Critics say developed countries have broken promises for international aid. Photo: UK Department for International Development (flickr)

With cause for concern about the future of international aid amid the financial crisis faced by rich countries, some developing nations find microfinance playing an increasing role in fueling local growth.

At last week's 4th High Level Forum on Aid Effectiveness in Busan, South Korea, powerful advocates including U.S. Secretary of State Hillary Clinton and U.N. Secretary-General Ban Ki-moon pressed for continued financial assistance from rich countries and better transparency for aid programs, according to the Washington Post.

But is "continued assistance" enough? Is it the kind of assistance that will lead to actual change? The European head of Oxfam International says the EU failed to take a leadership role at the summit, despite previous promises of aid allocation. Natalia Alonso says “donors are not on track to meet the Millennium Development Goals. In 2000, all rich countries recommitted to spend 0.7 percent of their national income as overseas aid by 2015, but a number of EU governments, such as Italy and Germany, are pretty far from this.” Oxfam found that amid the economic crisis, EU overall aid last year was just 0.43 percent of income, leaving a $65 billion shortfall to 56 poor countries.

It may signal more trouble for traditional international aid, the flow of cash or food aid transfers from richer to poorer countries. The economic crisis and criticisms of the summit leave the trajectory of aid in question.

As the world's wealth shifts to developing nations, some Western leaders want to be sure their aid is paying off. Former British Prime Minister Tony Blair wrote in a Washington Post opinion piece that “leaders of emerging economies must ensure that they are able to attract high-quality, sustainable investment.”

World Bank president Robert B. Zoellick also points to this shifting paradigm, stating that “the time has come to envision a world “beyond aid” – a world where the shift is from the paradigm of charity to one of mutual economic benefit.”

One way in which some developing countries are expanding local markets in the era of questionable international aid is through successful microfinance programs. While the long-term solvency of some forms of microfinance are in question, other examples point to successes engineered by both developing countries’ governments and private local banks.

Government funded cash-transfer programs in Mexico and Brazil have been recognized as quite effective at reducing poverty and spurring local market growth, The New York Times reports. These programs provide small infusions of capital to low-income residents for both entrepreneurial and cost-of-living expenses, feeding local economies. Indonesia’s state-owned Bank Rakyat has successfully demonstrated similar results in recent years through a mixed savings-credit model, according to Elisabeth Rhyne in her article, “Five countries where microfinance works,” for China Daily.

Rhyne also highlights Bolivia’s BancoSol, a for-profit bank dedicated to serving the poor that operates within a strict regulatory framework. Competition among similarly modeled microfinance banks has spurred growth with low interest rates in Bolivia. Cambodia and Mongolia are two countries where replication of the Bolivia model has allowed microfinance banks to be “market leaders and innovators,” according to Rhyne.

In Columbia, where 96 percent of businesses are small, demand for microfinance has grown fast in the years of the global financial crisis, according to IPS news. Microfinance in Columbia “grew at a steady rate of 15 percent between 2007 and 2010," states a Visión Económica study. Small companies fuel demand for microfinance because "they generally do not meet the requirements set by commercial banks,” Jorge Varón, the manager of the development credit fund of the Colombians Supporting Colombians (CAC) programme, told IPS. And in a country with so many small businesses fueling market growth, this is a divergent route from typical aid pathways.

The financial crisis hasn't killed international aid. But it has people talking about what's next. Microfinance looks like a big part of the answer.

Erik Mandell is a graduate of Middlebury College in Vermont. He is currently pursuing a master's degree in public administration and global leadership at Portland State. Read his other contributions to Global Envision.

Men in traditional Maasai clothing using their mobile phones. Photo: Mark Kelley (Flickr)

Envy Jared Cohen. At 29, the man has advised two U.S. presidents, shaped relations between countries, and now leads his own think-tank at Google. But his take on technology suggests you could do this, too.

Cohen, at a recent Mercy Corps-sponsored talk in Portland, OR, wowed the audience with personal anecdotes about how technology is changing international affairs. Cohen has seen firsthand the effects of communications technology and understands the potential it holds for the world’s future.

Cohen, a security expert, spent much of his talk describing the effects of communications progress on modern states and their rule of law. He spoke of technological literacy in Iranian youth that was instrumental in coordinating the June, 2009 Green Revolution. He spoke of an unemployed Colombian activist who used social media to coordinate the anti-FARC demonstration, the largest protest against a terrorist group in history.

"The 21st century," Cohen said, "is a really terrible time to be a control freak." But that applies whether you're trying to control peaceful demonstrators in Cairo or violent drug cartels in Mexico. Government control is proving ever more elusive as groups find out just how empowering technology can be.

Jared Cohen.

He painted a picture of exponentially growing networks that are bringing people together from around the globe. This interconnectedness makes it difficult to control and contain groups that are finding ever more ways to use technology that is itself rapidly progressing. These groups tend to be made up of young people, as the empowering effect of these new forms of communication is most potent for those who understand how to use them.

Each of Cohen’s points seemed to return to a basic theme: technology is eroding the barriers to entry to all sorts of games, markets, and movements. And while technology is getting better, people, especially young people, are getting better at using it. Cohen argues that “those who don’t have information technology today will be the most active users tomorrow.” Ten years ago, 361 million people had access to the Internet. Today, that number has increased to 2.1 billion, with the fastest growth in Africa, the Middle East, and Latin America. “Pakistan, in the year 2000, had 300,000 mobile phones. By 2010, it had over 100 million. That's in a population of 165 million,” Cohen explained. Technological growth will have the biggest empowering effect on those who currently find themselves with the least power.

Cohen’s opinions on this topic have authority because of the life he's led and the movements he's witnessed. He’s travelled the world and met with leaders of insurgencies and counterinsurgencies, democracies and autocracies. His own story is a case in point that technology is empowering those who know how to use it.

Technology, according to Cohen, is driving the changing tide of the times and youth tend to have an inherent advantage in understanding and deftly using these innovations. Cohen rode the wave of technology into the most exclusive circles in Washington. And he says we should all be using technology to find our own wave to ride.

Ben Osborn is a 2011 graduate of Lewis & Clark College in Portland, Oregon. Read his other contributions to Global Envision.

In post-earthquake Haiti, members of the Bohoc community rehabilitate and widen a road. Photo: Lisa Hoashi/Mercy Corps.

In minutes, everything was gone.

The funnel clouds from one of the United States’ worst tornado seasons in years destroyed homes, bridges, schools, and anything else in their path. While the loss is catastrophic, the reconstruction period that follows a natural disaster can create interesting economic niches and opportunities for those seeking to put the pieces back together.

This kind of destruction is not unique to the U.S. Catastrophes around the globe cause economic shifts. Sometimes this means a transformation in a country’s economic structure, but on occasion, disaster can spark positive changes.

In an example of structural transformation, massive winter flooding in Colombia recently put millions of acres of land underwater — having disastrous effects on the country’s dairy, agricultural, and cut flower industries. Colombia had planned to transform its eastern plains into the country’s primary agricultural sector, doubling the amount of land under cultivation, but the flooding presented a major roadblock. “...[I]n just a few hours we are losing what has been 35 years in the making,” one dairy farmer told Reuters.

Last year’s floods in Pakistan, the earthquake in Haiti, and Hurricane Katrina (to name a few) disrupted millions of lives and wiped out or severely destroyed local and national economies. Recovery may take decades.

But disasters have also spurred interesting new economic developments. The floods in Pakistan washed away thousands of miles of roads and railway lines, many bridges, almost 10,000 schools, and 1.7 million houses. Rebuilding them represents an enormous business opportunity. It is also a chance to introduce more resource-efficient practices in industries like agriculture, livestock, and dairy farming that were wiped out by the floods, Pakistan’s High Commissioner to the UK, Wajid Shamsul Haman, told Reuters.

Indeed, the destruction of infrastructure and existing institutions sometimes represents an opportunity to rebuild in new and improved ways. In March 2010, the Haitian government unveiled a plan to rebuild the nation that seeks to redistribute a large portion of the population to smaller, less disaster-prone cities, according to the New York Times. Building up the infrastructure in these smaller communities should create an economic incentive for people to stay. Planners hope that a decrease in Port-au-Prince’s population will help to alleviate many of the social problems related to overcrowding that it faced before the earthquake.

New Orleans experienced massive job loss following Hurricane Katrina, but by 2008 it had regained 99 percent of its pre-storm total thanks to thousands of new jobs in construction and government, says the New York Times. Some companies and nonprofits incorporated green building practices as part of the rebuilding process, according to the Christian Science Monitor. In fact, the New Orleans school system, which was in many ways failing before the hurricane, is ranked as the most reform friendly city for education by the Thomas B. Fordham Institute, says the Christian Science Monitor. Test scores and graduation rates are both up. In some ways, the city is experiencing a rebirth.

A natural disaster is, of course, still a disaster. Even the best-laid reconstruction plans may never materialize. This is especially true in the developing world, where the wounds left by a disaster are more severe and take longer to heal. Scientists predict the world will experience more severe natural disasters in greater numbers in the coming century, says The Guardian. That means more floods, more hurricanes, and more tornadoes like the one that recently ripped through Joplin, Missouri. It also means that now, more than ever, we need to understand how to create positive economic change in a disaster's aftermath.

Photo: Urban Poor Associates (UPA) (flickr)

In March of 2008, over 250 people from 34 different countries gathered to talk about trash in Bogotá.

Why? These people came together to attend the First International and Third Latin American Conference of Waste Pickers in Bogota, Colombia. The goal of the conference was to help waste pickers organize around the challenges they face and learn from each other's experiences.

Worldwide there are about 15 million people that earn their living by collecting and sorting through trash in order to find materials that can be recycled, resold and reused. Some waste pickers are actually hired by local governments and businesses to sort through trash to find recyclables, others do it illegally.

But waste pickers want more respect from their communities. They see waste picking is a business that is saving hundreds of thousands of pounds of salvageable material from landfills each year.

Conference participants devised strategies to work with their communities to legalize their trade in places where sorting through trash is prohibited. They broke out into groups and agreed on goals specific to their region. For instance, waste pickers in Asia are working to integrate the voices of environmental activists into their work. Waste pickers in Latin America plan to collaborate and organize with each other by using a community website.

Conferences like this one will help draw attention to the waste pickers' cause, as well as allow them to organize and establish a unified voice. Silvo Ruiz, a legal representatives working with the waste pickers, echoed the call for greater unity among waste pickers in the conference's final report.

We waste pickers will keep our hands in the garbage bag that provides our livelihood, but our head outside of the bag, to fight for the public policies we need to improve our situation. Intermediaries wait comfortably in their warehouses, and [w]aste [p]ickers do the hard work of collecting. Waste should not be for the intermediaries, but for the waste pickers who do all the work. United, we can fight for what is needed.

Photo: Conrad Fox

Imagine if you couldn’t order that book you’ve wanted off Amazon.com or take that short walk or car ride to the library either. Instead, you have to wait for your book to be delivered — by a man and his two donkeys.

According to the New York Times, that’s exactly what Luis Soriano, a school teacher from La Gloria, Colombia and his two donkeys, Alfa and Beto, have been doing for the past decade.

The idea of a Biblioburro, or “donkey library,” came to Soriano while teaching impoverished children and seeing the impact of learning how to read. He travels with his donkeys to deliver books to rural people who don't have easy access to schools or libraries. Political upheaval and drug-related violence have made his travels dangerous. Yet despite confrontations with bandits and a fall that left him with a limp, Soriano continues to venture out with his donkeys.

Soriano and his Biblioburro show what people with limited resources can and are willing to do for the sake of education. Countries with high illiteracy rates (Colombia’s is 20 percent) can learn from his idea. Building schools and libraries outside city limits can empower people to share their own knowledge. Even in the most destitute areas, people want to be educated and exposed to the outside world — even if that means bringing them a library on legs.

Ciclovía Documentary shot by Streetfilms

Bogotá, Colombia is holding a 70-mile long block party. And everyone’s invited.

Ciclovía — "bike path" in Spanish — is an event that closes down major roads for pedestrian use every Sunday and holiday from 7 a.m. to 2 p.m. Created in 1976, it rapidly grew from eight miles and 140,000 bicyclists to 70 miles and an average of 1.5 million weekly riders. Ciclovía is championed as a community building event that attracts people from all backgrounds for a day of biking, walking, skating and dancing in the streets.

In the above video, Bogota’s former park commissioner Guillermo (Gil) Penalosa discusses Ciclovía’s main appeal: social integration.

You will see people in $5,000 bikes and others in $50 bikes, and all having the same fun! Rich and poor, young and old, men and woman, tall or short... ALL!

Cited for “endless benefits” such as the improvement of personal and public health, Ciclovía has inspired other cities to develop similar programs, including Guadalajara, Mexico; Quito, Ecuador; Santiago, Chile; and Paris, where an expressway along the Seine is transformed into a pedestrian refuge one month out of the summer.

Cities in the U.S. are also developing similar programs, starting with El Paso, Texas. This Sunday Portland, Ore., is clearing 6 miles of roadway for six hours in its inaugural "Sunday Parkways." New York Mayor Michael Bloomberg announced his city's plans for Ciclovía-like event this August that would stretch from 72nd to the Brooklyn Bridge along Park Avenue.

Events such as Ciclovía are not only free, but they also bring all sorts of people together to get healthy and build a happy community. It seems like a no-brainer that every city should have a Ciclovía!