Alleviating Poverty Through Good Ol Capitalism
As many other well intentioned people, the only way I have been contributing to help alleviate poverty (specific consequences of poverty) has been through the minute amount of funds that I donate through civil society groups or other organizations. I am not sure, however, if the money I donate actually is able to make an impact on the lives of those I intend to help. I am sure many have felt or feel the same way as I do. I have started to question the role AID plays to improve the livelihood of the poor. My feeling is that AID that does not go for capacity building and self sustaining long term investments will only play the role of keeping recipients dependent on others.
What got me to think about this topic? I just started reading "The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits" by C. K. Prahalad. Prahad argues that the majority of the people in the world who live in poverty (4 billion of the world population lives on income less than $1500 a year) are latent market opportunties that multinationals and investors have failed to recognize. He further argues that this potential market with a huge aggregate buying power offers investors who think outside of the box a perfect opportunity to generate profits. In return, the poor can benefit from the investments and will be able to improve their lives. Prahad offers many statistical information as well as case studies to support this argument.
Coming back to me...
For the past few years I casually have been thinking of owning and running my own business. I have come to realize that businesses or organizations founded for a purely altruistic reasons may not be enough to motivate me to do my absolute best. There has to be something for me, the investor as well. I would like my investment to have enough rewards to let me take total control of my life. At the same time, I would like my work to impact the lives of those who are less fortunate than I am in a positive way.
As I progress through the book, I will post more stuff...
I agree with you in that statistically speaking, there is indeed a blurred correlation between AID money and improvements in the livelihood of the poor in Africa. According to a recent article in the The Economist, the first world in the past 40 years have spent a staggering figure of $450 billion dollars of aid money on the continent, which should have been sufficient enough to catalyze a sustainable economic growth in most of these poor African nations. In Sub-Sahara, human development indicators such as wealth distribution, inequality, poverty and life expectancy still remain low. Multilateral organizations such as the World Bank & IMF do recognize the progress (or mistakes) they have made in the past few decades and therefore have tried to adjust their conditions set for issuing debt relief or aid money accordingly.
Big donors and their institutions are increasingly pushing African governments to fully embrace the concept of open market, privatization, gov't transparency, corruption and so forth. But what confuses me is that despite the recent aid boost and talk of debt cancellation at the G8 summit, how is Africa going to successfully compete in the world market with its primary goods when billions of dollars are pored each year essentially to block these very commodities from penetrating most of the big donors' economies?
Anyway, I dont know much about Prahalad but if his approach to alleviate poverty is as revolutionary as they say, then by all means keep us updated
T
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