related investments might make sense as the top priority in a world of infinite resources and no other major issues. The reality is that we face many other moral decisions … life and death decisions affecting 10’s of millions of people … which must be considered. Here are some of the other potential priorities:

  • Agriculture output. Climate change is expected to reduce agriculture productivity by 1.4% by 2100. By 2080, global agriculture output is expected to more than double. If we did nothing to reduce the impact of global climate change, this doubling would be delayed until … 2081.
  • Malnutrition. Global warming is forecasted to increase the number of malnourished by 28M by the 2100. Today there are 900M malnourished people. We expect to add about 3B more people to the planet by 2100. By that time, the number of people malnourished is expected to drop to 100M. This is more of a political will issue than a financial issue.
  • Kyoto vs. Hunger. Spending $180B per year through 2100 on Kyoto will avoid 2M hungry by 2100. Spending $10B per year, the UN estimates could save 229M people from hunger today. Spending directly on hunger (vs. indirectly through carbon reductions) is 5,000x more effective. Climate change (if fully realized) would only address 3% of the hunger problem.
  • Foreign aid effectiveness. Focusing foreign aid on areas such as direct malnutrition policies, immunization and agricultural R&D would return value of 15-20x the good than the cost.
  • Innovation vs. reductions. Incentives for creating new technologies (a cornerstone of Obama’s proposed plan) which offer low-carbon alternatives will deliver 11x more good than the cost. Whereas simple CO2 cuts produce $0.90 return on the dollar. He encourages countries to spend 0.5% of their GDP on low-carbon innovation incentives.

I am not an expert on the numbers quoted, so that requires further review and validation. I do admire intellectual honesty and a genuine debate with all of the facts on the table as we have some very important priority decisions to make now with a new President and Congress. I’m hoping we’ll put aside philosophical arguments and let the best ideas win out … especially for the sake of the world’s poor who have no voice.