Why Donations Don’t Work: Introducing Opportunity-Based Economic Development

7 July 2016 Development

If you’re reading this page, or if you’re interested in our book, you probably care about people. Maybe you want to help and maybe you already do. Feeding the hungry, caring for the sick. In Haiti, thousands of people at government agencies and nongovernmental organizations, are trying every day to do just that.

However, several decades and billions of dollars later, we often seem no better off than when we started. Consider Haiti’s continued economic and political instability, even after a years-long UN peacekeeping mission and the massive amount of aid that flooded the country after the 2010 earthquake.

But what if that aid was actually part of the problem? What if Haiti’s economic woes were in fact a function of the international community’s misalignment to the Haitian economy writ large?

Consider peanuts.

This April, the Editorial Board of the Washington Post provided a scathing critique of a program wherein the US Agriculture Department would donate 500 metric tons of surplus peanuts to Haiti, in partnership with the United Nations. As the Post explains, donations like these, part of broader subsidy programs for US farmers, continually hurt Haiti’s economy by flooding the market with goods, often distributed for free.

But what about Haitian peanut farmers? Can they meet local demand profitably? What is the private sector’s role in developing an ethical, sustainable Haitian economy?

Instead of continuing misaligned initiatives that help Haitians in the short term to disastrous long-term effect, agencies and organizations can align themselves to the Haitian market economy to meet needs ethically and sustainably.

Over the next few weeks, we hope to introduce four key concepts from our book, From Aid to Trade: How Aid Organizations and Businesses Can Work Together to Transform Haiti.

First we’ll talk about the benefits of buying locally, how procuring from Haitian businesses first can foster growth and stability in the local market. Increasing balanced local transactions, even when we still need to rely on imports in the short term, can have a positive ripple effect, magnifying aid effectiveness.

Next we’ll discuss the platforms for connecting that partners in development can create to facilitate communication between aid organizations and private businesses. When partners share international standards, they can overcome barriers to transaction.

Beyond our local efforts, let’s think big and advocate for policy changes, identifying ways that government can support balanced transactions in an ethical market environment. This kind of long-term thinking is key to sustainable development.

Finally, we’d like to open up a conversation around investing in viable business opportunities. Establishing, identifying, and promoting ethical and sustainable enterprises allows the local market—Haitians—to meet demand profitably, renew resources responsibly, create employment, contribute tax revenue, and ultimately renew the nation.

If we can see Haiti’s often desperate need as a market opportunity for local businesses, we can break the vicious cycle of aid that’s getting us nowhere fast.

We hope you’ll join us over the next few weeks as we explore how we can, as a global community, help people in Haiti and in the developing world transform aid into sustainable trade.

Click here to read The Book !