Photo: Cassandra Nelson/Mercy Corps

Liberia lacks doctors, teachers, lawyers, electricians ... but they may have too many cooks.

Why? To help provide jobs following the end of Liberia's long and costly civil war, many international humanitarian agencies began delivering skills trainings to women. The most commonly taught skill? Baking, of course.

But there just aren't enough jobs for all the newly trained pastry makers. So women who learned to make wedding cakes and fancy foreign pastries are now selling two-cent donuts on the street. And foreign-owned companies (mostly Lebanese) continue to dominate the pastry making business.

In the rush to help Liberia, it appears that well-intended job trainings did not reflect market demand. The problem goes beyond baking. Other aid organizations continue to train women in the art of tie-dying. But unless Liberia's demand for tie-dyed shirts and sarongs reflects 1960s America, they may be wasting their time.

To some the word "immigration" evokes an image of people standing in line at Western Union, waiting to wire money home to families for groceries and clothing. It happens thousands of times each day all over the world. All those remittances — the small amounts of cash wired across borders — add up to a whopping $300 billion a year.

Dilip Ratha believes this $300-billion industry can play an important role in international development. He's a World Bank employee who is working to make it easier for migrants to transfer money and direct the cost savings towards economic development in their own countries.

Skeptics argue that if remittances equaled development, Mexico would look like Switzerland. Ratha might argue that without remittances, Mexico's economy might look a whole lot worse. His new paper suggests that Africa could add as much as $3 billion to public coffers just by reducing the costs that migrants pay to send remittances. (Currently, charges on these cross-border money transfers can be as high as 10 percent.)

Ratha hopes to prove that hundreds of billions of remittance dollars can be funneled toward poverty alleviation by making simple policy changes.

His personal story has shaped his beliefs. In the U.S., he earns a salary that is 100 times what he could have earned in his birthplace of India, and his own remittances have helped build schools and pay medical bills there.

And while the negative impacts of immigration often make headlines, Ratha stresses that there are costs of not immigrating, too — costs borne by people living in poverty and by everyone in the global economy.

Photo: Cassandra Nelson/Mercy Corps

James Surowiecki's commentary in The New Yorker this week offers a sobering reassessment of microfinance. His thesis is not that microloans are a bad thing, just that, if their goal is "to make poor countries richer," currently they aim at the wrong segment of the economy.

Surowiecki observes that often "Microloans are often used to “smooth consumption” — tiding a borrower over in times of crisis." This is much the same role that revolving credit like credit cards play in more mature economies. While this type of bridging consumer credit is tremendously important to the stability of a single household, it is isn't the type of credit that leads to the creation of jobs, something most developing nations are in dire need of.

"In high-income countries," Surowiecki writes, "more than sixty per cent of all jobs [are created by companies] bigger than a fruit stand but smaller than a Fortune 1000 corporation. It is this middle tier of small-to-medium-sized enterprises that a nation must cultivate if it is shooting for long-term economic growth."

Photo: Thatcher Cook for Mercy Corps

Will America's economic troubles spill over to South Asian markets?

India, because of its close economic ties to the U.S., could get caught up in the downdraft. Rising inflation rates are causing the country's conservative commercial bankers to squirm in a country usually considered the poster child for modernization. India ships more of its goods to the U.S. than to any other country — so if Americans curtail their spending in an economic slowdown, Indian businesses could lose big.

How can India maintain its high rate of economic growth despite the U.S. slowdown?

The Brookings Institute calls for India’s government to economically reform by addressing its major inefficiencies in connecting the rural poor with the mainstream economies. BusinessWeek points out the need for reforms in agriculture, infrastructure, health care and education. But it adds that reform "is the last thing" on the mind of India's ruling Congress Party.

Struggling fishing communities Brazil may have found a way to turn their economic troubles around. A university there has set up a fishermen's cooperative to introduce oyster farming in the area and boost economic development. The advantages of oyster farming go beyond economics — the industry can increase biodiversity and water-filtration services.

Thatcher Cook for Mercy Corps

"Microloans" are all the rage these days, as more people embrace the theory that small loans to the poor can stamp out poverty everywhere.

But even one of the main proponents of microfinance — the founder of the Internet microloan site Kiva — told the Council on Foreign Relations that microfinance is "just one factor" in economic growth:

So my conclusion at this point is that microfinance is weakly associated with macroeconomic growth. It’s just one factor; it’s not necessarily going to cause a country’s GDP [gross domestic product] to increase. It has to be accompanied by things like good governance, infrastructure, transparency in economics, and all sorts of other things that microfinance cannot in and of itself to bring about.

Flannery also points out that loans of $50 or $100 cannot build roads or schools. Microfinance certainly has its place, but Flannery provides a nice reminder that it's not a cure-all.

Photo: C Mulvany (flickr)

In the global rush towards biofuels, some countries are being forced to choose between affordable food and renewable energy. Many poor nations cannot afford to use staple crops like corn or soybeans as fuel. But some scientists and policymakers believe that they may have found a solution: jatropha.

Jatropha is an inedible nut that can be grown on non-arable land with little water or maintenance, and it's increasingly being identified as a possible alternative source for biofuels. Because its production would not take up valuable farmland, and would have little (if any) impact on food prices, jatropha is particularly attractive to developing countries seeking a balance between increasing energy demand and poverty alleviation.

India is currently trying to launch what would be the world’s largest jatropha biofuels project to date. Its Ministry of Rural Development has proposed a five-year, $375-million project to plant over one million acres of jatropha and research its potential as a fuel source. India is far from alone in its efforts to promote jatropha. Last year, British Petroleum signed a $160-million deal with a British biofuels firm to develop a joint venture in jatropha. A number of countries are pursuing their own jatropha projects, including South Africa, Malaysia, Brazil, Mali and others.

Photo: Chris Hondros for Mercy Corps

Like it or not, Kosovo is independent. Yet its survival depends on whether or not it will be able to build a functioning and sustainable economy, a goal that remains far from certain. Post-independence Kosovo faces daunting economic challenges, including weak infrastructure, unemployment rates of nearly 50 percent, and economic corruption that has been ranked as fourth worst in the world by Transparency International.

Although some in Kosovo are confident about prospects for economic growth and development, many estimate that it will be another ten to fifteen years before Kosovo can support itself economically. Commentary from the World Politics Review argues that independence may actually exacerbate Kosovo's economic problems:

While Kosovo may be able to get loans now from the IMF and World Bank, the last nine years have shown that aid alone is not going to do it. Kosovo has already received 25 times per capita the amount of aid given to Afghanistan, and the economy is still in shambles. Furthermore, it is a safe bet that Serbia will obstruct investment in Kosovo, first by shutting down the commercial border between the countries, and then by challenging privatization plans in the World Court and other international bodies. Late last week, Serbia indicated that it will continue to pay Kosovo's debts to the international community, which will amount to $70 million this March alone. Serbia's only reason for doing this is to preserve its legal claim to the territory and its right to tax any development projects. The legal wrangling likely to result will tie up proposed projects for years, and chase away the few investors Kosovo might be able to attract.

Photo: Reuters/Finbarr O'Reilly

A controversial article in a recent Economist refers to further evidence of the advantages of genetically modified crops (GMOs).

"The Next Green Revolution" discusses long-standing opposition to GMOs in Europe — many on the continent "have yet to touch or taste them," the article reads — but points out that rising GMO production means it will become increasingly more expensive for Europe to avoid importing them.

I have long been concerned about the Europeans' stance on GMOs — not because Europeans are denying themselves more cost-effective food products, but because of the impact that their position has had on the poor, particularly in Africa. A number of African countries have followed Europe's lead by banning imports of GMOs. I find it to be very sad when the poor and sometimes starving are denied access to less-expensive food because of short-sighted logic in Europe.

The fact that GMOs can provide cheaper food has long been generally accepted. But critics have argued against GMOs on the basis that the crops might have long-term risks. But these risks are vague and unspecified, so to deny the advantages never seemed logical to me. Now that the possible disadvantage to GMOs has been put to rest in many parts of the world, I hope the poor and hungry in Africa and elsewhere can finally access this money-saving solution to an important problem.

This isn't an adult tricycle, it's an innovative way to reduce the number of people — estimated at 1.1 billion — who lack access to clean drinking water.

The Aquaduct is essentially a bicycle that can transport and filter up to 20 gallons of water at a time.

It's simple to use: Just ride to your local water source and pour water into the rear holding tank. As you ride home, the pedaling forces the water through a filtration system and into a smaller holding tank in the front. You can also filter the water by pedaling in place.

Watch the video to see how it all works.

For the first time in more than five years, the average household income is declining in the U.S., reports the Financial Times.

Joseph Stiglitz, John Edwards and anti-war group MoveOn.org all blame the Iraq War for triggering a U.S. recession. While the connection is politically attractive to some, President Bush — and even some of his critics — argue that this simply isn't true.

When President Bush said last week that "spending in the war might help with jobs" and that "this economy is down because we built too many houses and the economy’s adjusting," even well-known Bush-basher Paul Krugman had to concede the point. In a blog post, he wrote, "Hate to say this, but he’s right."

I know that most everybody is tired of reality television by now. But a new documentary from Kenya that touts itself as "Apprentice meets Big Brother" is definitely worth watching.

Out of 5,000 applicants, the documentary follows six young Kenyans creating business plans in order to win prize money needed to launch their ideas.

Who competed? A young woman who wants to begin a translation service catering to visiting Chinese business people. An outspoken and confident young man, Oscar, wants to start an IT business.

What's most interesting about this film is that the filmmaker returns to these peoples' lives to discover that many of their entrepreneurial aspirations haven't gone anywhere because of the recent post-election violence. Who needs translation services when all international conferences have been canceled? Who needs hotel rooms or safaris when tourism has dropped by 90 percent? Even the plans of the young man who wanted to start a dairy co-op have been halted.

These are the stories that demonstrate that violent conflict has wider effects than claiming lives and destroying homes-- it has the potential to limit the entrepreneurial dreams of Kenya's best and brightest.

Photo: Jason Sangster for Mercy Corps

The UN head of food and agriculture, Jacques Diouf, is urging oil-producing countries to reinvest oil revenues into local agricultural programs out of concern for rising food prices. The oil-rich countries termed by the UN the Near East (which includes most North African and Middle Eastern countries) has seen steady declines in agriculture productivity during the last two decades, and external food aid has dropped significantly as well. However, according to the FAO, the number of undernourished people in the region has grown from 33 million in the early 1990s to over 100 million by 2004.

With plans to feed as many as 73 million people this year, the UN World Food Program is alarmed by recent price increases, according to the New York Times editorial, "Priced Out of the Market". Increasing food prices in themselves are not extraordinary, but the fact that grain and wheat producers, among others, are shifting their effort away from food to alternative energy production will dangerously complicate the situation - higher prices combined with a global food shortage will prove deadly.

The FAO's Hunger Map shows that most of the countries with the most dire need for food aid are not high producers themselves. While Near Eastern countries are still able to find enough food resources to feed their people right now, the Financial Times quotes Mr. Diouf's warning that “it is a difficult balance for governments to respond to the need of their populations by importing food at very high prices, and also to ensure that the poorest of their populations get access to food at reasonable prices.”

Even as the global market looks increasingly unsteady, China's economy continues to boom. It has already become apparent that this rapid growth is contributing to increasing income inequality.

The Financial Times argues that China should learn from Brazil by combatting economic inequality with more social spending on things like health care and education.

Photo Credit: Ells Culver/Mercy Corps

China today is making up for its technological deficits by undergoing an industrial revolution the size of which has never been seen. While it is one of the world’s fastest growing economies, there is still an important human perspective to what is taking place. The New York Times recently created a slideshow of images its reporters and photographers have collected from around China, documenting the lives of individuals participating in its rapid industrial expansion.