Tuesday, June 1, 2010

Buying International Development

The handout/hand-up debate has raged for years regarding the best way to help boost the economies and the per capita incomes in developing countries, and it has certainly heated up in the past few years. A couple weeks ago, TIME ran this story which noted that some experts on international aid were criticizing a man's efforts to send t-shirts over to Africa, claiming that such aid actually hurt the people of Africa, rather than helped. Of course, they said, his heart was in the right place, but would-be do-gooders need to consider the best course of action before plunging into the international aid world.

A while back, I noted in a post that the face of charity, as we know it, is changing somewhat from a "handout" model to one of social entrepreneurship. An extension of that, perhaps, is social consumerism. Certainly, buying products to assist a particular population has existed for a long while and has continued to gain steam lately. Large companies like Starbucks offer products that both raise awareness and help the company's public image. Small websites like The Hunger Site and companies like Ten Thousand Villages offer products created by craftsmen in developing countries to take out the middleman and get more money from the consumer to the producer.

Perhaps, then, in addition to aid dollars, developed nations should be investing in the infrastructure necessary for developing countries to gain easier access to world markets. In an Economist article, the example of Good African coffee is given to show that there are solid businesses coming out of Africa and, surely, other poor countries. What entrepreneurs in those places need less than aid money is venture capital, better transportation means to ship their products as inexpensively as possible, the lowering of certain trade barriers, and eventually, consumers in world markets who recognize the brand and quality of their product. This is, I suppose, a combination of a handout and a hand-up, but clearly the old method isn't working and something needs to be done as gaps in world economies continue to widen.

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