USAID Impact Photo Credit: USAID and Partners

Archives for Economic Growth

Photo of the Week: Accessing Credit for Food Security

Despite the importance of the agriculture sector in Ethiopia, access to credit is limited. USAID uses its Development Credit Authority to share risk with local banks, thus opening financing for underserved but credit-worthy borrowers. Photo Credit: Morgana Wingard

Celebrating Communities of Cooperative Building

As we come to the end of the Year of the Cooperatives, we celebrate our very own USAID Cooperative Development Program (CDP). By helping to solve governance, management and technical challenges, USAID and our partners aid cooperatives in their efforts to create lasting impacts for their members, their communities and their nation.

So what exactly is a cooperative? Believe it or not, you may know about more cooperatives than you think. Cooperatives are businesses with a difference: they are user-owned businesses that aim to satisfy members’ needs, generate profit and increase development within communities. They are a part of everyday life in the U.S. and abroad. We save at credit unions, buy hardware at Ace and True Value, purchase our camping gear from REI, spread Land O’Lakes butter on our potatoes from Maine Potato Growers, drink Welches or Ocean Spray juice, enjoy a Sunkist orange while we snack on Blue Diamond almonds or Sun Maid raisins while reading an Associated Press article.

But more importantly, Cooperatives directly benefit the livelihoods of hundreds of millions of people around the world with millions of jobs, 20 percent of them being international businesses. To support enduring cooperatives, USAID, between 1998 and 2010, funded 184 agricultural projects to strengthen agricultural value networks that included cooperatives, associations, groups and collective action organizations.

Cooperatives impact and improve lives at every socio-economic level, and promote gender equality. In Paraguay, where it is common for women to be economically exploited and not receive pay for their labor and where male family members routinely are credited with the actual labor a woman expends, ultimately marginalizing the impact of support for their families. However, Claudina Portillo rose above these challenges and initiated her own woman-owned cooperative. The Guaaiibi Poty Cooperative exports bananas and pineapple to Argentina. To assist Claudina and the women in the cooperative, USAID’s Cooperative Development Program (CDP) partnered with ACDI/VOCA and trained members of 15 cooperatives, including Portillo’s, on how to overcome gender issues and fight poverty. Session after session, with interest in her cooperative membership growing, Portillo established a youth subcommittee cooperative addressing the need for future farmers. With USAID’s CDP program, gender barriers were eroded; the cooperatives’ membership increased and Portillo’s dream of establishing a family-oriented cooperative to support the community became a reality.

However, cooperative development doesn’t end here. As we come to an end to the Year of Cooperatives, we will continue to increase awareness about the various cooperative development projects being implemented nationwide . We look forward to having many more years of developing and implementing sustainable cooperative programs across the world. View more stories about cooperatives or watch the video.

Photos: Secretary Clinton in Haiti


U.S. Secretary of State Visits USAID sites in Northern Haiti: Secretary of State Hillary Clinton traveled to northern Haiti on October 22. In addition to attending and making remarks at the inauguration of the Caracol Industrial Park, she visited the USAID-funded Caracol EKAM housing site and the USAID-constructed 10 megawatt power facility that will supply electricity to the Caracol Industrial Park and nearby areas. USAID officials in attendance included Deputy Administrator Donald Steinberg, Latin America and Caribbean Assistant Administrator Mark Feierstein, and Latin American and Caribbean Senior Deputy Assistant Administrator Beth Hogan. During her trip, the Secretary also met with President Michel Martelly, Prime Minister Laurent Lamothe, local and national elected officials, investors, and community members. Photos by Kendra Helmer, USAID.

Igniting Africa’s Tech Revolution

The recent growth of tech startups in Sub-Saharan Africa is starting to create a buzz.

And what’s not to be excited about? Tech companies created in Africa, by Africans, to address local and global problems have untold potential to change the world.  After judging a recent Global Innovations in Science and Technology boot camp in West Africa, venture capitalist Scott Hartley said “providing guidance for the top 1% of innovators likely improves the lives of the 99%.”

Personal computer usage in Africa is exceptionally low at 2% and internet penetration is only about 14%.   However, with indications that tech start-ups, tech hubs and internet usage across the continentare rapidly growing, the prospect for growth in the technology sector is significant.

Nonetheless, the hype has begun to overtake the growth.

One central challenge for startup tech companies in Africa is the simple fact that great ideas and viable business plans don’t mean much without access to financing. And financing for startups in Africa, especially in the tech sector, is difficult to come by.

Gaps in the market make it challenging for the tech ecosystem to develop.  Across much of Sub-Saharan Africa, people struggle to access the technological conveniences– broadband internet, reliable power supply, internet availability.  In many African countries, governments are still working to reform regulations and policies to make it easier for investors to reach entrepreneurs.

Additionally, the tech sector in Africa is considered high risk. Everyone speaks of the same example of success (read: M-Pesa), but investors are hungry for additional examples of risk paying off.

To top that off, the tech space is, by its very nature, less tangible to investors compared with brick and mortar businesses that sell traditional goods and services.  While a risk-taking culture has long developed in tech hot spots such as Silicon Valley, investors in sub-Saharan Africa tend to be more conservative and risk-adverse.

To close the gap between investors who are ready to invest but can’t identify startups with viable businesses and the entrepreneurs who are ready to scale up but can’t access financing, USAID partnered with Microsoft, Nokia, DEMO, and the State Department to launch the first-ever DEMO Africa. DEMO Africa, to be held in Nairobi on October 24-26, will feature 40 of the most innovative entrepreneurs from across Africa who will launch their products to a group of world-class investors, businesses, and media.

Through DEMO Africa, USAID is attracting, rather than replacing, private sector financing for economic development in low-income countries.  Entrepreneurs creating tech startups don’t need access to traditional aid, they need access to financing to grow. And to free up financing, we need to sensitize investors – venture capital funds, banks, and nontraditional financial institutions – to the tech sector. We need to create an appetite for investors to start investing.

Turning a great idea into a viable and profitable business model is difficult, but DEMO Africa is helping move Africa’s startup tech sector closer to ignition.

Stories From the Field: Iraq

Salah Naeem Hanna was forced to flee his home of 40 years because of the sectarian violence that gripped Baghdad in 2006. With his family of four, he moved back to his childhood hometown in the Nineveh Plains in northern Iraq and became an internally displaced person (IDP).

“We suffered a lot. I could not get a job” said Hanna. “My two children had to drop out of school to find work, but they could only find temporary, low-paying jobs. They were difficult years.”  In 2010, Hanna, a cook by training, opened a small store selling frozen foods using his family’s meager savings.  He named the store, which provided a small improvement in the family’s financial situation, “Al-Hilal Food Supplies.”

Hanna wanted to expand the small business but lacked the money to do so.  In February 2012 he received a loan as part of the USAID-supported Iraqi Vulnerable Groups Support Initiative, which helps IDPs, among many other groups. The program provided Hanna with $12,500 loan through the Mosul Bank, to be paid back in a 24-month period. The loan enabled him to buy new freezers, along with other equipment, and consolidate five neighboring shops into one large storage space. He hired three female workers, in addition to his son and daughter.  His menu of frozen foods increased to 16 different items.

The 50-year-old Hana describes his success. “I started distributing to different areas, even outside Mosul, including Basrah.  My business kept growing. I have two shifts now.  Before taking the loan, I would sell items worth around $80 a day in frozen foods. Now I sell [food] worth $800 a day!” Standing next to his son, he adds, “there is still room for more expansion and we will make it. We have come a long way, but there is still more to do!”

Live at UNGA – Day Three

To see the online conversation at UNGA, visit USAID’s Storify Feed

Day three at UNGA included two marquee events spotlighting progress to date on the Millennium Development Goals (MDGs) and the New Alliance for Food Security and Nutrition.  We also announced a new partnership to expand access to contraception for 27 million women and girls in low-income countries.

With only 15 months until the Millennium Development Goals (MDGs) deadline, USAID partnered on an event with the UK Department for International Development for a second year to draw attention to the importance of the global community working together to reach the MDG targets by 2015.  The event brought to life the enormous development advancements made on the way to achieving the MDGs and featured innovators from across the development community sharing transformative programs and policies.  The world has met two MDG targets ahead of the 2015 deadline – poverty has been cut by 50 percent globally and the proportion of people with no safe drinking water has been cut in half.

That afternoon, Administrator Shah co-hosted with other G8 members the New Alliance: Progress and the Way Forward event.  President Obama announced the New Alliance for Food Security & Nutrition earlier this year, in which G8 nations, African partner countries and private sector partners aim to help lift 50 million people in sub-Saharan Africa out of poverty in the next 10 years by supporting agricultural development. Initially launched in Ethiopia, Ghana, and Tanzania, at the event, representatives from the New Alliance, G8 countries and the private sector announced the expansion to other African countries, including Burkina Faso, Cote d’Ivoire, and Mozambique.

Finally, Administrator Shah took part in the UN Commission on Life-Saving Commodities for Women and Children. Prior to the meeting, Dr. Shah joined the Commission Co-Chairs, Prime Minister Jens Stoltenberg of Norway and President Goodluck Jonathan of Nigeria, alongside former President Bill Clinton, to launch a new partnership to make a safe, effective, long-acting, reversible method of contraception available to more than 27 million women in the world’s poorest nations. Under the agreement, Bayer is reducing by more than half the current 18 USD price of its long-acting, reversible method of contraception, Jadelle, in return for a commitment to assure funding for at least 27 million contraceptive devices over the next six years.  Dr. Shah stated, ”The US Agency for International Development is proud to have funded the development of this life-saving product. Today is a major step forward to making this product more accessible to millions of women, empowering them with the ability to make decisions about their health and family.”

As always, follow us live on Twitter to keep up with the latest developments!

The Journey Towards “Cash Light”

Around the world, 2.5 billion people lack access to formal financial services. As a result, most poor households live almost entirely in a cash economy. The Better Than Cash Alliance, a global public-private partnership dedicated to accelerating the use of electronic payments in place of physical cash.  USAID convened the Alliance, which includes forward-thinking partners like the Bill & Melinda Gates Foundation, Citi, the Ford Foundation, Omidyar Network, Visa Inc., and the U.N Capital Development Fund, to move the world toward a more transparent, efficient, inclusive, cash-light society.

Shifting to electronic distribution of social benefits, humanitarian aid or payroll payments can advance financial inclusion and help poor people build savings while achieving cost savingsefficiency and transparency.  The Alliance provides expertise and resources needed to make the transition from cash to digital payments to achieve the shared goals of empowering people and growing emerging economies.

Visit Betterthancash.org for more information.

From Conflict to Coping

Tisda, Mercy Corps Program Officer, in Ethiopia. Photo Credit: Erin Gray, Mercy Corps

Last summer, amidst the Horn of Africa’s worst drought in generations, Mercy Corps received encouraging news from local officials in the Somali-Oromiya region of Ethiopia.  In this area – long known for conflict, scarce resources and harsh conditions – communities that had participated in USAID-supported Mercy Corps peacebuilding efforts were reportedly coping better than they had during less severe droughts in the past.

We were intrigued, so we sent out a research team—and the findings were striking: when local conflict had been addressed, people were far better equipped to survive the drought.

To understand why, put yourself in the position of an Ethiopian herder.  When a drought hits, you can cope in several ways.  First, you will sell the weakest animals in your herd, raising cash to meet your family’s short-term needs while reducing grazing pressure on a water-scare environment. You may migrate with the remaining herd to areas where the grazing potential is better.  Along the way, you will rely on sharing access to scarce remaining water resources wherever you go.

Yet conflict can make these coping mechanisms impossible – blocking market access, freedom of movement, and access to shared resources like water. In this part of Ethiopia, population pressure and climate change had strained resources, spurring violence that in 2008-09 resulted in massive loss of lives and assets. In response to that conflict, Mercy Corps initiated a peacebuilding process in 2009 with support from USAID.  We helped participating communities focus on establishing peaceful relations, economic linkages, and joint management of natural resources.

A “resilience” approach to aid focuses on understanding, and improving, how communities cope with drought and other shocks.  Instead of just providing assistance that meets immediate material needs, a resilience approach also focuses on factors that affect a community’s ability to cope.  As Mercy Corps found last summer in Ethiopia, this often means focusing on factors that fall well outside the traditional assistance toolkit.

The program had focused on reducing violence – but our researchers found that it also built resilience along the way. Communities that participated in Mercy Corps’ program reported greater freedom of movement and fewer barriers to accessing resources, markets and public services than did non-participating communities. They identified greater freedom of movement as the single most important factor contributing to their ability to cope and adapt to the severe drought conditions. As one herder from the Wachile community said, “It is very difficult to use or access dry reserves (grazing areas) located in contending communities in a situation where there is no peace…the peace dialogues in the area have improved community interaction and helped us to access these resources.”

Our research report – titled Conflict to Coping – confirmed the important link between conflict and resilience in this region, and demonstrated that effective peacebuilding interventions help build resilience to crises.  Participating communities showed less reliance on distressful coping strategies, especially depletion of productive assets, than other communities. Importantly, the increased peace and security has allowed participating communities to employ more effective livelihood coping strategies, enabling them to better cope with extreme droughts.

Equal Futures Partnership Advances Global Women’s Opportunities

Sarah Mendelson is the Deputy Assistant Administrator for USAID's Bureau for Democracy, Conflict and Humanitarian Assistance. Credit: USAID

I am excited to have just returned from the kick-off of the Equal Futures Partnership to expand women’s opportunities around the world. The event was held in New York City and part of a number of events USAID is participating in during the United Nations General Assembly this week.

The world has made significant strides in expanding opportunity for women and girls; in the U.S., we just celebrated 40 years of Title IX, an act of Congress that changed the lives of many in my generation by enabling girls to have equal access to education playing sports. Equal access to sports in schools, particularly, taught many of us how to be fierce competitors and learn valuable lessons in team building.

Yet more work is needed to tackle the global gender inequality. Last week, I met in London with donors on this very topic where researchers discussed a number of startlingly facts:

  • In 2011, women held only 19 percent of parliamentary seats worldwide, while less than five percent of heads of state and government were women.
  • While in the past 25 years, women have increasingly joined the labor market, the World Bank’s 2012 World Development Report describes “pervasive and persistent gender differences” in productivity and earnings across sectors and jobs.
  • Though women are 43 percent of the agriculture labor force and undertake many unpaid activities, they own just a tiny fraction of land worldwide.

These realities demand an urgent response.

Building on President Obama’s challenge a year ago at UNGA, the United States government has partnered in a new international effort to break down barriers to women’s political participation and economic empowerment. The goal of the Equal Futures Partnership is to realize women’s human rights by expanding opportunity for women and girls to fully participate in public life and drive inclusive economic growth in our countries.

Through this partnership, the countries of Senegal, Benin, Jordan, Indonesia, Bangladesh, Tunisia, Peru, Denmark, Finland, Australia and the European Union are all making new commitments to action, and will consult with national stakeholders inside and outside government, including civil society, multilateral organizations including UN Women and the World Bank, and the private sector, to identify and overcome key barriers to women’s political and economic participation.  This partnership promises to be groundbreaking not only for the countries involved but also for those who are watching its implementation.

USAID and its Center for Excellence on Democracy, Human Rights and Governance stands by to provide assistance to these countries as well as many others throughout the world as they work to advance women’s political participation and economic empowerment.

This is thrilling work that helps make the promise of development real for everyone–not just a privileged few.

Visa Joins Global Partnership

This post originally appeared on the Better Than Cash Blog

Today, Visa joins with six partners from government, the private sector and the international development community to launch the Better Than Cash Alliance. Working together with our other founding members – the United Nations Capital Development Fund, the U.S. Agency for International Development, Citi, the Bill & Melinda Gates Foundation, the Ford Foundation, and Omidyar Network – the Alliance will help bring many of the world’s 2.5 billion unbanked people into the financial mainstream by providing them with resources that are safer and more useful than physical cash.

Around the world, governments, the development community and the private sector are making billions of dollars in cash payments to the poor – in salaries, pensions, emergency relief, social aid and more. Making these payments in physical cash or in-kind goods costs poor people time and money and can be unsafe.

To begin with, people in developing countries often have to travel great distances just to collect cash payments. That can mean days away from work and their families and, worse, the risk of being robbed on the journey back. Delivering cash to poor recipients often involves several couriers – and if any of these intermediaries pocket part of the amount, cash is impossible to track.

For anyone without a bank account, cash also is hard to save. Shifting payments to electronic or mobile payments offers more security and convenience – and, more importantly, an onramp to financial inclusion by providing easier access to accounts they could use to save, get a loan or make payments of their own.

At Visa, we are proud of the work we are doing already around the world to help governments enable the electronic delivery of social benefits and other disbursements. For example, in Mexico, Visa works with the government-owned Bank of National Savings and Financial Savings (Bansefi) to distribute social program benefits via Visa debit and prepaid cards to 6.5 million people, giving recipients opportunities to use financial services to save, budget and improve their lives.

In the Dominican Republic, Visa and the government teamed up to boost the national financial inclusion rate and address theft and delay issues of government benefits by distributing reloadable Visa Solidaridad cards. Today, more than 800,000 people in the Dominican Republic receive their aid via Visa card—which also helps provide customers for local merchants as those citizens use their cards to pay for food, fuel and medicines.

Through this innovative partnership, Visa and our partners in the Alliance aim to provide governments, the development community and the private sector with the inspiration, technical expertise and financial support to commit to making the transition to electronic payments and unleash new potential to reduce poverty and promote economic development.

Learn more by visiting the Better Than Cash Alliance website.

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