The Trade not Aid debate continues

The literature on Aid and the plight of those in poverty is extensive with Paul Collier (2007) identifying four “traps” to blame for the misery of “the bottom billion”. Conflict, natural resources (too many or too few), being landlocked with bad neighbours and bad governance are the traps that must be removed to move countries out of poverty. Hernando De Soto (2000) argues that the reason is “dead capital”, not the absence of capital, that is responsible for poverty in the third world countries.

There are several aid optimists led by Jeffrey Sachs (2005) emphasising how aid can make a difference and aid pessimists such as William Easterly (2006, 2010) and more recently Dambisa Moyo (2009) who focus a lack of value for money and a dependency culture.

With The Tyranny of Experts (2014), William Easterly uses an example from Ghana to expose the top-down authoritarian approaches to tackling poverty. By the time Gold Coast had gained independence as Ghana in 1957 it had developed a lucrative trade in cocoa. This niche success was based on the local knowledge of the Akwapim tribe in south-east Ghana rather than the expertise of colonial masters – who had tried to introduce coffee and cotton as cash crops but failed. Similarly, efforts to bolster productivity for cocoa on large-scale plantations all but killed off the industry.

The Akwapim used small holdings that intermixed crop with food, thereby offering ground cover and weed control. The yields they achieved turned the cocoa crop into an export earner.This Ghanaian experience with experts is parallel to the Ford Motor company’s efforts to grow their own rubber crop to break free from Malaysian monopoly on rubber for tyres (See: Grandin, Fordlandia 2009).

In this overview of global economic development over several centuries, Easterly (2014) highlights the importance of liberating and incentivising individuals to innovate – on process more than products – as opposed to parachuting in planners with catch-all solutions that take scant or no account of local context.

In her book The Idealist: Jeffrey Sachs and the Quest to end Poverty (2014) Nina Munk highlights Sachs vision and questions the shifting policies and sustainability of signature projects once the money runs out. Sachs has galvanized significant donors and movements to support his major Millenium Goals project but both Easterly elsewhere and Munk here question the results.

In 2000, 189 countries signed up for the UN’s MDGs. The idea was to work together to reduce world poverty by 2015. This is a complex arena and, with the global recession progress is fragile and ground-level complexities (Sachs, 2008) need closer focus. Elsewhere, Sachs (2005) has argued for clinical economics that combines theory and practice, general principles and specific context. Munk recounts how unanticipated external factors and unintended consequences keep getting in the way. Accountability is in short supply: “It’s just one long monologue from New York” Munk quotes one Nairobi manager grumbling to her.

Overall progress has been fragile but this is not simply a function of a tough global economic climate. As designer Paul Polak (2008) points out, though admirable and impressive, the strategies to achieve the MDGs are too reliant on big infrastructure investments, big agriculture projects, big irrigation and big budgets controlled by the governments of developing countries themselves. All too often these efforts bypass poor rural people on small holdings.

The Transformational agenda responds to global trends focusing the need to close the wealth gap; build local enterprise culture, capacity and skills. This is especially important in those countries with mineral or fossil fuels to trigger cash flow; as a means to build local content; fund diversification and build sustainable growth.

The Transformational agenda has an equally significant role to play in Humanitarian Logistics AFTER the Emergency. Decades of market fundamentalism has influenced a “hands off” approach beyond the necessary interventions on food, medicine and vital infrastructure in response to a crisis. As Paul Collier said after Haiti – “this is not about getting Haiti back on its feet; it was never standing”. There is a need to develop a fresh set of ideas to deal with a crisis and then move to a sustainable future.

Transformational Logistics is an umbrella term for logistics and supply chain thinking and practice in emerging and developing markets and regions. It is no longer enough to boiler plate developed world and / or Corporate solutions; there is a need for innovative and disruptive ideas to drive a fresh approach. Here’s three thoughts:

  1. Livelihoods and not lifestyles; stakeholders not just shareholders. The Logistics and supply chain discipline has made great strides as globalisation and technology have stretched source and supply to global markets. It is time to re-think and the driver is moving from an ethical to a hugely practical stance. In particular with the …
  2. Shift from linear supply chains to circular and inclusive value streams. The days when take > make > dispose was the focus of a chase to the bottom price are over. Given the hike in commodity prices (from 2008) and the need to re-use and re-cycle fast depleting reserves of minerals across the planet ALL supply chains have to be transformed from an ever better, cheaper and faster route from source to landfill via the consumer to a more sustainable take > make > re-use / re-cycle model. This is a trillion dollar market – to recover minerals and metals used in all sorts of products for re-use.
  3. Adaptable, affordable and accessible products and processes. This is what should drive thinking and good practice – not just brand values based on lifestyle appeal.

It is time launch the Transformational agenda…

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