Monday, June 7, 2010

More money for Haiti ... but will it help very much?

Dear Colleagues

It is difficult to take the international relief and development community seriously. They are very active in informing potential donors about how bad things are and how much more money is needed to help in the ongoing disaster ... but they tell very little about what it is that has caused the humanitarian crisis in the first place.
This from Action Aid today.
Sending food aid packages to Haiti is not enough.
Supporting local farmers and food markets is the answer to Haiti's hunger problem.
Tell Congress to pass the Haiti Supplemental package, and help Haiti feed itself.
and the following email text:
Dear Peter,

The rainy season is now upon Haiti, and flooding has turned camps for displaced people into dangerous breeding grounds for disease. Hunger also threatens a huge sector of the population whose lives were turned upside down by the earthquake nearly five months ago.

The House of Representatives now sits poised to pass a crucial Haiti Supplemental Appropriations bill that can help increase food and health resources – but they need to act quickly, before it is too late.

Your emails to Congress earlier this year helped legislators spring into action. Now we need your help again to mobilize this crucial $1.8 billion and to make sure that Haitian farmers play their rightful role in meeting their countries food needs.

Take action today and send a message to your representative, asking him or her to pass the Haiti Supplemental package as soon as possible – Haiti can't wait!

Food aid in the form of shipped rice and grain is not enough. Haitian President Preval explains that "if food and water continues to be sent from abroad, that will undermine Haitian national production and Haitian trade... Now we have to move more and more towards creating jobs so people are paid, and so they themselves step in to help Haiti."

Haiti needs the flexibility to buy food from its own local and regional markets, to help boost the economy and provide much needed jobs while creating a more sustainable solution to current nutrition needs.

Will you help us make sure that the Haiti supplemental is passed and that Haiti receives the aid that it needs most?

Now's your chance. Click here and tell Congress to approve the maximum amount of funding for Haiti in its upcoming appropriations work, including cash for food – so Haitians can buy locally grown food and support Haitian farmers.

"Together We Are Strong," is a common Haitian expression that explains the great need for interdependence in building the country up again.

We have a great opportunity to join our voices with Haitian farmers, women's groups and local businesses, and to ask Congress to pass much needed Haiti funding that will allow the country to buy food from its own markets. Support from within creates more jobs, more sustainable agriculture, and improved food security going into the future.

Now is our chance to make a difference. Send your message to Congress today and help Haiti feed itself for many years to come.

Thank you for taking action at this critical moment.


Peter O'Driscoll
Executive Director,
ActionAid USA
If you follow the money trail in any humanitarian disaster ... especially ones that get a lot of press coverage like the South Asia tsunami and the Haiti earthquake ... you get very worried very quickly. The problem is not the amount of money ... the problem is where the money goes and how it gets used.

Peter O'Driscoll is right to be trying to mobilize resources so that the Haitian people are able to live in a society where the economy works ... but when the resources are mobilized, how much of the resources will actually get used in ways that help to make the local economy work. How much of what is promised by the authorities actually gets done in practice? How much deep accountability is practiced by the institutions that are handling the funds?

The basic model used for humanitarian relief and development is a "welfare model". This is a simple way to describe a process where resources are imported and distributed in the country to people in need with priorities determined by level of need. The more need ... the more assistance. This is the dominant humanitarian aid process that has been used for decades ... and doing untold damage to the local economy wherever it has been used.

It is more than thirty years ago that I first started to see the negative impact of large food aid programs supported by food surplus countries/areas through the World Food Program and through other bilateral and multilateral mechanisms ... Canadian Food Aid, European Food Aid, US Food Aid (PL 480) and so on.

A struggling farmer in a developing country is not helped when his/her product has to compete in the market with "free food" from some food aid program. No farmer any in developed country would tolerate such a behavior in the markets they serve ... in fact they have the political clout to demand and get price support so that they get high prices even when market demand will not support high prices.

Development experts probably know well that most hunger and famine is not caused by the lack of food ... it is caused by dysfunction in the way food gets to where it is needed. A market system is used throughout the world to get food to where it is needed ... and a market system works on the basis of supply and demand, where demand is created by people that need the product and have the means to pay for it. And this is the problem ... needy hungry people are poor and do not have the means to pay for what they need. Development experts have totally failed to get to grips with this problem ... even though it has been identified for several decades to my knowledge.

Microfinance has been a modest tool to change the economic dynamic of the poor at the bottom of the pyramid ... but the scale of microfinance is small compared to the global market in agricultural products and the global distortions in agricultural marketing caused by subsidy and misguided humanitarian food assistance.

The great problem that has to be faced in the efforts to help people make progress out of poverty is the lack of capital at the bottom of the pyramid ... not so much the ownership of capital which would not be expected ... but the allocation of capital by capital markets to this huge segment of humanity (which I usually suggest is made up of some 4 billion people!). For the purpose of this discussion capital is not only money capital, but it is the lack also of eduction, health care, useful knowledge and know how, useful skills, access to equipment and infrastructure and organizations. Money helps ... but understanding and helping with all these other things is of immense value as well.

In the specific case of Haiti, there is going to be a need to mobilize resources so that the economy can be made productive ... and there is a need for "help" in a relief mode that is now 5 months old and needed for perhaps another 12 months ... but the bigger need is for the Haitian economy to be made functional and productive. This is not the same as rebuilding the old Haitian economic model ... with the same old same old winners and the same old same old losers.

On a broader global scale, I suppose the good news is that some of the old experts are retiring, and will not be doing much more damage. The bad news may be that the younger experts are not much better. My hope it that with the use of modern technology, some of the younger experts will think "outside the box" and might get it right in ways that the older experts could never imagine.

Watching the Haiti emergency progress from rescue to relief to rebuilding has been interesting ... but essentially very disappointing. The one area where I have tried to become engaged ... the matter of accountability ... the practice of accountability is as bad as ever, with no light at the end of the tunnel!

Peter Burgess

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