The Wall Street Journal

November Comment of the Month

November's Comment of the Month was sent in by Sarah Standish of Portland, Oregon. Sarah commented on Alok Amatya's post Dairy Cows Fight Terrorism in Fallujah. She offers an alternate look at the relationship between job creation and terrorism. Sarah also wisely points out the need to look at more than one source of information before drawing conclusions. For her efforts, we will make a $25 donation to a project of her choice on Global Giving.

This Wall Street Journal blog post mentions that one study suggested that job creation may not necessarily reduce terrorist attacks:

When unemployment declined in Iraq and the Philippines, violence increased. The scholars say that one reason for this is that government forces may be able to pay off locals for tips on guerrillas more cheaply when unemployment is high. Another possibility is military crackdowns may increase unemployment, because communities are walled off, but reduce attacks by insurgents.

These ideas should definitely provoke us to think carefully about the relationship between violence and job creation, but I don't think they present any compelling reasons to stop focusing on job creation. It sounds to me like the authors have noticed an interesting phenomenon but don't know quite how to explain it yet. In a complicated issue like this one, a single study is probably not enough to draw any absolute conclusions.

Keep writing in and share your though-provoking comments for a chance to win $25 towards the well-deserving charity of your choice!

* Lest anyone think $25 is not a lot, consider these figures from our affiliate Mercy Corps: $25 delivers clean, safe drinking water to 50 people in one of eastern Congo's sprawling displacement camps. $25 provides seeds to farmers in cyclone-devastated areas of Myanmar to plant five acres of rice. $25 gives traumatized children in Darfur 12 weeks of activities and psychological care to help them heal.

September Comment of the Month: Boxing Breaks Barriers

Topics: Women
Countries: India

September's winning comment was sent in by Alok Amatya of Portland, Oregon. Alok commented on our post Indian Girls Throw Punches at Poverty, and mentions how boxing is opening new avenues for and instilling self-confidence in Muslim women in India. For being chosen as this month's winner, Alok will get $25 to donate to the cause of his choice through Global Giving.

The WSJ article about Muslim girls from India taking up boxing was a very well written one. It puts in perspective the kind of social conservativeness that Muslim women like Ms Fatma have to battle to achieve self-actualization through a sport like boxing that her neighbors deem fit for boys only.

Traditional gender barriers prevent women like Ms Fatma from challenging the male social supremacy that reserves positions of any power or prestige for men, thus leaving for women only domestic chores and odd jobs like sewing, and lowering the female self esteem.

A sport like boxing is a compromise really—by pursuing it, the Muslim women does not challenge the economic supremacy of the male in the family, i.e. the father or the husband. Yet the value of the self-confidence inspired in women by being good at a complex sport—and at that, one presumed by their society to be fit exclusively for males—is immense.

It is very heartening to read about the fathers of women like Ms Fatma and Ms Shabnam standing up against social pressure for the sake of their daughters’ emotional and social well-being. Perhaps such fathers have understood that only feeding and clothing their daughters does not making them complete human beings. Also heartening to read is that women from these societies who excel at sports can not only take part in tournaments at various levels, but are also invited to join the police force or the railway because of their talent. Such a segway into other occupations traditionally reserved for men might inspire a wider social change, that would finally benefit both women and men.

Keep writing in and share your though-provoking comments for a chance to win $25 towards the well-deserving charity of your choice!

* Lest anyone think $25 is not a lot, consider these figures from our affiliate Mercy Corps: $25 delivers clean, safe drinking water to 50 people in one of eastern Congo's sprawling displacement camps. $25 provides seeds to farmers in cyclone-devastated areas of Myanmar to plant five acres of rice. $25 gives traumatized children in Darfur 12 weeks of activities and psychological care to help them heal.

Indian Girls Throw Punches at Poverty

Boxing is opening new doors for some Muslim girls from India. Photo: <a href="http://www.flickr.com/photos/slack12/235528286/"> flickr(slack12)</a>
Boxing is opening new doors for some Muslim girls from India. Photo: flickr(slack12)

An article in Friday's Wall Street Journal looks at how boxing is giving Muslim girls in India an alternative to their "practically scripted" life.

For many of these girls, the Wall Street Journal says life goes like this: "they stay home, help their mothers, and get married so they aren't a burden to their families anymore."

Sabihal Hussain, a women's studies professor at a New Delhi university explains how boxing is opening up new doors for the girls.

They find (boxing) as a way of coming out from conservativeness. They have very limited role — poor Muslim women — in the public sphere. So thes women, these boxers, they find a way to come out and this is an outlet for them to fight poverty.

The boxers train hard and those that are good enough to compete internationally, fight for cash prizes. But for many girls, boxing can be a gateway into a job with the the police or land them a college scholarship for a spot on the university sports team.

Iceland's Economic Crisis

The collapse of Iceland's three largest banks earlier this year sent ripples through the country's economy. In time the bank's collapse led to high inflation rates, protests, rising unemployment, and eventually, a resignations by many government officials. This Wall Street Journal video takes a closer look at Iceland's economic crisis, and how Icelanders are fairing under the country's new economic reality.

If You Pay Them, Will They Leave?

Topics: Migration
Countries: Spain, Mongolia, Japan, Czech Republic

As unemployment increases worldwide, countries are looking at ways to stop the bleeding. Spain, Japan and the Czech Republic have decided to pay unemployed immigrants to return to their homelands.

Spain is offering immigrants from outside Europe an average of $18,500 in unemployment benefits to leave. The government is hoping to lower its 17.4 percent unemployment rate, the highest in Europe. Those who take the deal get 40 percent up front, 60 percent once they arrive in their countries of origin. They can't reapply for work visas in Spain for three years.

Japan is offering a one-time payment of 300,000 yen (about $3,100) to South American factory workers of Japanese descent who buy a plane ticket home, plus an additional sum for each dependent. Immigrants taking the deal agree not to "return until economic and employment conditions improve." Japan's unemployment benefits pay nearly $2,100 per month. So, unemployed immigrants could theoretically make more money without a job in Japan than they would by taking the offer to leave.

The Czech government will provide unemployed non-EU citizens with a ticket home plus 500 Euros — more if the worker has young children, reports the Wall Street Journal. When the program started, there were no restrictions on when a worker could return. On April 1, however, the Czech Republic stopped issuing work visas for five countries including Mongolia, whose citizens represent two-thirds of those in the pay-to-leave program.

Impacts on unemployment have been negligible at best. The Czech Interior Ministry says that their program has been a success: it's filled nearly 65 percent of its 2,000-person quota. Still, that number is less than 1 percent of all unemployed workers. The 4,000 people who've accepted Spain's offer is far from the government's goal of 100,000. And fewer than 400 people have applied for the program in Japan.

It seems that many immigrants are choosing to weather the economic storm where they are. Their chances of gainful employment in the country they left must not be any better.

Is Foreign Aid Helping Or Hurting Africa?

A young girl walking on the outskirts of Kibera, the largest slum in Africa. Photo: <a href="http://www.flickr.com/photos/lo_/402495067/in/photostream">subcomandanta (flickr)</a>
A young girl walking on the outskirts of Kibera, the largest slum in Africa. Photo: subcomandanta (flickr)

More than $50 billion of foreign aid is given to African countries every year to address poverty on the continent. Although this may seem generous, and to some a solid strategy to treat Africa’s ailments, Dambisa Moyo — a Zambian economist with a background that includes Harvard, Oxford and Goldman Sachs — says just the opposite.

In her new book, Dead Aid: Why Aid is Not Working and How There is Another Way for Africa, Moyo claims that foreign aid has been "an unmitigated political, economic and humanitarian disaster.”

In a recent op-ed piece in the Wall Street Journal, Moyo writes that although she isn’t completely against humanitarian aid, she doesn’t believe "charity-based aid" can provide long-term sustainable development for Africa. Her biggest issue is with “government-to-government aid,” and funds from large monetary institutions like the World Bank. Moyo says the $60 trillion of this aid that's been given in the past 60 years is not working, evident from the fact that the number of Africans who live on less than $1 day has doubled in the last 20 years. And most foreign government aid, she argues, has been pocketed by corrupt politicians.

Trade, foreign investments and microfinance opportunities can provide a better future for Africans, Moyo said in an interview with the New York Times.

As expected, Dambisa Moyo’s claims have come under fire. In an interview with Newsweek, ONE Campaign co-founder Jamie Drummond says “Dead Aid” is “a poor polemic, with nothing new of substance, filled with anecdotal micro examples which ignore mountains of evidence." Madeleine Bunting from the Guardian calls Moyo’s claims “poorly argued” with “frequent pre-emptory glib conclusions.”

I wanted to get another perspective on Dambisa Moyo's assertions regarding the effects of foreign aid on Africa. So I asked Laura Miller — Program Officer for Central Africa at Mercy Corps — to respond to some of Moyo's claims based on her experience in the international-aid business, including stints in the Central African Republic and the Democratic Republic of the Congo.

Manasi Sharma: Moyo blames “government-to-government aid” and “large developmental organizations” like the World Bank, rather than charity-based aid for Africa’s worsening situation. She says funds from governments and the bank haven’t contributed to development and in many cases are misused. I know you represent “charity-based aid,” but I’m interested in your opinion since it’s one of her main points.

Laura Miller: The main objective of bilateral aid isn’t always humanitarian relief; it’s also used to help strengthen fragile or strategic states and improve trade relations with the West. Money from the World Bank is often geared more towards large infrastructure projects such as water systems and road networks. Usually the recipient government is responsible for managing funds given by the World Bank. Some countries’ governments are more transparent and provide more oversight over aid money than others.

Moyo does question the value of “charity-based aid,” too. She says it might help after a disaster, but says it only provides “band-aid solutions” and can’t be the “platform for long-term sustainable growth.” Her example is giving a young African girl a scholarship even though she’s unlikely to find a job after finishing school. What are your thoughts?

Mercy Corps is in involved in both emergency response and long-term sustainable development, so I don’t believe that charity-based aid is only a band-aid solution. In emergency situations, Mercy Corps evaluates if the agency can respond appropriately within the context of what's going on. However, many of Mercy Corps’ programs are geared towards long-term sustainable growth, such economic development.

Even if Moyo is correct that after receiving an education it may be difficult for graduates to find work, education is still important, and aid agencies such as Mercy Corps are working to help strengthen economic opportunities. Although humanitarian agencies cannot help everyone, we are making important strides in the countries where we work.

How does Mercy Corps decide which in-country organizations to work with to make sure the money from donors is put to its proper use?

Mercy Corps works with local and international organizations that are registered locally or have permission to operate in country. Before receiving funding, organizations typically must show that they are operational; this includes showing proof of bylaws, articles of incorporation, management structure and budget and project management experience. There's also a “checks-and-balances” system throughout the process which includes financial and program reports and site visits, all of which is outlined in a signed agreement between the two agencies.

Moyo says foreign aid damages the local economy when important necessities like mosquito nets and food are simply given away. Are locals being put out of work because of free aid?

It is extremely important to support the local economy because too much dependence on foreign aid can crush the local economy, and it's not sustainable in the long run. Material aid is appropriate when goods cannot be procured locally. Some organizations use a social marketing approach; instead of distributing goods for free, goods are sold through existing markets, which ensures that this cycle can continue over the long term.

According to Moyo, foreign government aid and funds from the World Bank have allowed corrupt African dictators to stay in power. Do you agree?

I think this is a larger issue than foreign aid alone. I’d venture to say that both donor governments and constituencies have gotten savvier over the years as to how aid is used.

Here's a pretty disturbing charge by Moyo: She says foreign aid actually increases the risk of civil conflict. People will take up arms to be in power because "the victor gains virtually unfettered access to the package of aid that comes with it."

I don’t think that foreign aid has necessarily increased civil conflict; again there are a lot of other factors at play. If a country is embroiled in political upheaval and civil conflict, some agencies or private companies may cease working in that part of the world. Mercy Corps works in transitional environments and applies “Do No Harm” for its humanitarian interventions.

Some of Moyo’s solutions to help Africa’s development have to do with stopping the inflow of “free money,” opening up markets and investing in civil service. Are these suggestions compatible with Mercy Corps’ initiatives?

Many of Moyo’s solutions can help development in Africa, but it’s important to focus on all levels of society: the household level, the community level and the institutional level. Mercy Corps’ focus on economic development dovetails with some of Moyo’s proposed solutions, though we operate more at the community level. Through our programs we promote demand-driven development, link producers with markets, and foster entrepreneurship among the local population.

The Informal Safety Net

These fruit sellers are just one example of the numerous jobs in the informal sector, or "off the books." Photo: <a href="http://www.flickr.com/photos/sraj/419064857/">S.Raj (flickr)</a>
These fruit sellers are just one example of the numerous jobs in the informal sector, or "off the books." Photo: S.Raj (flickr)

In developing economies, the "informal sector" is full of babysitters, maids, gypsy cab drivers and gardeners. These workers do everything from selling food to stitching pants to making bracelets to selling wine from roadside stands. They're paid in cash so their income is not reported to the government, and no taxes are paid.

The Wall Street Journal explains that contrary to conventional wisdom, the informal economy could be what's saving developing countries from financial ruin.

Traditionally, the informal sector "is not something to be cheerful about," as Nancy Birdsall of the Center for Global Development puts it. The Journal explains:

Economists have stressed the negative aspects of informal trade for decades. Informal businesses often don't pay taxes, and they routinely lack the capital and expertise to be as productive as big enterprises, leading to less innovation and lower standards of living. Since informal workers lack health benefits and other safeguards, they have to save more for emergencies, resulting in less casual spending that further drags down growth.

In the current financial crisis, the Journal notes, the informal sector may actually be the saving grace of developing economies. With demand for export goods falling, many workers are being laid off from their formal sector jobs in factories and are turning to creative alternatives for income. Without these informal opportunities to make and sell products — at the market, on the roadside, or as street vendors — many would be destitute.

The WSJ article, "The Rise of the Underground," highlights several of these informal workers, including a laid-off factory worker who built her own roadside stand to sell homemade medicinal wine to truckers. She now makes $3 more per day than she did at the factory.

Mercy Corps Aid Delivery Reaches Gaza

Mercy Corps' Cassandra Nelson.
Mercy Corps' Cassandra Nelson.

Despite Israel’s commitment to establishing a humanitarian corridor and daily three-hour ceasefire, delivering humanitarian supplies to the Gaza Strip has been a challenge. The Mercy Corps team on the ground reports that on the first day of the ceasefire, fewer than 40 trucks were allowed in — compared with nearly 500 trucks per day in spring 2007.

Yesterday a truckload of 7 tons food ($17,000 worth) for 2,000 people made it into Gaza. Mercy Corps staffer Cassandra Nelson shares her account of the transfer below.

Despite many obstacles and bureaucratic procedures presented by the Israeli authorities, Mercy Corps successfully delivered emergency relief food items to Gaza on Thursday.

The organization delivered a truckload of vegetable cooking oil, rice and canned tuna fish in sufficient quantities to feed 2,000 extremely vulnerable people for a week.

Mercy Corps spent the past 11 days working through Israeli red tape and protocols that seemed to change daily to secure the permission to deliver the truck today. The delivery was supposed to be made Wednesday, but at 2 a.m. the Mercy Corps team in Jerusalem received notice from the Israeli Defense Forces that the delivery was being postponed because it contained dates, which were not an essential food item. Today's delivery did not include dates.

The truck was repacked last night without the dates and with an extra three tons of rice. At dawn this morning, the truck and Mercy Corps monitors set out for the Kerem Shalom checkpoint.

The Mercy Corps vehicle joined a line of about 25 trucks waiting at the border. After about an hour long wait, the Israeli customs officials inspected the delivery and paperwork and allowed the truck to proceed into the unloading area for all shipments.

The vehicle was admitted to the unloading compound with several other aid trucks — all from various UN branches. The pallets were unloaded by forklift.

After all the items were removed from the truck and placed on the pavement of the compound, the security check began. Sniffing dogs were released to check the material. Next, a border control worker probed and stabbed every package with a long metal rod to check if anything might be hidden inside.

After the checks were completed, all the Israeli workers and other observers and monitors were told to exit back to the Israel side of the border. Once the compound was empty of all people, the gates on the Israeli side were slammed shut.

Next, the gates on the Gaza side of the compound were opened, allowing the Palestinians to enter the compound and collect the delivery with their trucks. No trucks were allowed to drive from the Israeli side to the Gaza side. Everything was offloaded from the trucks on the Israel side and then reloaded onto different trucks on the Gaza side.

Israeli guards said that at no point in the process are Israelis and Palestinians from the Gaza side allowed to meet each other.

The number deliveries are still far short of what is needed to serve a population that increasingly relies on outside aid to survive. On Wednesday, only 36 humanitarian-aid trucks were allowed to make their deliveries. Compare that to 2007, when an average of 500 trucks entered daily.

The Wall Street Journal reports on Mercy Corps' challenges in sending the delivery of food aid in this video.

McCain, Obama and Trade Barriers

Mary O'Grady and OpinionJournal.com discuss the historical impact of trade barriers on Latin America and if the expansion of free trade will continue in Latin America under Barack Obama or John McCain.

Watch the video from The Wall Street Journal.


Stories We're Watching

'Quiet Corruption' Hurting Africa's Poor

San Francisco Chronicle - Mon, 03/15/2010 - 09:22
A World Bank report says teachers and other public servants who don't show up for work are fueling "quiet corruption" throughout Africa that is disproportionately hurting the continent's poor.

Industrial Output Up; Hopes For Factories Grow

NPR - Mon, 03/15/2010 - 08:45
Industrial production edged up 0.1 percent in February, beating expectations and marking the eighth straight monthly increase.

Cash For Work and Planning for the Future

Mercy Corps Blog - Sun, 03/14/2010 - 23:23
Two Mercy Corps workers talk with 62-year-old Rosemarie Joseph in her makeshift tent at the Lycée Jean-Marie Vincent displacement camp in Port-au-Prince.

Price Gap Spices Sugar Fight

Wall Street Journal - Tue, 03/16/2010 - 21:09
The battle over U.S. sugar quotas is flaring once more as the gap between domestic and much-lower global prices reaches its widest level in at least a decade.

Ushahidi - Africa’s Gift to Silicon Valley

International Herald Tribune - Sun, 03/14/2010 - 12:08
A small Kenyan-born Web site is bringing crowdsourcing to disaster relief and other humanitarian causes.

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