Mobile Significantly Advancing Economic and Development Goals in Tanzania

A report authored by GSMA Intelligence, the research arm of UK-based GSMA, says "Tanzania is undergoing a digital transformation, reflected by the growing number of people connected to communications and internet services. This is having a profound impact on the country's social, cultural and economic frameworks, through enhanced access to key services and improved productivity and efficiency across economic sectors."

Digital Transformation in Tanzania optimistically notes: "The mobile industry is contributing significantly to the realization of Tanzania's development goals through various activities and initiatives by mobile operators and other ecosystem players. This report highlights four important contributions the mobile industry is making to the development goals":

• Access to key services – Mobile operators provide affordable access to life-enhancing services for people in underserved communities. Inclusive and innovative business models have emerged from the convergence of various mobile services, particularly connectivity, mobile financial services, digital identity, and M2M and IoT.
• Productivity and efficiency – Mobile is driving productivity and efficiency gains in businesses and public institutions, especially in the agricultural sector where the technology is helping to address the knowledge and information gap for farmers and enabling efficient interactions and transactions between key players in the value chain.
• Contribution to economic growth and social development – In 2016 the total value added generated by the mobile operators alone (taking into account direct, indirect and productivity effects) was around $2.5 billion, equivalent to 5.2% of GDP. The mobile industry also employs more than 1.5 million people directly and indirectly, equivalent to 2.6% of the population.
• Good governance – Mobile is a key channel for Tanzania's e-government strategy, with public institutions now using mobile money, SMS and USSD platforms to deliver services, collect payments and engage with the general public.

On the topic of mobile money, "Tanzania is one of the most advanced mobile money markets in Sub-Saharan Africa," the report explains. The service has helped to:

• Reduce transaction costs and improve safety for individuals and businesses;
• Enhance the efficiency of the economy by reducing the need for users to travel long distances to bank branches to make transactions in person; and
• Create employment and additional income for tens of thousands of small and medium-sized enterprises (SMEs) acting as mobile money agents.

Lastly, the report presents the following conclusion:

Government leadership is a critical factor in establishing a conducive environment and developing the momentum for greater stakeholder collaboration. In addition to implementing key policy enablers to support the growth of the mobile industry, the government and its agencies need to become more involved in charting a holistic plan to leverage mobile technology to realize the development goals, and engage relevant stakeholders in every step of this process. Mobile operators and other key stakeholders in the digital ecosystem all have roles to play.

Mobile operators should find ways to develop economically viable rollout models to expand network coverage; use cost-optimizing technologies and geo-analysis to optimize deployment; leverage APIs, hackathons, own app stores and partners to develop language-specific, relevant content; and embrace interoperability of platforms, such as mobile money and IoT, to drive scale and sustainability. For their part, donors, development partners, private sector players and civil society organisations need to work with policymakers to develop and implement regulatory best practices and partner with governments to improve ICT infrastructure in public institutions.

Are there lessons learned from Tanzania's mobile sector that can be replicated in other countries in sub-Saharan Africa?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.

Program to Use Solar Cookers to Eliminate Breathing Toxins While Cooking Does Not Produce Intended Results

Image: http://ow.ly/EOvJ30lieMO

In 2009, I published a post on this blog about solar cookers, which offer a simple, safe, and convenient way to cook food without consuming fuels. Solar cookers provide a number of value propositions including a solution of cooking without breathing toxins that are generated when cooking with fires fueled by wood or dung. For people in developing countries, using solar cookers also eliminate the need to walk long distances to collect wood or spend their limited income on fuel. Having traveled to developing countries in Africa, Asia, Latin America and the Caribbean throughout my career, I have long advocated governments or nongovernmental organizations to financially support programs that help deliver solar cookers to the world's most vulnerable populations.

Given my enthusiasm for this wonderful device that seemed to help millions of people, mostly women and girls, in developing countries worldwide, an article by ProPublica captured my attention. Eight years after the formation of the Global Alliance for Clean Cookstoves, a Washington, DC-based public-private partnership hosted by the UN Foundation, and $75 million spent by the organization that "was formed to help mount a sustained effort at tackling the threats posed by household pollution" including a pledge "to help engineer the distribution of 100 million cookstoves," the article says "the Alliance has fallen well short of its ambitious health and climate goals."

The article's author, Sara Morrison, notes, "An array of studies, including some financed by the Alliance itself, have shown that the millions of biomass cookstoves of the kind sold or distributed in the effort do not perform well enough in the field to reduce users' risk of deadly illnesses like heart disease and pneumonia."

What is more, "The stoves also have not delivered much in the way of climate benefits. It turns out emissions from cooking fires were less of a warming threat than feared, and that — outside of some de-forestation hot spots — the harvesting of wood for cooking fires only modestly reduces the sustainability of forests."

Ms. Morrison importantly explains that "[t]he Alliance's top officials do not dispute that they have met with an array of disappointments. For one thing, they said, some of the countries and companies that pledged tens of millions of dollars early on failed to deliver, which they blamed on shifting priorities and agendas, not the Alliance's struggles."

Going forward, "The Alliance's plans for the future come with something of an ironic twist: It will now make greater efforts to promote and distribute stoves that use propane, a fossil fuel, the same blue-flamed byproduct of gas drilling contained in cylinders under countless American backyard grills. (Outside of the U.S. propane is most commonly called liquefied petroleum gas, or lpg.) These stoves, it turns out, burn much more cleanly and efficiently than nearly all biomass stoves, reducing the harmful smoke given off during cooking while having a negligible impact on the climate."

While I am disappointed by the article's findings that the Alliance's solar cookers program did not produce the intended results, it is encouraging to see a shift take place with the aim to achieve a benefit to those in developing countries whom are tasked with cooking. Initiatives of these nature carry a high risk of failure. The problem of breathing toxins while cooking has not disappeared and it is essential to evaluate lessons learned and proceed with the knowledge gained to creating a long-term sustainable solution that will benefit billions of people worldwide.

What are your thoughts utilizing solar cookers for clean and efficient household cooking solutions?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.

Internet.org: Making Internet Access Available to the Next Five Billion People for Free

In the previous post, I talk about new efforts by technology companies across a variety of sectors to bridge the digital divide by connecting billions of people whom have no access to internet-based communication services. I highlighted Mark Zuckerberg's, Founder, Chairman and Chief Executive Officer of Facebook, keynote appearance at Mobile World Congress 2014, which focused on connecting billions of people in emerging markets to the Internet by offering basic connectivity for free. "Why are the next two billion not on the internet?" he asked. "The reason is not because they don't have any money, it's because they don't know the value of having a data plan or the services they can access." There is an intrinsic value to having people worldwide connected to the internet and this blog post will discuss Internet.org in greater detail including specific efforts the organization is undertaking to connect billions of people to the internet.

According to its website, Internet.org, which was launched in 2013, "is a global partnership between technology leaders, nonprofits, local communities and experts who are working together to bring the internet to the two thirds of the world's population that doesn't have it." Possessing the goal of making internet access available to the next five billion people for free, Internet.org's founding members include Facebook, Ericsson, MediaTek, Nokia, Opera, Qualcomm and Samsung. The organization will explore solutions in three major opportunity areas: affordability, efficiency and business models.

With respect to affordability, "Internet.org partners will join forces to develop technology that decreases the cost of delivering data to people worldwide, and helps expand internet access in underserved communities." On efficiency, "Transmitting data—even a text message or a simple web page—requires bandwidth, something that's scarce in many parts of the world. Partners will invest in tools and software to improve data compression capabilities and make data networks and services run more efficiently." And I agree with the organization's outline on business models: "Connecting billions of people will be a massive global effort that requires ongoing innovation." Internet.org explains that "developers, mobile operators and device manufacturers will work together to introduce business models that give people more ways to go online."

The Internet.org Innovation Lab was launched earlier this year, which is a collaboration between Ericsson and Facebook that will provide developers with the ability to test their apps in real world environments at Facebook's headquarters in Menlo Park, Calif. In a press release dated February 24, 2014, Stockholm, Sweden-based Ericsson said, "The lab will help remove one of the key physical barriers that exist for bringing the Internet to everyone. Developers today typically only have access to the network environment of their physical location." Furthermore, "With consumers today operating in different network environments (2G, 3G, 4G, WiFi) on multiple mobile operating systems and a wide range of devices, the complexity involved for developers can be overwhelming. The joint innovation lab will facilitate multiple network environments for testing and optimization, all in one location."

Once the remaining five billion people are able to connect to the internet, they will have access to value-added services that will assist individuals with learning or improving English language skills; educate individuals on health, sanitation, well-being and preventable diseases; provide farmers with critical and timely information on best practices, pricing, and weather; and facilitate the growth and development of small and medium-sized enterprises.

In this video produced by Internet.org, Mr. Zuckerberg explains the plan to make basic internet services affordable so everyone with a phone can join the knowledge economy:


Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

Savings Accounts are in High Demand by People in Poverty

From November 16-17, 2010, the Seattle, Washington-based Bill and Melinda Gates Foundation hosted the Global Savings Forum, the first global gathering focused on the role of savings in the developing world urging urged leaders in government, banking, mobile communications, and international development to work together to build a new kind of financial infrastructure to bring savings to the poor. The conference produced several interesting statistics about the unbanked—people who do not have access to a savings account.

It is estimated that 3 out of 4 adults in developing and middle income countries do not have bank accounts and worldwide, it is the poor, women, and rural residents who are the least banked. Only about 10 percent of the 2.5 billion people living on less than $2 per day have access to a bank account. Sub-Saharan Africa is the least banked region in the world with 80 percent of its population lacking access to a bank account. This is followed by the Middle East/North Africa and Latin America/Caribbean at 68 and 65 percent, respectively.

There is a misconception that poor people do not save. The truth is that poor people actively save in cash and through informal mechanisms, but these tools inadequately meet their specific needs. According to a series of studies, over the course of a year, a typical poor household in Bangladesh, India or South Africa uses no less than four and typically closer to ten types of financial instruments. Rotating Savings and Credit Association (ROSCA) membership rates among adults have been estimated at between 50 and 95 percent of adults in Cameroon, Côte d'Ivoire, Democratic Republic of Congo, Gambia, Liberia, Nigeria, and Togo and similar group savings schemes are widespread outside of Africa as well. (ROSCA is a group of individuals who agree to meet for a defined period of time in order to save and borrow together.) Furthermore, a study of 1,500 people in Uganda showed that 99 percent of respondents failed to reach their savings goals when using informal methods, either because the money was stolen or lost, or because they were too tempted to spend the money when it was stored as cash in their home.

The conference presented overwhelming evidence that savings accounts are in high demand by poor people. Interestingly, savings accounts are being engaged at rates up to 12:1 compared to loans, even when both services are available from the same institution. In Uganda, for example, 43 percent of people said a savings account is their greatest financial need compared to 31 percent who cited credit. A Consultative Group to Assist the Poor (CGAP) study of six microsavings-focused institutions also found rapid growth in savers. During a six-year time period, 20 million new accounts and $4.3 billion in savings volume were added, representing an increase of 87 percent and 71 percent respectively.

Several participants noted that safe savings options help people to manage risks, like illness, increase investment in livelihoods, and empower women. A study in the Philippines showed that access to certain savings products increased women’s economic empowerment, including decision-making power over purchases, family planning, and children’s education. Farmers who were given the option to put aside money toward the next planting season increased productivity, enhancing investments in farming inputs by 32-39 percent. A randomized control trial in Western Kenya found that women who had access to a formal savings account were able to save and invest 45 percent more in their businesses after six months, leading to increased purchasing power for food and personal expenditures. The same study revealed that women with formal savings accounts were better able to afford emergency health services without depleting the money invested in their businesses. For most poor households, using savings to pay for large expenditures is cheaper and more efficient than taking a loan. For instance, even microfinance institutions (MFIs) often charge over 50 percent annual interest on loans. Fees for small deposit accounts, however, often equate to zero or positive interest payments to savers.

Poor households with access to savings accounts are more likely to invest in education, increase productivity and income, and reduce vulnerability to illness and other unexpected events. The challenge remains that very few MFIs offer savings accounts, and more than 90 percent of the world’s poor still lack access to financial services and resort to risky, expensive, and inefficient ways to save. In my next blog entry, I will present a number of solutions discussed during the two-day forum that will increase savings mechanisms to a large underserved market.

Number of Internet Users to Surpass Two Billion by End of 2010

On October 19, 2010, the eve of World Statistics Day, the Geneva, Switzerland-based International Telecommunication Union (ITU) released a report, The World in 2010: ICT facts and figures, explaining the number of Internet users worldwide doubled in the past five years and will surpass the two billion mark in 2010. There will be an estimated 226 million new Internet users in 2010, with a majority, 126 million, coming from developing countries. China is the largest Internet market in the world with more than 420 million Internet users. 

Where people are accessing the Internet is different when comparing industrialized and developing countries. For example, the number of people with Internet access at their residence increased from to 1.6 billion this year from 1.4 billion in 2009, with 65 percent of these in developed countries and only 13.5 percent in developing countries where access to the Internet in schools, at work and public locations is crucial. By the end of 2010, 71 percent of the population in industrialized nations will be online, compared to 21 percent in developing countries. Regional differences are significant: 65 percent of Europeans are on the Internet compared to only 9.6 percent of Africans.

There is a growing demand for higher-speed broadband connections to access rapidly increasing high-bandwidth content and applications on the Internet. The press release explains that the ITU, the leading United Nations agency for information and communication technology issues, “considers broadband as a catalyst for growth. Recently, ITU and UNESCO launched the Broadband Commission for Digital Development that aims to promote the adoption of broadband-friendly practices and policies worldwide. ITU Secretary-General Hamadoun Touré says, ‘Broadband is the next tipping point, the next truly transformational technology. It can generate jobs, drive growth and productivity, and underpin long-term economic competitiveness. It is also the most powerful tool that we have at our disposal in our race to meet the Millennium Development Goals, the deadline for which is now just five years away.’”

Moreover, according to ITU, “Over the past year, there has been strong growth in fixed broadband subscriptions. By the end of 2010, fixed broadband penetration will reach 8 percent globally. But penetration levels in developing countries remain low: 4.4 subscriptions per 100 people compared to 24.6 in developed countries.”

While high-speed Internet is still out of reach for many people in low-income countries, mobile telephony is becoming ubiquitous, with access to mobile networks now available to over 90 percent of the global population. ITU’s new data indicate that among the estimated 5.3 billion mobile subscriptions by the end of 2010, 3.8 billion will be in the developing world. Furthermore, 940 million of the 5.3 billion subscriptions will be for 3G services.

Access to mobile networks is now available to 90 percent of the world population and 80 percent of the population living in rural areas and people are moving rapidly from 2G to 3G platforms, in both developed and developing countries. In 2010, 143 countries were offering 3G services commercially, compared to 95 in 2007.

The ITU report says mobile cellular growth is slowing worldwide. In developed countries, the mobile market is reaching saturation levels with on average 116 subscriptions per 100 inhabitants at the end of 2010 and a marginal growth of 1.6% from 2009-2010. At the same time, the developing world is increasing its share of mobile subscriptions from 53 percent of total mobile subscriptions at the end of 2005 to 73 percent at the end of 2010. In the developing world, mobile cellular penetration rates will reach 68 percent at the end of 2010 - mainly driven by the Asia and Pacific region. India and China alone are expected to add over 300 million mobile subscriptions in 2010. In the African region, penetration rates will reach an estimated 41 percent at the end of 2010 (compared to 76 percent globally) leaving a significant potential for growth.

An Ambitious New Initiative to Reduce Smoke Exposure in Developing Nations

According to the World Health Organization (WHO), nearly two million people die prematurely each year because of exposure to smoke from traditional cookstoves and open fires; that is nearly one death every 16 seconds. Furthermore, three billion people, nearly half of the world’s population, are affected by exposure to smoke from traditional cookstoves and open fires and WHO estimates that exposure to smoke from traditional cookstoves accounts as one of the top five worst overall health risk factors in developing countries. Given the adverse impact of cookstoves and open fires predominately on women and children, I am encouraged by the formation of the Global Alliance for Clean Cookstoves, a US$60 million dollar public-private partnership to save lives, improve livelihoods, empower women and combat climate change by creating a thriving global market for clean and efficient household cooking solutions.

The announcement of the Alliance’s formation was made by United States Secretary of State Hillary Rodham Clinton at the Clinton Global Initiative’s 2010 Annual Meeting. Outlining the problem, Secretary Clinton said, “As many as three billion people are gathering around open fires or old and inefficient stoves in small kitchens and poorly ventilated houses. Many of the women have labored over these hearths for hours, often with their infant babies strapped to their backs, and they have spent many more hours gathering the fuel. The food they prepare is different on every continent, but the air they breathe is shockingly similar: a toxic mix of chemicals released by burning wood or other solid fuel that can reach 200 times the amount that our EPA considers safe for breathing.” Moreover, explained Mrs. Clinton, “As the women cook, smoke fills their lungs and the toxins begin poisoning them and their children. The results of daily exposure can be devastating: Pneumonia, the number one killer of children worldwide, chronic respiratory diseases, lung cancer, and a range of other health problems are the consequence.”

The Alliance’s ‘100 by 20’ goal calls for 100 million homes to adopt clean and efficient stoves and fuels by 2020, which will be achieved by a collaborative effort among public, private, and non-profit partners to help overcome the market barriers that currently impede the production, deployment, and use of clean cookstoves in the developing world. Led by the United Nations Foundation, the Alliance will bring together leading foundations, non-profit organizations, academic institutions, corporate leaders, governments and UN agencies to help overcome current barriers and stimulate a thriving global market for clean cookstoves.

Why launch this initiative in 2010? The Alliance explains that several factors are aligning as never before to put the sector within reach of a “tipping point” for adopting clean cookstoves at scale. These factors include:

• Recent advances in clean cookstove design, testing, and monitoring;
• Compelling new research on the health and environmental benefits of clean cookstove;
• Recent commercial success and development of a number of business models in the field;
• The advent of national cookstove programs in India, Mexico, Peru and elsewhere;
• The increasing need for effective near- and long-term action to address climate change at the local and regional level; and
• The potential for carbon finance to fund stove initiatives at greater scale.

What can Governments and NGOs Learn from Coca-Cola?

The purpose of the TEDxChange forum was to promote public awareness of and support for the Millennium Development Goals (MDGs), which range from halving extreme poverty to halting the spread of HIV/AIDS and providing universal primary education, all by the target date of 2015. The MDGs are to be achieved by a collaboration of all the world’s governments and nongovernmental organizations (NGOs). The September 20, 2010 forum included a few speakers and a performance by Bajah + The Dry Eye Crew, a hip-hop group originally from Sierra Leone that is known for speaking out against political and social injustices. Melinda Gates, co-chair of the Seattle, Washington-based Bill and Melinda Gates Foundation, was one of the speakers and there are certain aspects of her speech worth discussing on this blog.

Mrs. Gates spoke about the worldwide presence of Atlanta, Georgia-based Coca-Cola Company, even in most underdeveloped regions of the world. This is in stark comparison to the items underserved populations are lacking such as condoms, vaccinations for curable diseases, and educational materials for malaria prevention and prenatal care. "Coke is everywhere," said Mrs. Gates. “In fact, when I travel in the developing work, Coke feels ubiquitous." Moreover, "Coke's success makes you wonder how they are able to get to these far-flung places." If Coke is so successful in delivering their product worldwide, "then why can't governments and NGOs do the same thing?”

Mrs. Gates explained that if the international development community wishes to achieve the Millennium Development Goals prescribed by the United States by 2015, “we need to learn from the innovators and those innovators come from every single sector. I feel that if we can understand what makes Coke ubiquitous, we can apply those lessons to the public good. Coke’s success is relevant because if we can analyze and learn from it, then we can save lives.” Mrs. Gates continued to explain that there are three things the international development community can learn from Coca-Cola: “Real-time data and immediate feed it back into the product, tap into local entrepreneurial talent, and they do incredible marketing.”

Coca-Cola takes immediate data to measure progress. This is different to development organizations where evaluation comes at the very end of the project and by then, it is too late to use the data. Mrs. Gates uses bowling in the dark as an example of the flawed system governments and NGOs use, “You roll the ball, you hear some pins go down, it’s dark and you cannot see which pins go down until the lights come on, then you see your impact. Real-time data turns on the lights.”

In order to reach distant markets in developing nations, Coca-Cola recognized that it had to change its distribution model that worked so effectively in industrialized nations. Observing that some people in Africa were buying Coca-Cola products in bulk and reselling it in rural villages, the beverage company created 3,000 created micro-distribution centers in Africa since 1990, which now employs 15,000 entrepreneurs. In Tanzania and Uganda, micro-distribution centers represent 90 percent of Coka-Cola sales.

How can governments and NGOs learn from Coca-Cola? "Governments and NGOs need to tap into that local entrepreneurial spirit as well because locals know how to reach the very hard to serve places and they also know their neighbors and what motivates them to make changes," remarked Mrs. Gates. She cites Ethiopia’s new health extension program as an example where the Ethiopian government noticed that so many people resided long distances from medical centers that prevented them from seeking immediate medical care. In 2003, using a similar model used in the Indian state of Kerala, the Ethiopian government trained 35,000 health extension workers to deliver medical care directly to the people in rural areas. In five years, this program increased the number of workers from one per 30,000 to one worker for every 2,500 Ethiopians.

Mrs. Gates continued to explain that "health extension workers can help with so many things whether it is family planning, prenatal care, immunizations for the children, or advising the woman to get to the facility on-time for an on-time delivery. That is having real impact in a country like Ethiopia and it's why you see their child mortality numbers coming down 25 percent from 2000 to 2008. In Ethiopia, there are hundreds of thousands of children living because of the health extension program."

With respect to marketing, Coca-Cola's successful strategy lies in localizing their brand and advertising on a country or region basis. I have witnessed this during my travels. Whether it is in Uganda, Brazil or China, Coca-Cola creates advertisements using local people and in the local language, which gives the impression that the beverage company is locally-based. Everyone knows that Coca-Cola is a large American conglomerate, but their marketing strategy reflects a localized feel to the product. Governments and NGOs need to incorporate similar marketing strategies whether it is condom distribution to eradicate AIDS/HIV or promoting sanitary behavior like washing hands after defecating or linking toilets to courtship like a northern India state did to save lives caused by dysentery. Mrs. Gates said that if governments and NGOs “begin to understand what people want in health and development, then we can change communities and whole nations.”

You can watch the Mrs. Gates' speech in its entirety in the video below or through this web link:

USAID-Funded Apparel Center to Provide Training to Thousands of Haïtians

The U.S. Agency for International Development (USAID) is an independent agency that provides economic, development and humanitarian assistance around the world in support of the foreign policy goals of the United States. The Washington, DC-based agency provides assistance in sub-Saharan Africa, Asia and the Near East, Latin America and the Caribbean, and Europe and Eurasia. Many people, for justifiable reasons, criticize the effectiveness of USAID’s programs and policies aimed at helping the world’s most underserved population. While I can write a book about many of USAID’s failures, and several have been written, I wish to discuss an initiative that has the potential of being one of USAID’s successes.

On August 11, 2010, USAID announced the opening of the Haïti Apparel Center (HAC). The new facility will help Haïti grow its private sector workforce by training more than 2,000 professionals per year to help meet the need for skilled workers in Haïti’s garment industry. In addition to providing vocational training, the center will further enable Haïti to maximize the benefits of the Haïtian Economic Lift Program (HELP) Act signed into law in May 2010, which improves U.S. market access for Haïtian apparel exports.

According to the USAID announcement, “In the 1980s there were about 150,000 garment workers in Haïti; now there are around 20,000. The value of Haïtian apparel exports to the United States in 2009 amounted to roughly $512 million, employing more than 25,000 Haïtians. The HELP Act, which has been widely supported by Congress, significantly expands Haïti’s trade preferences to the U.S. It also promotes investment in Haïti and supports the rebuilding of the garment sector which was significantly damaged over the years due to political unrest and more recently by the earthquake. According to a Congressional Research Service report issued in June, rebuilding costs for the industry are estimated at $38 million to refurbish damaged buildings, replace machinery and train new employees.”

The HAC is part of “Konbit Ak Tet Ansanm” (KATA), a four-year, $104.8 million USAID designed and financed job-creation initiative. In partnership with CHF International, it provides training and improves manufacturing skills of workers involved in the textile industry -- including sewing machine operators and mechanics and quality-control supervisors. The facility also offers executive seminars to senior managers, factory owners and leaders in the business community.

All applicants take a test on dexterity, color blindness, basic literacy and numeracy. Students who are accepted as sewing machine operators are then enrolled for a six-week course that includes training on how to work in a formal work environment and a curriculum developed by [TC]2, one of the leading associations that represents garment buyers. After graduating from the program, students will be highly sought after by employers. In advance of its formal opening, the HAC has trained more than 50 sewing machine operators, and 13 operator trainers have already graduated. All of these students are now employed -- and the operators now rank among the top performers in local garment assembly plants.

The more than 6,000-square-meter HAC facility was provided by the Government of Haïti and renovated and operated by USAID partner CHF International-Haïti. It is located in the SONAPI industrial park -- minutes from the garment factories in and around Haïti’s capital of Port-au-Prince and close to workers’ residential neighborhoods.

Eating a Balanced Meal on a Tight Budget

Having traveled to developing countries worldwide, I routinely see people of all ages malnourished as a result of a poor diet. Moreover, given the current economic climate, poor nutrition is a systematic problem in industrialized nations as well with the primary obstacle caused by the high cost of food. To help people overcome this obstacle, Gopal Kapur launched FamilyGreenSurvival™, which according to his website, “is designed to build a deep commitment to green living, develop knowledge and empathy for the world’s low income and poor population, deliver a program of healthy nutrition practices to combat obesity, and to provide education scholarships for students from low income families nationally and internationally.” The organization’s goals are:

• Deliver a program of personal practices designed to develop deep commitment to ‘green living’ to save energy and reduce packaging waste;
• To help develop knowledge and empathy for the world’s low income and poor population;
• Deliver a program of nutrition education, smart food shopping, healthy cooking and eating skills to help combat obesity, diabetes, heart disease, and cancer;
• Deliver a national and international program of school, college, and university scholarships for students from low-income families; and
• Partner with local, national, and international organizations, communities, and government agencies in support of green living, nutrition education, healthy cooking and eating, and financial support for low-income families.

FamilyGreenSurvival offers a variety of programs for good nutrition at a very low cost. For example, the EatingGreen™ program is based on the adage: “Think Globally, Act Locally,” and asks people to pledge to eat only raw ‘green’ foods one day a month. ‘Raw’ foods such as vegetables, fruits, nuts, seeds, honey—all of which have been minimally processed after harvesting—and water from the tap. The guidelines for Eating Green include:

1. All food is eaten raw, choose foods that have been minimal processed and shipped after harvesting; visit local or nearby farmer’s markets;
2. No wood or charcoal fires, gas burners, or barbeques;
3. No electrical appliances – micro wave oven, blender, juicer, coffee maker, stove, or oven. Use only mortar, pestle, and manually operated devices;
4. No disposable plates, cups, napkins, paper towels, or plastic utensils;
5. No bottled water, no soft drinks, no alcohol, no coffee or tea; this is the opportunity to drink just water or hand squeezed juices; and
6. Minimal TV, telephone, and computer use; it’s a day to reflect, talk, walk, exercise, garden, sing, dance, relax, and frolic.

FamilyGreenSurvival’s EatingRightWhenOurBudget’sTight™ program consists of healthy, tasty, and easy to prepare breakfast, lunch, and dinner dishes where the cost of the daily menu averages around $6 per person. When this shopping and cooking program is followed diligently, it will go a long way in helping to reduce the obesity problem and related chronic diseases such as diabetes, heart disease, and cancer. The following program components are provided free of cost to program participants:

1. Nutrition education, smart shopping, and recipe tasting sessions conducted through churches, food banks, and similar public service organizations;
2. Selected recipe ingredients distributed to session participants;
3. Recipes featuring breakfast, lunch, dinner, and snack dishes, with cost per serving and nutrition analysis information; and
4. Nutrition education and cooking demonstration videos (DVD/CD).

Here is an interview of Mr. Kapur about the EatingRightWhenOurBudget’sTight™ Program on Sacramento, California’s KTXL-TV:

Center Opens to Help Develop Renewable Energy Solutions in West Africa

Photo of a wind farm
in Cape Verde:
Martin Lugmayr/UNIDO

Among the many challenges facing Africa is having regular access to electricity, which is necessary for commerce, education and general development purposes. While Africa possesses vast sources of renewable energy, the current sources of energy for millions of Africans stem from fossil fuels or large-scale hyrdo dams that dramatically disrupt fragile ecosystems. Therefore, I was pleased to read the United Nations Industrial Development Organization (UNIDO) announcement that a regional center to help develop the renewable energy potential for West Africa opened in Cape Verde.

Based in the Cape Verde capital of Praia and supported by UNIDO and the Government of Austria, Cape Verde and Spain, the Center for Renewable Energy and Energy Efficiency (ECREEE), a specialized agency of the Economic Community of West African States (ECOWAS) “will help develop renewable energy and energy efficiency markets in West Africa, in policy and capacity development and quality assurance, in designing financing mechanisms, and implementing demonstration projects with potential for regional scaling-up.”

“The current energy systems in the ECOWAS region are failing to support the growth prospects of the over 262 million inhabitants, especially the needs of the poor. The creation of ECREEE is a central milestone in efforts to accelerate the deployment of renewable energy and energy efficient technologies and services in the region,” said Yoshiteru Uramoto, Deputy to UNIDO’s Director-General. “Investing in renewable energy systems and introducing energy efficient technologies will contribute to the region’s economic and social development without harming the environment,” he added.

Photo of wind farm
in Andalucía, Spain:
Beatriz Feichtenberger/EXTENDA

I am familiar with Spain’s advances in renewable energy and it is encouraging to see countries like Austria and Spain provide financial and technical assistance to programs such as ECREEE, and their willingness to export technology to developing countries. Technology sharing from industrialize nations is vital to achieve sustainable development in the world’s most underserved countries.

UNIDO's July 6, 2010 announcement further explains, "Estimates suggest that a total of 23,000 MW of large and small hydroelectric potential is concentrated in five of the ECOWAS Member States, of which only 16 per cent has been exploited. There is good potential for all forms of bioenergy. Traditional biomass is already the main source of energy for the poor majority and accounts for 80 per cent of total energy consumed for domestic purposes. There are also considerable wind, tidal, ocean thermal and wave energy resources available. The region has vast solar energy potential. UNIDO has a number of projects in Africa where renewable energy sources like small hydro, biomass gasification, wind energy, solar thermal and photovoltaic, are used to promote the development of small industries, particularly in rural areas, that contribute to growth and poverty reduction."

Aaron Rose is an advisor to talented entrepreneurs and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.

Doing Business in a Poor South African Neighborhood

PBS Newshour aired a segment on July 5, 2010 about the efforts of a South African company, Dabba Telecom, which is selling mobile phone and Internet services in one of Johannesburg’s poor neighborhoods. Dabba’s Rael Lissoos says less than one percent of households in South Africa can afford landlines. Given the high cost, people are forced to use prepaid cell phones at rates three times what Americans pay for a similar service, even though South African earn significantly less. Moreover, as explained by Newshour’s Fred de Sam Lazaro, “Lissoos says the huge fees to connect or terminate calls to even local phone networks hurt South Africa’s competitiveness against countries with much lower telecom rates, like India and China.”

Beyond becoming more competitive with other emerging or developing nations, broadening access to cheaper mobile and Internet services helps bridge the digital divide that prevents people from gaining the skills required to compete in a global economy. In addition, companies are formed and jobs created that help stimulate the economy for individuals and entire communities including those living in poverty. The news segment highlights a South African entrepreneur, Collins Moyo, who owns two Internet cafes. Mr. Moyo claims that without Dabba’s lower connection rates, he would have no profit. “If, say, I can pay 10 rand to telecom, maybe Dabba, I can pay two rand, so I’m saving eight rands.” He says the 80 percent savings is allowing him to expand to a third store.

The most remarkable point of the story is the fact the private sector, not the government, is increasing the Internet footprint to an underserved population. For developing countries like South Africa, people must have regular access to modern information and communication technology devices and services. Efforts like Dabba Telecom should be replicated in other developing countries. You can watch the Newshour segment by clicking on the link below:

Should I Buy a Drink or Send my Child to School?

“There’s an ugly secret of global poverty, one rarely acknowledged by aid groups or U.N. reports. It’s a blunt truth that is politically incorrect, heartbreaking, frustrating and ubiquitous: It’s that if the poorest families spent as much money educating their children as they do on wine, cigarettes and prostitutes, their children’s prospects would be transformed. Much suffering is caused not only by low incomes, but also by shortsighted private spending decisions by heads of households.” This comes from Nicholas D. Kristof’s op-ed in The New York Times on May 22, 2010.

Mr. Kristof cites examples of parents unable to pay their housing rent, mosquito nets that help combat malaria or school fees for their children, but they are spending scarce financial resources on alcohol, cigarettes, and prostitutes. His also op-ed refers to a study by two Massachusetts Institute of Technology economists, which claim that “the world’s poor typically spend about 2 percent of their income educating their children, and often larger percentages on alcohol and tobacco: 4 percent in rural Papua New Guinea, 6 percent in Indonesia, 8 percent in Mexico. The indigent also spend significant sums on soft drinks, prostitution and extravagant festivals.”

I know this issue extends beyond the developing world to industrialized nations. The global solution lies within financial education. Furthermore, social services must be offered for people to overcome their addictions to drugs and alcohol. With respect to financial education, there is evidence that women tend to be more responsible when it comes to money management and initiatives implemented by nongovernmental organizations, government agencies, and the private sector should be tailored to further support this trend.

Another solution lies within microsavings, which are small deposit accounts. Microsavings accounts operate similar to a conventional savings account, but the former are designed for smaller amounts of money. Pairing microsavings accounts with financial education programs will promote wiser spending decisions by parents, which will result in long-term sustainable development.

The Linkbook: South Africa's Latest Low-Cost Compact Computer

South Africa-based Vodacom announced the launch of the Linkbook, a low-cost compact computer designed specifically to provide users with simple and affordable Internet access. According to company’s press release, “The Linkbook’s operating system is geared primarily towards a user-friendly web experience; from email to social networking and browsing, as well as basic Open Office - everything a business entrepreneur, student or first-time PC user could need in a computer. Everything works off the desktop - including shortcuts to popular local online content and e-commerce websites - making it the most intuitive, simple to operate device of its kind available anywhere in the world.” (Photo: Vodacom)

The Linkbook, which has an embedded SIM card, as well as two USB ports, will be available on a 24-month contract at a subscription fee of R199 per month, including a monthly 300 MB data bundle, from participating Vodacom outlets, nationwide. The Linkbook website explains, “With an embedded HSDPA module for totally wireless internet connectivity, the attractively designed Linkbook is compact in size, has advanced design functionality, a user-friendly interface and the fact that everything works off the desktop - including easy-to-navigate shortcuts to popular online content and e-commerce web sites - makes it the most intuitive, simple to operate device of its kind.”

The Linkbook is targeted for markets where low PC penetration rates exist. While I have not tested the low-cost computer, I support any product that focuses on increasing Internet accessibility, thus closing the digital divide that exists in emerging and developing countries. In order to become a productive participant as an industrialized nation, low-cost computers and smartphones are essential for people to connect with a vital service, the Internet, which is used as an educational, economic, and health care tool to promotes sustainable development.

A Three-Day Discussion Regarding Social Venture Capital and Social Enterprises

Through the efforts of the Florida Association for Volunteer Action in the Caribbean and the Americas, Inc. (FAVACA), a Florida-based nonprofit organization serving the needs of the people in Haïti and throughout the Caribbean for over 25 years, I had the pleasure of attending the Social Venture Capital/Social Enterprise Conference Miami (SVC/SE, Miami 2010), which was held in Miami Beach, Florida from March 17-19, 2010. Part of the SVC/SE, Miami 2010 conference was the Sustainable Haïti conference, referred as a “conference within a conference,” which brought together social entrepreneurs and social investors, U.S. government officials, nongovernmental organizations (NGOs), Haïtian Diaspora, Haïtian government officials, faith-based groups, and corporations with a presence in Haïti. The purpose of SVC/SE, Miami 2010 was to promote economic development within Latin America and the Caribbean by utilizing social venture capital and social enterprise. Over 700 people attended from 30 plus countries and approximately 240 speakers participated on 110 panels and workshops during the three day event. I participated on two panels: Social Entrepreneurship in Post-Earthquake Haïti and Social Venture Capital as a Tool for Growth.

Several excellent discussions that took place as a result of well-planned presentations or side conversations during session breaks. I made several points during my two presentations, but the one that garnered the most responses is the failure of NGOs’ ability to achieve long-term solutions. (I recognize that not all NGOs are ineffective, but those operating with clearly defined deliverables and benchmarks for success are too few in the world.) While many NGOs attending the conference agree that the aid model is largely ineffective, I find their reluctance to reform their respective operating model very disturbing. To become effective in eradicating poverty in the developing world, NGOs should partner with the private sector in implementing a long-term sustainable solution. For small and medium-sized enterprises (SMEs) with operations in a developing country, I recommend that NGOs collaborate with these businesses by providing job training, education, health and essential life skills that will ensure that workers remain healthy and properly trained to participate in a formal economy. These skills will pass from generation to generation, thus breaking the cycle of poverty.

While I have addressed my criticisms of the microfinance model implemented by most microfinance institutions (MFIs) in this blog, I focused my presentations in Miami on the need for job creation in addition to supporting entrepreneurship through microfinance. I recognize there are several benefits of microfinance in some of the world’s most undeveloped regions, but there are not enough measured results to justify the amount of money invested into MFIs. Microloans provide short-term debt financing, but does not necessarily create long-term enterprises. In addition to providing working capital to entrepreneurs, investments in developing nations should focus on job-creation through equity financing (microcapital). Moreover, I recommend that MFIs work with businesses in industrialized markets by creating a partnership strategy to open an office or plant with local populations in developing nations, thereby establishing a partnership that many underserved entrepreneurs. (Photo of Marc Roger (left) and Aaron Rose (right): Benjamin Wilkinson/HAITI ONWARD)

SMEs in industrialized markets should receive microcapital from MFIs to help stimulate business expansion into developing nations. Three conditions must be stipulated with these investments: SMEs must use local populations and provide fair compensation, implement microsavings mechanisms for the employees, and establish a health insurance program with NGOs or for-profit insurance providers. The number of employment opportunities in developing nations will grow exponentially with strategic partners located in industrialized markets.

I also discussed my experience of being presented with an investment opportunity to revitalize a factory located outside of Les Cayes, Haïti that produces vetiver oil. My visit to the factory was a side trip during my time serving as a consultant to evaluate Haïti's strategy to utilize tourism for social and economic development (see "Haïti: Pearl of the Caribbean" and "Haïti: Using Tourism as a Means for Sustainable Social and Economic Development").

Distilled from the roots of vetiver grass, the aromatic oil is widely used to scent household products to everything from detergents, soaps, and cleaners, to window coverings, baskets, and matts. It may be used to treat skin problems. And as a natural anti-inflammatory it is recommended to remedy arthritis, muscular aches and pains, rheumatism, sprains, swelling, muscle or joint stiffness, and similar problems.

During my visit to the dilapidated factory, I was provided details on how my investment would be used to modernize the distillery. The pitch, however, failed to address a key questions such as: How will the oil be transported to the port in Haïti's capital of Port-au-Prince, which is located several hours away (assuming that gangs do not steal the barrels off the trucks)? Is the sea port in a condition that allows for rapid loading of products on cargo ships? (I should note that while we were not stopped by gangs or corrupt police during the drive between Port-au-Prince and Les Cayes, a bridge over a major river was out and there was a wait of several hours to drive through the river.)

In addition, while France was once a leader in the production of products that uses vetiver oil, most of these products are now manufactured in Asia. Do the factory owners have the resources to connect with Asian buyers? Answers to these questions can be done through better collaboration between NGOs, governments, and the private sector. After some consideration, I passed on the opportunity to invest in the vetiver oil distillery.

Other speakers at the Miami conference talked about the need to establish a bond market in countries like Haïti to finance infrastructure development, credit ratings for investment instruments to help developing countries modernize their financial systems to compete in a rapidly global economy, and establish full currency convertibility measures.

A fellow panelist, Marc Roger, a consultant based in Port-au-Prince, noted that every developing country has a blue-chip company. More collaboration among the governments of developing nations, NGOs, and the local population should take place to attract additional blue-chip enterprises. Furthermore, according to Mr. Roger, there should be a better focus on establishing business incubators to create small and medium-sized enterprises, and NGOs and the private sector must work together in establishing a legal framework that includes a judicial process for business disputes, fair employment laws, and regulations to protect natural resources.

I want to thank FAVACA for their generous sponsorship of the SVC/SE, Miami 2010 and I wish to express my gratitude and appreciation to John Rosser of DVK L3C for organizing this important event, which was very timely considering Haïti’s devastating earthquake that occurred this past January. I am pleased to be a participant and honored to share the podium with a distinguished group of speakers with a wide array of knowledge and experiences.

And I conclude this post by sharing a video produced at the Sustainable Haïti conference where I and others provide our insights for a new model to promote sustainable development in Haïti.

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

Student Loans as Development Aid

While I am a supporter of the microfinance concept, namely, the access of basic financial services such as loans, savings, money transfer services and microinsurance by underserved populations, I am critical of the application strategies employed by microfinance institutions (MFIs). I am pleased, however, to discuss the workings of an organization that is effectively administering small loans to help students in the developing world achieve a college education or vocational training.

Vittana recognizes that the students benefiting from microloans ordinarily could not receive loans to finance their education from local banks. The Seattle, Washington-based nonprofit organization partners with local microfinance organizations to establish student loan programs—often providing the only access to college loans. Through Vittana’s website, individuals are able to lend $25 and $50 at a time to individual students. Currently, Vittana, which is an Indian word for “seed,” has active partnerships in five countries: Mongolia, Nicaragua, Paraguay, Peru and Vietnam.

I had the opportunity to attend an event organized by SeaMo in November 2009 that featured Vittana’s co-founder and chief executive officer, Kushal Chakrabarti. One issue Mr. Chakrabarti discussed was the focus to provide student loans rather than scholarships. He said, “Students do not want a hand-out, they want a hand up. A loan enables them to go to school without feeling beholden.” He explained that small monthly payments provide an easy way for students (borrowers) to repay the money. In fact, many students actually begin repaying ahead of schedule, which represents their personal drive for financial responsibility.

Recognizing the impact of education, Mr. Chakrabarti said, “Education is income generating; more than microfinance (small loans for entrepreneurs).” In the developing world, a college graduate can earn 200-300 percent more than they would have otherwise. However, there are less quantifiable measurements that have an equal impact to the college graduate, their family and surrounding community. Single mothers gain self-confidence by receiving a college education or vocational training. Not only is she acquiring the skills to obtain a skilled job with a higher income, but she is becoming a role model to her children and perhaps other single mothers in the community. Moreover, communities become stronger by having some of its residents possess an education in high-valued professions such as teaching, medicine, engineering or law.

During his presentation, Mr. Chakrabarti noted that the typical borrowers are 18-25 years old, loan amounts range from $500-$1,500 and repayment periods last from 6-24 months with a successful repayment rate of 97-98 percent. While the interest rates vary from region to region, Vittana’s partners usually charge a 10-15 percent annual rate. And to mitigate the loss of the loan, most partners require that a close relative co-sign on the loan. It is rare that a student is unable to repay the loan him or herself, but in the case that the student has difficulty making a payment, a parent, grandparent, or spouse will ensure that the student repays on schedule.

It is important to note that donors providing funds (loans) to students through Vittana are not making a charitable donation; the loan will be returned to the donor upon repayment by the student. Upon repayment, the donor will have the option keep their money or make a loan to another student. How does Vittana generate revenue? Although not required, many people make a donation beyond the loan amount help Vittana cover their costs. Vittana also received direct financial support from individuals and foundations such as the Peery Foundation, the Mitchell Kapor Foundation, and the Crystal Springs Foundation.

Here is a video that highlights Vittana’s operations through testimonials of students receiving loans through this innovative application of microlending:

Decade of Vaccines: Gates Foundation Pledges $10 Billion to Fight Childhood Diseases

At the 40th annual World Economic Forum held in Davos, Switzerland, the Bill and Melinda Gates announced “that their foundation will commit $10 billion over the next 10 years to help research, develop and deliver vaccines for the world’s poorest countries,” according to a Gates Foundation press release. “The Gateses said that increased investment in vaccines by governments and the private sector could help developing countries dramatically reduce child mortality by the end of the decade, and they called for others to help fill critical financing gaps in both research funding and childhood immunization programs.”

The Seattle, Washington-based philanthropic organization said that it “used a model developed by a consortium led by the Institute of International Programs at the Johns Hopkins Bloomberg School of Public Health to project the potential impact of vaccines on childhood deaths over the next 10 years. By significantly scaling up the delivery of life-saving vaccines in developing countries to 90 percent coverage—including new vaccines to prevent severe diarrhea and pneumonia—the model suggests that we could prevent the deaths of some 7.6 million children under 5 from 2010-2019. The foundation also estimates that an additional 1.1 million children could be saved with the rapid introduction of a malaria vaccine beginning in 2014, bringing the total number of potential lives saved to 8.7 million.”

An article by Seattle Times writers Sandi Doughton and Kristi Heim says that the Gateses’ pledge “ranks as the biggest philanthropic pledge ever to a single cause….The $10 billion pledge represents a doubling of Gates Foundation spending on vaccines. The Chronicle of Philanthropy said the amount is more than the entire assets of the Ford Foundation, America's second wealthiest foundation — after Gates.”

The foundation’s announcement notes that the new funding “is in addition to the $4.5 billion that the Gates Foundation has already committed to vaccine research, development and delivery to date across its entire disease portfolio since its inception.” The foundation's initial vaccine investments created an organization called the Global Alliance for Vaccines and Immunisation, or GAVI, which was launched at the World Economic Forum ten years ago.

The GAVI Alliance, the Gates Foundation explained, “has reached 257 million additional children with new and underused vaccines, and prevented 5 million future deaths. In the coming years, GAVI will focus on rapidly introducing vaccines to tackle diarrhea and pneumonia.” Billions more are needed, however, “from other donors to achieve the goal of 90 percent coverage of childhood immunization. Critical funding gaps exist at GAVI and in the global polio and measles programs, and more support is needed for the research and development necessary to produce new vaccines.”

The Gates Foundation occasionally receives criticism for not doing enough to help impoverished adults in the developing world. Responding to this issue during the January 29, 2010 press conference, Melinda Gates said that the foundation, with the help of Warren Buffet’s financial support, contributed to the “Green Revolution” in Africa that increases the productivity of small farms, moving tens of millions of people out of extreme poverty and significantly reducing hunger. In addition, said Mrs. Gates, the foundation is supporting innovative microsavings programs to help those who do not have access to traditional financial services to deposit funds in safe and secure bank accounts. For additional information about the foundation’s support of microsavings, please read “Gates Foundation to Help Poor People Save Money.” The press conference may be viewed in its entirety in the video below:

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