USAID Impact Photo Credit: USAID and Partners

Archives for Economic Growth

Riding the Growth Bubble in an Increasingly Urban World

Did you know that more than half the world now lives in urban areas? And that in the next several decades nearly all population growth will be in urban areas? That’s equal to about 1.4 billion additional urban residents in developing countries from 2010-2030 alone—equivalent to a city the size of Chicago emerging every two weeks for the next 20 years. It doesn’t just stop there, either: The growth bubble gets even bigger after 2030.

To make matters worse, more and more urban residents are living in squalid, hazard-prone, unhealthy and crime-riddled environments, leaving them highly vulnerable to the devastating impacts of natural disasters. The living conditions depicted in films such as Slumdog Millionaire and the image below are everyday life for nearly one in six human beings on the planet. By 2030, it will be reality for nearly one in four.

Shanties hug the water in Manila’s slums. / United Nations University in Bonn

Shanties hug the water in Manila’s slums. / United Nations University in Bonn

The recent earthquake in Nepal, and its impacts on the capital Kathmandu, has laid bare the challenges of governance in the rapidly growing cities of developing countries, particularly with regard to urban planning and management. The risks and vulnerabilities of living in urban conditions like these are only exacerbated during crises. Additionally, the fastest urbanization is taking place in developing countries, which are already disaster-prone. This is why now, more than ever, we must take into consideration the rapidly growing urban bubble before us.

In the past, most plans to manage urban growth and reduce poverty were aspirational–or even inspirational–but almost never operational in terms of actually helping urban communities affected by disasters and crises. Acknowledging this and looking forward, we must focus on creating resilient living conditions in urban areas that are capable of withstanding the subsequent shocks of a disaster.

In Ravine Pintade, USAID worked with partners to remove rubble and help rebuild the neighborhood using two-story shelters. / Carol Han, USAID/OFDA

In Ravine Pintade, USAID worked with partners to remove rubble and help rebuild the neighborhood using two-story shelters. / Carol Han, USAID/OFDA

Take for example Haiti, where in 2010 a magnitude 7.0 earthquake rocked the city of Port-au-Prince, killing over 200,000 people and displacing 1.5 million more. The Ravine Pintade neighborhood was one of the hardest hit areas—nearly two-thirds of the 1,000 families living in the area were instantly made homeless. In the wake of this tragedy, USAID worked with the local community and partners, Project Concern International and Global Communities, to build back safer shelters and neighborhoods.

Ravine Pintade now has a range of disaster-resistant shelters, including what is thought to be the humanitarian community’s first-ever two-story shelters, 8,000 feet of drainage pipes, and improved access to clean water through water kiosks and rainwater harvesting systems for bathing and washing. With these risk reduction measures, Ravine Pintade is serving as a model of how to “Build Back Safer.”

Our work in hazard-prone urban areas reflects the lessons learned in Ravine Pintade. In Mixco, Guatemala, USAID and partners worked to develop the “Barrio Mio” (My Barrio) project, featuring neighborhood-level pre-disaster planning to address natural hazards and socioeconomic vulnerabilities. Thanks to that project, Mixco ended up with reconfigured neighborhoods that created a safer living space

If both humanitarian and development actors engage now and continue to work together toward operational solutions like these, then we can improve resilient living conditions in urban areas that will better withstand the shocks of future crises. We must manage the rising humanitarian risks in areas with rapid, unplanned urbanization and ensure that our humanitarian responses account for the challenges of rapid urban growth. The next time a disaster hits a densely populated city, this will ultimately help us save lives and reduce suffering.

Now is the time to make effective change and get ahead of the expanding global urban growth bubble. It is critical that the places where more and more of our species choose to live – cities – become better able to withstand the shocks of disasters and crises — making them better, safer places to live.

ABOUT THE AUTHOR

Charles Setchell is the Senior Shelter, Settlements, and Hazard Mitigation Advisor with USAID’s Office of U.S. Foreign Disaster Assistance.

Burgers and Business Give At-Risk Honduran Youth Hope

Editor’s note:This blog originally appeared as a longer feature story from Creative Associates International.


Chuy sells between 16 and 25 burgers each day to help support his family. / David Snyder, Creative Associates International

Chuy sells between 16 and 25 burgers each day to help support his family. / David Snyder, Creative Associates International

Tegucigalpa, Honduras — In his family’s small kitchen in one of the capital’s most at-risk neighborhoods, 23-year-old Jesus Lanza, wearing an apron and gloves, flips hamburger patties and fries potatoes. Today, he will sell from 16 to 25 burgers, enough to help support his parents and 8-year-old sister.

Jesus, known by his nickname “Chuy,” has a steady burger business. Neighbors regularly pop in for a bite in the tiny kitchen restaurant. He even rides in his father’s taxi for deliveries farther away.

But “Chuy’s Burgers” is about to go through a growth spurt thanks to a prize of $5,000 he won on Dec. 19 in the “Honduras Emprende” entrepreneurship contest, held annually by the Tegucigalpa Chamber of Commerce and Industry.

Honduras: Burgers & business give at-risk Honduran youth hope from Creative on Vimeo.

Chuy hasn’t always been this successful. Just a couple of years ago, he said, he was off course, involved in drugs, drinking and destructive habits. A community pastor told him this path would likely end in “either death or jail.”

“I watched my friends, one by one,” Chuy said. “The drugs were going to destroy them….I did not want this for my life and for the future of my family, so I asked God to open a door for me, a better way for my future, better welfare for my life.”

Tegucigalpa is one of the most violent cities in Honduras, considered the most dangerous country in the world outside of a war zone. Gangs and drug activity plague many of the city’s poorest barrios, like the one where Chuy and his family live.

Reintegration Through Entrepreneurship

With help from the Alianza Joven Honduras (Youth Alliance Honduras) violence prevention program, which is funded by the U.S. Agency for International Development (USAID) and implemented by Creative Associates International, Chuy enrolled in a social reintegration through entrepreneurship and employment training program for youth at high-risk run by the Tegucigalpa Chamber of Commerce and Industry.

The program, “Second Opportunities for Our Youth,” has trained more than 150 18- to 29-year-olds in entrepreneurship, as well as conflict resolution, life planning and resilience skills. Participants learn how to start and sustain a business, and they are provided with small grants to get their ventures off the ground.

“The specific objective of the project is to reintegrate back into society people who in the past have been linked to criminal acts or have been imprisoned with a background in rehabilitation centers,” said Fabricio Sierra, project coordinator for the youth-at-risk reintegration program at the Chamber of Commerce.

“What we are looking for is that these young people believe in themselves and seek alternatives to their economic problems rather than the violence, drug dealing, or belonging to criminal gangs. They have the potential to find ways to generate an income that would really be favorable—to pay their studies, pay for their houses, lights, their daily meals. We have such talented people with very entrepreneurial ideas,” he said.

For many former gang members or youth like Chuy living in violent neighborhoods, the stigma associated with their communities can prevent them from getting jobs in established businesses. Self-employment can be a viable economic alternative and a means of reintegration into society.

Chuy with his mother and sister in their kitchen, where his burger business is based. / David Snyder, Creative Associates International

Chuy with his mother and sister in their kitchen, where his burger business is based. / David Snyder, Creative Associates International

Collaborating on Shared Problems

Since 2011, Alianza Joven Honduras, USAID, the Honduran government and the Tegucigalpa Chamber of Commerce have collaborated to support former gang members and at-risk youth with job skills training and key tools for adapting to post-gang or post-crime life.

Karla Ruiz, general manager of the Tegucigalpa Chamber of Commerce, said that when the Chamber saw the possibility to “teach what we know”—how to start a business—the program was born.

The Second Opportunities for Our Youth program received $30,000 in funding from Alianza Joven Honduras and another $30,000 from the government’s Security Tax Trust Committee for its 2014 and 2015 activities.

Ruiz said that by teaming up with initiatives like Alianza Joven Honduras and partners from the public and private sector, the Chamber of Commerce and other groups can work on common objectives like reducing violence and reintegrating highly at-risk youth into society.

The program has certainly had a positive effect on Chuy, who plans to use his contest award to expand Chuy’s Burgers, which will ultimately generate additional income for his family.

“If you had seen me in the past, and now what I am, there has been a totally radical change,” he said. “If my friends had this opportunity, I think they would become better human beings for Honduras.”

With reporting by Emmanuel Rodriguez

Olive Oil of Hope

Olive oil connoisseurs, take note.  I recently tasted organic olive oil that would satisfy the most discerning palates, and it has the added element of peace-building, too.

Near East Foundation staff present USAID Assistant Administrator Paige Alexander with the final product: organic olive oil produced with support from the Olive Oil Without Borders project. / Lubna Rifi, USAID

Near East Foundation staff present USAID Assistant Administrator Paige Alexander with the final product: organic olive oil produced with support from the Olive Oil Without Borders project. / Lubna Rifi, USAID

While traveling in  the West Bank for the first time as USAID’s Assistant Administrator of the Bureau for the Middle East last month, I noticed the landscape was dotted with olive trees. To Palestinian farmers, olive trees represent economic opportunities and hold cultural significance. A hundred thousand Palestinian families in the West Bank depend on the olive oil industry, an important part of the Palestinian economy.

USAID Assistant Administrator of the Bureau for the Middle East plants an olive tree with olive farmers participating in the Olive Oil Without Borders project. / Lubna Rifi, USAID

USAID Assistant Administrator of the Bureau for the Middle East plants an olive tree with olive farmers participating in the Olive Oil Without Borders project. / Lubna Rifi, USAID

Olive oil also represents an important opportunity for peace-building in a region marked with strife

Enter: USAID’s Olive Oil Without Borders. Implemented by the U.S.-based Near East Foundation, the project builds trust, mutual understanding and collaboration through economic cooperation in olive oil. It has allowed 1,500 Palestinian and Israeli olive farmers, mill operators and olive oil distributors to meet, share farming methods in workshops, improve their skills and increase olive oil production and profit through global exports.

All of this is consistent with USAID’s mission to promote resilient, democratic societies.

In the past, olive oil prices in the West Bank fell because the market was limited and exports were minimal. One of the most striking achievements of  Olive Oil Without Borders was an agreement reached in February 2013 by Palestinian and Israeli officials that allowed Israeli citizens to purchase Palestinian olive oil for the first time in 10 years. As a result, in less than two years, 3,600 metric tons of Palestinian olive oil were sold to Israeli companies. Palestinian farmers increased revenues by $20 million.

During my visit, I met Muhammed Shouly at his organic olive farm in Asira Shamaliya, in the northern West Bank. Shouly has been actively involved in Olive Oil Without Borders since its launch in 2011.

Muhammad Shouly is an olive farmer who tripled his harvest  after learning about supplementary irrigation techniques through the Olive Oil Without Borders project. / Lubna Rifi, USAID
Muhammad Shouly is an olive farmer who tripled his harvest after learning about supplementary irrigation techniques through the Olive Oil Without Borders project. / Lubna Rifi, USAID

For centuries, Palestinian farmers relied solely on rainwater for their olive trees. During cross-border meetings that brought Shouly and other Palestinian farmers together with their Israeli counterparts, he learned about supplementary irrigation, a technique to provide olive trees with additional water. Shouly applied this method on his olive orchard during the summer months and it tripled his harvest.

I also talked to Miyassar Yassin, another farmer from Asira Shamaliya participating in Olive Oil Without Borders. She took part in an olive oil quality tasting seminar with Palestinian and Israeli farmers, learning to quickly identify virgin and extra virgin olive oil

Miyassar Yassin just concluded an olive oil quality tasting seminar through the Olive Oil Without Borders project.  Here she is with her two daughters. / Lubna Rifi, USAID
Miyassar Yassin just concluded an olive oil quality tasting seminar through the Olive Oil Without Borders project. Here she is with her two daughters. / Lubna Rifi, USAID

The project has upgraded 18 olive mills in the West Bank and Israel, representing one-fifth of the olive mills in the area. The renovation of Qussay Hamadneh’s mill—which included the replacement of steel tanks for storing olive oil—vastly improved sanitary conditions and boosted the quality of the olive oil produced.

Qussay Hamadneh improved the quality of the olive oil he produces with support from the Olive Oil Without Borders project. / Lubna Rifi, USAID

Qussay Hamadneh improved the quality of the olive oil he produces with support from the Olive Oil Without Borders project. / Lubna Rifi, USAID

Olive Oil Without Borders is just one of dozens of programs that we support throughout the West Bank and Israel. Its success lies in bringing together individuals from different backgrounds to work on issues of common concern. The visit gave me great hope because participants are not only learning how to increase production, they are also learning about each other

Before leaving, I planted an olive tree. I know the farmers I met will nurture it, and I look forward to coming back to see how it has grown and pick its olives.

The USAID-supported Olive Oil Without Borders project brings together Palestinian and Israeli farmers to increase the quality and quantity of olive oil. / Lubna Rifi, USAID

The USAID-supported Olive Oil Without Borders project brings together Palestinian and Israeli farmers to increase the quality and quantity of olive oil. / Lubna Rifi, USAID

ABOUT THE AUTHOR

Paige Alexander is USAID Assistant Administrator of the Bureau for the Middle East

Building the Bridges of the New Silk Road

Silk still plays a role in the New Silk Road. Household silk production feeds Afghanistan’s carpet and textile industry. USAID is helping open up trade routes and increase economic connectivity between Central and South Asia as part the New Silk Road Initiative. / USAID

Silk still plays a role in the New Silk Road: Household silk production feeds Afghanistan’s carpet and textile industry. USAID is helping open up trade routes and increase economic connectivity between Central and South Asia as part the New Silk Road Initiative. / USAID

For hundreds of years, the main trade routes between Europe and the Pacific passed directly through what are now the countries of Central Asia. These trade routes brought prosperity and fostered the exchange of ideas and technology across cultural boundaries. In recent decades, civil unrest, ethnic tension, and mistrust have led to Central Asia being a roadblock instead of a thoroughfare for trade.

What would it take to reconnect Central and South Asia?

Support for new transmission lines connecting the sources of power in one country with customers in another?

Or millions of dollars in trade agreements, reviving age-old connections between traditional trading partners?

Maybe it’s a fortified wheat program, poised to improve nutrition for millions of Afghanistan’s children; or strengthened cooperation in transboundary watersheds to enhance regional peace and stability?

USAID has made these contributions and more as a part of the U.S. Government’s New Silk Road initiative, an ambitious effort to build a more secure, stable and prosperous region with Afghanistan at its heart.

While the goals of the program are lofty, the benefits of these programs are quite specific.

Manzura Zhabarova is an Uzbek entrepreneur who owns a clothing and thread manufacturing company. Our programs helped connect her with a new market: prospective clients in Mazar-i-Sharif, Afghanistan. “I could not believe that this world existed 800 meters away from us on the other side of the bridge,” she said. “It’s our responsibility to help our neighbors in Afghanistan. Trade is how we can help.”

USAID’s Deputy Assistant Administrator Manpreet Anand meets with regional traders attending USAID’s Central Asia Trade Forum held last year in Almaty, Kazakhstan. / USAID.

USAID’s Deputy Assistant Administrator Manpreet Anand meets with regional traders attending USAID’s Central Asia Trade Forum held last year in Almaty, Kazakhstan. / USAID.

There are few greater challenges for U.S. foreign policy today than the continued development and stabilization of Afghanistan. As military engagement winds down there, it becomes even more critical to build on the gains of U.S. defense, diplomacy and development efforts.

Afghanistan’s new administration is working to bolster its regional ties in order to promote the economic growth and stability its citizens need. As Afghan President Ashraf Ghani noted during a recent visit to Turkmenistan, “At the moment, Afghanistan has turned into a bridge.  Our trade and transit can create many opportunities; energy and electricity and natural gas will be sent to Afghanistan and to other countries through Afghanistan.”

Our efforts are helping to make this vision a reality. For example, we’re advancing regional electricity efforts, particularly through our support for CASA-1000, an ambitious electricity transmission system sending surplus summer hydropower from Kyrgyzstan and Tajikistan to energy-strapped markets in Afghanistan and Pakistan.

USAID helped the Aga Khan Foundation and Pamir Energy inaugurate newly constructed power transmission lines in Khorugh, Tajikistan, to meet the energy needs of Afghanistan's Badakhshon province. / USAID

USAID helped inaugurate newly constructed power transmission lines in Khorugh, Tajikistan, to meet the energy needs of Afghanistan’s Badakhshon province. / USAID

Recently, our support helped finalize a regional pricing agreement, helping pave the way for regional electricity transfers which would bring much needed revenue to Central Asia as early as 2018.

The benefits would be felt well beyond the exchange of energy. As State Department Deputy Assistant Secretary Fatema Sumar said, “CASA isn’t really about turning the lights on. It’s about getting countries to work together. That’s priceless.”

From Karaganda to Karachi, our programs are breaking down trade barriers and creating economic opportunity in ways that promote political understanding. Around the region, we are helping countries join and participate in the World Trade Organization, bringing businesses together, leading to millions of dollars in regional deals and sparking new demand for intra-regional trade between Central and South Asia.

These efforts have prompted us to think in new ways about how we work together as an Agency. Our New Silk Road initiatives involve the coordinated efforts of five separate USAID missions, representing two regional Bureaus and leveraging shared human and financial capital toward achieving shared objectives.

In Tajikistan, about half of all Tajik rural households do not have access to safe, potable water. USAID helps turn water from a source of conflict to a source of cooperation. / USAID

In Tajikistan, about half of all rural households do not have access to safe, potable water. USAID helps turn water from a source of conflict to a source of cooperation. / USAID

This is a pivotal time for Central and South Asia. This vast region faces challenges and opportunities. On the one hand, the Central Asian states have begun to grapple with the potential rise of violent extremism. On the other, in South Asia the world’s largest population centers seek faster economic development and integration into the global economy. We have responded accordingly – with diplomatic engagement and development leadership – because increasing prosperity and stability in this part of the world benefits us all.

At the recent London Conference on Afghanistan, Secretary Kerry reaffirmed that “Afghanistan’s economic future depends on improved connectivity with regional and international markets.”

The New Silk Road is an example of the far-reaching impact our development programs can have, and raises the bar of what we can expect from our investments in international development.

ABOUT THE AUTHORS

Assistant Donald “Larry” Sampler serves as Assistant to the Administrator in the Office of Afghanistan and Pakistan Affairs (OAPA). Jonathan Stivers serves as the Assistant to the Administrator in the Asia Bureau.

Historic Donor Agreement: More Money Where It Is Needed Most

In Barisal Sadar, Bangladesh, Ayub Ali serves his community by producing quality fingerlings (young fish), which is a key factor for local fish farming. As part of the USAID-Aquaculture project, he learns about modern method of aquaculture through training. This knowledge and support has made him a successful entrepreneur. / World Fish, A. W. M. Anisuzzaman

In Barisal Sadar, Bangladesh, Ayub Ali serves his community by producing quality fingerlings (young fish). As part of the USAID-Aquaculture project, he learns about modern method of aquaculture through training. / World Fish, A. W. M. Anisuzzaman

This year, 2015, will be seminal in setting not only bold new goals – like ending extreme poverty – but also in making bold reforms that change the way things get done.

As donors, one of our primary concerns is to use our taxpayers dollars as effectively and efficiently as possible in order to leverage significant change. That means attracting other forms of capital (public, private, social, multilateral – you name it) and directing those resources to where they can best have the sort of transformative development impact that we all want.

At December’s High-Level Meeting of the Organization for Economic Cooperation and Development’s Development Assistance Committee (OECD-DAC) in Paris, we advocated for and achieved important policy and structural changes to how donors allocate resources and report those numbers. These changes will impact the future of Official Development Assistance (ODA) — the international definition of foreign aid that is used to track donors’ foreign aid commitments.

First, 29 DAC members agreed to “allocate more of total ODA to countries most in need,” including low-income countries, the least-developed countries (LDCs), small island developing states, landlocked developing countries, and fragile and conflict-affected states.

We believe this policy is critical. The countries that can least afford to self-finance are the same ones lagging behind on the eradication of extreme poverty and the basic human development needs that form the foundation of the Millennium Development Goals.

Second, we created a fairer, more transparent, and better targeted system for development-focused lending. Three integral changes include:

  • Creating a fairer accounting system. Previously, donors got equal credit for grants and qualifying loans¹ – even though the loans needed to be repaid.  Under the new rules, only the grants and a portion of loans (known as the “Grant Element”) will count as Official Development Assistance (ODA). The United States only provides assistance in the form of grants.
  • Directing money to the most needy. The formula for deciding what counts as ODA now rewards donors who lend money to least-developed countries – i.e., those who can least afford commercial terms or self-financing.
  • Increasing transparency. During the meeting, members agreed to publish all ODA statistics more regularly, with frequent reviews and updates.
A worker at Muya Ethiopia weaves fabric that will become clothing and accessories sold on store shelves thousands of miles away. From 2005 to 2014, with support from USAID, Muya expanded from seven to 400 full-time employees and now sells 90 percent of its products overseas. / IESC, Steve Dorst

A worker at Muya Ethiopia weaves fabric that will become clothing and accessories sold on store shelves thousands of miles away. From 2005 to 2014, with support from USAID, Muya expanded from seven to 400 full-time employees and now sells 90 percent of its products overseas. / IESC, Steve Dorst

In order to unlock more development funding for the least-developed countries, the changes also endorse focusing on work with the private sector in support of the New Model of Development. These changes will also bring transparency to development transactions and encourage donors to send money to the neediest countries. They could not come at a more perfect time.

This year, the Millennium Development Goals will expire and the world will come together to decide on a new set of post-2015 sustainable development goals. These new benchmarks are likely to redefine USAID’s target of ending extreme poverty–a mission that will rely heavily on effective financial policies. Thanks to the lending reforms and support from other donor countries, USAID is in a strong position to move forward in tackling the development of countries most in need.

We can provide support to boost the economies of low-income countries to minimize poverty, but this renewed emphasis on countries most in need, including LDCs, small island developing states, landlocked developing countries, and fragile and conflict-affected states, stands to make an even greater difference.

This summer, donor countries and recipients will have a chance to further refine their approach to these issues at the third International Conference on Financing for Development in Addis Ababa, Ethiopia in order to achieve the next set of global development goals.

Currently, we are poised to bring significant changes to global development. With this early success in agreeing to changes in the recording of ODA loans and a renewed focus on countries most in need, large steps have been taken to help us realize an end to extreme poverty.


¹To be counted, loans had to be concessional in character and convey a grant element of at least 25 percent (calculated at a rate of discount of 10 per cent), a formula that has grown very out of date. Click here for more information.

ABOUT THE AUTHOR

Alex Thier is USAID Assistant to the Administrator for Policy, Planning and Learning. Follow him @Thieristan

A Spotlight on the World’s ‘Invisible’ Workers

Haitian construction workers in the Dominican Republic include an estimated 900,000 to 1.2 million undocumented migrants. The USAID Global Labor Program is supporting research and advocacy for international standards to protect their rights. / Ricardo Rojas

Haitian construction workers in the Dominican Republic include an estimated 900,000 to 1.2 million undocumented migrants. The USAID Global Labor Program is supporting research and advocacy for international standards to protect their rights. / Ricardo Rojas

USAID invests in people and their communities. But the people who do the most to bring wealth, infrastructure and services to a globalizing world may be those who leave their communities behind. They are construction workers, nurses, dishwashers, farm workers and maids. They are not likely to vote, or be leaders in their communities, or even lead their own households. But they do provide nearly half of all financial flows to developing country economies. They are the world’s 232 million migrant workers.

“Than,” one of many Burmese migrant worker in Thailand’s fishing industry, who face some of the worst abuse in the world.  / Jeanne Marie Hallacy, Solidarity Center

“Than,” one of many Burmese migrant worker in Thailand’s fishing industry, who face some of the worst abuse in the world. / Jeanne Marie Hallacy, Solidarity Center

“Than,” whose full name is protected for his privacy,is a 16-year-old Burmese boy who came to Thailand with his parents to find work. He works on fishing boats, earning only a little over $200 for an entire one-month boat journey. His father was arrested for not having a work permit, so now Than must provide for his two younger sisters, and earn back the money his family paid for a labor broker to bring them across the Thai border. His sisters hope to attend a school for migrants. Than only completed a sixth grade education.

Than is one of the luckier ones. Many Burmese migrant workers in Thailand’s seafood industry are little more than forced laborers. A report by the Solidarity Center found many workers were forced to work 16 to 20 hours a day and went without pay for months. Employers told workers their wages were being used to repay the labor brokers who brought them to Thailand.

Unemployment and underemployment have forced over half of Dominican Republic workers, many domestic workers from Haiti, into the precarious informal economy.  USAID’s partner Solidarity Center is supporting these workers to organize for their rights. / Solidarity Center

Unemployment and underemployment have forced over half of Dominican Republic workers, many domestic workers from Haiti, into the precarious informal economy. USAID’s partner Solidarity Center is supporting these workers to organize for their rights. / Solidarity Center

Thanks to interventions supported by USAID, some of these workers have been able to win back wages and better working conditions.

Even when migration is voluntary, life can be very difficult. Domestic workers migrating from Asia to the Middle East often lose the ability to communicate with their families or even their children; yet they keep working for wages they hope will enable those children to have a better life.

Even though migrant workers’ contributions to global financial flows are stunning (in 2014, remittances from expatriate workers were estimated to be $436 billion up from $132 billion in 2000), these workers are almost never the beneficiaries of any development program. They are largely invisible, restricted by law from participating in political or civic life in their countries of destination, and cut off from family and community ties in their countries of origin. They fall outside of human rights norms, and therefore are often victims of exploitation.

Between 2 million and 4 million migrant workers toil in Thailand as dockworkers, in seafood and domestic work. / Jeanne Marie Hallacy, Solidarity Center

Between 2 million and 4 million migrant workers toil in Thailand as dockworkers, in seafood and domestic work. / Jeanne Marie Hallacy, Solidarity Center

However, human rights advocacy organizations are beginning to advocate for the rights of these workers in new and innovative ways, and USAID is supporting a range of activities in several countries with high numbers of migrating workers.

According to the national census data in Nepal, as of 2011 over 700,000 Nepalis were recorded as working in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, with over a quarter of the country’s GDP coming from remittances. Unfortunately, too many Nepali workers are also exploited and trafficked as they migrate for work and in the destination country.

In Qatar, it’s been reported that more than 400 Nepali workers have already lost their lives working on World Cup construction sites. To help thwart the exploitation that may occur in the labor recruitment and migration process for foreign employment, USAID’s CTIP Project in Nepal has established 250 Safe Migration Networks to help educate community members on safe migration and monitor those who do migrate for employment. Much more needs to be done, such as ensuring ethical labor recruitment practices in countries of origin and decent working conditions in countries of destination.

The Thai fishing industry in Thailand has been described as being built on the slavery of migrant workers from Burma, Cambodia, and Laos. / Jeanne Marie Hallacy, Solidarity Center

The Thai fishing industry in Thailand has been described as being built on the slavery of migrant workers from Burma, Cambodia, and Laos. / Jeanne Marie Hallacy, Solidarity Center

USAID’s Global Labor Program has elevated the profile of some of the world’s most invisible workers: domestic workers around the world. A successful global campaign led by representatives of migrant domestic workers themselves succeeded in winning a new international convention on the rights of domestic workers, and bringing them from their homes into the world’s spotlight.

On this International Migrants Day, civil-society groups from around the world are presenting a framework for migration and development called the “Stockholm Agenda” to U.N. Secretary General Ban Ki-Moon. This initiative is a starting point for a broad and robust dialogue on how to ensure we spotlight and support the world’s migrant workers. It is our shared responsibility to ensure that “migration works for all.”

ABOUT THE AUTHORS

Bama Athreya is a Labor and Employment Rights Specialist
Marina Colby is a Senior Counter-Trafficking in Persons Advisor
Both work in USAID’s Center of Excellence on Democracy, Human Rights and Governance

Delivering More Bang for Development Bucks: Cost-Benefit Analysis and Feed the Future

Ireen Mapfumo, a Zimbabwean farmer, shows off a handful of protein-rich soybeans she harvested as one of eight lead farmers contracted by a USAID project in Zimbabwe. /  Fintrac Inc.

Ireen Mapfumo, a Zimbabwean farmer, shows off a handful of protein-rich soybeans she harvested as one of eight lead farmers contracted by a USAID project in Zimbabwe. / Fintrac Inc.

Now more than ever, development professionals and policymakers ask a fundamental question: Is a project worth the investment? Many are looking to cost-benefit analysis (CBA) for an answer.

Starting in 2009, USAID re-committed to cost-benefit analysis (CBA) as a critical tool for effective decision-making, and dramatically expanded its usage and training. CBA is an economic model that weighs strengths and weaknesses to determine how to implement or modify a project. USAID uses CBA to help determine when and where to invest for maximum results.

Feed the Future, Meet Cost-Benefit Analysis

Coinciding with this renewed interest in CBA was an increase in U.S. investment in global food security. At the 2009 G8 Summit in L’Aquila, Italy, President Obama called on global leaders to reverse a three-decade decline in agriculture investment. The U.S. Government’s global hunger and food security initiative, Feed the Future, embodied the U.S. contribution to this global commitment to reduce poverty, hunger and undernutrition.

Feed the Future wasn’t just a commitment of funding. It signaled a new way of doing development, founded in support of country-led efforts, deep partnership, and a relentless focus on results. It’s fitting, then, that Feed the Future became a critical player in the renewed push for incorporating CBA into USAID’s efforts.

As the lead agency for the Feed the Future initiative, USAID determined early on that it would roll out CBA analysis to Feed the Future countries through its overseas missions. This included specialized CBA training for agricultural officers and others working on Feed the Future’s early implementation so that CBA methods could be incorporated into agricultural program design.

Cost-Benefit Analysis Explained

CBA blends smart design with evidence to figure out if a project makes sense for the people USAID serves.

Analysts examine the incentives facing multiple stakeholders, including prices, profits, and losses over a long period of time. USAID uses this information to determine who is likely to win or lose as a result of a project, and adjusts design as necessary. Once the incentives are clear, the CBA model calculates the project’s costs and benefits.

Since we live in an inherently uncertain world, CBA analysts don’t stop there. CBA has helped Feed the Future projects account for volatile changes in circumstances, such as food price fluctuations over time.

Twenty-three missions around the world have used CBA to analyze or inform Feed the Future programming. Initial results have found that Feed the Future investments will achieve a 32 percent economic rate of return on average. By comparison, long term U.S. Government bonds only yield about three percent.

Perhaps even more important for the growth of CBA practice are the hundreds of USAID officers — including many agriculture officers — who have received training in how to incorporate CBA methods in program design. These agricultural officers will incorporate what they have learned into future projects, amplifying the effects of CBA.

USAID Cost Benefit analysis for Feed the FutureCreated by Gregory Gangelhoff

Cost-Benefit Analysis in Action

CBA is producing concrete results. In Haiti, USAID analysts conducted CBA of agricultural projects under Feed the Future West, an ongoing USAID program. Feed the Future West aims to modernize and create productive agricultural zones. Analysis determined that farmers would enjoy an internal rate of return (IRR) of 49 percent if all project targets were met. In other words, for every 1 dollar invested the host society receives an average of 49 cents in additional income over the project’s life.This result is significant: development institutions typically accept a minimum IRR of 12 percent for most projects.

Seventeen kilometers of improved roads in the Haitian mountain community of Fond-Baptiste now provide easy access to this local Monday market and larger markets on the coast. / Steve Goertz

Seventeen kilometers of improved roads in the Haitian mountain community of Fond-Baptiste now provide easy access to this local Monday market and larger markets on the coast. / Steve Goertz

USAID’s CBA analysts also examined how to remedy a shortage of rural roads in Haiti so that farmers could bring goods to market.

In Ethiopia, CBA helped guide $54 million in recent program planning. USAID estimates that these CBA-assisted programs have the potential to pull up to 400,000 people out of extreme poverty, explains Daniel Swift, an economist for USAID/Ethiopia.

In particular, USAID calculated the costs and benefits for Ethiopians of meat and dairy value chains as part of the Pastoralist Resiliency Improvement and Market Expansion (PRIME) project. The Mission’s original plan called for animal health and maintenance training, but CBA proved that the benefits of this training could not justify the investment. Instead, CBA led the mission to investments with more bang for the development buck.

This includes helping establish a meat processing plant that is expected to yield an estimated “$68 million in economic benefits for Ethiopia” in the form of a “tangible and sustainable market for poor pastoralists in the region,” according to Swift. Here and elsewhere, CBAs allowed decision makers to identify new opportunities and expand successful initiatives in the right places.

In concert with strategic analysis and a strong record of collaboration with private-sector partners, CBAs have become a part of the Feed the Future success story in this critical country.

Cost Benefit analysis in Feed the Future at USAIDCreated by Gregory Gangelhoff

CBA is more important than ever at USAID, but this work is far from complete. Tom DiVincenzo, USAID/Guatemala Mission Economist, notes that CBA analysts continue to seek new ways of explaining their work to decision-makers, who can struggle to fully understand the value of this type of analysis.

So what can the development community do to promote CBA and empower decision-makers in using it? Connect CBAs to “concrete examples” that non-economist decision-makers can understand easily, DiVincenzo notes. The results are worthwhile. When quantitative analysts work hand-in-hand with agricultural experts, their collaboration can plant the seeds for future prosperity.

ABOUT THE AUTHOR

Gregory Gangelhoff is an Economist in USAID’s Office of Economic Policy working on cost-benefit analysis, domestic resource mobilization, and growth diagnostics. Follow him @gwgangelhoff
Sally Rey is a Program Analyst in USAID’s Bureau for Food Security working on Feed the Future. Follow her @SalCary

The Economic Case for LGBT Equality Worldwide

Dr. Claire Lucas, USAID’s senior adviser on partnerships, addresses the audience at the launch of the joint Williams Institute-USAID report on LGBT inclusion and economic development. Seated, left to right: Carla Koppell, chief strategy officer, USAID; M.V. Lee Badgett, report author and research director, Williams Institute; and Brad Sears, executive director, Williams Institute. Photo credit: Matthew Corso/USAID

Claire Lucas, USAID’s senior adviser on partnerships, addresses the audience at the launch of the joint Williams Institute-USAID report on LGBT inclusion and economic development. Seated, left to right: Carla Koppell, chief strategy officer, USAID; M.V. Lee Badgett, report author and research director, Williams Institute; and Brad Sears, executive director, Williams Institute. / Matthew Corso/USAID

What if there was hard-and-fast evidence that discriminatory laws and actions against lesbian, gay, bisexual and transgender (LGBT) individuals hurt economic prosperity in emerging markets and developing countries?

Last week, I was proud to join in the launch of a groundbreaking report published by the Williams Institute as part of USAID’s LGBT Global Development Partnership that undertakes this empirical analysis. The underlying study found that human rights and economic prosperity are intertwined and that greater inclusion of LGBT people in emerging economies, at both the micro and macro levels, is positively associated with a country’s economic development.

Across 39 emerging economies and other selected countries, the study found substantial evidence that LGBT people are limited in their freedoms in ways that also create economic hardships.

The study uses, for the first time, the Global Index on Legal Recognition of Homosexual Orientation, which establishes categories of legal recognition and protection for lesbians and gay men, as well as a provisional index on transgender rights that was created specifically for the report. The index identifies eight types of laws that indicate a country’s level of legal recognition of LGBT people. It includes legalizing consensual acts between same-sex adults, providing protections against discrimination in employment or the provision of goods and services, and legal recognition of same-sex couples or the legal ability of couples to adopt children. The index allows for a numerical value to be assigned to each country in the study based on the number of laws currently enacted that provide either basic protections or address family recognition and adoption rights.

Based on this index, the study was able to show that one additional legal right in the index is associated with approximately a $320 in per capita GDP, or about 3 percent of the average in the sample countries, and a higher human development index value. For instance, Kenya has a score of zero, as it does not provide any legal protections for LGBT people and has a per capita income of $1,318. In contrast, Argentina has a score of seven and a per capita income of $13,323.

This positive correlation is significant because it allows us to put a price tag on discrimination. Based on the models and anecdotal evidence, we can see that countries that discriminate against LGBT people are pushing entire groups of people out of the formal economy and reducing the economic gains they would otherwise enjoy if they were allowed to be productive members of society.

So what does this mean for development and the LGBT community?

This research has potentially powerful ramifications for the way USAID works, for the donor community, for business leaders, for policymakers in emerging markets, and even for the U.S. taxpayer and legislators.

By linking stigma and discrimination against LGBT individuals to a country’s economic well-being, the issue of bigotry is not just felt and understood by those who are LGBT, but by anyone who cares about that country’s economic growth.

In April, Marco Andrés Jaramillo—an entrepreneur and CEO of EgoCity, an online and print magazine in Medellín, Colombia—joined 60 LGBT Colombians for #ActivatingLGBT, an entrepreneur training hosted by USAID partner, the National Gay & Lesbian Chamber of Commerce of the United States, and the Colombian LGBT Chamber of Commerce.

The training, held in Barranquilla, coached innovative LGBT entrepreneurs on how to create and sustain economically viable businesses, conduct trade with international partners, and make use of inclusive procurement policies. With new skills and connections, his business is booming.

Today, Jaramillo is turning his business from a small, niche magazine focused on his local community into one serving major multinational clients throughout Latin America and Europe. In the past year alone, business has grown by roughly a quarter.

Entrepreneurs like Jaramillo are engines of growth for their communities, countries and continents. Far too often, LGBT individuals around the world are excluded from contributing to their economy because of who they are. The fact is simple: Economic growth depends on a healthy, inclusive workforce, and people can’t work if they are routinely excluded from schools, jobs and health care or subject to other harms such as violence and police abuse.

ABOUT THE AUTHOR

Claire Lucas is a Senior Adviser in the U.S. Global Development Lab focused on partnerships.

Engaging China on Global Development

China is currently undergoing an evolution in its approach to development assistance and cooperation. The country continues to expand its contributions of resources, expertise and engagement on international development issues. As a result, the Chinese Government is continually reflecting on emerging challenges; the structure, mechanisms and partnerships needed to advance development priorities abroad; and new means of financing international development efforts.

Alex Thier addresses an audience member question during a CIDRN speaking engagement.

Alex Thier addresses an audience member question during a China International Development Research Network (CIDRN) speaking engagement. / Maria Rendon, U.S. Department of State

Recognizing the importance of frank, face-to-face bilateral dialogue to discuss these trends,  USAID held the inaugural U.S.-China Global Development Dialogue in Beijing on April 29.

China’s ongoing economic, social, political and environmental transformation will have a significant bearing on its domestic and global positions on related issues over the next 10 to 15 years. Despite progress, China still accounts for more than 10 percent of the world population living in extreme poverty – yet also sits on the world’s largest foreign cash reserves, some $4 trillion. Indeed, while we were in Beijing, the World Bank revised the purchasing power parity (PPP) exchange rates, which boosted Chinese GDP by more than 20 percent, putting it even closer to the size of the U.S. economy by that measure.

Alex Thier poses with Prof. Li Xiaoyun of China Agriculture University.  Prof. Li Xiaoyun co-chaired and commented during the CIDRN public event series on China and international development where Thier was a featured speaker.

Alex Thier poses with Prof. Li Xiaoyun of China Agriculture University. Prof. Li Xiaoyun co-chaired and commented during the CIDRN public event series on China and international development where Thier was a featured speaker. / Maria Rendon, U.S. Department of State

China is an important partner with developed and developing economies in negotiations around the post-2015 development agenda, climate change, financing for development and other global issues.

In the official U.S.-China global development dialogue, the Chinese exhibited a strong desire to engage with the U.S. Government on global development issues related both to broad international policy as well as practical elements of implementation.

The country is proud of the role it has played in achieving the current Millennium Development Goal of halving the proportion of its own people living in extreme poverty—over the last two decades China has helped lift nearly 600 million of its citizens out of extreme poverty—but still sees much need for continued domestic progress. We found strong agreement with the Chinese on the goal of ending extreme poverty  and common ground on increasing development cooperation effectiveness through internationally agreed on principles like the Global Partnership for Effective Development Cooperation.

USAID, like other government and private donors, has started small scale, practical cooperation with China in third countries (“trilateral cooperation”). For example, the United States and China recently launched an agriculture partnership in East Timor that is intended to improve the production of income-generating crops to enhance food security and nutrition. The first harvest was in March, and now more than 52 participating East Timorese farmers are seeing the benefits of modern farming techniques.

Charles Rice for USAID

A U.S.-China partnership is helping enhance food security and nutrition in Timor-Leste / Charles Rice for USAID

Discussions with a variety of Chinese universities, think tanks, foundations, and private sector and civil society organizations also demonstrate a growing interest and participation in development policy and implementation.

Overall, the first U.S.-China Global Development Dialogue was an important opportunity to advance our mutual interest in development policy dialogue, strengthening cooperation and enhancing policy coherence in partner countries. The next set of global development goals—including ending extreme poverty and sharing a sustainable global commons and economy—will require a concerted effort with all partners, China key among them.

ABOUT THE AUTHOR

Alex Thier is the Assistant to the Administrator in the Bureau for Policy, Planning and Learning. Follow him @Thieristan.

Liberia’s ‘Road’ (miles and miles) to Recovery

Little more than 10 years have passed since Liberia began rising from the ashes of a 14-year civil war that decimated its political, social and economic order.

While nearly 84 percent of Liberia’s population still lives in extreme poverty on less than $1.25 per day, during Nobel Peace Prize Laureate President Ellen Johnson Sirleaf’s presidency, the GDP per capita has grown on average by nearly 8 percent per year. The country is slowly navigating a development path leading to better health, a stable democracy, an improved domestic agriculture market, and increased exports of products such as iron and rubber.

Yet despite some advances, Liberians continue to face a daunting challenge – all too often, when the “rubber meets the road,” there is quite literally no road to travel.

Photo Credit: USAID Food and Enterprise Development

Liberia has 66,000 miles of roads, but less than 7 percent are paved. / USAID

Liberia cannot continue to break the cycle of poverty without an effective road network to connect its people and resources.

The country, approximately the size and shape of Tennessee, boasts a mere 66,000 miles of roads, and of these less than 7 percent are paved. By comparison, the Volunteer State has more than 93,000 miles of paved roads. Quantity is only part of the problem though: potholes the size of small vehicles scar what few paved roads exist, while dirt roads become muddy parking lots during the rainy season of May to October. In Bong County, a heavily populated agricultural region, citizens regularly voice their frustrations at their inability to access markets, hospitals, and government services:

“My village there,” said Sarah, one resident of Bong Mine, pointing across a rice paddy, “has no way to reach [services]. We walk to schools, we walk to clinics, it takes all day.”

The country’s infrastructure network represents the most visible symptom of the former conflict, stifling access to markets outside the capital. These broken roads decrease the food supply and exacerbate hunger and malnutrition in rural Liberia.

Members of a women’s farming group harvest rice in Liberia. / David Benafel, USAID FED

Members of a women’s farming group harvest rice in Liberia. / David Benafel, USAID FED

Before the war Liberia was a net exporter of rice. Today, 97 percent of rice consumption in the capital city of Monrovia is imported. Amazingly, it is cheaper, by volume, to ship rice the 7,500 miles from Thailand to Monrovia than it is from Gbarnga, a leading agricultural community just over 100 miles away.

Yet Liberia has no intention of leaving their economy stuck in neutral. Our partnership with Liberia, the World Bank, the Swedish International Development Cooperation Agency, and the Japan International Cooperation Agency will provide a total of $240 million in the next five years to improve up to 300 miles  of Liberia’s ailing network of roads.

USAID helped by first conducting a cost-benefit analysis of which improvements would yield the most positive and sustainable possible outcome for the people of Liberia.

Photo Credit: USAID Food and Enterprise Development

Because of the poor state of Liberia’s roads, it is cheaper, by volume, to ship rice the 7,500 miles from Thailand to Monrovia than it is from Gbarnga, a leading agricultural community just over 100 miles away. / USAID

Here’s one example of the types of information this analysis considered: When the cost of transportation decreases and the risks associated with traveling these roads dwindle, traders begin to reach these farmers with new information. Fertilizer and improved seeds can arrive at the farms before the planting season, agricultural yields increase, and farmers find it cheaper to deliver produce to the market.

Moreover, children will be more likely to make the trip along the road to school, sick individuals can plan a visit to the clinic, and government officials can better reach constituents with much-needed services. In short, the roads provide a number of ancillary benefits, and all must be factored in when selecting the most cost-effective use of development dollars. It is no simple calculation.

In the course of one month, the USAID team measured the myriad economic benefits from increased activity along the roads against the costs of road construction and long-term maintenance.

Armed with this analysis, USAID began rehabilitation in February 2014, galvanizing access to a better life to approximately 140,000 people who live within a mile and a half of these rural roads, and potentially many thousands more in the broader region through improvements in food security, health, and education.

There is strong reason to believe, in other words, that the figurative roadblocks to peace and prosperity for Liberia may be overcome as soon as the actual ones are.

 

ABOUT THE AUTHORS

Michael Nicholson is an Economist for the USAID Liberia mission @dr_nicholson
Colin Buckley is a Program Analyst at USAID in the Office of Economic Policy @colinhpbuckley
Kristen Schubert is an Economist at USAID in the Office of Economic Policy @KristenSchub

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