Defeating Global Poverty

A new survey by the World Health Organization on the impact of widespread distribution of free bed nets combined with anti-malarial medicines notes some very positive results. Here are some excerpts and summaries:

In Ethiopia, deaths of children from malaria dropped more than 50 percent. In Rwanda, they dropped more than 60 percent in only two months.

Zambia had only about a 33 percent drop in overall deaths because nets ran short and many districts ran out of medicine. But those areas without such problems had 50 to 60 percent reductions.

“We saw a very drastic impact,” said Dr. Arata Kochi, chief of malaria for the W.H.O., “If this is done everywhere, we can reduce the disease burden 80 to 85 percent in most African countries within five years"

He estimates this 5-year campaign would cost about $10 billion and would reduce the death rate due to malaria to thousands per year rather than millions per year who now die.

Reporting on this report in The Economist and New York Times.

Labels: africa, malaria, poverty

Uganda health experts are asking the developed world to allow them to strategically deploy DDT-based products to fight malaria.

Here are some stats on malaria:

• Over 10 million Ugandans are infected each year
• Up to 100,000 Ugandans die from malaria each year

Using an inferior product (more expensive, lasts shorter duration and costs more), Icon, Uganda was able to reduce a 100,000 local population carrying the disease (a key factor in long-term impact on malaria) from 30% to 3%! This investment more than paid for itself in lower healthcare costs and human productivity let alone human suffering.

The issue is that DDT has been banned by western governments since 1972 and international aid requires that receiving countries also ban DDT. There is no plan to use DDT for agriculture (which is why it was banned), but simply for household use to help kill the mosquitoes carrying the malaria disease. While the research now is very clear, G8 environmentalist still are against any uses of DDT.

See full article in WSJ, Give us DDT.

UPDATE 8-20-2007: New York Times article, A New Home for DDT, refers to new research that DDT has the added benefit that mosquitoes which are immune to DDT are still repelled by it making it an extremely effective indoor malaria (and yellow fever and dengue fever) prevention technology.

Labels: africa, ddt, malaria, poverty, uganda

The Trouble With Africa: Why Foreign Aid Isn't Working by Robert Calderisi is a very interesting read for anyone interested in getting more insight into the complexity of seeing a better future for Africa. Calderisi has 30+ years on the ground with international development and shares many stories about his personal experiences as well as behind-the-scenes issues of dealing with various Africa projects and leaders over the past 20 years. Even though he was a World Bank executive, he provides plenty of critique of the World Bank and the complexities of dealing with international politics.

Calderisi concludes with 10 bold and contraversial recommendations for re-directing African international aid towards the better governed countries in an attempt to deliver some helpful long-term beneficial results.

Read my full book review

Labels: africa, book reviews, poverty

The Economist published a report on how mobile phones are starting to become banking tools for the poor. In South Africa, 16 million people, over half of the adult population, have no bank account. Yet 30% of those people have mobile phones almost all of which are used on a pay-as-you-go basis.

You might think -- why do poor people need/want bank accounts? The report highlights Andile Mbatha, who owns a hair salon in Soweto. He used to have to travel more than 2 hours by minibus to send money to relatives ... a personal delivery. He also used to have to keep what ever cash he had on hand at the salon or with him as he travelled. He now uses a new mobile banking service called Wizzit which enables him to instantly transfer money to his relatives for a very low fee which enables him to spend more time earning money. He also now receives payment for services at his salon via mobile phone from more than half of his customers which means that he doesn't have to manage a lot of cash.

The reality is that the poor, with by definition fewer resources, have needs (often more so than wealthier people) to transfer their monies to support other dependents and family members who out of necessity live significant distances from each other. Without bank accounts, the transaction cost of making these payments (recurring ones are often referred to as remittances) are very high ... even higher than what it costs wealthy people to transfer even much larger sums. This is often referred to as the the "poverty tax" where the less well off pay a premium because they are not able to use more economical service options due to their economic and/or social status.

I am a big fan of scalable models like this which provide valuable services to the poor at a price point that works for the poor. This enables increased productivity and therefore enables more earnings capability which is a core element in increasing wealth (another way of saying decreasing poverty levels).

And, I'd like this kind of service too!!

See NPR story on Wizzit.

Labels: africa, mobile banking, poverty, wizzit

Greg Wyler, an American tech entrepreneur, is investing his own money in bringing Internet services as a business to Rwanda. His company, Terracom Communications is for the first time offering cellphone coverage, Internet access and television to unserved parts of the country. Terracom is hooking up schools to the Internet and opening Internet cafes throughout the country. They are even starting to offer high-speed laptop mobile network services like Verizon/Sprint EVDO service!

There are lots of questions about whether this business will ultimately succeed, but at least he is trying!

Read the WSJ story

Labels: africa, internet access, poverty, rwanda, terracom

This article was pointed out to me by my friend Harry Veihmeyer... The number of people with mobile phone subscriptions in Africa is projected to explode to 378M by 2011 increasing penetration levels to nearly 50% by then. From there its one small step to internet connectivity for the mass of Africans.

Mindbranch's African Mobile Handset Market Analysis (2006-2009)

Labels: africa, mobile banking, poverty

Probably the best chapter in Jeffrey Sachs’ book, The End of Poverty, is Chapter 16: Myths and Magic Bullets describing the myths which perpetuate our apathy towards aid to Africa. Here’s his intro:

“Everything up to this point [in the book] is fine and good, except for one matter: it ignores the human factor. Take the case of Africa. Africa needs around $30 billion per year in aid in order to escape from poverty. But if we actually gave that aid, where would it go? Right down the drain if the past is any guide. Sad to say, Africa’s education levels are so low that even programs that work elsewhere would fail in Africa. Africa is corrupt and riddled with authoritarianism. It lacks modern values and the institutions of a free market economy needed to achieve success. In fact, Africa’s morals are so broken down that it is no surprise AIDS has run out of control. And here is the bleakest truth: Suppose that our aid saved Africa’s children. What then? There would be a population explosion, and a lot more hungry adults. We would have solved nothing.”

“If your head was just nodding yes, please read this chapter with special care. The paragraph above repeats conventional rich-world wisdom about Africa, and to a lesser extent, other poor regions. While common, these assertions are incorrect. Yet they have been repeatedly publicly for so long, or whispered in private, that they have become accepted as truth by the broad public as well as much of the development community, particularly by people who have never worked in Africa.” (p. 309, bold is mine)

Sachs goes on to challenge each of these assertions with a fair-minded and fact-based response. He proposes the truth as follows:

• Money spent in Africa is not all “down the drain”
• Well-designed aid programs are not destined to fail in Africa
• Corruption is not the main culprit/enemy of aid effectiveness
• Lack of full democracy does not necessarily prevent aid from being effective (think: China)
• Africa doesn’t have core values that are much different than the rest of the world
• Fully free markets are not the panacea for poverty elimination
• Mature property rights and laws are not a pre-requisite for economic development (in South America, it has been documented that property rights improvements only became a priority after wealth had increased)
• Africa’s sexual morals are not statistically that much different than other regions
• Reducing poverty reduces population growth through accompanying lower fertility rates
• A “rising tide” of economic development doesn’t automatically reach all citizens
• Unregulated “survival of the fittest” has not been the history of successful economic development

I think this chapter is worth the price of the book for those who want to be able to make decisions based on the facts.

Labels: africa, international aid, poverty, sachs

The July 2nd-8th issue of The Economist has this as the headline as the world turns interest towards "making poverty history" in Africa. A few interesting quotes from the introductory article:

"Some [critics] say aid [to Africa] is useless. Some say it is worse than that. Economists worry that it crowds out export industries, by, for example, bidding up the price of skilled workers. And aid may make governments dependent on their paymasters in the rich world, not their taxpayers at home. For every extra dollar of aid they are given, governments raise 28 cents less in tax, says Sanjeev Gupta, of the IMF."

"The claims for aid should not be inflated. Grand, global targets, such as the UN Millennium Development Goals, might helf the international bureaucracies fill their coffers and justify their existence. But they also invite disappointment and disillusionment when the goals are missed."

"But neither should the demands be exaggerated. The sums (the Commission for Africa calls for an extra $25 billion a year over the next three to five years) amount to just 0.08% of the 22 richest donors' combined GDP. And besides, what else would the money be spent on? The European Union alone wasted $55 billion last year on a common agricultural policy designed to keep food expensive for its consumers."

"To benefit Afrcia the money need not even be spent in Africa itself. It is sometimes said that 90% of the $75 billion spent each year on medical research is devoted to the concerns of just 10% of the world's population."

"No one should be naive about aid. It cannot make poverty history, and it can do harm. But to say that nothing works is wrong. Cynicism is only the most common form of naivety."

Labels: africa, economist, international aid, poverty