The Poor are not Hungry, They are Malnourished

Hunger is different from malnutrition. Hunger means you don’t have enough food eat. Being malnourished means that you don’t have enough of the right food to eat. This is a huge distinction that gets lost in development. One could argue that malnourishment can fall under the umbrella of hunger but the problem with that is that the two call for completely different policy solutions and therefore we must have a distinction between the two.

If someone is hungry you give them anything as we do. Corn, grain, or any other staple good that is each to supply and ship. If someone is malnourished they need meat, vegetables, fruit, or some other item that is harder to obtain and usually not easy or cheap to transport.

Conflict zones aside, the poor are not hungry as Esther Duflo and Abhijit Banerjee found and documented in Poor Economics. When incomes of the poor increased their caloric intake did not increase, meaning they are not hungry. They did spend more money on food which means that they traded staple foods for more expensive food like meat. One can survive on staple goods but they do not provide the proper nutrition to have one achieve their highest cognitive growth possible.

Food drops, which are always staple goods, do nothing to address this issue. Moreover they disrupt local supply chains and adversely effect farmers which are always the poorest of the poor. Again, aside from conflict zones where supply chains are already disrupted, there is virtually zero evidence supporting large subsidies of staple foods for food drops corn and grains.

The core in addressing malnutrition is really addressing income. A more nuanced but very important issue in malnourishment is that the poor can have enough money on hand for proper nutrition for long periods but shocks to income which often occur do great harm and stunt the growth to children. Microfinance helps this but cash transfers are better.

People are Fundamentally Good. Evidence – Cash Transfers

In development is it all to often that you find individuals who throw up their hands and think that all of their efforts and everyone else’s efforts are helpless. In my own experience this is almost always the result of a lack of understanding amongst individuals. Cultural differences are often the root issue but aid workers always will tell you understand the culture. Yet they come to the conclusion that the poor aren’t making the right choices and are irrational. I guarantee you that these people do no understand the culture that they claim to. As evidence, unconditional cash transfers.

Unconditional cash transfers are the flavor of the decade in development. These typically give cash grants to individuals along with some technical training. The purpose is to inject cash into poor households to allow them to invest in themselves are increase productivity and in turn income and consumption.

If you have a negative outlook on people we would find discouraging results like increase in alcohol consumption, frivolous spending, and no long term impact. We see the exact opposite. Cash is used to procure productive assets and there is long term impact. Many studies also have found that there is no increase in alcohol consumption which is often blurted out by doubters (though they have nothing but speculation).

Interestingly, a similar experiment happened by accident in North Carolina where Native Americans received cash payments from a newly built casino. The mental well being of the children increased as well as education. And alcohol consumption went down. These results should not be surprising at all if we believe that people want to be productive, add to society, provide for their families, etc.

The over arching lesson for those in development is that people are self-interested by the same things we all are. We are created equal after all right? If the poor are making decisions that you don’t understand then you haven’t done enough psycho analysis or challenged your assumptions enough to make sense of the situation.

Thoughts Before Tonight’s Republican Debate

Currently I am reading about the growth in light manufacturing in China as there is so much to learn from China and it left me with two thoughts that are intriguing as we enter (too early I agree) the Presidential race season:

  1. The left is very much against the notion that the wealthy are job creators and produce increases in social welfare but the left is a huge supporter of Elon Musk. Isn’t he the perfect example of what the right is talking about?
  2. Deng Xiaoping famously said in 1978 “let some get rich first” as he embarked on pro-business and pro-market reform in China. Since then the country has achieved dramatic increases in education, health, and overall well being along with bringing over 400 million people out of extreme poverty.

Why I Am Leaving Uganda (Part 2)

Leaving anything is difficult as there are many memories and relationships that have been made along the way. Stepping away from Uganda is no different but what helps the most is the road that lies ahead. Coming to 31 Bits was still the right decision even though is has been a very difficult time for a number of reasons. With that said I also think it is the right time for me to leave.

Plenty of great memories in my time at Bits in Gulu, Uganda

Plenty of great memories in my time at Bits in Gulu, Uganda

Having both a background in business and international development is a rare combination. Development is dominated by government and nonprofits where business is usually an afterthought. It should come as no surprise that social businesses focus far more on the social side than they do on the business side. The obvious problem is that if you don’t get the business aspect correct, the social impact of the organization doesn’t matter all that much. More importantly though is why do we always view business and social impact as if they are competing concepts?

From even my time in graduate school that seems so long ago I was dreaming of a business concept that the success of the business is dependent on the impact. Where you can’t achieve one without the other. Social businesses shouldn’t be about combining charity with a product but about finding creative and cost effective solutions that give consumers what they want. The fact that social businesses like Bits aren’t blowing up isn’t about exposure but about not giving consumers what they want. I have heard from many people that they love the product and mission but they jewelry is too expensive. Sseko, based in Kampala, was on Shark Tank this past season and the sharks were stunned that their basic flip-flops cost $65.

Sseko on Shark Tank this Spring

Sseko on Shark Tank this Spring

The business is further hurt by difficult to understand marketing messages. You may disagree with Toms’ One for One model but we all know what the model is. A recent article featuring Bits stated that Bits is “an initiative which gives them [women] a stable income”. That is true but Bits is about so much more yet the rest isn’t easily captured in a simple statement leaving Bits undifferentiated and minimizes the perception of the value of the model. Lastly, from an academic standpoint, social businesses aren’t really pushing new ideas and learning lessons that have already been taught in development. (See my previous post for clues as to why)

In my role at Bits, my focus has been devoted towards finding ideas that increase impact without increasing expense. For instance, micro loans are very beneficial for the poor not just in business but helping cash flow problems. Studies in India (Portfolios of the Poor) revealed that 50% of loans aren’t used for business but still have significant social utility. Shifting from charity to investment isn’t a reduction in impact by any means. In fact one could argue investment would create greater impact as it creates objective ways to judge and measure it while not having any of the problems that charity creates through dependency. With charity, money is expensed and gone. In contrast, investment has unlimited potential that can be measured and judged objectively. When you invest in someone, you believe in them. What is the implicit message we are telling the poor by only giving them things? I believe in the poor and I think you do too.

These ideas have been festering since graduate school but they really have come alive in my time in Uganda. But I don’t want the social aspect to be ancillary. The most aggressive companies to date seem to be only reserving 10% of proceeds to social aims. Others do 10% of profit or a portion of the proceeds or have some program that is vague about how money is allocated. All these companies do is skim from the top and pass the cost on to you, the consumer. It is slapping charity on top of business which isn’t creative nor all that effective.

What I am proposing to do is devoting 100% of profit towards putting the money back into the community where the products are made from. Only when those investments produce a return would I see any of that money. We call this concept Second Profit where all the profit from the product sold is put back into small businesses where the product was produced and only when those businesses are successful would it return to shareholders. What is really important is that as a consumer, you would know that every dollar of your purchase is used to either put the product in your hand or goes directly into businesses that desperately need capital, creating jobs and opportunity for the poorest of the poor. In the West 13% of the population is self-employed but in the developing world it is 49%! Small businesses don’t just need capital, they need a partner!

These two don't just want to be educated but to be able to apply themselves one day and be the best they can be

These two don’t just want to be educated but to be able to apply themselves one day and be the best they can be

Youth unemployment in Uganda is 64% yet the people have never been more educated and healthier than they are now. Isn’t the point of education to get a good job? We have been operating under the assumption that the job exists but at 64% unemployment, despite increasing educational attainment, no one can say that assumption is true. A focus on wealth creation is the key for each individual to reach their true potential. Under my model, if the businesses don’t succeed, you stop believing in me and my products and I don’t get paid. Isn’t that the way it should be?

The Product

A great product is essential for any business yet this is where some social businesses far short. They have an inflated value of their impact and focus their attention on getting the message out rather than having products that can compete on their own. When my search started for a product I told my partners that if we have to ask consumers to pay more for a product because it is from Africa then I am out. I want a product that people are shocked from Africa. Just because we have a model that we believe can transform lives doesn’t mean we can sell sub-par products. I want the impact simply to be the bonus to the consumer even though it is central to the business.

The decision to focus on leather can down to a few key factors. 1) Leather is cool 2) There is significant value added in leather goods which is great for the people who make it 3) Leather is very versatile and the leather goods market is huge 4) East Africa is abundant in resources for the primary inputs in leather production.

After lots of networking and a promising but ultimately unsuccessful trip to Nairobi we finally found a contact that met our needs and our ambitions. Roy is an Indian-born Ugandan who has a very raw operation but with incredible potential. Not only can he get past the major hurdles in leather manufacturing but he was actually granted land by the President of Uganda because of environmentally friendly operation he is constructing.

Tannery in Jinja, Uganda

Tannery in Jinja, Uganda

About 90% of all leather in the world is made through an incredibly chemical intensive (chrome tanning) process. On average it takes 1 pound of chemicals to produce 1 pound of leather. This is why almost all tanneries in the world are in developing countries where environmental regulations don’t exist and contaminated water can be dumped rather than treated. This process can be devastating to communities which rely on the fishing grounds and rivers for their way of life. Always assume the leather you are have or see in stores is made through this chemical process.

Our leather will not be made in this way. The tannery with our contact uses a vegetable tanning process that uses all organic compounds to tan the leather. This is a much more skill intensive process which makes it so rare in Africa. To my knowledge it is the only exclusive vegetable tannery in all of Africa. Not only will our products fuel further investment in Africa but also in an environmentally sustainable way that very few can offer. Google vegetable tanned leather and you will find very few options and what options you do find will be very expensive. While leather bags are always expensive we are looking at leather sandals from Mombasa, Kenya and made by the same contact which would be affordable to all. Already I can guarantee that our sandals will be the cheapest veg tanned sandals on the market but have to grind it out to make sure I can make the same guarantee with the quality as well.

Took 30 hours on a bus (one way) to visit this factory in Mombasa where I am currently having sandals made

Took 30 hours on a bus (one way) to visit this factory in Mombasa where I am currently having sandals made

Starting any new business is a massive undertaking and the actual path will have many twists and turns but we all want products we truly believe in. The more people trying to address that market need the better the poor will ultimately be. Whether success or failure follows, when we look at situations like the state of the global poor, the more ideas the better because the only thing we cannot accept is the status quo.

Why I am Leaving Uganda (Part 1)

In almost one week exactly I will be getting on a plane back the US. This time without a return ticket to Uganda. Last October I took a job with 31 Bits but will be stepping away from after Friday. Often in our careers we need to step away in order to keep moving forward and this has been central to my decision which has come as a result of many factors that I see all across work being done in Africa.

I still have a deep respect for 31 Bits and always will. While deficiencies in the organization exist it serves no purpose to call them out individually but to gather the lessons I have learned about multiple organizations that build up to the core reasons of my departure. In short it comes to these core things:

  1. Most development hasn’t worked but organizations ignore this
  2. Poor Management
  3. Lack of learning and initial knowledge
  4. The belief that the rags to (relative) riches story can be everyone’s story
  5. The belief that education and training alone can lead the poor to prosperity
  6. The belief that the West knows best
  7. Emotion, emotion, emotion

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*Note that this does not apply to all organizations in development. USAID (United States Agency for International Development) for instance does some incredible work and while they still have issues, most don’t apply. But for anyone who donates money or purchases products from companies and organizations doing work in Africa, you unfortunately are putting money into these issues. Yet that isn’t your fault because what other option do you have?

As a good friend often says, LET ME EXPLAIN:

  1. $2 trillion dollars spent on Africa in the fast 4 or 5 decades hasn’t produced a whole lot. Africa is still the poorest continent and poverty has significantly gone up. Past solutions have not worked well and there are plenty of failures with only a few marginal successes. Yet innovation within organizations is incredibly lacking. It is the same failed ideas that are regurgitated in slightly new forms and packaged to appear different. Other than those that focus on microfinance, every social business is founded on a charity based model that still leaves the responsibility of income on the poor. Companies that focus on microfinance (Mission Belt) loan through third party organizations and make claims about microfinance that if you study the topic, know aren’t true. When I was in graduate school the biggest need I saw in all of development was innovation and new ideas. Not only are there not innovative ideas but it is really hard to change from within an organization because they don’t start with the understanding that most things haven’t worked.
  2. It is really hard to run a small organization on two continents. My three years consulting in corporate America showed me that there is always a disconnect when you don’t’ physically work with coworkers and clients. In development organizations this is incredibly amplified. This is to be somewhat expected but the real problem is that management often doesn’t understand this disconnect which makes work on the ground very difficult. Organizations are very dictatorial meaning very little information from the ground gets to the top to effect decision making. Often this is due to lack of managerial experience at the top but also because management often looks to put square pegs in round holes without realizing they are doing so.
  3. Each organization is convinced of their program. Therefore they learn lessons on their own that have been taught many times over. My first lesson in my first job was to not reinvent the wheel yet that is exactly what is done out here over and over. It has been frustrating that so many things that are being attempted I (and others) know are not going to work out like the decision maker thinks yet am unable to do anything about it. There are so many assumptions made by management that if they looked critically at what they are doing and researched, would know that these assumptions are wrong. So many organizations, Bits included, focus on empower the individual through investing in their small single-person business. This assumes that the poor want to be entrepreneurs. I assure you this is false.
  4. Stories of life transformation are incredibly powerful but it is because they are so rare that makes them so powerful. People who have been made to make dramatic changes in their lives are inspiring because they have been able to achieve what so few can. Such stories certainly exist but from the start why does it seem plausible that the rags to riches story can everyone’s story? Stories are very deceiving. Of course organizations will tell you stories of transformation but the assumption that one person’s story is everyone’s story doesn’t hold up. Being in Africa you soon realize that everyone has an incredible story because of the challenges of poverty but just like documentaries are out to prove a point, so do these stories. The stories also continue to be told even long after they no longer remain true. Organizations are eager to find short term success and continue to tell that story long after that short term success is evaporated and no real impact is left. Again if the stories were all true development would have large success that make a difference at the macro level but we have plenty of evidence that that isn’t happening. Most of us have stories from our parents, grandparents, great grandparents… where massive sacrifices and years of hard work were made for the sake of our family’s future. Most organizations portray an image that such hard work and sacrifice can be bypassed by some program.ragsriches-300x253
  5. This is a hard one because education is always a good thing but it simply isn’t producing results. Educational attainment around the world has tripled. Universal primary education worldwide has almost been achieved yet poor countries like Uganda remain poor. The real issue isn’t really about formal education. We look at decisions the poor make and when we disagree with them the answer is always training and education rather than trying to understand why they make the decisions they do. The poor aren’t dumb. They make decisions that they see as best the same way anyone else does. The decisions of the poor may seem odd to us but rarely do people learn from them and always feel like the poor need to think like they do. We need to think more like the poor do to understand them. Trying to change behavior almost never works out here yet so much effort and money is spent towards doing just that.
  6. Doubling down always seems to be the response when organizations don’t see the impact they expected. Never is there any doubt about the model or program. The answer is that we need more model or more program (or more cowbell). So much time, effort, and money is wasted because organizations always think they know the answer and aren’t willing to entertain the thought that they might be wrong. Even though the same solutions have failed so many times over in other situations, there is always some reason why management thinks that they can get it right.

    In Development Organizations it is always All In. Never fold.

    In Development Organizations it is always All In. Never fold.

  7. If there is one thing that sums up everything I have written here and the simplest way to explain the problems in organizations I see out here it is emotion. We all know stories of organizations that start from a trip to some faraway place where an individual saw something they had to do something about. With no knowledge, no understanding, no critical thinking organizations are borne out of pure emotion. This is the biggest reason why I think that there is so little substance behind all the rosy pictures organizations present. Owners, management, employees, volunteers, and donors are so emotionally connected to the desperation of poverty and the hope the think they can bring to the poor. How can you possibly insight change in an organization where there is so much emotion behind every decision being made. Where owners are so protective of their organizations like newborns. How do you bring up that things could be done better or that the ideas they have in their heads don’t have much hard evidence behind them? I knew that was going to be my biggest challenge going in and in the end the primary reason I am leaving Uganda.

With that said, I have always firmly believed that if someone sees something that frustrates them, they have no right to voice that frustration unless they themselves are willing to do something about it. My time in Uganda has only encouraged me that something can in fact be done about the lack of results in Africa. But for that you have to wait for Part 2…

Don’t Teach A Man To Fish. Start A Fishing Company

Let’s cut to the chase. The phrase “Give a man a fish he eats for a day. Teach a man to fish he eats for a lifetime” is simple and seems like a revelation but is incredibly problematic. First off, it assumes the poor don’t know how to fish. In other words, the poor have no skills. Nothing to offer and need our “help”. This logic is implicit but plays well with the Messianic complex most Westerners have when they engage with the poor. We in the West always have the answers.

teach-man-fish

The poor have plenty to offer. The evidence is that the vast majority of the poor have no interaction with the West and are able to survive. It isn’t a good living but they can provide for themselves and their families so this in itself shows that they have productive capacity and don’t need out “help” to survive. But do they need our help to thrive? That is the more important question.

Maybe the poor have skills but not the right ones. Maybe we haven’t been teaching them the right skills. Maybe the poor have trouble matching their skills to the right situation. These are all interesting thoughts but there is something far more fundamental.

Teaching the poor a skill does nothing to take the risk off of that individual. Yes they have a skill now but the ability to use that skill to generate income is wholly on that individual. Imagine yourself in that situation. You graduate college and have all these “skills” and it is on you to create your own income. Very few people leave college and set out to create their own job. Almost everyone applies to get a job. Why?

Because it is hard to create a job and very risky. Starting your own business is a leap of faith and rife with uncertainty. Very few in the West take this on even though we have our families and friends to lean on if we fail or other social safety nets. In Uganda, you fail and you can’t feed your family. You fail and you have to pull your kids from school. You fail and you can’t afford vital medications. You fail and you have to take on massive debt to survive.

Assuming that the poor want to be entrepreneurs and start their own businesses assumes that the poor are different than ourselves. The mantra has always been “go to college, get a good job”. Not “go to college and create your own job”. Why do we think the poor are different? Do you really think that the poor would rather start their own business than be an employee with a stable income? Kudos to those who start their own businesses but you are the exception. If we believe we are all created equal then why do we think the poor would choose to add more risk to their lives and start their own business if they didn’t have too?

Simply giving someone a skill doesn't mean they use that skill effectively

Simply giving someone a skill doesn’t mean they can use that skill effectively

A paper came out of MIT in 2011 trying to explain when children of mothers working in maquiladoras in Mexico were much taller than other children. Income wasn’t too much higher in the factories and couldn’t explain the difference so the result initially seemed puzzling. The conclusion of the author, one that seems very plausible, is that the stability of the job allowed for the family to think of the future since they know how much income will be coming in each week. They can budget to afford education and food each week. In retrospect those who have to create their own income may suddenly go out of business and though they usually have enough income will have nothing for a period of time that stunts the growth and overall well-being on their children even though overall income isn’t that different between the two.

The title of the paper is in fact “Working for the Future” which alludes to the reduction of risk that the poor face and therefore can think of the future instead of only being able to think of today. Microfinance, education, health interventions, and nearly every other intervention still forces the poor to create their own wealth.

Creating a fishing company isn’t as sexy as teaching individuals to fish as we want to see impact on the individual level to make the connection with each person and see in their eyes the difference we have made. I once told my boss that we should be confident in the long term effects that a job makes rather than devoting so many resources to individuals so we see short term impact. This went nowhere as people in development need to see that impact themselves as they are emotionally tied to it. It makes sense and I understand it. It is a hard mentality to break but if we really care about the poor we need to look at all possibilities even if that means being less emotionally connected to the differences we are making in the lives of the poor.

Wise-Words-From-Ron-Swanson_o_97661

How to Create Thousands of Jobs in Africa: Ethiopia and Roses

Unemployment has been a constant talking point in the US since the recent Financial Crisis. The current official unemployment rate is around 5.5% down from a peak of 10%. Though many argue that the rate is understated (labor participation has gone down), the US rate has remained much lower than the unemployment rate in Sub-Saharan Africa which was largely untouched from the crisis. Persistent unemployment is a panacea on the continent as shown in the picture below.

Global Unemployment Rates

                                   Global Unemployment Rates

In Uganda data is hard to get (Uganda has no data in the picture) but a 2014 study estimated that the unemployment rate among the youth (15-24) is roughly 83%. Rather than going into the devastating consequences that unemployment causes, it is more revealing to start to understand why it is so difficult to create jobs in Africa and for that I actually want to turn to a success story. There are thousands of explanations on why things fail but learning how to succeed in job creation in Africa shows what it takes and how to replicate it, if possible.

Ethiopia and Roses: A “Success” Story

The first rose farm appeared in Ethiopia in 2000. Since then industry has grown in leaps and bounds and now employs an estimated 85,000 workers. Average family size in Ethiopia is around 5 so that means 425,000 people are directly affected because of that first farm and probably thousands more because of indirect effects like transportation, irrigation, and construction. Export earnings for roses are expected to be $500 million all because of that first farm.

Owner of the first rose farm: Ryaz Shamji

Owner of the first rose farm: Ryaz Shamji

This is exactly the sort of story we want to replicate all over Africa. Think about all the kids who can stay in school because their parents have jobs in the rose industry. Think about all the illnesses that have been both treated and avoided due to the increase in incomes. That is the impact of job creation.

But is it that easy? Are there all these ideas that people just need to try or is there something more standing in the way? The full story of the rose industry sheds light on these questions.

The first farm was founded by Ryaz Shamji who is the son of the head of a major Ugandan conglomerate. That is the first red flag. The man who started the farm was already wealthy but let’s keep going. Ryaz looked to acquire 20 acres of land which took him over a year because there are no property rights.  He finally acquired the land after meeting with multiple high ranking government officials. Second red flag. He also received a soft loan from the state-owned Ethiopian Development Bank for 30% of the financing and Ryaz has since said that without this loan the farm wouldn’t have been built. In short the first rose farm required both wealth and government connections. How many people in Africa have that?

In a nutshell that sheds a little light on how difficult it is for the poor to do much of anything of scale. It reveals why there are almost no small and medium sized businesses in Africa because you need money and connections to get beyond all the obstacles. That isn’t feasible for nearly all Africans and keeps power and wealth consolidated for those already in power.

Size of businesses in Africa greatly differ from the United States. The rose industry helps to explain why.

Size of businesses in Africa greatly differ from the United States. The rose industry helps to explain why.

Africa has incredibly potential but as shown the challenges are overwhelmed for the poor to create their own success. Too often job creation is at the whim of the elite. This is the exact opposite of China for instance which fostered competition between smalls firms and reduced the excessive burdens facing them. Africa creates more and more barriers for the poor so that only the people and industries that they want to succeed do. This isn’t of course the case in every situation but while exceptions exist, they are few.

How much do you care where and how your product is made?

Purchasing eco-friendly, organic, gluten free, vegan, non-GMO products in a safe working environment where the workers are paid fair and just wages is an ideal that we want to uphold but only rarely are able to achieve.  As everything in life, it is all about trade-offs. We can have all the above conditions but they come at a cost. They also come with a loss of ignorance.

Unless you among the upper middle class, chances are you can’t purchase everything you use on a daily basis that was made in the best conditions and methods possible. We may purchase organic food but have to sacrifice on wearing clothes that comes from Asia under who knows what conditions. If you Fair-Trade-Certifiedlook at the clothes in the closet, your wallet, backpack or purse, jewelry do you really stand by how everything was non_gmomade? I see myself as a socially conscious person but I had no plans to buy an electric vehicle when I was in the US and had a good job because I didn’t have $40,000 to spend on a car. My guess is most of you don’t either. Are we bad people for that? Flatly, no.

The point is not to feel guilty but the simple reality is that there is no easy path to the world we want to live in. It isn’t our fault we can’t move away from oil or that over a billion people live in extreme poverty but we certainly want to do something in these areas. None of us may like the fact that our products are from China but if we were really willing to pay more money for the same product that wasn’t from China, wouldn’t companies start making them in other places?

As someone who has seen manufacturing on multiple continents, China incredible efficiency can’t be matched or even approached right now. That will change but not anytime soon. Yet you and I shouldn’t have to wait around to start creating a better world.

African manufacturing for instance is far behind Asia. A wallet that you can get made from the best leather manufacturer in Kenya will cost you $20 yet you can get a better wallet made from China for only $5. This massive gap is exactly why you can’t get much of anything from Africa and when you do, you pay through the roof for it (my employer charges $60-$80 for a paper bead necklace).

Breakdown of Global Manufacturing

Breakdown of Global Manufacturing

Perhaps there could be a way where Asian efficiency can be leveraged so that the healthy margins on Asian products could be redirected towards investing in African manufacturing so that one day the same goods could be made in Africa. Perhaps you could sell a wallet made in China with the guarantee that the profit will be used to invest in African leather manufacturing. Would that product sell? Or would consumers hold out until the day (whenever that is) that the wallet can wholly be made in Africa?

TOMS for instance are made largely in China. They are trying to change this but the cost differential makes it largely prohibitive. TOMS has said that by the end of 2015 they want 1/3 of their production to be in the same countries that they give shoes. With hundreds of millions in the bank, that is all that TOMS can promise.

Call it privatized import substitution for those who remember Econ 101 but would you buy a product from China if you knew that it would create industry and opportunity for the people on this planet who need it most?

US in 1800 = Uganda Today

British Economist Angus Maddison put together in 2007 the first comprehensive analysis of global incomes dating as far back as is possible, known as the Maddison Project). For the US and most of Western Europe the data is sporadic before 1800 but has yearly data after 1800. For the rest of the world the data starts post World War II as estimates before then are not reliable.

The most fascinating aspect of the data is being able to compare where countries are at today versus the year that the US had the same level of economic activity. It is a crude comparison because cars and computers span the globe in even the poorest places but it really drives home how far behind certain places are.

For Africa, most countries have the same GDP per capita (inflation adjusted) as the US did in the early 1800s. Uganda for instance has just about the same GDP per capita that the US had in 1800. For comparison sake, Mexico has about the same GDP per capita as the US did in 1910.

Comparison of Historical GDP per Capita for the United States and Uganda using 1990 dollars

Comparison of Historical GDP per Capita for the United States and Uganda using 1990 dollars

There is no credible data before 1950 so that is why the red line is only on the right half of the graph. Uganda’s GDP per capita is basically flat. It has been growing in recent years but it is still a very poor country. The highest point on the graph for Uganda is about where the US is in 1800.

Now much of Uganda is far more advanced than the 1800s US. There is internet, off and on electricity, running water, satellite TV, etc but when you look at how the average person is living here, the 1800 comparison seems spot on. While the amenities are available, the vast majority don’t get to use them. Most don’t have a car, electricity, running water, a computer, etc. Quite the opposite, many rarely eat meat because that is a luxury item for them.

What is more interesting is that as a Western who is here to help am I asking myself what was the US like in 1800? What were the things that worked for the US to develop in the 1800s? Ha.

US in the mid 1800s

US in the late 1800s. Uganda has cars but it is pretty safe to say that the average person here is much better off than the average Ugandan

The biggest areas of focus for Americans out here is in education and health. Surprisingly, Uganda probably has better education and better health care then the US did in 1800 because some of those modern advances have made their way out here too. So if we follow this line of reasoning do we really need to scratch our heads at the lack of development despite the focus on education and health? The US didn’t need vast improvements in those areas before it took hold of the industrial revolution but somehow Uganda needs to?

Uganda compared with a few other countries

Uganda compared with a few other countries

For me the biggest takeaway is this. For most of the 1800s the average US government budget was 3% of GDP. Today in Uganda, the government is about 20% of GDP. In the US in the 1800s, individuals making a name for themselves made America. In Uganda today, the individual in undermined by the power of the state and importantly, the presence of aid (Westerners) doing things they couldn’t possibly dream of doing themselves. Unless of course the government and aid were never here. Then they would have to dream like Americans in the 1800s had to.

Why I love Invisible Children

Living in the town where Invisible Children all started give you a unique view and understanding of the organization that is very polarizing for many. The organization announced it is winding down its operations this past December and it brought mixed emotions for people in the US. While it is very easy to identify with the criticism that many lob at IC, it is hard not to step back and admire the organization for what they were able to accomplish.

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As someone who started his journey into International Development because of what was going on in Darfur about 10 years ago, you have to give props to IC for getting off their butts and doing something. Without IC, many of us wouldn’t have known about the atrocities that took place out here and would never have heard the name Joseph Kony. And for that reason alone you have to acknowledge IC’s success. They were founded as an awareness organization and guess what? We are all aware now.

Where IC drew a lot of criticism starts from the point that people don’t want to be aware about problems ultimately they want to solve them. Yet is it really fair to put the stopping of a civil war on three filmmakers in their 20s? If we are to judge the success of IC on stopping the Lord’s Resistance Army and Joseph Kony, as many do and did, then IC was set up to fail from the start. Politicians and academics with PhDs abounding struggle to solve civil wars so why many want to criticize IC and do so loudly, I think they completely miss the point.

In my mind if IC is subject to any criticism it is being naïve. But nearly every organization and well-intended person that enters Africa has to go through that. Arguments about CEO pay and how much go to programs are for the birds. NGOs and nonprofits will always deal with them unfortunately but in my mind IC is no better or worse than any other organization in my mind. The subject of IC comes up every now and then in Gulu with the Americans here as well as sometimes with the locals. Even met Tony who is a bit of a celebrity now.

Even in Gulu people express mixed feelings for different but similar reasons than those in the US but I don’t think anyone could have executed a vision they way IC did. It is only because of their incredible success that we find it so easy to criticize them. If an organization is small we always give them the benefit of the doubt but as soon as you grow to the heights that IC did, everyone wants to tear you down. So while many people have issues with IC, including myself, they not only dreamed but worked ceaselessly to achieve it. Today Joseph Kony and that LRA are a shadow of what they used to be. Many top leaders have either defected or been killed and Northern Uganda has seen the peace that they desperately needed. It is hard to fully measure IC’s impact but the fact that nearly everyone in their 20s knows of the organization it is hard to argue of its success. It should inspire each and every one of us not just on what is possible but how much people care for and want to be a part of change in Africa. For those reasons I love Invisible Children.