Envío Digital
Central American University - UCA  
  Number 234 | Enero 2001



Shipwreck: NGOs to the Rescue

Some time ago, I was told a startling parable. It was about a place somewhere in the South where people lived in ramshackle boats that barely stayed afloat and in fact they often sank…

Gabriel Pons Cortes

Such disasters occurred from time to time, and when ever they did thousands of people drowned. The news began to reach the North as journalists managed to take photos of the sinking ships, with people struggling to swim among the waves and mothers trying desperately to save their children. The people of the North were shocked by what they saw and wanted to do something. In the beginning, they didn’t ask why the boats were sinking. They simply wanted to help save as many lives as possible. A long time went by before anyone thought to try to understand the causes.

At first, only a few people from both North and South were involved in the rescue work. With little experience and more determination than ability, they dedicated themselves to fishing people out of the sea, intuitively deciding what needed to be done. Many rescue techniques were developed during this early period. Many people became skilled captains. Based only on their daily work and experiences, they founded a scientific field on the Rescue of Shipwreck Victims, which would later be taught in the world’s best universities.

The captains from the North returned to their lands as heroes. When they told their stories, people felt sorry for the victims and demanded that their governments do something. Presidents and ministers were concerned, not by what their voters were thinking, which in fact mattered little to them, but rather by the plight of victims who owed them a lot of money that they wouldn’t be able to pay back if they didn’t survive. Defending their own interests, they also sent out rescue boats.

Over time, still more boats arrived. Some were run by captains from the North who were motivated by compassion while others were only looking for adventure. Governments of the North provided some boats and governments of the South provided others, but the North covered their costs. The captains and crews included recycled leftists, members of religious orders and more than enough government officials; most were well intentioned, though some hoped to make a good living out of rescue work.

Many people from the North gave money and it became necessary to justify the expenditure. To do so, a procedure was invented that is still known as a "project." This consists of sending a boat to save a specific number of previously identified shipwreck victims. The rescuers set out with these projects to save those they can and return to present details of their expenditures. Sometimes they save a few people, sometimes none at all, but they always present their accounts. Those who provide the money view clear accounts as more important than good results because it is well known that rescuing is a tough task and success is not always guaranteed.

And that’s how things have gone right up to the present day. There are now all sorts of boats in the South’s seas, from rafts fashioned out of logs with barely enough room to accommodate the victims they pick up, to luxury yachts that offer an apéritif to those they fish out of the waters. Some foreigners offer seaworthy ships to those sailing the rafts—if the word "sailing" can be used to describe their efforts to brave the waves without sinking—who are managing to rescue victims through hard work despite their limited resources. Many groups in the North are saddened by the catastrophe and give money to buy more and better boats for those who have proved they can rescue the greatest number of shipwreck victims. The results are patchy. Sometimes those given the brand-new boats rescue still more victims thanks to the power and maneuverability of their new crafts, but sometimes they are stupefied by such luxury and spend their time courting the donors in an attempt to obtain even more luxurious boats. And sometimes, the owners of the new ships don’t know how to steer them and crash against other boats, sometimes even sinking.

In a few rare cases, those on the rafts reject the new boats, preferring to continue rescuing people in their poor, fragile crafts. They say this makes them feel closer to the suffering of their fellow beings and allows them to see them better than if they were high up on the deck of a yacht. Many of the owners and crew of the expensive boats are former shipwreck victims themselves, who have learned enough from their experiences to take the helm of their own boats. Some captains got a license because they were attracted by the good salaries and others because they wanted to save their fellow beings. The former is understandable and should not be condemned: saving shipwreck victims is delicate, difficult work and should be properly rewarded. The latter is more laudable, although good intentions are not enough in themselves.

More questions than answers

The parable continues… I would like to use it here to discuss the world of cooperation. There is a certain feeling of despondency among some of those dedicated to cooperation that contrasts with the complacency or lack of critical spirit that prevails among others working in the same field. These comments are aimed at both groups.

The intent is to contribute ideas for debate. These ideas are based on years of direct cooperation work in the South as well as work as a technical specialist in rural areas of the North. This experience has enabled me to compare the similarities and differences of these two ways of life. I generate more questions than answers and am aware that they may create even greater confusion by criticizing the tools currently used without proposing alternatives. The idea is not to abandon those tools, however, but rather to understand the reasons we use them and the limits of our work, so that we do not go around giving the impression that we nongovernmental development organizations (NGDOs) have all the answers to the problems.

The poor person’s pile of coins

The problem of poverty is particularly important. It is very hard to describe the causes of poverty in such a limited space. Most readers will probably have a good idea of just how complex a problem it is. The following simplified image is an attempt to offer a better understanding of the deficit that cooperation has to cover.

This deficit can be seen as the incapacity of the poor to accumulate capital, which we can imagine as a pile of coins. While they try to add coins from above through a new calf, the sesame harvest or the sale of hens, others are disappearing from the bottom as the result of a sick child, the theft of a horse, the latest floods or a corn blight. They can never make the pile of coins grow and hence never break through the poverty line. The lack of economies of scale in subsistence farming and the limited possibilities of increasing productivity due to bad ecological conditions do the rest. With just one hectare of arable land—and sometimes not even that—millions of families from poor countries are unable to bring about the miracle of development.

Cooperation usually adds coins from above rather than preventing the loss from below. This involves giving people a cow, better seeds or a tractor. Sometimes the piles are unprepared for such big contributions and collapse, as when beneficiaries can’t manage the technology provided. Other times the contributions are so insignificant—some projects consist of providing half a dozen hens or a goat—that they cannot compensate for the loss of coins from below.

Occasionally, they do aim to prevent losses by building grain storage centers to take advantage of the differences in seasonal prices or by establishing preventive health programs or other programs to increase people’s security. But coins are often lost so fast that the projects can do nothing to stop it. Cooperation then becomes discouraged or exasperated, because the project isn’t resolving the problems or can’t lift people above the poverty line. Sometimes the exasperation comes because it feels—and this is important—that the interventions don’t last long enough.

Rarely is it borne in mind that such losses will necessarily continue in the prevailing neoliberal conditions, in which there are no free clinics for sick children; no police to prevent cattle theft (if they aren’t responsible for the theft in the first place); no state veterinarians to control livestock diseases; and no insurance to cover droughts or floods. In this context, the projects cooperation offers to cover the deficit should not be interrupted or things will regress to their previous state. We must, however, come to terms with the fact that because of the low prices fetched by agricultural products, the ecological vulnerability and the limited capacity to produce at competitive prices, this will happen soon enough in any case. It is useless to try to bring about "development" under unfavorable conditions. This fact is unabashedly recognized in the North through agricultural subsidies. Nobody expects that European farmers "will have achieved the conditions of sustainability"—in cooperation-speak— in ten years, and will no longer need to collect on their sheep. Few consider this worth mentioning in public or even worth thinking about. So why does it have to hold true in the South?

Not enough boats
for so many people

A shipwreck victim has managed to build a raft out of the remains of the boat that is solid enough to hold his whole family. Captains from the North turn up to investigate the matter. There is no doubt about it: it is a raft and it allows them to survive comfortably. The foreigners look at the homemade craft, take photos and film it. A debate arises among the captains from the North. Is this something that can be generally applied? Is it a model for the other shipwreck victims? Is this the path to follow? Some believe it is while others think it’s just an exception, that the majority should continue swimming. The latter are worried, however, because people can’t swim forever. Or can they? "This one can swim very well. Come and have a look!" The launches mill around the swimmer, who, forced to swim, has developed a good style. His strokes are energetic and he appears capable of keeping it up for hours, even days. The swimmer provides hope to the other victims, who wonder if they could swim like him, if they might be able to save themselves just by swimming. Many foreigners confirm that it is possible, as they stand high and dry on their boats. They tell the victims that they can never aspire to having their own boats and so must learn to swim well if they are to survive. Soon other good swimmers are found and the boat owners become obsessed with finding them and studying their movements. Many women manage to keep themselves afloat along with their children. These women receive special attention.

A rumor immediately circulates among the yachts that it is possible to save oneself by swimming. This does not mean that the local boat captains are going to get rid of their crafts. Why should they? But as there will never be enough boats for everyone, those who are swimming will have to resign themselves to continuing to do so. Many who can hardly swim at all will have to improve their stroke so they can survive the worst storms. Such is the resignation of the victims that few wonder why they can’t get into a boat too. Few of them know that victims in other countries are provided with at least an inflatable dinghy, which, while not exactly a yacht, will do the trick until the situation improves.

Soon meetings are set up between the owners and the strongest swimmers. Some of the owners invite the swimmers up onto the boats to explain how they do it, and encourage them to teach other swimmers and would-be swimmers. There is just one condition: what they teach the other victims must be related to swimming. There should be no talk of boats, because they’re very expensive and there aren’t enough to go round. The purists demand that no lifejackets be provided either. Such is the enthusiasm generated by this idea that when they discuss what to ask from the donors who are financing the rescue, they no longer even mention lifejackets. The project proposals are to teach the victims to swim and the only funds required are for the classes, which are very cheap.

In search of success stories

The two most common forms of behavior among NGDOs and the institutes and universities that study poverty are determined by whether or not they believe that the poor can successfully enter the market under the same conditions as those with whom they are going to compete. Those who think they can also believe that cases in which people have successfully broken out of poverty must be taken as a reference and promoted as a method that can be generally applied. It is a surprisingly simplistic attitude, found even among a few front-line NGDOs and prestigious universities. If one peasant farmer has grown rich by cultivating onions, then the answer for peasant farmers is onions. Other successful cases are sought out for general application: agricultural cooperatives that have carved out a niche exporting vegetables to the United States, cacao exporting companies that offer special benefits to the farmers, rural banks with 98% recovery rates, etc., etc. Researchers study such cases because they believe it will be possible to reproduce the success by understanding how it came about. But it is hardly ever taken into account that such cases are rare and when they do occur, it is precisely because a number of favorable circumstances have coincided. In other words, the cases are exceptions. A project found an unoccupied market niche, for example, and someone had the luck, knowledge and enterprise to ensure its success; the beneficiaries responded well and buyers were found.

Modest achievements but
no "sustainable development"

The same holds true when it comes to creating viable businesses. One example is El Castaño in El Salvador, which has become a powerful agroindustry after 14 years under AID’s tutelage. Some of these successful businesses have been studied in great detail but no significant steps have been taken to reproduce them. The fact is that they occur at exceptional moments and are not usually replicable. The mistake is to think that what can be achieved by one business can be achieved by all.

Even in the hypothetical case that the favorable set of circumstances could be reproduced, there still would never be as many vacant niches as there are poor people in need of development. The vast majority will either cultivate the same basic grains, without the technology or ecological conditions to produce anything else, or will compete among themselves to sell merchandise at traffic lights. The main problem here is our lack of understanding, because if we recognized that our proposals won’t work for everyone we would not be so triumphal, and our triumphalism would not be used against us.

There is another point of view that is not necessarily opposed to the above. Sometimes, as in the case of the shipwreck victim who swims well, poor people do manage to sustain themselves. Somehow they are able to accumulate more coins than they lose. They scrape together a small amount of capital and break out of extreme poverty, reaching a more or less dignified level of poverty thanks to credit or productive projects, or the provision of basic services, or just because this kind of thing happens from time to time. Such success is modest, but is more common than cases of successful nontraditional crops or viable companies. It is not exactly an exception, because it occurs quite frequently in the application of certain types of projects. The mistake here is failing to understand the limits of this model and selling it to small donors as "sustainable development," the solution to the poverty problem. This is an example of the inconsistency between NGDO discourse and the results of our work. It is not too flagrant when we do it to submit requests to big donors, since it’s normal to play up successes, however modest they may be, to get more money. But it’s a major error when we let the powers that be use this as a justification for offering aspirin as a cure for cancer.

Once it appears possible to save oneself by swimming, it occurs to us that swimming is not only a solution but also the best possible solution. There are two quite clear examples of this. One is rural, involving "sustainable agriculture" and its variations, such as ecological, diversified and backyard agriculture. The other is more urban, although it sometimes takes a rural form, and involves "micro-businesses," a particularly vague term in which "micro-businesspeople" range from the unemployed living on their daily takings to business owners with several employees. Both poor peasant farmers and the poor in the informal urban sector work within the limits of subsistence.

Sustainable agriculture:
a form of disconnection

Given the despair produced by the unsustainability of projects and increasingly difficult production conditions, many NGDOs have taken the path of "sustainable agriculture." This represents a kind of disconnection from the formal economy, as it involves protecting oneself from the adverse market conditions rather than taking them on. It means no longer calling for radical solutions and resigning ourselves to things as they are. We can resign ourselves so much that we end up believing that this disconnection represents a real solution.

Imagine a peasant farmer who grows corn on a hectare of land on a dry, steep, rocky slope. His harvest is small and provides too little food to last the whole year. He has to sell part of it off to pay off the loan he took out to buy fertilizer and pesticides. The year’s reserves consequently run out four months before the new harvest, and the yield drops each year because the soil is eroded and has lost its nutrients. This situation occurs in all poor countries and many different solutions have been tried. Promoting sustainable agriculture is one of the most common.

There are many definitions of sustainable agriculture. They tend to be vague when it comes to describing exactly what they involve, and include points like "fitting within a framework of sustainable development that is socially just, economically viable, ecologically balanced and rooted in traditional culture." Many agencies have taken this to mean organic agriculture, which shuns the use of chemical fertilizers or pesticides with the dual aim of reducing production costs and improving the environment. Both objectives are laudable, but as in so many other cases, the problem lies in a tendency to exaggerate and to ignore the true scope of the solution.

Success in reducing costs,
failure to increase productivity

Like the other branches of the economy, agriculture has to find a favorable balance between productivity, costs and product price. Organic agriculture has been very successful in reducing costs but for various reasons has largely failed when it comes to increasing productivity. The yields achieved on farms where alternative technologies have been introduced are for the most part below average. Generally speaking, the explanation lies in the fact that damaged soil takes years to recover, and recovery is not always guaranteed in any case.

Much like cooperation in general, organic, ecological or sustainable agriculture—it is known by all three names—is a question of splitting hairs. It is not the same to promote it in certain soils as in others. Growing organic coffee, which often enjoys favorable prices that compensate for the reduced productivity, has nothing in common with growing basic grains—corn and beans in Latin America, sorghum and millet in Africa, rice in Asia. Basic grains tend to be sold on the local market and no major benefits accrue when chemical products are not used.

Indeed, it is precisely in the promotion of organically grown basic grains that the greatest inconsistencies can be found. The true viability of non-fertilizer methods need to be analyzed through studies of the addition and extraction of nutrients and the availability of organic matter in those areas where organic methods are proposed. The explanation is simple. With the exception of legumes, basic grains extract a large amount of nutrients from the soil. A good example is corn, which is an important crop in the tropics. Corn cultivation removes large quantities of nitrogen, phosphorous and potassium, elements that have to be replaced by fertilizers to maintain the original state of the soil. The problem is that chemical fertilizers do not maintain the soil’s original structure. They impoverish it because they do not replace the lost organic matter, although in the short term they are more efficient than organic fertilizers in the form of livestock manure or compost.

The controversy arises when it comes to establishing the real damage caused by fertilizers. Many of the evils attributed to them, such as soil impoverishment and the poisoning of rivers and lakes, occur when they are applied in large quantities per hectare, a practice common in rich countries. But this almost never occurs in underdeveloped countries, which cannot afford such extravagance. In the South, the problem lies in the lack of fertilizers rather than their excessive use. Without them, it is impossible to obtain sufficient production to meet the population’s needs. One authority on the subject says that the "use of mineral fertilizers should be substantially increased in line with the need for food, although organic sources can and should contribute more to the supply of nutrients […] Although the environmental consequences of using and producing fertilizers should be avoided, the problem in most developing countries is an insufficient rather than excessive use of fertilizers."

Why promote utopias in the South
that don’t even work in the North?

We must understand the limits of organic agriculture to determine its real viability and, most important, its place on the path from subsistence to development. The South cannot be seen as a place for utopias, including the ecological utopia, that have been unattainable in the North. Northern agriculture is indeed anti-ecological given the large amount of energy it requires, but it must be remembered that the South has to compete with the anti-ecological efficiency of the North, which can produce more at a lower price thanks in part to the subsidies farmers there receive. If it were not for this competition, or if the world as a whole agreed on maximum allowable productivity levels as well as working out the minimum production levels required to feed everyone, then it would be possible to realistically promote organic agriculture. But that is not the case.

Agencies often impose their ecological perspectives without considering the real potential of the land, the peasant farmers’ economic needs or their ability to obtain the necessary labor, which is a major consideration in organic agriculture. A realistic approach is essential because opening up the borders offers only two options to basic grains producers: they can dedicate themselves to subsistence agriculture with minimal harvests that do not provide enough to feed their families; or they can obtain reasonable productivity levels through the reasonable application of chemical products. This does not imply that there is no need to promote soil care, the provision of organic matter or rational chemical pesticides use. It does mean, however, that we have to understand the limits of organic agriculture.

Soil conservation?
Crop diversification?

We can also question the profitability of soil conservation practices. It would be interesting to do a study that compares the cost of a hectare of land on the agricultural frontier—that border between croplands and forests where millions of hectares are deforested every year—with the yield one gets by cutting down its trees, growing grains on it for a few years, then using it as pastureland to raise cattle and finally abandoning it. It is quite possible that this behavior is economically rational. Deforesting is profitable in the short term and is often necessary for poor countries whose forests are their main economic resource.

As Lester Thurow has argued, "Tropical rainforests may produce the atmosphere we all need to survive, but for Brazil, Indonesia and China it is economically rational to cut them down. Nobody pays for pure air, but people do pay for oranges and meat. They have all the right in the world to cut down their forests and turn them into orange groves and pastureland in order to enrich themselves." It is useless for us to try to convince peasant farmers not to cut down trees if we do not compensate them for the work involved in conserving the land and forests. Should the farmers pay for the ecological protection of the land—even when it is theirs and goes against their own economic interests? The poor cannot be asked to think about saving humanity when they do not even know what they are going to eat tomorrow.

Another option is diversification. This can offer some degree of defense against the low productivity of basic grains. Many NGDOs propose a farming system in which basic grains represent just one component and are complemented by livestock, family vegetable gardens—mainly left to the women—and permanent or semi-permanent crops. This option may improve things, but will not solve the problem.

There are two forms of diversification. One is the adoption of new crops that represent a genuine economic alternative. There is no objection to this proposal. The only problem is the difficulty of finding a market niche that allows people to expand into new crops or livestock. There have been few successful initiatives in which nontraditional crops made for a clear economic improvement. In Nicaragua, many producers still remember a number of failed trends, such as growing ginger. Other risk takers fared better, such as those who cultivate pitahaya, a cactus fruit that has earned a share of the US market. In any case, whenever the sale of a new export brings about an improvement, production tends to be promoted by demand for the product. Many development projects are designed in the absence of any such clear demand and supply alone cannot guarantee a place in the market.

The latest fad:
"Backyard agriculture"

The other alternative is "backyard agriculture"—the latest cooperation fad. It arrived from the North after several studies begun in the late eighties indicated that the area around the house where animals are raised and vegetables cultivated provides an important contribution to the family economy. The studies on which this trend is based are real, but they are influenced by a kind of reasoning similar to that of the milkmaid who dreamt about the great possibilities of reproducing her capital. The difficult conditions peasant farmers face mean that all too often the continuous loss of coins does not allow the miserable contribution represented by half a dozen hens or a few tomato plants to increase to such an extent that it makes any discernable "difference." This does not mean there are no exceptions, simply that they do not occur frequently enough to provide a solution to the problem of poverty.

As with other options, the problem lies in the figures and their limits. To represent a "significant contribution," these activities would have to be on a sufficient scale to change the structure of the peasant farmers’ agrarian production, which is precisely what they need. Perhaps they could ultimately raise six pigs instead of two, which would represent a modest contribution to their economic situation. But they will never be able to put a twenty-pig farm in the backyard, which is what it would most likely take to overcome their basic economic problems. The backyard probably represents just one more step toward subsistence and surely better nourishment, but not toward development. Is it worth financing expensive vehicles, the wages of agricultural engineers and administration costs in million dollar projects when the results are so poor?

From country to city:
peasant farmers aren’t wrong

One widely held belief in the cooperation world is that peasant farmers are wrong to leave the countryside for the city because their living conditions will only deteriorate there. But in fact, people who move from the countryside to the city are hardly ever wrong. Living conditions in rural areas are much harder than in the city. For example, it is harder to obtain food in rural areas once reserves have been depleted, health centers are rare and in many countries violence is more acute than in urban neighborhoods, no matter how violent the neighborhoods may be. Furthermore, the life of a street peddler is less affected by climatic uncertainty than that of a farmer.

Urbanization is not a bad thing in itself, although the results are bad if it takes place under inadequate conditions. Unfortunately this is almost always the case given the minimal role municipal governments play in poor countries, where they either can’t or don’t want to do anything to ensure appropriate urban land use or provide services to shantytowns. It is impossible to imagine an underdeveloped country making any progress with over 30% of its population living in rural areas. In the rural areas of the South, too many people produce too little per family. For development to take place there must be fewer people producing more. This conclusion is mathematically obvious. The population needs to move to the cities and the industrial and service sectors need to become more important. All of this is part of the natural course of a changing economy.

When families move from the countryside to the city, they have to find a way to forge ahead. Most find opportunities only within the economy’s informal sector. Known in the North as the "submerged economy," it exists outside of the structured economy where businesses are registered, formal accounts are kept and taxes are paid. The informal economy is also characterized by very limited productive resources and lack of access to credit. Most urban production projects implemented by NGDOs are in the area of informal sector micro-businesses. The definition of a "micro-business" varies according to a country’s development level: the more developed the country, the more workers a business can have before crossing the line from a micro-business to a small business. In underdeveloped countries, micro-businesses tend to have a maximum of ten workers. In some countries they are also classified according to their amount of capital.

In practice, those who encourage micro-businesses and particularly those who give them credit tend to use broad criteria when determining the lower end of the spectrum. A woman who sells goods from a basket on her head at traffic lights could be considered a "micro-businesswoman." A shoeshine boy, a cobbler, in fact an endless succession of occupations also qualify. Indeed, it would be no surprise to find that a person bumming a few cents at the traffic lights qualifies as a "charity micro-businessman" instead of a beggar.

Murphy’s relentless law

In commenting on the work carried out by NGDOs in the urban micro-business sector it is essential to distinguish between supporting already existing businesses whose owners have proved to be apt businesspeople and forming new businesses with more or less convincing aspirants. Some institutions dedicate themselves to providing credit support or technical assistance to existing micro-businesses that have been operating for some time. These have the best success rates. NGDOs dedicated to creating new businesses tend to be more susceptible to the failures that are the natural result of any economic activity. In Against Capitalism, Schweickart mentions a study that concludes that two out of every three business starts in the United States disappear. The United Nations Development Program offers more pessimistic figures on the world scale: nine out of ten businesses go under. These failures occur in both the North and the South, although the consequences are different. In the South, bankruptcy always has a greater impact than it appears because the opportunity cost of family labor is not taken into account.

When an NGDO starts up a productive project by trying to establish a viable new business capable of competing in the market, we never stop to consider that it might end up among the 60% to 90% of businesses that don’t make it. However, elementary probability tells us that these failures do happen. The reasons can be attributed to many different causes that are generally governed by Murphy’s Law, which is as relentless in cooperation as it is in life. This law can be summed up as follows: productive or economic development projects always fail at their weakest link. And in the South there are so many weak links that it is hard to know exactly which one is responsible.

What is it that fails in these attempts to create viable businesses? Without going into much detail, another comparison might help to illustrate how a project starts up. Using another metaphor, many productive projects attempt to start up a "vehicle" (a micro-business) and get it on the road. We have gasoline (credit), the starter motor (the NGDO support), and the engine block (the project and its beneficiaries). Setting up a business is like connecting the starter. If the engine block is good and well prepared, it will run. If not, we will continually be turning the starter until the battery, which represents the project funds, runs out.

Why does a project fail?

There are many reasons why a project fails to work. Let’s take a look at some of the most common:
The engine doesn’t work. Not everyone can be a businessperson. Attempts are made to turn agricultural workers into farmers or the unemployed poor into efficient "micro-businesspeople," but this is not always possible. In the North, a high proportion of people are salaried employees in government or the private sector. Even few businesspeople are responsible for founding and establishing their own businesses. Most people enjoy the security of having someone else worry about paying them at the end of the month, and the majority of those in the North who read these lines will probably be among them. For all that, we happily propose that everyone in the South, who generally have far less training than their Northern counterparts—that is, if they have any—should take the plunge and become an aspiring businessperson.

Battery failure. The project is too small to turn over, which happens a lot. No calculation is made of the minimum size needed for a business to function or how much has to be invested in people with limited education if they are to succeed. Businesses are started with too small an inventory or too little working capital, or people are given only a few seeds or head of cattle, which resolve nothing. When the world had more economic borders, it was more common for people to start up a business with little money and manage to limp along. But now globalization means that competition is keener and businesses have to be bigger and more efficient. Donors from the North are unlikely to approve a business project requesting US$5,000 per worker. They will say it’s too expensive, but the fact is that it is increasingly costly to support viable businesses. Not any old jalopy will survive the competition, not least of all because in many countries of the South, modern and efficient businesses, supermarkets and multinational franchises and chains are already competing in all sectors of the economy. How can a poor micro-business in a small stall compete?
The roads are impassable. NGDOs work, or at least should work, with the most underprivileged sectors of society. The poor live in the worst locations, with minimal infrastructure; many are illiterate and have limited knowledge of accounting. What we tend to forget is that, in trying to palliate all of these deficiencies by establishing a "viable business," the best we are doing is bringing the poor up to the starting line—and it’s not exactly the inside rail—in the race against the rest in which we know that no more than three or four out of every ten will finish.

Everyone lying at once

An initial conclusion is that there is a problem with the discourse used. In not admitting to the high failure rate of projects designed to establish viable businesses, everyone is lying: the beneficiaries when they say they can do it; the local organization when it presents the numbers for the project to be financed; and the organization from the North when it believes those numbers. Meanwhile, the big donors sigh and look away as they grant the funds. The big donors are the main ones interested in having the project—and with it the "aspirin theory"—validated. It suits them to have society think that the solutions being applied are the right ones.

In reality, the economic development of micro-businesses is too complicated for a simplistic and over-localized business formation policy, based on projects to establish a small business in a single place, to have any impact. The successes in this area, which NGDOs have largely not promoted, have been achieved by "clusters" or industrial districts. These are groups of businesses in the same geographical area that work in the same productive sector in some phase of the production chain, from raw materials to the finishing of the product. The businesses in the clusters have the necessary size and technological capacity, and group together on their own or at the state’s urging to enjoy advantages in obtaining skilled labor or export facilities. This phenomenon can be found in both rich and poor countries. There are groups of thousands of small businesses in India, Pakistan, Brazil and Indonesia, which have a better chance of competing than isolated businesses. Clusters have emerged as the result of naturally occurring processes in favorable environments, sometimes with state support. Due to their limited capacity to act, NGDOs are not likely to produce similar processes.

Perhaps it would be advisable for NGDOs to stop creating artificial businesses with workers who have no business vocation or adequate training and limit themselves—as many are already doing—to supporting improvements in existing micro-businesses that have the capacity to grow and are situated in areas with real potential. Or perhaps they should concentrate on subsidizing bigger, socially responsible businesses so they can provide more jobs than they would otherwise be able to do. Or, simpler still, they could support local governments to increase their expenditure and generate public sector jobs. The situation is so foggy that NGDOS from the North and South would have to engage in a broad debate to seriously discuss whether it is really worth promoting projects to form new businesses.

You can’t cure cancer with an aspirin

The work of NGDOs dedicated to sustainable agriculture and micro-businesses may be making poverty more dignified, but nothing more. The kind of work carried out by NGDOs with their often limited means cannot be criticized. What can be criticized, however, is that many of them have been surprisingly happy to aim at achieving levels of dignified poverty for their beneficiaries, demonstrating an almost scandalous satisfaction with mere survival and presenting it as "the road to development."
The problem lies in what we tell the NGDOs’ donor partners and how the powers that be take advantage of this discourse. The evils of poverty are like a cancer, and for the time being we NGDOs have only aspirin to treat it. Curing cancer requires a much more expensive treatment, which we can’t offer. But we think, say, even proclaim that aspirin is the cure; this is the problem. The rich countries that own the expensive cancer treatments also propose aspirin as the remedy, among other reasons because the NGDOs that are treating the poor really believe that it’s enough; we preach to the four winds that our work is the best way to go, and is ecological, self-sustainable and self-manageable to boot. The powers that be are delighted with this discourse because it proves very cheap for them. They spend less that they would otherwise have to in order to provide a real cure involving price subsidies, agrarian insurance, quota-regulated markets, the promotion of urban employment through public spending and other luxuries enjoyed by the North.

Most of the economic sectors of the South are not viable and will not be viable. Put another way, it will not be possible for these countries to develop unless they can sustain their non-competitive sectors. A peasant farmer with one hectare of mountainous land is not competitive and never will be. The same is true of a woman who sells at the marketplace with a basket balanced on her head. You have to know the limits to which these people are subjected and understand that there is a limit to what they can achieve with NDGO support given the real conditions in which they live.

As a first step, we must change our discourse and stop saying we are seeking development when we’re only working for a more dignified form of poverty. We must recognize that the success stories will only mirror normal success rates for such activities and that the exceptions are rarely replicable. We must abandon the self-complacency that enables us to be satisfied with dignifying poverty. Above all, we must demand real solutions from the powers that be rather than just aspirin.

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