Note: From January until June 2015, our events were promoted under “Values in Perspective”. We have since changed our name to IdeasXChange.
March 31, 2015: IdeasXChange hosted an interactive workshop on the changing face of international development – one that focuses on encouraging local talent to find solutions to poverty instead of traditional aid-giving models established by Western countries.
Over 40 participants ranging from UBC students and faculty, practitioners, and community members joined pioneers and practitioners in the field of international development. The discussion focused on moving towards more sustainable models to tackle poverty by supporting local entrepreneurship and talent.
Attendees interacting with pioneer of the UBC Arc Initiative, Aklilu Mulat.
What is the problem with international aid?
Some argue there are problems with Western aid programs for the developing world. They argue that aid may have worsened poverty and encouraged corruption. Meanwhile, others have taken a different approach to alleviate poverty by supporting local talent through entrepreneurship. This is a model that supports programs such as social enterprises and microfinance, instead of seeing individuals in the developing world as incapable of finding local solutions to local problems.
Legacy of colonization and dependence on primary commodities (raw materials)
Poverty and economic stagnation – a prolonged and slow period of economic growth – in the developing world is complex. It is the result of historical events, external factors, and dysfunctional economies and government institutions. All of these factors put developing countries in a position of disadvantage which doesn’t allow them to compete fairly at the international scale with higher-income countries.
The legacy of colonization affects development. European colonization led to the reorganization of:
Human capital – skills, knowledge and experience possessed by an individual or group of people, viewed in terms of economic value.
Financial capital – economic resources measured in terms of money used by businesses to buy what is needed to make their product or provide their services.
Natural resources – substances or materials such as minerals, water, forest and last that occur in nature and are used for economic gain.
Once many of these former colonies gained independence in the 20th century, many of them became reliant on a few resources, generally raw materials without an added value.
Added value is the money gained at every step of a production of a good – for instance, people profit when trees are cut, when they are processed into planks, when the wood is ultimately turned into furniture and when it is sold in a store. Generally-speaking, those that profit the most are closer to the finished products, which are often times in higher-income countries.
As a result, poorer countries become dependent on the flow of money from these higher-income countries to sustain their economies since they don’t have finished products themselves to sell.
Aid can worsen poverty and lead to corruption if not administered responsibly
Some argue the legacy of dependence from the higher-incomes has continued into the 20th century through international aid. Aid has not always taken into account the local needs of the communities they are working in. According to economist Dambisa Moyo, nearly a trillion dollars in international aid to Sub-Saharan Africa in the 20th century has in fact, worsened living conditions in the continent and encouraged corruption.
This is because aid is often times not monitored and because governments are not compelled to provide essential services for their people. Instead, NGOs and other Western organizations take care of that, which perpetuates a vicious cycle of poverty and doesn’t lift developing countries out of poverty.
Supporting local entrepreneurs and local talent to alleviate poverty
As a result of these policies, some have taken a different approach to international development. An approach that takes into account the needs of local communities by working in partnership with locals by supporting social enterprises and microfinance.
Panelist Aklilu Mulat, a native Ethiopian gave an example during the IdeasXChange workshop. Mangos for instance grow in such abundance in Ethopia that they are sold at below-market prices to countries like Saudia Arabia since many in the country lack the facilities to store or process such fruits. Three months later, the same mangoes come back to Ethiopia and other eastern African countries as juice.
Through the Arc Initiative, a UBC project sponsored by the Sauder School of Business which Mulat helped to pioneer – juice-making businesses have been set up throughout Ethiopia by working side-by-side with local entrepreneurs who can run these businesses. Mulat argues that this model can help local economies and in turn, lift people out of poverty.
Panel discussion on supporting local talent and working with communities
The following three panelists provided their field expertise on how to achieve sustainable development by supporting local talent through business, entrepreneurship and innovation.
Jeff Kroeker: Head of the Arc Initiative by the Sauder School of Business, an initiative seeks to build a bridge, to facilitate the exchange of knowledge and business skills. BA (Trinity Western), MBA (Queen ’s), CMA, FCMA.
Aklilu Mulat: Born in Ethiopia, he came to Canada in 1979. Over 20 years serving with various not-for-profit organizations, experience conducting internal audits of field operations in Canada and overseas. Aklilu was also part of a group which developed the evaluation criteria for not-for-profit organizations funded by CIDA. B.Sc. (Natural Science), BA (Business Administration), CMA.
Barry Thorsness: Project Founder/Coordinator of TAFA, an NGO providing education for children in Malawi, helping to finance business school for a number of its pupils and a believer in fostering local entrepreneurship and local talent. TAFA’s directors are based in Malawi and are involved in supporting an array of projects from rice/maize plots to a sausage making business.
A discussion on the theme of encouraging
After panel introductions and a question and answer period, participants worked together through breakout sessions on how to move towards more sustainable development aid models.