Foreign Aid is broken. Can giving cash directly to the poor help fix it?
Just give money to the poor: That’s the essence of GiveDirectly’s strategy for global good. It sounds way too simple to work. What about trainings and empowerment and oversight?
But initial studies suggest it works very well indeed — and that GiveDirectly could jumpstart an entirely new way of easing global poverty.
In western Kenya, GiveDirectly grants recipient families about $1,000 over the six to nine months, more than doubling their annual incomes, on average. Recipients can spend the money however they want. So far, it seems, they’re making investments with long-term returns: sturdy tin roofs that, unlike thatched ones, don’t require constant repairs; school fees for their children; and livestock and land.
One internal study of the cash transfers found that families saw their personal assets increase an average of 58 percent over a year, while monthly incomes rose an average of 28 percent, thanks to returns on investments made with GiveDirectly cash. (The study was conducted by a researcher at MIT’s Poverty Action Lab and a co-founder of GiveDirectly.) Just across Kenya’s western border in Uganda, a three-year government cash-transfer program had similar success.
Could the GiveDirectly approach rescue development?
The million Chinese who’ve landed in Africa are plucky, hugely ambitious and have an eye for opportunity. They’re also helping make China a big player on a continent once dominated by the West.
You’ve seen the headlines: China is taking over Africa, and the United States and Africa’s former colonizers in Europe have lost sway.
Mostly, it’s true. Throughout Angola, Ghana and the Congo, some of China’s largest companies are building roads and railways. They’re backed by Chinese banks, and they’ll pay off their loans in kind through mining and oil deals. All the while, small-scale Chinese entrepreneurs are moving to Africa, opening pharmacies, trading furniture or buying land to farm, much as earlier generations did in Southeast Asia and North America. African governments are welcoming them with open arms, and for the most part, so are Africans themselves.
Earlier literature on China’s rise in Africa pushed us past the easy — and flawed — paradigm of China as Africa’s latest ”colonizer.” But in his forthcoming book, China’s Second Continent, Howard French argues the Chinese who migrate to Africa do so as individuals motivated by simple, familiar dreams of opportunity.
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A former China bureau chief for The New York Times and veteran Africa correspondent, French traveled the African continent, speaking Mandarin with Chinese men and women who had grown weary of the daily grind in their homeland. The characters French encounters are risk-takers: sometimes foulmouthed, often lucky and universally ambitious.
Read the full Q&A: Howard French on ‘China’s Second Continent’ | C-Notes | OZY
China isn’t the only one raising its stake on the African continent.
African leaders are happy to look beyond Western aid and investments that come tied to pesky political conditions, like asking for free elections or letting the opposition out of jail. As a result, China, India and other Asian firms willing to look the other way are making major inroads across the continent.
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Now, Turkey is joining the crowd and forging a route into Africa, setting its sights on Uganda, an East African nation with untapped reserves of oil and minerals. It could be the start of a beautiful friendship.
Read more: Turkey’s Rise in Africa | Fast forward | OZY
By the books, it’s rising. Africa had six of the world’s 10 fastest-growing economies in the 2000s. Minerals, metals and oil are nourishing long-starved government coffers. In January, Kenya’s Revenue Authority said it had collected too much money in taxes over the previous six months — 24 percent more than during the same period the year before.
But don’t go telling your friends Africa is no longer poor. The raw numbers are misleading, and “much of Africa’s celebrated growth is vulnerable,” according to the first Africa Transformation Report, published last month by the African Council on Economic Transformation (ACET). According to ACET, African economies have failed to transform in ways that would ensure long-term gains.
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In that argument, ACET joins a burgeoning subfield of economists trying to explain the discrepancy between fast economic growth and slow human progress in some African countries. Their ranks include Dani Rodrik and other development economists, but ACET’s report may be the most prominent. They hope their ideas change how we think about national success.
Read the full story at OZY.com
Nairobi’s first cupcake shop demonstrates the power of a rising consumer class — and teaches a lesson about labor in emerging economies, too.
If anyone needed more evidence that Kenya’s economy is on the rise, a sort of confirmation arrived recently — in buttercream and a half dozen flavors that change daily.
Sugarpie Cupcakes in Nairobi has won plenty of fans and local press, attesting to this city’s changing tastes. The expats tend to favor Belgian chocolate, while the Kenyans prefer chai or red velvet, but overall sales have grown fast since the business launched late last year.
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Running the business is no cakewalk — but its vagaries and workarounds reveal a lot about Nairobi’s consumerist aspirations, and the economics that underlie them. A rising number of middle-upper-income Kenyans sees cupcakes as one of many small luxuries they can afford. And some among Kenya’s large, (non)working class see that as something to aspire to.
Read the full story at OZY.com
In the 19th century, foreign explorers came to Africa in search of ivory, rubber and slaves. Today, they come for Africa’s minerals — its copper, zinc and tungsten. The developed world needs them for its skyscrapers, cell phones and much in between.
The exchange is sometimes unfair. Often, African governments don’t know the value of the natural resources underground, but mining companies from the West — and, increasingly, China — do. That knowledge asymmetry has cost African countries and their citizens as much as $1.4 trillion over the past 30 years.
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But a more level playing field may be in sight, thanks to a World Bank initiative that aims to compile Africa’s mineral maps into a single, public database: the so-called Billion Dollar Map. The goal is to give African nations as much information as possible about their natural resources so that they can earn a fair price for the minerals they sell, World Bank officials say.
While mineral maps of the African continent exist, most are private or piecemeal. The Billion Dollar Map is crucially different: Its contents will be available to the public. And that, experts hope, will minimize underpricing and corruption, and help governments get a fairer price for their countries’ resources.
Read the full story at OZY.com
Urban Kenyans hate wasting time in traffic as much as you do, and they’re turning to mobile-phone apps to free up the road.
By Jacob Kushner
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Traffic in Nairobi is so mind-numbing it makes L.A.’s Interstate 5 look like the Autobahn. Motorcycles squeeze between cars and trucks that practically park on major boulevards and highways. Street peddlers walk to and fro selling newspapers, flowers, air fresheners and children’s toys to captive audiences. Roundabouts become cartoonishly clogged.
Nairobi is the world’s fourth most congested city, far worse than any in the U.S., according to a 2011 survey. Kenya’s government estimates traffic jams cost Nairobi $600,000 per day in lost productivity and wasted fuel. That’s $219 million per year.
As the number of cars on the road increases, the city’s future holds even more frustration and waste, unless Nairobi can find a different type of solution for its traffic woes. One team at IBM’s headquarters in Nairobi thinks it’s found an answer – and if it works, it could provide relief to millions of commuters throughout the developing world.
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Read the full story at OZY.com or at NPR.