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Archives for Economic Growth

USAID Seeds Innovation: 15 Social Entrepreneurs Making a Difference

Mathew, a field engineer, stress tests the Smart Tractor at a test farm in Kaduna as kids from a nearby village watch. / Jehiel Oliver.

Mathew, a field engineer, stress tests the Smart Tractor at a test farm in Kaduna as kids from a nearby village watch. / Jehiel Oliver

Picture this: A farmer in Nigeria needs to plow her field, but does not have laborers to do it. Using her mobile phone, she sends an SMS message, and within days, a tractor arrives. She can now plow her field 40 times faster than manual labor, and at one third of the cost. And the tractor owner earns a profit as well.

This “sharing economy” platform is more than a great idea; it is a startup called Hello Tractor, founded by Jehiel Oliver – a recipient of a global fellowship from Echoing Green, sponsored by USAID’s U.S. Global Development Lab.

Through a partnership, the Lab has funded two classes of Echoing Green’s Global Fellows. The goal is to “prime the pump” for global social entrepreneurship by supporting individual entrepreneurs working in developing countries.

Over two years, fellows receive up to $90,000 in funding to realize and advance their innovations. Fellows also participate in leadership development events and receive mentoring from leading business professionals. To date, the Lab has supported more than 29 Global Fellows from 20 organizations.

With interests that range from “Uber for tractors” to rights for the visually impaired, the innovations from this year’s Echoing Green Global Fellows provide essential services, create jobs and reduce poverty — often through market-based solutions.

I recently spent time with a number of fellows at a retreat, listening to their stories about the inspiring work they engage in around the world.

Wendell and Etienne

Global Fellows Etienne Mashuli and Wendell Adjetety used their personal experiences as motivation to help post-conflict African youth through the Tujenge Africa Foundation they established in Burundi.

Female farmers are trained on the Smart Tractor at a farm settlement in Federal Capital territory. / Jehiel Oliver

Female farmers are trained on the Smart Tractor at a farm settlement in Federal Capital territory. / Jehiel Oliver

Having survived the Rwandan civil war and genocide, Etienne escaped a cycle of poverty thanks to quality education later in life. “I remember the first time I did really well in school,” Etienne said. “My father was so proud, he gave me a loaf of bread.”

But school became struggle for Etienne after his uncle was shot. He managed to overcome this setback, getting a full ride to a college in Illinois and later earning a master’s degree from Yale.

To help other youth in similar situations, Wendell and Etienne began the foundation to strengthen education, leadership and peacebuilding in Burundi, South Sudan, Central African Republic and the Democratic Republic of the Congo.

Afzal and Sabrina

After seeing the dire conditions in the informal baby care centers of Nairobi’s slums, Sabrina Premji established Kidogo with Afzal Habib.“The smell was the first thing I noticed,” said Sabrina. “As I walked forward into a dark room, I felt something brush my foot, and when I reached down, I saw it was an infant. There were at least a dozen infants in one small room.”

Faith, 11 years old, carries baby Richard to a Kidogo Center in Kangemi enabling her to go to school / Sabrina Premji, Kidogo

Faith, 11 years old, carries baby Richard to a Kidogo Center in Kangemi enabling her to go to school / Sabrina Premji, Kidogo

The experience drove her to find a way to provide high-quality and affordable early childhood care. She teamed up with Afzal, who applies his background in management consulting to lead the organization’s strategy and finances.

Afzal and Sabrina launched Kidogo last year to transform the trajectory of children living in urban slums by providing care and education.

This year, USAID is funding 15 Global Fellows who are sparking change in communities around the world. Other fellows include:

  • Aleem AhmedLove Grain—connects Ethiopian teff farmers with international markets by building partnerships with farmer cooperatives and supporting supply chains.
  • Katy Ashe and Edith ElliottNoora Health—trains and educates marginalized families in India with simple, low-risk health skills to improve clinical outcomes, provide care and save lives.
  • Sara Leedom and Julienne OylerAfrican Entrepreneur Collective—works with incubators, accelerators and investment funds to support young entrepreneurs in Africa by providing capacity building, mentorship and direct financing to grow their enterprises.
  • Mohammed Dalwai and Yaseen KhanThe Open Medicine Project—saves lives in under-resourced communities in South Africa, India and Pakistan by providing healthcare workers with free and open access to critical health information using mobile technology.
  • Sara MinkaraEmpowerment Through Integration—empowers blind youth in Lebanon and Nicaragua by providing life skills and emotional support through inclusive education and recreational programs.
  • Matt AlexanderSuyo—unlocks the transformational impact of secure property rights by making it easier and more affordable for low-income families in Latin America to formally register their property.
  • Pranav BudhathokiLocal Interventions Group—creates efficient feedback loops between governments in South Asia and citizens demanding better services.

Within the Lab, we believe good ideas can come from anywhere, but innovators need the resources and opportunities to thrive. There is no doubt that social entrepreneurs will continue to change communities, economies and nations for the better, and we are committed to enabling promising ideas worldwide.

ABOUT THE AUTHOR

Tahalia Barrett is a global partnerships advisor in the Center for Transformational Partnerships within the U.S. Global Development Lab at USAID, working on entrepreneurship and diaspora engagement.

First Time Loans Give Grassroots Farmers a Chance to Grow

Carlos Sigue, an agribusiness owner in Mozambique, with his 15-hectare plot where he grows several vegetables, including potatoes, cabbage, and cucumbers. / Scott Haller, USAID

Carlos Sigue, an agribusiness owner in Mozambique, with his 15-hectare plot where he grows several vegetables, including potatoes, cabbage, and cucumbers. / Scott Haller, USAID

Carlos João Tovela Sigue, a small farmer in Maputo, Mozambique, had bigger dreams than the small plot of land where he eked out a living for himself and his family by cultivating potatoes, cabbage, cucumbers and other vegetables.

He dreamed of improving his lot in life by expanding his small farm, but he had to put this dream on hold when he discovered a roadblock ahead. “It is difficult to expand production without a bank loan,” Carlos says.

For many small farmers like Carlos, accessing a loan to buy seeds, fertilizer and other supplies to expand their businesses can be difficult. Most banks assume that lending to farmers like Carlos is very risky, so they often offer limited finance on undesirable terms.

Fortunately for Carlos, he discovered a USAID program that provides a partial guarantee on loans for small farmers through the Agency’s Development Credit Authority (DCA) to reduce risks and encourage local banks to lend to underserved borrowers.

Through a partnership between USAID and the Swedish International Development Cooperation Agency (Sida), two banks in Mozambique received DCA guarantees to encourage lending to farmers and entrepreneurs, the main populations that local banks often overlook.

Since receiving a loan backed by USAID and Sida two years ago, Carlos’s farm grew from 3 to 15 hectares. With this financing, Carlos mechanized his farming processes and upgraded his irrigation system. This loan also allowed Carlos to hire more seasonal workers.

Harvesting a return on investment

Carlos Sigue received a loan from Banco Terra with the backing of USAID and Sweden’s development agency. He used the funds to grow a thriving business that won awards for its success. / Scott Haller, USAID

Carlos Sigue received a loan from Banco Terra with the backing of USAID and Sweden’s development agency. He used the funds to grow a thriving business that won awards for its success. / Scott Haller, USAID

Carlos paid off his entire first loan and took out a larger second loan to help him reach bigger goals and greater financial security. With this credit, he plans to farm 350 hectares of family land, accumulate 700 cows, and buy a larger truck for taking crops for sale to the market.

When small businesses and entrepreneurs can access credit, they can create a better economic future for themselves and their communities. Carlos is a case study in success and the Government of Mozambique recognized his excellence in agricultural entrepreneurship with multiple awards.

Many other farmers like Carlos are accessing credit for the first time because of the DCA guarantee program. Since 2006, the DCA program in Mozambique has helped to guarantee 795 loans.

When these borrowers were surveyed regarding the performance of the DCA guarantees in Mozambique, the results were positive. Most borrowers reported that this was their first experience with a financial institution, and about one-third of these first-time borrowers were women. Borrowers said the guaranteed loans helped them expand their businesses, create jobs, and improve the quality of their lives.

“In all interviews, farmers who benefited from the loans mentioned increasing the area [of land] cultivated and…productivity.”

“All farmers mentioned having financial means through the loan to hire additional labor, [which included] mostly women as seasonal labor…more food for the family and having [a] surplus for commercialization purposes.”

—ELIM Serviços Lda, the organization that led the independent evaluation

Everyone wins when development agencies partner with banks to bring financing to promising entrepreneurs. While USAID and Sida continue unlocking private capital for hundreds of borrowers like Carlos in Mozambique, similar DCA partnerships are providing over 160,000 borrowers in 74 countries across the world with much-needed financing.

Scott Haller, a USAID Development Credit Authority portfolio manager, and USAID Communications and Evaluations Analyst Beth Pappas contributed to this story.

ABOUT THE AUTHOR

Claire Everhart is the communications specialist for USAID’s Development Credit Authority.

Sustainable Finance Key to Health Equity

A newborn in Nigeria. USAID is intensifying efforts to develop, test and scale up simple, low-cost approaches to preventing newborn deaths in lower-income countries. / Amy Fowler, USAID

A newborn in Nigeria. USAID is intensifying efforts to develop, test and scale up simple, low-cost approaches to preventing newborn deaths in lower-income countries. / Amy Fowler, USAID

The world faces an alarming shortfall of funding needed to transform global health. If the world is to end preventable child, adolescent and maternal deaths, we need new forms of development finance to close a $33.3 billion annual funding gap.

A new financing platform announced this week at the Conference on Financing for Development in Addis Ababa, Ethiopia aims to do just that. The Global Financing Facility (GFF) is a country-driven financing partnership to accelerate efforts to end preventable maternal, newborn, child and adolescent deaths by 2030.

The launch of the financing platform brings together $12 billion from public and private partners, both domestic and international, to scale up national strategies in four countries particularly in need: the Democratic Republic of the Congo (DRC), Ethiopia, Kenya, and Tanzania.

Their five-year strategies include life-saving interventions based on evidence of what works best that will be expanded to reach those that are most in need.

Why is this financing platform important?

Donor resources alone are not sufficient to reach our targets and meet the Sustainable Development Goals. We need innovative approaches to financing, with increased domestic commitment from countries and regional development banks, as well as more involvement from the private sector. Our core intent is to support countries as they work to provide for the health of their own citizens, and help them along the pathway to sustainable financing.

How is this different from business as usual?

As a financing mechanism, the GFF is an example of how to use official development assistance to catalyze additional private sector funding. The GFF is partnering with the World Bank to raise money from capital markets for countries with significant funding gaps for child, adolescent and maternal survival.

Every $1 invested into the GFF is expected to mobilize between $3 and $5 from the private capital markets. The investments in the GFF are designed to help countries transition to self-financing for maternal and child survival programs.

Who is contributing money?

USAID is investing $50 million, subject to Congressional approval, into the financing platform at the country level to scale up national strategies to end child and maternal deaths in the DRC, Ethiopia, Kenya, and Tanzania.

Other donors include Canada, Japan, multilateral organizations, host governments, civil society, and the private sector.

Is it working?

Tanzania is one example of the increased focus on women and children that the GFF can help bring about in country. By blending some of our grant funding through the GFF, we have enabled the Government of Tanzania to significantly increase financing for women’s and children’s survival and health.

A mother in Rwanda with her ​newborn ​daughter. Investing in survival & health can lead to greater individual and national productivity and growth. / Amy Fowler, USAID

A mother in Rwanda with her ​newborn ​daughter. Investing in survival & health can lead to greater individual and national productivity and growth. / Amy Fowler, USAID

Why just these four countries?

Over the next five years, the ultimate goal for the global facility is to support 62 high-burden low- and lower-middle income countries through the GFF. The DRC, Ethiopia, Kenya, and Tanzania are part of the first wave of countries. Results from these nations will inform the best way forward for any continued U.S. government funding of the GFF.

The next group of eight countries eligible to benefit from the global trust fund will be Bangladesh, Cameroon, India, Liberia, Mozambique, Nigeria, Senegal and Uganda.

Why invest in global health?

In low-income countries, child mortality is 15 times higher than in high-income countries, and maternal mortality almost 30 times higher. Despite remarkable progress across global health, the brutal fact is the world’s poorest people still pay the most for things like clean water and basic health services.

There is substantial evidence on the “health-to-wealth” pathway, and how investing in survival and health can lead to greater individual and national productivity and growth. Increasing access to health services — especially for the poor – is a sound and sustainable investment that can command great economic returns. To put it simply, people who are healthy are more productive at work.

We have a clear and conclusive case to invest in health. Now we must summon the will to mobilize domestic resources and activate creative co-financing approaches that will transform societies.

ABOUT THE AUTHOR

Dr. Ariel Pablos-Méndez was appointed by President Barack Obama to lead the Global Health Bureau at USAID. He is also the Agency’s child and maternal survival coordinator.

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

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