Financial Consortium To Alleviate Global Poverty

So improving financial services and financial systems in part can help alleviate global poverty?  Certainly!  Microfinance allows for more businesses to run,  which leads to more job creation, increasing economic growth, and thus reducing the number of people living in severe poverty.  The concept is fairly simple.  Check out this video!

-Georisa Chang
SOURCE: Consortium on Financial Systems and Poverty

Renewed Partnership Between U.N. and U.S. Peace Corps Strengthens Fight Against Hunger

An agreement was signed on Thursday between the United Nations and the United States Peace Corps marking their mutual allegiance in the battle against world hunger.  The plan -- increase food security in 76 countries where more than 8,600 U.S. volunteers work.

Signed by the U.N. Food and Agriculture Organization (FAO) and the U.N. World Food Programme (WFP), this ensures that all three organizations have access to the resources necessary to help the world's poor and hungry.  Highlighted by WFP Executive Director Josette Sheeran, "...we all work a hand up, not just a hand out, to improve their own ability to produce and access food for their families and communities."  Like the old saying goes, "Give a man a fish, you feed him for a day, teach a man to fish you, feed him for a lifetime."

The Peace Corps has worked with FAO and WFP in nearly 40 countries promoting food security through citizen participation, education, and capacity building.  Some of the techniques and practices shared between Peace Corps volunteers, FAO, and WFP include: training on sustainable gardening and organic farming, providing education on nutrition and hygiene for children, proper food storage and handling, and a workshop on how to grow produce.  This critical issue of food security must be treated at the source, the poor and the vulnerable.

"FAO and the Peace Corps have a long history of working together in rural communities throughout the world.  This agreement signals a renewed, enhanced commitment to harnessing the respective strengths and expertise of our three organizations to tackle the root causes of hunger and ensure sustainable food security and economic development."

-Jacques Diouf, FAO Director-General

-Georisa Chang

SOURCE: UN News

UN Deputy encourages tourism as method to end poverty

In a recent speech, UN Deputy Secretary-General Asha-Rose Migiro urged governments and financial institutions to support tourism as a method that can “stimulate economies and overcome poverty”.

Dr. Migiro’s October 10th address to the United Nations World Tourism Organization (UNWTO) in South Korea pointed out how tourism has seen impressive growth over the last several decades and now represents 5% of the world’s GDP, saying also “this is creating jobs for local communities and diversifying national economies.” She then poised the question, “how can this phenomenal growth be harnessed in support of the Millennium Development Goals?”

The Deputy Secretary-General focused three ways in which targeted efforts can have a greater impact for developing nations.

• In countries where poverty and hunger are most extreme, tourism can continue improving basic infrastructure and services, such as transportation, communications, energy, and water supply.
• The expansion of tourism will continue to generate opportunities for employment, and the creation of tourism-focused small businesses focusing on goods and services.
• Tourism can empower women by employment as managers, and create opportunities for women-run businesses, Dr. Migiro added that she has seen “first-hand how community-oriented tourism can promote women’s social and economic mobility and unlock their entrepreneurship.”

The Deputy Secretary-General also proposed several specific action items for governments, investors, and donors to take; saying governments should develop a pro-poor tourism strategy that focuses on services and jobs, they should integrate gender participation in all decision-making, government should increase community participation in developing tourism products and in the development and management of tourism sites, and they should integrate environmental and cultural protection with tourism development.

Despite the obvious positive effects, the Deputy Secretary-General was quick to point out that tourism had not been made a “priority area for either funding or engagement” by the world’s governments or donors, saying “I urge you to advocate on behalf of tourism's potential to create jobs, attract foreign exchange, investment and know-how and stimulate local economies.”

Raised in a village on the side of Mount Kilimanjaro in Tanzania, Dr. Migiro said she had seen first-hand the positive impacts tourism can have on developing economies.

"Over the years I have seen how tourism has helped to change the face of this majestic landscape,” she commented, speaking of the “great power of tourism”.

Dr. Migiro closed by emphasizing that sustainable development is perhaps the highest prioarity for her boss, Secretary-General Ban Ki-moon

“Saving our planet, lifting the poor from poverty, and advancing economic growth for all are one and the same cause - From the soil of sustainable development we can grow peace, security, human rights and a world of opportunity for all.”

-Joshua Rogers

SOURCE: The United Nations

“Invest In U.S. Global Leadership”: Former Members Of Congress

Despite having different political opinions, former members of Congress, Tom Daschle and Tom Ridge agree on one fact: when it comes to the issue of America’s security and prosperity, there is no alternative of continued engagement and U.S. leadership around the world. They also stated that, making disproportionate cuts to U.S. investments in diplomacy and international development would be a serious mistake especially in time like this.

In answering the question, how investment in global partnership can help U.S. economy, the former members pointed out that, increasing America’s share of exports will require substantial investments in programs that forge international partnerships, open new markets and help develop local environment where U.S. products and services can be sold successfully. The 1% international affairs budget can do just that.

Over the past 40 years, U.S. trade has tripled as a share of national economy, and nearly half of all U.S. exports now go to the developing world. The authors quoted Tom Donohue, president and chief executive officer of the U.S. Chamber of Commerce, “95 percent of the people we want to sell something to live somewhere other than the United States.” Not only that a majority of the 500 largest companies currently receive more than half their revenues from foreign sales.

Not only economic reasons, but also the national security reason emphasizes the importance of U.S. investment in diplomacy which is why prominent military leaders like former Defense Secretary Robert Gates, are such strong advocates for the full funding of the international affairs budget. The former Congressmen underscore the significance of the initiative, “Impact 2012: Building a Better, Safer World, a nonpartisan education effort that calls on candidates of both parties to commit to protecting and strengthening U.S. strategic investments in development and diplomacy. After all, when it comes to the point where country’s security and prosperity are at stake, every other issue just falls short.

-Nisha Noor

SOURCE: POLITICO

UNDP's International Centre for Private Sector in Development

A new UNDP center opened its doors last week in Istanbul, Turkey. This new facility is called UNDP's International Centre for Private Sector in Development, and according to UNDP administrator Helen Clark, it aims to engage the private sector in anti-poverty efforts and to be a source of expertise on building business models that promote home-grown enterprises and create employment in developing nations. The private sector has a main role in fostering economic growth and development, and institutions like this centre will be of great help, since they serve as knowledge depots and a way to link local, regional and global development actors.

“People in country after country are calling not only for new freedoms and an end to injustice, but also for the chance to earn a decent wage and improve their standard of living. To meet their aspirations, countries need dynamic and competitive businesses creating jobs and spurring innovation” claimed Clark during the opening event. By actions like this brand new centre, UNDP tries to involve the private sector in international development and commit it to advance towards the accomplishment of the Millennium Development Goals.

- David Nebreda

SOURCE: UNDP

Foreign Aid 101

Switzerland To Increase Aid Budget

As the United Kingdom did some days ago, the Parliament of Switzerland voted for increasing overseas aid for development for the next years, despite the international economic crisis. With the additional funding, Switzerland's foreign aid value will reach 640 million Swiss francs, which is equivalent to 690 million US$. The Swiss Senate has also decided to scale the country's contribution to development and aid up to a 0.5% of the GNI before 2015. That level is still shorter than the famous goal of 0.7, but it is considerably bigger than the US 0.16%. Today, only four countries assign 0.7% of their GNI to official development aid: Denmark, Sweden, Luxemburg and the Netherlands.

The reasons declared by Switzerland's Foreign and Economy Ministers, this increase responds not only to the desire of reducing poverty, but also to advance Swiss interests abroad and to tackle the causes that lie beneath insecurity, conflicts, migration fluxes or environmental problems. The US should be taking note when even a country traditionally isolationed, neutral and barely involved in international affairs as Switzerland starts taking measures in this sense in the middle of an economic crisis.

- David Nebreda

SOURCE: DEVEX

O3b Networks: Connecting the Unconnected

Communications have not been the same since the appearance of internet. From its beginnings in the 80s, internet has developed to be the most accessible and popular way to connect big numbers of people from every corner of the World almost instantly. It has also decisively influenced every part of our lives, from job search to vocabulary. But there is tail for this face of the coin: out of 6.9 billion people living today, less than 2 billion use internet, and most of them can be found in the First World. So, there are almost 5 billion people with very limited or no access to the web. This means that more than two thirds of the population simply cannot participate in the fluxes that motion what has been called "the Information Age".

But there is a company that has decided to skip this massive cleavage. O3b (other 3 billion) Networks aims to wide open the "information highway" for one half of the World's population. By a combination of fiber cable and a new generation of satellites, O3b Networks will provide an affordable internet connection to more than 150 countries, concentrating in insufficiently connected areas like South America, Africa, Middle East, Asia or the Pacific and overcoming traditional obstacles for information flows like geography, economics or political instability. If this initiative achieves its declared goals, the new opportunities for the countries and human beings favored by it will be almost unlimited.

In the words of O3b founder, Greg Wyler: "We will enable individuals, families, communities and nations to enrich their quality of life through greater interactivity with the global community. O3b will accomplish this mission by reducing core and access transmission costs through the deployment of a groundbreaking, next-generation satellite constellation that enables operators to offer easier, faster and more affordable connectivity to their customers, profitably and therefore sustainably." With a cooperative, fresh, and responsible attitude, and trying to involve as many actors as possible (from population to PC manufacturers, from local communication companies to governments) Ob3 Networks sets an example of how companies can find enormous opportunities in international development and the battle against poverty.

- David Nebreda

SOURCE: O3b Networks

Finally, Hope For Many War Victims In Sri Lanka

On Februrary 1st, a multilateral program was launched between the Sri Lankan Government, the United Nations, and its humanitarian partners on the island off the southern coast of India to help rebuild and improve the lives of the thousands of people that have been affected by the war between the government and the Tamil separatists. Targeted for people in the northern part of Sri Lanka, the program is designed to assist the impoverished and displaced populations by providing frameworks and strategies for long-term sustainable economic development. Now that the decades-long war is over, the goal is to allow people to get back to leading normal lives, and ensure that living conditions for everyone are vastly improved. Some of the strategies outlined are to build shelters and homes, and to continue to support agriculture, food security, and livelihood recovery. With this partnership with the UN, the Sri Lankan Government is optimistic that the hard-hit northern regions of the country will be able to experience positive economic and social development, helping to improve the living condistions and welfare of thousands of people.

- Brock McNairy

SOURCE: UN News Centre

Melinda Gates on Saving for the Poor

In a recent Gates Foundation Blog, Melinda Gates discussed the importance of saving for poor people. With the recent surge in the distribution of microloans to people in developing countries, more people in the development field are realizing that saving mechanisms are just as important. Poor people have been saving for a while, (it’s hardly a new concept to them), but it has been hard for them to put their savings in banks as they are geared towards wealthier customers, and are often hours away in a city. As a result, poor people’s options for saving are limited to hiding cash in their homes, and buying jewelry or livestock. These people need reliable, safe ways to save their money so that they can invest in their futures and their children’s futures. Just like any person in the U.S. would want.

The Global Savings Forum was held on November 16^th in order to find solutions that provide impoverished communities with money-saving mechanisms. Key players from banks, microfinance institutions and more, gathered to brainstorm about what innovations could make “financial inclusion a reality for poor people.” Melinda Gates, a participant at this Forum, pledged $40 million from the Gates Foundation to help these partners collaborate. She remarks that her inspiration to get involved in this project was drawn from a trip to Mexico, during which she witnessed a system involving women receiving welfare payments at rural retail stores. It’s a system that works because the women trust the system and they have better access to their savings accounts. Additionally, the women are given a smart card that is linked to their finger print in order to access their accounts.

-Clare Ortblad

SOURCE: Gates Foundation

Rwanda: A Success Story

Considering that Rwanda has a turbulent and violent past, it is remarkable that the country is now on an upward trajectory due to recent development projects. Rwanda’s capital, Kigali, is modernizing rapidly as hotels, a national museum, and a few skyscrapers are being constructed. Rural areas are also being affected by new construction projects, including new roads and the laying of miles-long fiber optic cable. The government intends to provide its entire population with access to internet. These recent developments in Rwanda are truly exciting – one of the smallest countries on the continent is spending its own money (not donor funds) on projects that will push it forward into the 21^st century. The government’s plan to lay more than $100 million worth of fiber optic cable, and connect its citizens through the web, will provide “some of the world’s poorest people with access to one of the richest resources: knowledge.” In addition, during the recent United Nations Millennium Development Goals (MDG) summit, Rwanda was hailed for its good work in achieving the MDGs, particularly towards maternal and child health. Go Rwanda!

- Clare Ortblad

SOURCE: NYTimes

Too Much Aid to Handle?

In a recent Beyond Profit article, Jerryanne Heath raises an interesting point in regard to the outpouring of aid that Haiti has received since the earthquake last January. She argues that in this particular situation, aid should be focused on saving immediate lives rather than improving the long-term infrastructure or developing a ten year plan for Haiti.

Why? Aren't both forms of aid important for creating a stable nation?

Heath points out what many people tend to forget: Countries can't just be grouped into developed and developing nations. Haiti's past is unique. By ignoring the specific economic and political plight of the Haitian people and overwhelming its government with money that it cannot fully use, donors not only waste money, but diminish Haiti's responsibility to become a sovereign, mature democracy, able to support its own citizens.

What's the solution then? During a crisis such as the earthquake, the priority, of course, is saving lives. It has been inspirational to see the outpouring of support and aid flow to a nation during a time when it needs it the most. But continuing to give aid to help "develop" a nation without a clear action plan on how to solve the overwhelming corruption in Haiti is in many ways irresponsible. The focus should be on helping Haiti to develop a functioning, legitimate government, with the power to tax and distribute aid to its own people. Then, and only then, will aid given to the nation be fully used.

What does this have to do with The Borgen Project? Well, one of the questions we frequently get asked is, "How can we support giving aid to countries that are obviously corrupt? How can you be sure that the aid will reach the people who actually need it?" We have the same concern. We don't support throwing money arbitrarily at nations. We want our Congressional leaders to develop plans with other nations to ensure that aid is not siphoned through corrupt politicians, illegitimate businesses, or drug tycoons. Nations that wish to receive aid must understand the importance of eliminating corruption.

-Corey Cox

SOURCE: Beyond Profit

Innovative Development Financing: Globalization as a Force for Good

It has become clear in recent years that current trends of globalization often adversely affect the developing world. The integration of world markets has resulted in the struggle of poor countries to keep up with the technological gains of wealthier nations and compete with multinational producers, both domestically and abroad.

However, recent innovations in global finance offer the opportunity for globalization to help, not hurt, the world's poorest populations.

In the last decade or so, the global financial sector has become the primary beneficiary of economic growth, and the current volume of foreign exchange transactions is about US$3.6 trillion per day. It occurred to some that the developing world should benefit from this staggering volume of financial trade, and in 2002 at the Monterrey economic summit, the concept of innovative development financing first made its way into international discussions. In the years to come this concept expanded, and starting in 2006 the first innovative finance mechanisms were implemented.

Today, three mechanisms exist to raise funds for development: UNITAID, which uses a small levy on international airline tickets to bring affordable HIV/AIDS and malaria treatments to developing countries; the IFFIm, which uses revenue from bonds to establish immunization programs worldwide; and the Advance Market Commitment, a pilot program that connects donors with pharmaceutical companies to increase funding for vaccine research and secure fair pricing for consumers.

Since 2006, these mechanisms have generated more than US$3 billion in aid, which has gone to 80 recipient countries. (These funds supplement official assistance from nations and international institutions.) Their legitimacy and effectiveness have gone largely uncontested. Surprisingly, however, less than a dozen countries are currently participating in these efforts, the United States not included. The Millennium Development Goals Summit in NYC next week will hopefully bring greater exposure to development finance and its potential.

The forces of globalization and its often harmful byproducts will not be reversed anytime soon. However, innovative development finance shows that through international cooperation, the connections globalization fosters can benefit our whole world, and not just a privileged few.

-Elizabeth Newton

SOURCES: Leading Group on International Financing for Development, The Christian Science Monitor

Basket Weaving Inspires Rwandan Women

The 1994 Rwandan genocide left the country's population 70% female. Since then, Rwanda has had the most gender-equal parliament in the world. Women can also own land and can legally have a separate bank account from their husband's. Since the genocide women have also begun to become entrepreneurs in order to rebuild their country. In a partnership with US company Macy's, Rwandan company Gahaya Links, run by two sisters, has begun to financially empower women. Gahaya Links employs 4,000 women to weave baskets which are then sold to Macy's. Each basket takes four days to weave and is sold for $46. Workers take home $8 of that. Many men have been inspired to follow their wives in the craft, doubling family incomes. Gahaya Links has also worked to empower Rwandan women to start their own businesses.

- Clara Hill

SOURCE: "Weaving out of poverty" - CNN, "Shop for a Better World" - Macy's

Report Optimistic About Africa's Future

The 2010 African Economic Outlook report, released on Monday, predicts a positive turnaround in a continent hit hard by the global financial crisis. The average growth rate of 6% amongst African nations in 2006-2006 was pushed down to 2.5% in 2009. In spite of this drop, however, experts are positive about the future, predicting a growth of 4.5% in 2010, and 5.2% in 2011. The findings of the report increase pressure on the International Monetary Fund and the G-20 to take these statistics into account when they announce their suggestions to the financial sector concerning contributions to help the alleviate the ongoing situation in Africa.

-Andrew Oestreich

SOURCE: ONE International