Archive - May 2008

Date

May 30th

Gulf Region’s Financial Woes Mean More Job Opportunities for Women

In the Gulf area, religious customs and social norms make it a taboo for women to mix publicly with unrelated men, even for trivial purposes. In a male-dominated world, this makes it nearly impossible for women to earn an income. Now, economic necessity is forcing the conservative society to accept the idea of women in the workplace.

Many women-only ventures are being created to bring more women into the country’s workforce. Mega-retailer H&M is opening the first women-only department store in Saudi Arabia. Though small female-run stores already exist, this major venture is a landmark concession by the Saudi Government.

Saudi Arabia’s newest hotel is also women-owned, women-managed, and women-run – from the IT engineer to the electrical engineer. Until January, women could not check into any hotel alone unless accompanied by a male family member or if they had written permission from a male guardian.

Saudi and UAE banks have set up segregated branches for women only. In the UAE, a government holding company has set up an investment company run by women for women. These facilities allow women to manage their finances independently of prying fathers, brothers or husbands.

Home businesses and business dealings are also starting to crop up. The Economist reports, Western female bankers are seizing this opportunity and travel regularly to the region to hold private meetings with female clients in their homes.

Saudi official Faisal bin Muammar said high unemployment among Saudis and the reliance upon seven million foreign workers was forcing the societal change. “We cannot go on having seven million foreigners [at work] and our graduate women in their houses.”

To some, the Gulf’s women-only places are a sign of progress; for others, it simply reinforces gender segregation. Whatever the case, there are still problems for women gaining access to capital. It is difficult for female businesswomen to obtain loans, especially if they are not from prominent families. Even in Bahrain, where nearly one-third of businesses are registered by women, some can only get a business license in their husband's name. This just goes to show that the idea of women in the workplace has yet to fully materialize.

May 29th

Protectionism hurts working class Americans

In last week's New Yorker, James Surowiecki makes a point made previously on this site: "Free trade with poorer countries has a huge positive impact on the buying power of middle- and lower-income consumers [in America] — a much bigger impact than it does on the buying power of wealthier consumers."

The anti-trade rhetoric from the Democratic presidential contenders may play well in the Rust Belt, but pursuing protectionist policies not only will hurt our standing abroad, but also will erode the buying power of working class Americans. As Surowiecki puts it, "Obama and Clinton, in their desire to help working Americans — and gain their votes — are pushing for policies that will also hurt them."

May 27th

Choking the Lungs of Our Earth

Photo: Deforestation in Mato Grosso, a major soybean growing region in Brazil <a href="http://farm2.static.flickr.com/1338/789028037_0a46add3fe.jpg?v=0">leoffreita (flickr)</a>
Photo: Deforestation in Mato Grosso, a major soybean growing region in Brazil leoffreita (flickr)

The woman known as the “guardian angel” of the world’s biggest rainforest has called it quits.

Marina Silva cited "the growing resistance found by our team in important sectors of the government and society" in stepping down as Brazil’s environment minister. Environmentalists saw her as a key ally in defending the Amazon.

Silva’s resignation is but one in a series of foreboding events in the face of increasing deforestation. Despite three years of decline, deforestation accelerated in the Brazilian Amazon during the last half of 2007. Land conversion pressures are attributed to soaring prices and demand for soy and beef exports. Brazil’s ascent to an agricultural superpower and its steady, 5-percent economic growth has stimulated hydroelectric dams, roads and other infrastructure projects.

The environmental effects of Amazonian destruction have global consequences. Deforestation not only threatens the existence of the indigenous populations who have lived in the Amazon for millennia, but also irreversibly damages a region of unparalleled biodiversity. Deforestation also exacerbates global warming. According to mongabay, an environmental news site:

… the country is ranked as the world's fourth-largest emitter of greenhouse gases due largely to deforestation and forest degradation, which account for 70 percent of its total greenhouse gas emissions.

Despite the global importance of the Amazon, Brazil’s president Luiz Inacio Lula da Silva has made it clear that an international debate on the Amazon's fate is unwelcome.

This week, President Lula declared: "The Brazilian Amazon has an owner, and that owner is the Brazilian people.” He acknowledged conservationists' concerns but stressed the need to use the resources of the Amazon forest, which makes up two-thirds of the country’s territory.

If Brazil insists on framing the Amazon as a domestic issue, perhaps the best hope for conservation lies with the people who inhabit it. Construction of the Belo Monte dam — which would be one of the world's largest hydroelectric power plants, after China's Three Gorges and the Itaipu dam shared by Brazil and Paraguay and would also threatens severe ecological and social damage — gathered more than 1,000 environmental activists and Indians protesters in Altamira last week.

Nineteen years ago, a similar dam project was successfully defeated after being met with international condemnation. With today’s rate of deforestation and economic pressures, however, the future of the Amazon looks grim. The actions of both President Lula and Marina Silva lead us to one conclusion: in Brazil, economic growth trumps environmental protection.

Beyond Lung Cancer: When a Nation's Wellbeing Depends on Cigarettes

"If you've ever smoked a major-brand cigarette, the chances are you've smoked Malawian tobacco," says the BBC. "Virtually every western cigarette uses a bit of the produce from this small southern African nation in its blend."

The battle between cigarette companies and anti-tobacco campaigns poses a challenge for Malawi, one of the poorest nations in the world. In Malawi, tobacco production contributes to 10 percent of GDP and is the second-largest employer in the country.

Proponents of tobacco production argue that tobacco is a crop of choice for farmers because it is easy to grow on marginal soils that yield little else, and earns about seven times more than maize and 22 times more than cotton. In Malawi, revenues from tobacco production are generated from a mere 2 percent of the country’s arable land.

Critics of tobacco production argue that the wealth generated by this resource is not spread evenly across the country. With the price of tobacco constantly fluctuating, those hardest hit are small farmers who are often forced to sell their produce at a loss when tobacco prices fall below market value. According to The Malawi Tobacco Control Commission (TCC), a local government watchdog, it takes US$1 for farm workers to produce a kilogram of tobacco, but that kilo is sold for only US$0.70. As a result, farmers on the big tobacco estates become bonded laborers, forcing whole families to work and repay the landlord. One study found Malawi's tobacco industry employs 78,000 children.

What's not in dispute is that Malawi's tobacco industry is struggling. The government is starting to push alternatives. One is farming mushrooms, where there is already a"brisk local market" — and a potential to meet unmet global demand.

On the tobacco auction floor. Photo: <a href="http://flickr.com/photos/joella/199129349/">joellaflickr (flickr)
On the tobacco auction floor. Photo: joellaflickr (flickr)

May 23rd

Silk Road Reopens

Topics: Trade
Countries: China

Is the Silk Road making a comeback?

Newsweek says the historic trade route between Asia and the Middle East is reopening as trade grows between China and oil-rich Gulf countries. The chance to renew the old economic relationship between Asia and the Gulf coincides with a U.S. economy on the rocks and much of the world heading towards recession.

The joining of wealth seems perfect, with the Middle East is rich in oil and China looking for overseas investment.

What could reviving the old Silk Road mean for the U.S.? Newsweek quotes David Rubenstein, co-founder of the equity powerhouse Carlyle, as saying: “The economic center of the world is beginning to shift from the U.S. and Europe to the Middle East and Asia."

The original silk road. Photo: <a href="http://www.flickr.com/photos/sanjoy/177101851/">sanjoyg (flickr)</a>
The original silk road. Photo: sanjoyg (flickr)

May 20th

Jobs: Midwest Hit Hard

Countries: United States
Many General Motors manufacturing jobs has moved overseas. Photo: <a href="http://www.flickr.com/photos/70205638@N00/506768914/">ifmuth (flickr)</a>
Many General Motors manufacturing jobs has moved overseas. Photo: ifmuth (flickr)

Guess which media outlet is offering an insightful "We the People" series covering unemployment in the Midwest and other pressing U.S. election-year issues? The Kansas City Star? Perhaps the Chicago Tribune or the New York Times? Try Al Jazeera.

In "Jobs," the Dubai-based publisher examines how Dayton, Ohio is dealing with unemployment after losing more than 250,000 jobs in the last eight years. Dayton has been hit hard by outsourcing of manufacturing jobs, rising employment and increased home foreclosures. As one person put it, "the people are here but the jobs are not."

Watch part one of Jobs: End of the Line on YouTube

Watch part two of Jobs: End of the Line on YouTube

International Rent-a-Womb: The Outsourcing of Baby-Making

Topics: Women, Health, Globalization, Culture
Countries: India

"My husband lost his limbs working in the factory," Jyoti Dave, a surrogate mother in India, told Reuters. "We could not manage even a meal a day. That is when I decided to rent out my womb."

Commercial surrogacy is nothing new. In the U.S., where it is legal in many states, companies such as Growing Generations offer up to US$25,000 to surrogates while charging couples between US$30,000 and US$45,000 per child.

Today rent-a-womb has gone international. Its headquarters
are in India
, where surrogate mothers can earn US$5,000 to US$7,000 per birth — income equivalent to a decade's worth of a rural wages for a woman.

These surrogates offer their services to an international clientele hailing from Italy, Singapore, Sweden and other wealthy countries. Most of these couples turn to surrogacy after multiple failed in-vitro fertilizations or repeated miscarriages. It's no surprise India appeals to medical tourists; it offers affordable service, highly qualified doctors, and fewer legal hurdles than found in other countries.

Boston Globe columnist Ellen Goodman is among critics of commercial surrogacy who are disturbed by the idea of the human body as a commodity. Others are uneasy about the ability of the wealthy to essentially rent wombs from the poor.

Many participants in international surrogacy, however, argue that they are helping those in financial desperation. "How else will us uneducated women earn this kind of money," one surrogate mother explained to Christian Science Monitor, "without doing anything immoral?"

May 16th

Coming to America: Bangladeshi-Style Banking

Topics: Microfinance
Countries: United States, Bangladesh
Microfinance has worked in the developing world, but will it work here?  Photo: <a href="http://www.flickr.com/photos/petroleumjelliffe/210477896/">PetroleumJelliffe (flickr)</a>
Microfinance has worked in the developing world, but will it work here? Photo: PetroleumJelliffe (flickr)

A few weeks ago microfinance pioneer Professor Muhammad Yunus was in Queens, New York. No, he wasn’t soliciting funding or international support for his Bangladesh-based microlending institution. He was cutting the ribbon on the brand new Grameen Bank America building.

Thousands of miles away from the original Grameen Bank, the American version will function much like its Bangladeshi counterpart: loaning to groups of women rather than individuals. Like the women who first participated in Yunus’ innovative banking scheme, American borrowers will convene at one member’s house to collect weekly dues. This type of group-lending model increases accountability, since defaulting on your loan affects your peers' access to credit as well as your own.

The Grameen Bank targets women because they're more reliable borrowers. To date, Grameen America has loaned upwards of $250,000 dollars to more than 100 women who are using their $500 to $3,000 loans to establish or expand businesses ranging from floral arranging to house cleaning.

But Yunus has some skeptics to win over. Many question whether the Grameen model will resonate with Americans. Microfinance expert Saiful Islam says "Bangladeshis, Indians, Latinos will follow it, but I don’t know about others." In 1985, a similar program started by Yunus in rural Arkansas at the request of then-Governor Bill Clinton failed due to mistrust among participants, according to Shorebank's Mary Houghton, who helped advise the microfinance experiment in Arkansas.

It does seem somewhat of a strange fit: banking targeted to empower the poorest of the poor in one of the most prosperous countries in the world?

The United States does have its fair share of people living in poverty, however. Immigrants in particular have a hard time accessing credit and are more likely to use predatory lending agencies that charge steep interest rates. What's more, the Center for Financial Services and Innovation, reports that approximately 40 million American households are considered underbanked.

Also, contrary to public perception, microcredit is not aimed at the poorest of the poor. "It’s actually supposed to help those below a certain poverty line who are looking for self-employment as a route out of poverty," says Raj Desai of the Brookings Institution.

In that case, the U.S.-based bank may run into trouble. Approximately 1 out of every 11 Americans work for themselves, while about 1 in 4 in Bangladesh are self-employed.

Yunus will need time to prove that the American model can be successful. It may be that American women need more than greater financial access to climb out of poverty. But Yunus' large following and wide array of awards — including a Nobel Peace Prize — suggest he has a fighting chance.

Changing the Score

Topics: Globalization

At first glance, the Homeless World Cup sounds like a joke. But in fact it's an inspiring event that uses the world's most popular sport to fight a worldwide problem.

In 2001, social entrepreneur Mel Young combined the international language of football with global homelessness to create this socially powered spin-off. Each year since, homeless people from dozens of countries (it was 48 last year) have participated on teams sponsored by nonprofits in their home country.

The annual event has had a significant impact on its participants. In a survey of those who competed in the 2006 edition in Cape Town 92 percent said they have "a new motivation for life” and 44 percent said since getting involved in organized soccer they've "improved their housing situation”

"The Homeless World Cup opened chances for me," said Angus, a Nigerian who became homeless in Austria after being granted asylum there in 2002. "The most important — I have good friends now. I also play football at a club, and I am getting an education. I am learning the German language and attending High School to get a diploma."

The social impacts of this tournament extend beyond its participants. Part of the mission is to improve public perception of the homeless by increasing awareness. In an interview with BBC News, Young says:

I think it just changes everybody. The homeless people involved change because they find inspiration, self-respect and self-esteem from the crowd applauding them. The public also change as they usually have a stereotypical view of what a homeless person is e.g. lives on the street, is dangerous etc.

Some people criticize the Homeless World Cups for using funds that could otherwise be spent building shelters. By daring to be unconventional, however, the organization has created greater benefits. They've not only established 50 local grassroots projects in participating countries, they've also boosted the self-image of a marginalized population.

This fantastic short film shot at the 2007 Homeless World Cup in Copenhagen reveals the enthusiasm of the players and the tournament:

May 15th

From Gold Medals to Fair-Trade Cotton

Topics: Economic Development, Trade
Countries: Mali

Social entrepreneur Steven Redgrave gained renown by winning gold medals in rowing in five consecutive Olympics from 1984 to 2000. After retiring from competition, Redgrave was knighted in 2001, launched a line of men’s leisurewear and started a charitable trust focusing on educational and social needs in the UK.

In 2005 he visited Africa, and was moved to action by the poverty he observed. With the help of a major British retailer, Redgrave relaunched his clothing line, FiveG (short for "Five Gold"), as a 100-percent fair-trade enterprise.

In this video diary, produced by Fairtrade Foundation, we follow Redgrave as he visits a rural farming community in Mali that produces cotton for his products.

Thanks to fair trade, not only do these rural farmers receive a higher wage, but their community as a whole benefits as well. The video explains how the community receives what is called a "social premium" that is used for community development projects, including a new health center and a primary school.

For an in-depth look at fair-trade cotton, check out this analysis from the Center for Strategic and International Studies in our archives.

WSJ: 'China Earthquake Exposes a Widening Wealth Gap'

Countries: China

Yesterday's Wall Street Journal offered a novel slant on the China earthquake, proclaiming in a Page One story that "the disaster is throwing a harsh spotlight on the widening gap between rich and poor."

May 14th

Reviving Farming in Mexico

A small farmer in Oaxaca, Mexico is spreading knowledge of ancient farming techniques to discourage citizens from abandoning their land.

The Mixteca highlands, where Jesús León Santos resides, is home to some of the most barren land in Mexico. However, in the last two decades, León and a group of farmers have worked to reclaim and reforest the land. Farmers are getting bigger yields a reason to stick around by adopting long-discarded farming techniques.

As the land has begun to produce again, Mr. León has reintroduced the traditional milpa, a plot where corn, climbing beans and squash grow together. The pre-Hispanic farming practice fixes nutrients in the soil and creates natural barriers to pests and disease.

Although the yields are tiny in comparison to mechanized, bulk-producing farms located elsewhere, they're enough to provide the option for people to remain on their own land — and in their own country.

Mexican farmers continue to abandon their land and migrate to the U.S., some because their soil is unproductive or they can no longer compete under Nafta. And those who remain face escalating global food prices. As one former Oaxacan farmer put it to AP, "Not only are farmers not growing food, but we are going hungry because we can't afford the foreign food that drove us off our farms."

León’s aspiration is to give options for a better life in Mexico itself. So far, his strategies have given some farmers an opportunity they haven't had in centuries.

For those of you interested in learning more about the Mixteca highlands and how farmers are implementing ancient agricultural practices, check out the book The Other Game: Lessons from How Life is Played in Mexican Villages.

May 12th

The Giant Pool of Money

Confused about the housing crisis, the falling dollar, the credit crunch or the securities problem "that nearly brought down the global financial system?"

Last week, This American Life took it all on in "The Giant Pool of Money." In one hour, This American Life breaks down the most complex financial problem in recent U.S. history, and does it better than anyone I've come across.

May 9th

Poverty Amid Progress in Peru

Topics: Governance, Economic Development
Countries: Peru

Peru has one of the fastest growing economies in Latin America. Over the past six years, the country’s GDP has grown more than 6 percent annually. This is largely due to high market prices for mineral exports, increases in private investment and liberal economic policies that have been put into place by President Alan Garcia and his predecessor Alejandro Toledo.

Yet Peru’s economic growth is having a limited impact on poverty rates. While the capital, Lima, and the northern and coastal regions are flourishing, over 70 percent of the Andean region still lives in poverty. A major factor in this persistent poverty is the fact that many Peruvians continue to work in the informal sector of the economy, writes the Economist:

These unwaged people are often more or less cut off from the market economy. And it is market connections that make economic growth “trickle down” to the poor, points out Richard Webb, a social researcher and former central-bank governor. Enabling that to happen is thus a job for public policy. Better roads, education and social policy are all needed.

President Garcia has worked to increase social spending on anti-poverty programs, and staunchly advocates market-based solutions to Peru’s poverty problem. However, Garcia’s ability to combat poverty continues to be hampered by his unpopularity (his latest approval rating is only 26 percent), his lack of a legislative majority, and fears of corruption in lower levels of government. Unless Garcia can find a way to make Peru's growth work for more Peruvians, his liberal economic policies may lose support from those who aren't seeing the benefits of market capitalism.

Street violence and frozen chicken

Countries: Lebanon

With so much media attention on Cyclone Nargis and the endgame of the Democratic Primary, one story getting inadequate attention is the latest turmoil in Lebanon.

Sectarian strife is nothing new to Lebanon, but at least one Lebanese blogger suggests that the current unrest is being triggered by the recent spike in food prices.


Stories We're Watching

As Growth Slows, India Awakens to Need for Foreign Investment

International Herald Tribune - Wed, 02/08/2012 - 08:26
India’s central bank and economic analysts predict that growth will fall sharply to 7 percent this fiscal year and remain sluggish.

Social responsibility and a new world order

Washington Post - Innovations - Tue, 02/07/2012 - 07:56
Just before the New Year, the London-based Center for Economics and Business Research announced that Brazil had overtaken the United Kingdom as the world’s sixth largest economy. Furthermore, it predicted that by 2020, India and Russia will also have overtaken all the European economic powers.

Aid for trade policy rears its ugly head

The Guardian's Poverty Matters - Mon, 02/06/2012 - 01:41
The UK government's dismay at not being granted the contract for Typhoon fighter jets in India is an indication that its controversial aid for trade policy is still very much alive.

Liberia's battle to put the lights back on

The Guardian's Poverty Matters - Sun, 02/05/2012 - 23:00
Ellen Johnson Sirleaf has set ambitious targets to restore the country's electricity supply. But will it meet them by 2015?

As Africa's consumers rise, so does inequality

Yale Global Online - Fri, 02/03/2012 - 10:17
Kenya struggles to spread the wealth from rapid growth.

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