Archive for August, 2009

Looking at Development

Hello all,

Check out this insightful article by Kenyan economist James Shikwati. He questions the real goals and effects of development and the role of the G8.

“Development is the Ability to interpret/understand the World and creatively/efficiently respond to the challenges that confront humanity in order to increase the levels of human comfort on earth. The current development model sustains Africans on the “scratch the soil” level while they (G8 and re/emerging economies) import raw materials and add value to them. Adding value to African raw materials enables importing countries to grow their industries, financial and knowledge sectors while the African is left with hoe in hand scratching the soils for minerals and crop. Please note that even chicken in Western Kenya scratch the soil. Little ingenuity is needed in the scratch the soil model!”

The president of Rwanda, Paul Kagame, put it nicely; “The debate about good and bad aid misses the point. Aid must do things that wean people off aid—if not, aid is a failure.” (from a newsweek column by Fareed Zakariah)

Dambisa Moyo, Zambian economist and author of Dead Aid, argues that foreign aid has not helped Africa and may have even made things worse (Munk Debates: Dambisa Moyo argues in favour of …).

Although far from perfect, the microfinance sector has certainly begun to shift the focus of development strategies away from handouts and onto more innovative solutions. However it may also be prone to the same ailment as traditional aid. Ideally microfinance should help to bring about a situation in which it is no longer needed or useful: real development.

So is microfinance actually furthering development? Some new studies on the effects of microcredit from MIT and IPA (Innovations for Poverty Action) are not terribly conclusive on that front. Check out a review from the Economist on this here.

What is clear is that there is no magic solution. Microfinance certainly has its benefits and its place, however it is crucial to keep in mind the real goal of any poverty alleviation program: to eliminate the very need for its existence.



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A nice photo of the PMO from after our Spring Colloquium on Global Health and Microfinance.CIMG4472

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