Photo: Will Weathersby/Mercy Corps

Mercy Corps and Google.org are linking up to change the Gaza Strip and West Bank, one peaceful IT solution at a time.

Thanks to the Arab Developer Network Initiative (ADNI), young Palestinians will have the opportunity to develop web-based technological skills, sparking a new generation of capable, creative entrepreneurs. With the help of training sessions from Google and Mercy Corps’ seasoned experts, and additional funding from Source of Hope, ADNI is expected to open up a new professional field for Palestine’s motivated, young, job-seeking graduates.

The Challenge: For many Palestinian youth these days, unemployment is standard—the majority are jobless, despite relatively high educations. This youth bulge, created by a large baby boom in the 1980s, has ballooned during a global economic lull and left thousands of skilled 20- and 30-somethings without work. The unemployment rate for youth between 20-24 years is 66 percent in Gaza and 34 percent in the West Bank. It’s a terrible time to be young and in need of a job in the Middle East.

Palestine’s tech sector is so far not keeping up with forward-thinking tech innovations, such as cloud computing and app software. Currently, the sector represents a small niche, accounting for only five percent of the Palestinian economy. The lack of harmony between technological innovation and economic development is compounded by the alarming fact that about one percent of online content is available in Arabic.

The Opportunity: With a $900,000 grant provided by Google.org (the philanthropic branch of Google) for the first two years, and an additional $1 million provided by the Source of Hope Foundation, ADNI will have a healthy nest egg to start developing its program. The initiative includes three major components: technological and business-specific training, local and international mentorships, and seed capital investments.

What are they coming up with? Ideas already proposed by Palestinian ADNI participants include an app that turns off when entering a mosque, hand gesture recognition software, and Gaza Places, the Palestinian version of Google Maps. Mercy Corps and Google hope that investing in ambitious, fertile minds will, in turn, create dynamic innovations with social impact and the potential to produce income.

Photo: Mohammed El Baba for Mercy Corps

The Obstacles: Mobility and location flexibility is a well-known headache for the territorially-conscious region. However, an Internet connection allows people to work anywhere and cloud computing has changed the way we think about physical IT resources and traditional bumps in the road to developing apps. The initiative sets up a win-win situation: Palestinians receive the toolkit they need to supply an unfulfilled demand, while Google expands its interests in the Arabic-speaking market, which is ripe for paid online advertisements.

While the results of this project appear promising, ADNI still has many valleys to cross before reaching the promised land. No 3G network currently exists in the region for wireless devices. Commercial goods and materials cost a pretty penny, approximately 50 percent more than outside the borders. PayPal is not available to most. In Palestine, the platforms the global tech sector is built on simply aren't in place.

The Hope: In spite of these inconveniences, both Mercy Corps and Google are optimistic about their joint venture. “Palestinians have such a unique position," says Gisel Kordestani, Google's director of new business development. "They're well educated. They have strong English-language skills. With 88 million people in the [Middle East and North African] region getting online, they have the opportunity to build something for the Arab world."

And so Google.org, Mercy Corps and Source of Hope seem to be abiding by a proverb from one of the most notable male figures from Nazareth, who once preached: “Do not withhold good from those to whom it is due, when it is in your power to do it.”

Get involved as a mentor, trainer or investor: arabtech@sea.mercycorps.org

RELATED CONTENT:What They're Saying at Startup Weekend in Gaza

An oil pipeline to Canada's untapped Tar Sands deposits would create short-term construction jobs, but its effects on the climate could permanently destroy jobs elsewhere. Photo: rickz (Flickr)

Proponents of the proposed pipeline from Canada’s Athabasca Tar Sands to the Gulf of Mexico claim that its construction would create jobs. But while the long-term employment prospects are debatable at best, the resulting long-term economic devastation is far more certain.

The recent decision by the Obama administration to deny a permit for the construction of the pipeline has received much press and been touted as a victory for environmentalists. But as climate activist Bill McKibben and his organization point out, stopping the extraction of the tar sands would be a victory for those far removed from the American environmental movement as well.

McKibben said in an interview with Green Prophet that “Any place that is already living close to the margins is in the greatest danger” when facing climate change.

This means the world’s poorest, already suffering from food shortages and decreased agricultural production, would be hardest hit by this carbon bomb. And scientific consensus backs up McKibben’s view.

Country Ranks, Estimated Percentage of Agricultural Productivity Loss by 2080: Potential Carbon Emissions from Canadian Oil Sands. Photo: Center for Global Development

David Wheeler, senior fellow emeritus of the Center for Global Development, compiled a recent study specifically tying the exploitation of the Canadian oil sands to increased agricultural losses.

Wheeler concluded that “full exploitation of Canada’s oil sands deposit would impose significant agricultural productivity losses on over 3 billion people in the developing world, and particularly in sub-Saharan Africa.” He calculates that “combustion of the Alberta deposit would increase the atmospheric concentration of CO2 by 99 ppm, or 21.3 percent of the increase already projected to occur by 2100.”

Or, as reputed climate scientist Jim Hansen of NASA put it, tapping the tar sands would be “essentially game over for the climate."

Wheeler's findings show a "game over" scenario in poor rural regions, in particular, predicting agricultural productivity losses of up to nearly 13 percent in Africa and 9 percent in Asia. Wheeler, who also created a ‘Climate Vulnerability Index’ by country, sums up his findings powerfully and succinctly, stating "Put simply, the potential destructive power in Canada’s oil sands exceeds anything modern civilization has witnessed to date."

“This new report puts into stark relief exactly what ‘game over’ looks like: Millions upon millions of starving people across the planet," says 350.org co-founder Jamie Henn.

On the ground, countries projected by Wheeler to see further damaging impacts are already struggling with agricultural losses. Another 350.org co-founder, Phil Aroneanu, told Global Envision that “we have a plethora of anecdotal and story-based thoughts from our organizers around the world” of agricultural devastation and food shortages linked to changing climate patterns.

Drought-stricken countries in the Horn of Africa, including Ethiopia and Sudan, among others, provide some of the most poignant images of climate-related suffering. An Oxfam International report points out that 85 percent of Ethiopians depend directly on agriculture. And as a local farmer told Oxfam, “The rain doesn’t come on time anymore. After we plant, the rain stops just as our crops start to grow. And it begins to rain after the crops have already been ruined.”

And with the projections from scientists like Hansen and Wheeler, Africa’s farmers and communities appear unlikely to recover soon.

While McKibben writes that “Blocking one pipeline was never going to stop global warming,” and Obama’s denial of the Keystone permit may well not kill the project in the long run, the scientific and anecdotal evidence is clear: Vulnerable populations are suffering at the hands of carbon kings already, and tapping the tar sands will exacerbate their problems.

So the Keystone proposal may or may not be dead. But the political discourse around potential job-killing has mostly left out an important aspect: the killing of crops and livelihoods elsewhere in the world.

McKibben has said that extracting Canada’s tar sands would mean lighting the “fuse to the biggest carbon bomb on the planet.” For now, at least, that fuse remains unlit.

With mobile money, Haitians are able to complete transactions like this one wirelessly. Photo: Karl Grobl for NetAid.

This article was republished by The Christian Science Monitor.

In Haiti, cash is escaping from wallets and savings accounts are breaking free from brick-and-mortar banks.

Two years after 2010’s devastating earthquake, mobile money has taken off in the island nation. While the country has seen setbacks in many areas and continues to struggle, one bright spot is the transformation of the country’s traditional banking sector. Physical banks were wiped away by the quake and subsequent hurricane, and a mobile banking network that uses cell phones has grown up in their place.

Toting your money around on a cell phone might sound scary, but for many Haitians it’s more secure than carrying around a wallet, which isn’t protected by a PIN. The handy infographic to the right shows how a mobile money transaction works.

How a mobile wallet transaction takes place in Haiti. Infographic courtesy Mercy Corps.

In the months following the quake, both Mercy Corps (our parent organization) and The Gates Foundation sponsored separate Haitian cell phone companies, Voilà and Digicel, to help mobile money take off, with the Gates Foundation offering monetary incentives for the first company to get a program off the ground and for continued improvements in order to get entrepreneurial engines revving.

For many Haitians, mobile money can open a door to personal choice. Mercy Corps has used mobile money to distribute food aid to families across Haiti and deliver payments from its cash-for-work programs. Instead of spending hours waiting in line for a cash payment or a food ration, Haitians receive a wireless money transfer on their phones once a month.

The technology holds promises for the future, too. Long-term, mobile money could be expanded so that it’s accessible to everyone for all of their personal purchases. Haitians could use mobile money to send remittances to family members in other parts of the country, according to AudienceScapes. And after visiting with Mercy Corps staff in Haiti in 2010, New York Times columnist Nicholas Kristof wrote about the way that mobile money is creating a way for the poor to save money like never before. Most banks won’t accept very small deposits, but now a mobile phone could double as a savings account. It could blow the microsavings sector wide open.

Mobile money could also help make Haitians healthier. Even before the earthquake hit, Haiti’s public health indicators were the worst in the Western hemisphere, according to the U.S. Department of State, and those problems were only compounded by the disaster. In Kenya, one of the first countries to adopt mobile money, customers can use it to pay - and save up for - health services. Expectant mothers use it to save for health care, and in rural communities Kenyans have used the service to pay for access to clean water, reports USAID. Looking forward, a mash-up of mobile health and mobile money technologies in Haiti could lead to new insurance plans and health voucher programs, according to Health Unbound.

With mobile money quickly gaining widespread use, the developing world is leaps ahead of the developed. Mobile money launched in Kenya in 2003, according to The National Archives, but Google Wallet’s similar service in the U.S. wasn’t released until September of last year and has yet to truly take off. Maybe it’s time for American company executives to start taking a few pointers from Haiti.

Mercy Corps made cutting down trees for cooking fuel more sustainable through a reforestation project in Alta Verapaz, Guatemala. Photo: JGrant for Mercy Corps.

A new program in Brazil is turning tragedy on its head by paying the poor to preserve their natural surroundings.

Resource depletion and environmental degradation are common echoes of poverty. Desperate to get by, many rural poor turn to the only income source around: the natural environment.

That's why Brazilian president Dilma Rousseff outlined a new program called Bolsa Verde (green allowance) to promote environmental protection and decrease deforestation in the Brazilian Amazon, according to mongabay.com. The program will provide BR $300 (US $180 US) every three months to extremely impoverished families living in national forests and sustainable reserves. Recipient families must currently have monthly incomes of less than BR $70 (US $40) to qualify.

In exchange, residents pledge not to deforest illegally or to poach timber. It’s a huge jump in income for the poor, and in one of the world’s most rapidly growing economies, it's a small price for the public to pay.

“Incentive is important because we assign an economic value to nature. It's as if it were compensation for conservation," said Manuel Cunha, president of the National Council of Extractive Populations of Amazonia.

The program is modeled after Brazil’s existing and widely respected Bolsa Familia (family allowance) program, which has helped reduce poverty and inequality over the past several decades, according to The Economist.

Bolsa Verde seeks to expand these successes, reducing the strain of poverty on ecosystem services as well. And when the environment is protected, the poor lead better, healthier lives. So Brazil plans to increase people’s income so they take better care of their environment and themselves.

The government, however, isn’t trying to stop resource consumption that people depend on. "It is an incentive to have sustainable use of natural resources. [Residents] have the right to use biodiversity, but in a sustainable manner," Roberto Vizentin, Secretary of Sustainable Rural Development of the MMA, told Globo News.

If effective, this could mean both improved financial livelihoods and reduced vulnerability for Amazonian residents. And the environment and the rest of the world get something from the deal as well.

Village savings and loan schemes help the poor save in remote communities like this one in Malawi. Photo: Erik Mandell for MercyCorps

The world's poorest have long struggled to borrow. Now, an alternative microfinance model is also making it easier for poor people to save.

Microfinance institutions have provided lending services to millions of the world’s poor people for several decades. But loans must be paid back, and even traditional microlenders are hesitant to lend money to the poorest of the poor—including those living in some of the most remote and unpopulated communities. That’s where the model of village savings and loans associations (VSLAs) comes in, according to a recent Economist article.

The idea is simple: savings, rather than just borrowed money, is key to helping poor people become more stable and less vulnerable. Differing from the better-known Grameen Bank model of microfinance, which provides individual or group loans and operates on credit, a village savings and loan scheme allows a group of community members to pool their savings, lend within the group, and save the interest earned from the loans to disperse to members individually or use for community projects.

This model enables both borrowing capabilities and longer-term savings accumulation for both the group and its members.

CARE International, a humanitarian aid organization focused on fighting poverty, engineered the VSLA model in Niger in 1991. Today, CARE oversees village savings and loan associations in Ghana, Malawi and Uganda. Numerous other non-governmental organizations have promoted village savings groups that serve more than 4.6 million members in 54 countries.

While nonprofits promote the model, the groups themselves are internally managed. Unlike solely credit-based models, group members do not owe repayment to an external bank, but rather to their own pool. Group constitutions are established by members, outlining rules, interest rates, and how savings and interest will be shared. Sometimes transactions, debts and credits are written in basic ledgers, but some groups with no literate members rely on memorization, familiar to those with a culture of oral history, according to Hugh Allen, founder of VSL Associates.

Amid criticism of the effectiveness of traditional microfinance models, as we reported a few months ago, VSLA schemes offer a different path to poverty alleviation.

And for some of the world’s poorest, savings—not a loan— is the golden ticket needed for a better life.

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.

The departure of skilled workers in the developing world may, contrary to popular belief, do more good than harm. Photo:banoiff (flickr)

When educated professionals depart a developing nation, does greater wealth arrive? Some scholars in the international development community are saying farewell to the notion that the ‘brain drain’ hinders impoverished countries from expanding human capital and increasing the growth rate.

Exit brain drain. Enter brain gain.

The brain drain has long been perceived as a constraint on the progress of developing nations—much-needed doctors, professors, and scientists often abandon their homelands in exchange for better salaries and more comfortable lives in the developed world. However, research indicates that if countries can hit a sweet spot of sending around 20 percent of their talent to other countries, the residual impact of those individual losses will actually spur economic and educational growth at home.

But how? One way is through remittances, cash transfers from an individual in one country to another elsewhere. Take Ghana, for example. Some figures place remittance levels at $400 million per year, on par with the country's two biggest exports, cocoa and gold, which account for 25 percent of the foreign exchange earnings of the nation. To put this figure in perspective, in previous years Ghana has received around $650 million in foreign aid. Compared to other developing nations, that's low—in some, “remittances are more than double the amount of foreign aid,” as reported by Foreign Policy.

Furthermore, remittances can withstand the tests of natural disasters, and political and economic crises. Chances are an economic and political collapse in Egypt would deter foreign investment but encourage a migrant to increase his or her monetary givings to Egyptian relatives. Now those are derivatives Fannie and Freddie should have bet on.

Much of the new economic activity happening in African countries like Ghana are catalyzed by residents who have traveled or lived in developed countries. New York University professor William Easterly refers to this as “brain circulation,” that is, the movement of ideas and investments from educated professionals between their homes and the West.

Often, brain drainers will eventually return to their country of origin or maintain residency both abroad and at home. Not only do these individuals in turn support the economic development of their hometowns, but they also inspire members of the community to invest in education. According to Easterly, most students are motivated by the idea of living abroad, noting that “if this prospect is closed tightly, this may have an effect on the effort levels of students in the system, and therefore the quality of the graduates of the school system.”

Additionally, travel expands capital horizons. Robert Guest notes in Foreign Policy that “countries trade more with countries from which they have received immigrants.” A migrant living in the UK might inform his sister in Somalia that there is demand in his city for a specific talent she may have the skill sets to provide. Diaspora thus encourages a fluidity of ideas, innovations, and supplies and demands between often disconnected parts of the world.

Investing money abroad can be the best way to bring more of it home. Brainpower may work that way, too.

You need two DNA sets to tackle big development challenges. You need a development DNA—an understanding of the particular needs and characteristics of your customers, the poor people that you're trying to reach. And you need business DNA—how do we structure solutions that are fit for purpose, scale and sustainability?

- Christ West, Director, Shell Foundation

Stanford Social Innovation Review, V9N4

Young Portuguese congregate in a park in Lisbon. Photo: Erik Mandell for MercyCorps

Amid its ongoing financial crisis, Portugal’s prime minister has a surprising message for his country’s struggling residents: leave.

It’s just one example of Portugal looking to emerging markets for relief as power dynamics of international economic relationships change.

Conservative Prime Minister Pedro Passos Coelho suggested that moving to Portuguese-speaking countries and former colonies such as Brazil and Angola could be an alternative for young Portuguese hit hard by unemployment, according to IPS news. Coelho’s suggestion specifically focused on teachers, saying that other places could provide better job markets for educators. But the Prime Minister’s suggestion is being met with criticism, including from the governments of his imagined receiving countries for Portuguese emigrants.

Brazil and Angola both shot down this suggestion quickly, stating that they had no need for teachers from Portugal, IPS reports. Ana Maria Gomes, a leader of Portugal’s opposition Socialist Party, also criticized Coelho, saying "that is the last thing a prime minister should say... because no matter how complicated things are, we can and must pull out of this.”

Yet given recent economic trends, it makes sense that a struggling European country like Portugal might consider unorthodox solutions.

Brazil, the world’s largest Portuguese-speaking country, recently surpassed Great Britain to become the world’s sixth largest economy, reports The Guardian. Douglas McWilliams, chief executive of the Centre for Economics and Business Research (CEBR) described Brazil’s economic rise as part of a larger trend. He told The Guardian that "Brazil has beaten the European countries at soccer for a long time, but beating them at economics is a new phenomenon. Our world economic league table shows how the economic map is changing, with Asian countries and commodity-producing economies climbing up the league while we in Europe fall back."

This global shift of economic power, evident in Brazil’s rapid growth, is seen elsewhere as well. The emerging power of the so-called BRIC economies (Brazil, Russia, India and China) has been widely recognized for a while now, with trade in manufactured and resource-based commodities fueling the rapid growth. And the global financial and Euro-zone crises have accelerated the divide in growth between emerging economies and traditional economic powers.

Including the BRIC countries, 19 of the 30 predicted largest economies by 2050 are currently emerging markets, according to HSBC. And Project Syndicate reports that changing patterns of innovation and research and development will further fuel this shift, pointing out that in 2000 so-called developed countries only accounted for 76 percent of global R&D, down from 95 percent in 1990.

News of the rise of emerging economies isn’t new, but these figures pose a problem for struggling countries like Portugal. And the trend of turning to emerging countries for financial assistance signals a rebalancing of power likely to last.

Coehlo’s suggestion for emigration coincides with news that the Chinese state-owned Three Gorges Corporation bought 21 percent of Portugal’s largest power producer from the debt-burdened government, reports the Christian Science Monitor. The largest-ever Chinese investment in Europe further illustrates Portugal’s precarious situation. As another Chinese state-owned enterprise, China State Grid Corporation, bids on purchasing Lisbon’s national power grid operator, Portugal shows its willingness to sell assets to emerging economies to stay afloat.

“The European economy needs blood, but not in the form of a transfusion,” said Wang Yiming, a senior Chinese economic policymaker. “We need to create new blood by promoting investment.” In other words, China doesn't want to simply loan cash to the West. But it’s willing to invest in concrete assets.

Wang’s statement demonstrates China’s view of itself as an economic savior. If troubled countries have assets to sell, emerging economies are willing and able to buy.

So China is buying shares of Portugal’s utilities, and Brazil doesn’t want its unemployed emigrants. The Portuguese example shows that emerging economies now have more choices when it comes to global economic relationships.

Five hundred years after Portuguese landed in Brazil, have the colonial winds reversed? Maybe not entirely, but emerging economies now have a comparatively better hand to play. And for countries like Portugal, the game of economic power is no longer stacked so strongly in their favor.

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.

Download the full size image. Courtesy Mercy Corps.

During the lifecycle of a Haitian mango, a lot can go wrong.

By the time it reaches the U.S., it's a lucky little mango if it hasn't been packaged poorly, bruised and squished, harvested at the wrong time, ravaged by insects and decimated by poor weather. In all likelihood, it's probably been thrown out along the way, never to make it.

For the large international supermarkets and businesses that buy mangoes (think Whole Foods and Coca-Cola's Odwalla brand), this is just the cost of doing business. It happens to some degree with every perishable product—particularly fruit—and it's no cause to shed tears.

But for Haitian farmers, that cost of doing business may actually cost them their business.

Nonprofit development organizations are in tune to the plight of the small-scale farmer and have identified a few key moments in the mango lifecycle where value can be added (see Mercy Corps' "Farm to Market" infographic above). On the other side of the coin, companies like Coca-Cola want to ensure the mango supply chain is intact, because it's difficult to make Mango Lime-Aid juice without mangoes. Both have poured money and expertise into helping mango farmers succeed.

It's not too far of a stretch to say that improving the incomes of small-scale farmers can improve the long-term prospects of a country like Haiti, devastated and slow to recover.
The spotlight on Haiti may dim over time, but the mango is definitely finding a juicy role for itself in the story.

Yesterday's news could be tomorrow's biofuel. Photo: Lisa Batty (Flickr)

Why not do something useful with those stacks of holiday cards languishing at home? Like re-charge your cell phone.

Japan has taken recycling to the next level: Sony recently unveiled a paper-powered battery prototype. How does it work? Engineers use the enzyme cellulase to break down paper matter into glucose sugar. Combine a few more enzymes with a dash of oxygen and you get a bona fide biofuel.

The process is pulled right from nature, researchers explained: it's used by white ants and termites, which use digested wood as a form of energy.

The paper-fueled battery is still in the early stages of development, but even low-output experiments have big potential. If brought to market, the prospect of using paper waste to recharge mobile phones or run small devices such as fans or lights is a bright spot on the innovation frontier. Whether off-the-grid in rural Africa or struggling with energy payments in the U.S. or Europe, turning paper waste into usable energy can play a part in alleviating poverty.

Perhaps the newspaper industry can capitalize on this green initiative to generate a little green of its own.

Reliance on quality produce from Africa prompted Albert Heijn to undertake aid projects. Photo: Erik Mandell for MercyCorps

A Dutch company looks to combine international aid with corporate profit, according to allAfrica.com.

The supermarket chain Albert Heijn is funding and conducting development projects in Africa, including constructing water systems in Ghana, farmer training programs in South Africa, and expanded schooling in Kenya. But the company doesn’t claim that its efforts are based in charity. "It's very much business-driven. It bears almost no resemblance to charity or good causes," says Henri Zondag, chair of the Albert Heijn foundation.

Albert Heijn supermarkets rely heavily on quality produce from Africa, and the idea is that healthier, happier and better-educated suppliers make trade relationships more productive. The Dutch government is a player in this arrangement too, encouraging business-sector participation in cooperative development relationships and economic benefits for the Netherlands. The government hopes that “making a profit can be a great incentive for [development] projects.” The company envisions projects that forge partnerships that lead to greater profit. If both are correct, in the long term all parties involved could win.

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.

Trujillo, Honduras is currently a quiet backwater town, but the Honduran government has grand visions for its future growth. Photo: Wanaku (flickr)

Picture this: a nearly independent city-state -- a Hong Kong in one of the western hemisphere’s poorest countries. Sound far-fetched? Maybe so, but one country has high hopes for a changing urban future.

According to the Economist, Honduras wants to outsource development of a new city. The idea is to create a ‘charter city:’ a semi-autonomous zone with everything from governance to a separate currency managed independently and overseen by experts outside of the Honduran government. But Honduras faces the question of whether a ‘clean slate’ of separate rules and management can spur economic growth that has been largely elusive in the region.

The political wheels are rolling, but the road to a charter city is long and uncertain.

The national legislature recently legalized the creation of “special development regions,” although the ensuing steps are taking longer than anticipated. In December, Honduran president Porfirio Lobo began appointing a ‘transparency commission’ to oversee the project, despite mixed opinions of the initiative held by other government officials.

Yet charter city supporters remain enthusiastic about the steps taken so far, and optimistic about the direction of the project.

According to Paul Romer, an economics professor at New York University who proposed the concept, charter cities represent a “new type of special reform zone,” building on the idea of a special economic zone by “increasing its size and expanding the scope of its reforms.” His idea is to create internal start-ups, akin to the way that businesses often set up new divisions free to operate outside of old rules. Mr. Romer believes that the clean slate will allow government authorities to experiment with laws and governance. “What types of mechanisms will allow developing countries to copy the rules that work well in the rest of the world?” he asked The Economist.

And people in developing countries like Honduras, Mr. Romer says, will respond to the initiative by embracing opportunities in charter cities. “The worldʼs poor know that better rules prevail elsewhere,” he says, citing the Gallup report that 630 million people would like to move permanently to another country.

Charter cities, Romer claims, should also be of interest to rich countries, such as the United States, struggling with illegal immigration, as they offer an alternative to residents of poorer countries seeking to migrate.

“The new entity’s open door gives the huddled masses an alternative," Romer told The Economist. "Instead of risking their lives on perilous journeys to cross borders illegally, they can move legally to a charter city.”

But many do not agree with Romer’s plan for building cities from scratch in the world’s poorest nations, and outsourcing their design and government to rich countries. Duncan Green of Oxfam has been critical of Romer’s idea for several years, and writes that “the underlying motive seems to be to liberate development from the supposedly dead hand of dysfunctional and corrupt states, transferring it instead into the hands of benign and honest technocrats” in Honduras.

As Green points out, the Trujillo charter city proposal is incomplete at best. Even with significant outside investment and oversight, charter cities would likely suck talent and resources away from their surrounding nation-states. And even with private security forces protecting the land of new development and investment, the presence of a wealthy, employment-generating city could create huge slums outside its borders.

The allure of a Central American Hong Kong may sound appealing to some, but officials must address many questions. After all, Hong Kong was a longtime colonial outpost before becoming a semi-autonomous economic zone. Is that really what Honduras wants? Or can Trujillo skip the colonial stage?

Honduran officials have a long road ahead to bring change to the Caribbean coast. But Mr. Romer’s vision has people talking. And for Honduras, it may just have a promising direction in store.

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.

Candles provide a light in the dark for those without access to electricity. Photo: Sara Y Tzunky

Is microfinance the solution to energy poverty? If partnered with renewable energy, it could prove to be true.

Energy poverty—a lack of access to electricity, fuel and more efficient cooking technologies—affects over two billion people, according to the United Nations' Rebeca Grynspan, making it a huge development priority.

Living without electricity simply makes you poorer. Kerosene lamps are expensive, ineffective and fill a home with hazardous fumes. But without a lamp, it's impossible to work or study after sunset. Cooking over an open flame pollutes the lungs and requires hours of wood-gathering, a huge loss of productive time. This is where simple solutions (like more efficient cookstoves) can yield huge impacts.

As a weak economy shrinks international funding pools, countries need to be increasingly wiser and more creative in their resource management. It’s worth noting that a lack of infrastructure presents the rare opportunity to build right the first time. By funding sustainable energy initiatives through microfinance, two things can happen: (1) Programs aiming to reduce energy poverty can work closely with locals and make more informed decisions by relying on indigenous knowledge; and (2) Money stays in the local economy, creating avenues for future investment and wealth generation.

Mercy Corps is combining these two endeavors to address energy poverty. The organization's Energy for All (E4A) program, funded by the European Commission, began in May 2011 in the country of Timor-Leste. It's primarily focused on lighting, cooking fuel needs and natural resource management. Because the population of Timor-Leste heavily relies on crops for fuel, food and income, they are especially vulnerable to shocks. Without access to energy, their problems are exacerbated, true for most poor people in developing countries.

Mercy Corps utilizes a market-driven approach to address energy poverty issues: By remaining external to the market, they strengthen the local economy and seek to create linkages where gaps in service exist. Simply donating materials or stoves undermines local businesses and acts as a disservice to the community. But upfront costs of adopting new technologies is often a major barrier, so Mercy Corps is partnering with microfinance institutions in Timor-Leste to initiate loans.

Mercy Corps' comprehensive survey compiled and assessed the needs of local households, to paint a clear picture of the specific needs and challenges of the community. The outcome is a program design that will implement solar power, improved cook stoves, seed storage and sustainable forestry initiatives.

And a performance tool developed by the Grameen Foundation, the Progress out of Poverty Index (PPI), will help local microfinance institutions determine whether the services they provide are effective or not.

Additionally, the E4A program is establishing alternative energy centers that will demonstrate their sustainable business models to the local market, with a special focus on rural off-grid areas.

I had the opportunity to visit Soft Power Health in Kyabirwa, Uganda, an organization testing an improved community cook stove. Access to a seemingly simple cook stove not only improves the health of the user but requires less fuel and reduces cooking time. By easing access to tools like this, the group is educating the surrounding community with hands-on instruction and use, the first step in technology adoption.

The concept of energy poverty received international attention last year when the UN announced that 2012 is the International Year of Sustainable Energy for All. They are seeking opportunities to scale up efforts that will achieve universal access to modern energy services. As part of the Millennium Development Goals, the UN has set a target date of 2030.

That's an ambitious timeline for getting electricity to everyone, and it's unlikely to happen without the for-profit sector. This makes it imperative that governments, lenders and non-governmental organizations implement market-based solutions that allow communities to lift themselves out of poverty through developing a robust local economy. Microfinance-backed renewable energy can be the first tool in this process.

Many organizations are taking the lead in implementing energy innovations where the need is great. What other programs and innovations d you know of that address the needs of people without energy access?

Post-independence affirmative action policies to redress the class imbalance in India include reserved spots at schools for lower castes. Photo: Thatcher Cook for Mercy Corps.

Few Indians make it across the divide between poor and rich. But some so-called “untouchables” who have crossed it see only one way to bring fellow Dalits across: employ them themselves.

Lydia Polgreen writes in The New York Times of the struggles faced by Dalits, who occupy the very bottom rung of Hinduism’s social hierarchy, in today’s booming Indian economy. She says that while Indian law officially prohibits caste-based discrimination, ongoing social stigma in the private sector—in the form of exclusion from all but the lowest-paying jobs—has left the group among the poorest in the country.

Most struggling Dalits never turn their rags to riches, but the few whose successful businesses have catapulted them to the top have “bought rank in the market economy,” Polgreen writes. Many of their successes are, in part, the product of post-independence affirmative action policies to redress the class imbalance, including reserved spaces for lower castes in education institutions and public jobs.

Just last month, the Indian government continued this trend by requiring state and public companies to make 20 percent of their purchases from Indian businesses, specifying that a fifth of those purchases be made from businesses belonging to the country’s lower castes, like Dalits. Four percent of public purchases equals about USD $1.3 billion, which is nothing to sniff at.

The push to expand affirmative-action policies into the private sector, particularly in hiring quotas, has met harsh criticism. The Economist argues that moves in this direction would be disastrous, resulting in even more social polarization and hiding the real source of inequality—lack of access to good education— which is already being addressed by older policies, albeit inefficiently.

Meanwhile, Dalit business owners have developed their own solution. The Dalit Indian Chamber of Commerce and Industry is a thriving hub of corporate leaders bypassing government intervention altogether by networking with qualified jobseekers and filling purchase orders from other Dalit businesses. And if the group’s growth in membership and activity is a harbinger, we’ve found the bridge to cross the divide.