DAMU

Suppose you are a parent in rural India, or parts of Africa, or China. You are poor. School is available for your children. But you may have to pay school fees, and you must buy uniforms and books. The nearest school is in the next village – a dangerous walk for a young girl.

Besides, you need your daughter at home to fetch water and take care of her younger siblings. You know that education is important – but it is your sons who will support you when you are old, while your daughters will become part of their husbands' families. Your decision is easy – the boys, and only the boys, go to school.

Gene Sperling, formerly President Clinton's national economic advisor, now at the Council on Foreign Relations, likes to talk about the central paradox in girls' education : Going to school is good for girls. Educated girls make more money. They are more productive farmers and have smaller, healthier, better-educated families of their own. They are even less likely to catch the AIDS virus. Educating girls is also great policy for a nation. Closing the educational gender gap boosts economic growth.

But educating girls is not necessarily good for parents – and they make the decisions. Most poor people in the world live in societies in which the girl marries into her husband's family. Educating a daughter, these cultures say, is like watering a neighbor's garden. Parents will send their girls to school only if the costs are very low.

That's one reason why far fewer girls than boys go to school. Of children in primary school today, 150 million will drop out before they finish – two thirds of them girls. In Africa, the majority of girls do not finish primary school.

School is often very expensive. School fees in some countries, such as the Congo, are more than the national per capita income. When Tanzania abolished school fees in January, 2002, school attendance doubled overnight – and most of the new students were girls. There are other costs. Parents must buy books and uniforms. When Kenya tried abolishing fees for uniforms, books and school construction in some places, students stayed in school 15 percent longer.

The other cost to parents is the lost value of the girls' work at home. To solve this problem, many countries now pay families to send children, especially girls, to school. It is a central feature of Oportunidades-style cash payments, for example. Bangladesh's government provides 15 to 20 kilograms of grain, mainly wheat, per month to families of poor boys and girls if they maintain 85 percent attendance in primary school. The government also pays a stipend to all girls in rural areas in grades 6 through 10, covering the cost of tuition, exams, books, supplies, uniforms, transportation and even kerosene for lamps to study by. The girls must keep up minimum grades, attend classes and not get married until out of school. This program has boosted girls' enrollment from 27 percent to 60 percent.

Bangladesh is also home to the schools run by BRAC, the Bangladesh Rural Advancement Committee. BRAC's community schools have doubled the completion rates of government schools by overcoming the hidden obstacles to educating girls.. BRAC runs more than 30,000 schools for poor students, many in places where the nearest government school is far away. Teachers are women – often local high school graduates given training by BRAC. These features reassure parents that their daughters will be safe on the way to school and while in class. School schedules work around harvests and allow girls to be home during peak chore times. BRAC schools are run in close consultation with parents and do everything possible to help parents give their daughters the gift of learning.

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Posted by Kurt at 5:47 AM | Permalink | Comments   

When Shenggen Fan, now 45, was growing up in a village in China, it could take two days to get to Shanghai by motorboat and then bus. It took him an hour to walk to high school. Farmers grew only products they could eat or sell to their neighbors.

Now when he lands in Shanghai, he can drive to his family's home in three hours. The high school is a 10-minute bike ride from his house. Farmers now buy animal feed and fertilizer from trucks visiting the village, and sell other visitors the cereals, watermelons and pigs they raise. The village has grown much more prosperous.

What has changed? Roads. Dirt trails were first replaced with all-weather roads made of broken bricks mixed with dirt, with drainage. Then the road to town was paved.

Almost everything people need to be able to live decently requires a road. A good dirt road with ditches is fine, or one built by villagers themselves with local stones or locally-made bricks. It just needs to be a road that allows a farmer to push his products to market in a hand cart, and that lets buses and trucks get from the village to the main trunk roads. The villagers themselves can maintain it.

Roads allow farmers to market their products, and bring in fertilizer and seeds. They let rural residents take non-farming jobs in nearby towns. Sick people can get to the hospital in time. Roads make it easier for the government to bring in water and electricity. Children can get to school faster, which means more will go. "With roads, people travel out and bring in new knowledge," says Mr. Fan. "They change their behavior. Roads are a window to the outside world. In extreme cases, roads are life-saving – in the Ethiopian famine of 1984 and 1985, thousands of people died because they could not be reached by food aid."

Today Mr. Fan is a Senior Research Fellow at the International Food Policy Research Institute in Washington. The studies he and his colleagues have done on how poor governments should spend their money show that building small feeder roads is one of the single most effective ways to fight poverty (pdf). In India, it would be the single most effective antipoverty program, the group concluded. Feeder roads would also be among the best ways to spend money in Africa and China.

Rural roads are not glamorous. Government officials want to build highways, not feeder roads. China, for example, has expanded its national highway system by 44 percent a year since 1988. But rural roads have expanded only 3 percent a year. In Africa, fewer than 10 percent of feeder roads are currently passable during the rainy season, effectively cutting off villages for months at a time.

Thirty years ago, the World Bank concentrated on infrastructure. But many of its projects to build dams, highways and electrical plants were plagued with corruption and waste, or ended up hurting poor people. Building infrastructure, including roads, got a bad name. What's needed today is the infrastructure equivalent of microcredit – small projects for villagers that are a necessary first step out of poverty.

Credit: NYtimes,
By TINA ROSENBERG

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Posted by Kurt at 5:46 AM | Permalink | Comments   

In 1995, the Mexican peso crashed and the economy contracted by 6 percent. At the time, Santiago Levy, the deputy finance minister, realized that the country's antipoverty programs were going to fail its poor. The programs were a hodgepodge of food subsidies, adopted in response to powerful food producers. They were inefficient because they targeted foods everyone ate, rich and poor. Some even targeted foods the poor don't eat, such as bread – poor Mexicans eat tortillas.

Mr. Levy saw a looming disaster – but also an opportunity to build political support for an antipoverty program that worked. Stealthily, he organized a pilot project to test a new idea in Campeche, far away from the capital so it would draw little notice. He began a program to pay poor mothers to keep their children in school and take their kids to the health clinic. He compared the results to poverty figures in a group of similar villages without the program. It was a great success. Data in hand, he persuaded President Ernesto Zedillo to phase in the new program and phase out the food subsidies.

Oportunidades, formerly called Progresa, is now embraced by all parties in Mexico and, with financing from the World Bank, is helping virtually every poor family. It not only focuses antipoverty spending on those who really need it, it does so in a way that encourages families to break the cycle of poverty for their children.

The average family in Oportunidades gets $35 a month – about a quarter of the rural family income. Families with many children in school can get up to $153 a month, a ceiling imposed to avoid providing incentive to have more children.

From the beginning, Oportunidades built in rigorous evaluation. Those studies have shown that it does focus its help on Mexico's poorest people, and that the money is producing good results. Children are bigger and healthier. Oportunidades has also cut child labor and led to more schooling – in rural areas, for example, the number of children starting high school increased 85 percent. Moreover, by paying women, Oportunidades has augmented their power inside the family without increasing domestic violence.

There are fashions in foreign aid, and Oportunidades is hot. The World Bank sings its praises (pdf). So far 25 countries have adopted some version. New York mayor Michael Bloomberg just announced he is looking for donors to finance a pilot program to test whether New Yorkers, too, can be bribed out of poverty.

Credit: NYtimes,
By TINA ROSENBERG

Labels: article, poverty

Posted by Kurt at 5:42 AM | Permalink | Comments   

In 1976, a Bangladeshi economist named Muhammad Yunus came upon a group of 42 artisans – but perhaps the more appropriate word is "slaves." They made crafts such as chair seats, and used materials lent to them each day at exorbitant rates of interest by the buyer of their work. They were forever in debt, unable to turn enough profit to buy their materials in advance at market prices. Mr. Yunus gave the group a loan from his pocket that averaged 62 cents per person. With that, they bought their freedom.

Twenty years later, the Grameen Bank, the organization Mr. Yunus founded, has lent small sums of money to 6.7 million people in Bangladesh, almost all of them women, many of whom had never before touched money. It offers savings, insurance, home mortgages, pension funds, scholarships, credit for families to buy fertilizer, build latrines or dig wells, and a program of no-interest loans for beggars, so they can offer candy or dried chiles for sale as they go house to house.

Microcredit now reaches nearly 100 million clients in more than 100 countries. The World Bank has found that microcredit accounted for 40 percent of the entire reduction in moderate poverty in rural Bangladesh —and that it had an even bigger impact on extremely poor borrowers.

Microcredit raises an entire village's standard of living – even non-borrowers' lives improve. (Lending to men, by contrast, proved not to affect poverty at all.) Studies of microcredit programs all over the world show that it produces higher incomes and better-fed children, and improves a family's ability to survive illness or drought.

To many people, the name Grameen is synonymous with microcredit. But the Grameen Bank is not even the largest microcredit lender in Bangladesh – that is the Bangladesh Rural Advancement Committee. Nor were Mr. Yunus's 62 cent loans the first – the earliest documented microloan took place in 1973, in Recife, Brazil, lent by Accion International , a group that has now lent over $10 billion.

But what Mr. Yunus and Grameen did – why they are sharing the 2006 Nobel Prize for Peace -- was show how an idea helping a few hundred people could be expanded to help millions. Grameen has also struck the proper balance – it is sustainable and profitable, with $600 million in savings from borrowers as capital. At the same time, it has never forgotten that its mission is to fight poverty, not maximize profit. It charges interest rates far lower than other commercial microlenders.

Grameen developed a model now in use globally. Although it is a bank, in many ways it is the opposite of a bank. Traditional banks in poor countries do not lend to the poor — administrative costs are too high, and the poor were thought to be bad risks. Normal banks stick close to business districts, require collateral, and lend mainly to men.

Grameen turned this on its head. Instead of collateral, Grameen depends on social pressure to guarantee loans. Women form borrowing groups of five, and must pay back their loans regularly for others in the group to be able to get one; borrowers must pledge to eliminate dowry, eat vegetables, have small families and educate their children — requirements not likely to be found at conventional banks.

It has been a decade since Grameen Bank accepted any donations or took loans. But hundreds of newer microfinance groups still look for donors. Accion International, for example, creates new microfinance institutions in 22 countries, which stop needing help once they become profitable. It also trains traditional banks in how to lend to the poor.

Microcredit started as an antipoverty program, but continues as a business. That is one reason it has grown and grown while other forms of aid fight for governments' dollars and attention.

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Posted by Kurt at 5:43 AM | Permalink | Comments   

Look around the edges of any large third world city and you will see vast settlements built by the residents themselves. Migrants from the countryside claim empty plots in nighttime land invasions, put up a blanket with a pole or a cardboard roof and begin stockpiling bricks. Their livelihoods are similarly jerry-rigged. A man will nail together a booth, at which he can sit and repair his neighbors' shoes. A woman will open a window to the street to turn her living room into a mini-bodega, selling cooking oil and rice.

Most people surveying these kingdoms of dust and hope see only poverty. But Hernando de Soto saw something else – untapped wealth. Mr. De Soto, a Peruvian economist, realized that the world's poor own trillions of dollars' worth of assets. But their houses, plots of land and businesses lacked formal title – and so could not be used to do all the things that people in wealthy countries do to turn a little money into a lot of money.

Without title, people can not sell stakes in their businesses, use their homes as collateral for loans, buy insurance, or form limited liability corporations to reduce their personal risk. They cannot get credit in banks. They do not improve their businesses because their investment may suddenly vanish at any moment. They must spend money and time bribing the police to keep from being kicked off their land. In many cases they cannot even get electricity and telephone service.

Mr. De Soto's crusade, which has now marched to El Salvador, Egypt, Mexico, Honduras, Tanzania, El Salvador, the Philippines, Haiti, Albania and elsewhere, attempts to turn these dead assets into living capital. All countries, of course, have ways to register property. But in most poor nations, they involve so much red tape that they are essentially useless for the poor. Mr. De Soto had tried an experiment in Peru – he established a two-sewing machine garment factory in a Lima slum and hired five college students to get all the necessary permits to legalize it. He claims it took them 289 days and cost them 31 times the average monthly minimum wage.

Mr. De Soto likes to say that when he walks through the rice fields in Bali, a different dog barks whenever he crosses from one farm to another. The dogs recognize the assets under their masters' control. But the legal system does not.

To change this, Mr. De Soto founded an organization in Lima called the Institute for Liberty and Democracy. It carries out research on the informal sector. But the governments of Peru and El Salvador have also hired the I.L.D. to run registries that give poor people simple, quick ways to get title for their land, homes and businesses. It also helps them use those titles productively. In other countries, I.L.D. is helping governments design such agencies or train government officials to do this work.

The I.L.D.'s work in Peru means that legalizing a business can now be done in a day, by visiting a single desk. The cost dropped from $1,200 to $174. The group says that between 1990 and 1995, 300,000 titles were registered in urban Lima (pdf), and the value of the underlying land doubled by 1998. Hundreds of thousands of new businesses have been legalized. Poor people saved millions in administrative costs, and Peru raised millions of dollars in new taxes.

Getting title, of course, does not mean that poor people can necessarily turn it into higher incomes. To use newly legal assets, the poor must still contend with banks that won't lend to them, and courts that require bribes and put up other hurdles. Tackling these issues may help solve one of the most vexing drawbacks of globalization and the market economy – in much of the third world, they have tended to benefit only the wealthiest. But establishing property rights is a necessary first step.

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Posted by Kurt at 5:40 AM | Permalink | Comments   

Universal vaccination is cost-effective foreign aid at its best. It is so successful, so widely considered essential, that many people today do not realize that it began only 20 years ago.

When Unicef and the World Health Organization started a global effort to vaccinate children against common childhood diseases in 1985, they were met with widespread skepticism. Vaccination rates for children in many countries were appalling – only 20 percent of the world's children in 1980 had gotten their third shot of D.P.T. (diphtheria, pertussis and tetanus) on time, the conventional measure of vaccine coverage.

But the program has had stunning success. By 1990, 75 percent of children had completed their D.P.T. shots on time. Bangladesh went from 9 percent D.P.T. completion in 1987 to 98 percent five years later. Worldwide, children were being immunized against polio and measles as well.

The logistics are heroic. Wars are routinely halted for inoculation campaigns. Entire countries get vaccinated in two days. Measles vaccines are successfully kept cold during day-long journeys by bicycle and canoe.

A full course of immunization, including everything in the supply chain, costs only $30. In the last 20 years this campaign has saved 20 million lives. It has given hundreds of millions of children a better start.

In the 1990s, however, the world's attention turned to other problems, and vaccination rates slipped backwards. Bangladesh fell back to 66 percent in 1999. Every year 27 million children — a quarter of the world's children — go unvaccinated against the basic diseases. Two to three million of these children die. Even for those who survive, these diseases can be crushing, forcing children to drop out of school, and parents to spend time and money they cannot afford on doctors and care for their sick children.

The challenge today is two-fold: to improve basic vaccine coverage, and to put new vaccines into global use. Vaccines now exist to protect children against common diarrheal and pneumococcal killers, against hepatitis B and a common influenza. But they are mainly in use in wealthy countries. Soon there may be a malaria vaccine as well. All these must become part of the universal vaccine package.

Help has come from an organization launched in 2000, the Global Alliance for Vaccines and Immunization. Financed by governments, organizations such as the World Bank and Unicef and the Bill and Melinda Gates Foundation, GAVI gives poor countries money to improve their infrastructure and logistics – and then gives them more if they actually achieve improved vaccination rates. It also helps assure a predictable market for new vaccines, which encourages drug makers to produce them in large quantities. It has helped expand both basic and new vaccine coverage – because of GAVI, for example, 90 million children have been immunized against hepatitis B(pdf).

Immunization became a victim of its success, but close attention and new partnerships are now reviving vaccines. It is a lesson that eternal vigilance is needed, even to protect a program that became venerable practically overnight.

Posted by Kurt at 5:38 AM | Permalink | Comments