The Marketplace Magazine May/June 2008

May June 2008

Where Christian faith gets down to business

Wireless in Africa: Handheld gizmos help fight poverty

Table manners for a hungry planet How the potato changed my life Being spiritual in a noisy crowd

The Marketplace May June 2008

Roadside stand

Didn’t mean for that to happen They call it the law of unintended consequences.

Especially in business and economics, you can plan with diligence but there’s always a quirky flipside lurking in the shadows. (Theologians and psychologists have their own name for it.)

Take technology, for instance, the topic of this issue’s lead article (page 6).

That article (and this column) was written on a laptop.

Thirty years ago I would have used an IBM Selectric; 40 years ago a Royal manual.

I wouldn’t want to go back to the old technology (though the Selectric still wins for typing an address on an envelope).

In the old days, though, no one lugged a clunky typewriter into a business meeting. No one strung a telephone cable into the conference room so they could monitor calls while in session. Or brought a bundle of mail to sort during the unveiling of a strategic plan.

But the ease of plugging in and tuning out is becoming a turnoff in meeting rooms, even in that Disneyland of gadgets known as Silicon Valley. Some businesses are taking steps to curb the worship of Vulcan, the ancient god of technology.

They’ve even gone so far as to ban laptops, BlackBerrys, Sidekicks and iPhones from conference rooms so that employees make more eye contact with each other than with their screens. “Even if people are just taking notes, they are not giving the natural human signals that they are

Cover photo illustration

by Ray Dirks

The Marketplace May June 2008

Ragan Report, a communications newsletter, says employees handle dismal news better if they’re given some prep time and context. Executives who bear unhappy tidings need to maintain ongoing communication rather than springing bad news on unaware employees.

“They’ll be better prepared to deal with it intelligently — and make better decisions about what to do next — if you’ve been communicating thoughtfully and candidly with them all along,” the newsletter says.

listening to the person who is speaking,” complains the cofounder of Dogster Inc. “CrackBerry” addiction is said to keep people from being fully present. “Aside from just being rude, partial attention generally leads to partial results,” says a San Francisco businessman in the Los Angeles Times.

Some large companies like Loblaw, Intel and U.S. Cellular have gone a step further by enforcing weekly e-mail-free days or restricting BlackBerry use in the office, reports the Globe and Mail. They believe a pause from distraction frees up mindspace for creativity, deeper thinking and long-term planning.

Research shows many employees who work on computers check e-mails 30 to 40 times an hour. “People can spend all day clearing their e-mails,” says a Los Angeles psychologist of this pattern of chronic distraction. “They equate a clean inbox with a clear mind, and it’s not the same.”

Reporting this unsavory retro news may seem odd, even curmudgeonly, in a magazine celebrating Africa’s wireless boom. But that old law of unintended consequences just won’t go away. As with so many innovations, just about the time developing countries start to catch up (refrigerators and automobiles, for example) the rest of us start to catch on that there’s a downside to it all.

Probably to no one’s surprise, poor countries will take the brunt of the agricultural impact of global warming, according to a world authority on development. Contrary to some reports that claim to find a silver lining in climate change, global warming will not give agriculture a seasonal boost but will hurt farming everywhere, especially in Africa and Latin America, says William Cline in his new book Global Warming and Agriculture: Impact Estimates by Country. He says the effect of business-as-usual global warming will “turn malignant for agriculture globally,” and the damages will be “most severe and begin the soonest where they can least be afforded: in the developing countries.”

A magazine (not this one) invited corporate workers to submit Dilbert-like quotes from their real‑life managers. Some submissions (with company identity removed): • “As of tomorrow, employees will only be able to access the building using individual security cards. Pictures will be taken next Wednesday, and employees will receive their cards in two weeks.”

• “What I need is an exact list of specific unknown problems we might encounter.”

• “E‑mail is not to be used to pass on information or data.

It should be used only for company business.”

• “This project is so important we can’t let things that are more important interfere with it.”

• “Doing it right is no excuse for not meeting the schedule.”

• “No one will believe you solved this problem in one day! We’ve been working on it for months. Now go act busy for a few weeks and I’ll let you know when it’s time to tell them.”

• “We know that communication is a problem, but the company is not going to discuss it with the employees.”

• Quote from the boss: “Teamwork is a lot of people doing what I say.” — WK

Subscribers can choose to receive their copy of The Marketplace by e-mail. If interested, contact subscription@meda.org

Elsewhere on the reporting front, many companies are dusting off their old “bad news” skills as the economy slumps. Many have to relearn how to deliver such news with integrity and compassion. The

Carl Hiebert photo

In this issue

6

Wireless in Africa

8

Table manners for a hungry planet

When you’re out in a remote village, cellphones, text-messaging and GPS may not be the first things that come to mind. But they’re there, new tools in the campaign against poverty.

It’s the end of an era for cheap food. With more of it going into gas tanks and to satisfy new appetites in places like China and India, what’s on the menu for the poor? By Ron Enns Crops and furrows: a parable of the kingdom. Page 12

10

The humble spud, celebrated by the United Nation’s Year of the Potato, became a vital “famine food” after war and storms wiped out the rice crop in Bangladesh. By Arthur DeFehr

Departments 2 4 19 20 22

Roadside stand Soul enterprise Soundbites Reviews News

12

In the garden of MEDA

14

Getting into the world

16

Microfinance, then and now

Volume 38, Issue 3 May June 2008 The Marketplace (ISSN 0199-7130) is published bi-monthly by Mennonite Economic Development Associates at 532 North Oliver Road, Newton, KS 67114. Periodicals postage paid at Newton, KS 67114. Lithographed in U.S.A. Copyright 2008 by MEDA. Editor: Wally Kroeker Design: Ray Dirks

Change of address should be sent to Mennonite Economic Development Associates, 1821 Oregon Pike, Suite 201, Lancaster, PA 17601-6466.

To e-mail an address change, subscription request or anything else relating to delivery of the magazine, please contact subscription@meda.org

The Bible begins and ends in the garden, lush with foliage and vegetation. Over the years MEDA’s programs have produced a United Nations of crops — to feed and sustain.

Our culture sees Christian spirituality as finding a quiet place to get away from it all. Can you “be spiritual” in a complex world of noise, crowds and angry customers? By Gregory Pierce

Twenty years ago microcredit was a toddler; now it’s a savvy grown-up. A former commercial banker looks at the industry’s evolution, and the opportunities ahead. By Spencer Cowles

For editorial matters contact the editor at wkroeker@meda.org or call (204) 956-6436 Subscriptions: $25/year; $45/two years.

Postmaster: Send address changes to The Marketplace 1821 Oregon Pike, Suite 201 Lancaster, PA 17601-6466

How potatoes changed my life

Published by Mennonite Economic Development Associates (MEDA), whose dual thrust is to encourage a Christian witness in business and to operate business-oriented programs of assistance to the poor. For more information about MEDA call 1-800-665-7026.

Web site www.meda.org

The Marketplace May June 2008

Well done “Economics need not be a dismal science or the study of so-called filthy lucre. It can instead be the story of human beings working together for the common good in God’s love economy. Each person, using the gifts she has been given, through trial and error, success and failure, struggles to become the best she can at what she is gifted to do. She brings into the world her own unique good works or good deeds — well-grown vegetables, well-made clothing, well-written computer programs, well-administered offices, well-performed surgeries, well-designed airplanes, well-taught classes, well-governed nations, well-crafted poems — each an expression of her uniqueness as a person created in the image of God and as a citizen in the kingdom of God. Through the medium of money she exchanges the fruits of her labors with others who bring different goods and services to the economic table.” — Brian McLaren in Everything Must Change: Jesus, Global Crises, and a Revolution of Hope

Business with purpose

Ray Dirks photo

How do you witness on the job — by wielding a Bible and passing out tracts to co-workers?

Better to do quality work, handle ethical issues well, and “know quietly that you are a servant of the living God in the workplace and therefore you are a servant to people,” according to Gerry Organ, a businessman and former professional football player.

Organ was the lead organizer of Purpose@ Work, a Christian business conference held in Toronto in early April to explore workplace faith and influence.

As reported by Charles Lewis in the National Post, the conference promoted the view that “businesspeople have a calling, just as great as any minister, because there are a lot more people in the marketplace than in church pews.”

He quotes David Rae, former president of Apple Canada, as saying, “We have more people that we influence than your pastors,” although clerics rarely if ever lay hands on businesspeople and send them out into the world like missionaries. “We should challenge pastors to think about businesspeople the same way,” Rae said.

Jeff Gunther, a hospitality and retail entrepreneur, said his conversion to Christianity produced the common struggle of wondering if he should now work in traditional ministry. “But then I realized I’m good at business and that’s where God wants me and I can pastor a whole company instead of a church.” Running a business and employing people was doing God’s work, he added.

Latte for the Lord?

Coffee in church is nothing new, but at Grace Capital Church in Pembroke, N.H., parishioners can quench both their spiritual and physical thirst thanks to an on-site Starbucks.

Is this the ultimate commodification of faith, as some critics charge? Or is it a savvy adaptation of a business skill-set?

“Starbucks has done what churches should have done a long time ago, and that’s to become more people‑friendly,” says senior pastor Peter Bonanno. “It’s not so much the coffee as the environment the coffee and the coffee bar create — a relaxed, relational, and fun place.”

It seems to be working. Besides earning $500 a month for church causes, Sunday attendance has doubled to 550. (Christian Science Monitor) The Marketplace May June 2008

Two dozen words to remember You’ve seen it on posters and plaques. Simple and concise, it has influenced ethical behavior around the world. Known as the FourWay Test (later adopted by Rotary, the world’s first service club), it all started with a Christian businessman who sold pots and pans. His name was Herbert J. Taylor, and he came up with the 24-word test while praying at his desk. He began using it to evaluate every business decision, believing that if a company could answer yes to all four questions it was on good moral ground. Throughout his life he was Ray Dirks photo convinced the test was a gift from God. Here are Taylor’s 24 words: “Let us do the good 1. Is it the truth?

— Vincent de Paul 2. Is it fair to all concerned?

3. Will it build goodwill and better friendships?

4. Will it be beneficial to all concerned?

that presents itself.”

Where they itch It’s not exactly David Letterman’s “top 10” list, but it could be a Mennonite business version. A compilation of business/faith issues cited as “most pressing” by business leaders included these: 1. Leadership/management style 2. Lifestyle/standard of living 3. Frantic schedules/stress/ burnout 4. Litigation/use of the law 5. Disciplining/discharging employees 6. Employee compensation/benefits 7. Collecting overdue accounts 8. Economic justice 9. Family business conflicts 10. Retirement/management succession

The mission field of my life Your work is a key part of your mission in life, right? Here’s a series of questions used by South Carolina minister Johnny Rumbough to help people think it through.

1. Do I see God at work in this mission field of my life?

2. What do I see God doing in this mission field?

3. What am I doing right now to participate with God in this mission?

4. What will I do next to become more involved in this mission field?

5. What is God’s purpose for me in this mission field?

6. Who can help me in this mission field?

7. How can I explain this mission to others?

8. What role does church life have with this mission field of my life?

Overheard:

“Get a job you love and you’ll never work a day in your life.”

The Marketplace May June 2008

Wireless in Africa Handheld gizmos — new tools in the campaign against poverty in developing countries Ray Dirks photos

by Wally Kroeker

W

hile traveling in Tanzania for MEDA Ed Epp came across a group of colorfully attired Masai youth in a market.

He discreetly switched on his palmsized camcorder and positioned it to photograph them while he faced the other way. Later, when he checked his footage back at the hotel, he burst out laughing.

“I thought I was being so subtle,” he says, “but as soon as I turned the other way one of them took a cellphone from under his Masai robe and photographed me photographing him!”

“Whether you’re in a modern office or in an underdeveloped village, connectivity is productivity,” writes Iqbal Quadir, a lecturer at Harvard’s Kennedy School of Government and founder of GrameenPhone in Bangladesh.

When you’re in a remote village, the last

Last year Africa’s

thing that comes to mind is cellphones. But they’re there — in great numbers. With 8,000 new users every day, Africa is the world’s fastest growing cellphone market.

Privatization of telephone monopolies has opened the door to nimble competitors to sell air time in small affordable units, making cellphones widely accessible.

“Cellphones are enabling millions of people to skip a technological generation and bound straight from letterwriting to instant messaging,” says the New York Times.

wireless revolution got visibility from the One Laptop Per Child initiative by a group of faculty members at MIT. Even thus equipped, there’s still the question of how to power them for Internet access.

Regular wired networks can be a problem in mountains or rain forests. And how do you recharge batteries when you don’t even have power to light your hut at night?

One proposal is solar energy to bring the web to farflung areas. If a solar-powered wireless router connected villages, laptops could tie in via a built-in generator run by a crank or foot pedal.

Proponents say this would enable developing countries to “leapfrog wired infrastructure.”

If this would work, writes Ranty Islam in the Christian Science Monitor, “the Internet may bring cheap communications to remote communities, allowing them to access weather forecasts and health information, track market prices, or simplify dealings with authorities.”

Banks have used the technology to bring financial

services to poor people who are otherwise unconnected.

Villagers who used to stuff spare cash under a mattress can now move funds by pressing a few buttons.

They can pay bills with their cellphone and transfer funds to family members far away. For people in isolated places it’s easier than going to town to make a payment.

And it’s a way around bank fees and red tape.

“People might not have shoes but they have a cellphone,” says one electronic banker. “We can turn that phone into a bank in their pocket.”

For many rural Africans, buying air time is now a regular item on their shopping list.

There are other benefits, too.

A Congolese fish seller who doesn’t even have electricity to freeze her catch keeps her fish on a line in the water until a customer calls, by cellphone of course.

Others use them to keep in touch with families, summon help, or transmit vital medical information.

The Marketplace May June 2008

MEDA, meanwhile, is putting wireless advances to work in the field.

When you see farmers using primitive methods to cultivate you’re not inclined to think of electronics. But in rural Zambia irrigation use is getting a nudge from technology as de rigueur as the latest BlackBerry.

MEDA is pioneering a new way to help subsistence

farmers move beyond hauling water to their fields in a bucket. It works with International Development Enterprises (IDE) and the Zambia National Farmers Union to get affordable equipment into the hands of farmers while also strengthening the local commercial chain. At the heart of the project is a discount certificate, along the lines of the voucher system MEDA pioneered for insecticide-treated mosquito nets in neighboring Tanzania.

The process starts with a training session where farmers are introduced to simple treadle pump and drip irrigation technology and become eligible for a $50 discount voucher.

At the end of the session the trainer uses a short-text messaging system (SMS) handset to transmit the farmer’s name, location and trainer ID to a central computer which instantaneously sends back an approval code which the trainer writes on the farmer’s discount certificate.

The farmer takes the certificate and cash to a registered dealer to buy a pump or drip system. The retailer, also using SMS, sends in the certificate code, product serial number and retailer ID. The retailer receives an approval message which verifies the certificate and credits his/her account with $50.

The system dramatically speeds the approval process,

reduces paperwork, cuts down on the chance of fraud and helps the retailer and manufacturer with inventory control.

The latest technology is also at work in Tanzania

where MEDA’s Hati Punguzo program has redeemed three million vouchers for insecticide-treated mosquito nets. The vouchers are issued to pregnant women and mothers of young children — who are most vulnerable to mosquitoborne malaria — and can be used with a small fee to buy a net. A vital component is the vast network of commercial outlets that offer an ongoing supply of nets throughout the farthest reaches of the country.

For the past year Hati Punguzo has used global positioning system (GPS) technology to collect location coordinates for every Reproductive and Child Health (RCH) clinic, retailer and wholesaler in the program.

“This lets us determine the distance traveled by a woman to redeem her discount voucher,” says Tim Piper, MEDA’s country manager in Tanzania. “We can calculate average distances traveled as well as density of retailers.

If the distance traveled in an area is too great, then we can sign up new retailers in order to improve distribution density.”

GPS units were first issued to field staff in 14 regions who were taught to collect and download information and report it to the head office in Dar es Salaam. Additional GPS units have since been acquired for the remaining seven regions and Zanzibar.

MEDA recently began using an African-designed vehicle management system called Power Track, which monitors a vehicle’s date, time, position, heading and speed. Vehicle information is uploaded to a central database on a continuous basis.

Along with better management of company resources, Power Track is proving to be an efficient way to collect and track clinic and retailer locations. Regional managers using the two vehicles with Power Track keep a log with the time and name of every stop they make.

The system has been so successful that MEDA is planning to install Power Track on every new vehicle it acquires.

The collection process also positions MEDA to become a data provider as it interacts with 4,500 RCH clinics and 6,500 retailers.

“We have the opportunity to become information providers to the Ministry of Health,” says Piper. “Our goal is to possess the complete database of healthcare sites and to make it available to the government.”

Hati Punguzo’s next stage of automation is an Electronic Voucher System which uses mobile wireless technology to issue and redeem vouchers.

“We will be able to tell the precise time between voucher issuance and redemption,” says Piper, “and then use such data to research the behavior of consumers with their vouchers.” ◆

Family connectivity

W

hile traveling from Arusha to Dar es Salaam, Tanzania, Ed Epp repeatedly heard the same cellphone ad played over and over on the bus speakers: “You are your mother’s son,” the radio voice said.

“You are your brother’s brother. Your home is the village, but you are in the city. How will you keep connected?”

Playing to Africa’s strong sense of community, it offered yet another reason to buy in. ◆

The Marketplace May June 2008

More and more food is going into gas tanks and for pricier diets in emerging nations.

What’s on the menu for the poor?

Ray Dirks photo

Table manners for a hungry planet year to the next within a growing region. Global production, however, typically fluctuates less than 3% annually, as good crops in some places offset poor crops elsewhere. Production has consistently increased by about 2% per year even considering that 30 million hectares (about 4%) has come out of production since the early 1980s. That’s what is astounding about this food shortage — it is happening at a time of relative abundance.

The main

contributors to increased demand are the fallout from persistent economic growth in China and India and the relatively sudden increase in use of crops for biofuel. It’s hard to overstate the importance of these developments.

A significant proportion of the global crop has shifted to the energy market. It may not seem like much but it’s the speed of growth that has provided the shock to the market. Europe has a 10% mandate for biofuel. The U.S. is the world’s largest corn exporter and in the space of a few years now uses more corn for ethanol than for exports even though production increased by 25% over the previous year. According to The Economist, U.S. ethanol demand accounts for more than half of the Consumers are world’s current unmet need for cereals. in for a grocery Just as important, there is underlying jolt, but nothing demand growth from China and India due to compared to what increased wealth that has gone into more poor countries expensive diets. In all developing countries consumption of cerewill face.

by Ron Enns

W

ho goes hungry when the cupboard gets bare?

Grain prices rising to record levels, staple food shortages, price and export controls for food, the lowest cereal ending grain stocks in 30 years, continuing government mandates for biofuel from crops. Should we be concerned where the next meal comes from or what it will cost? What about the poor of the world? Are they destined for famine?

What’s going on?

The short answer is that, yes, grain supplies are tight but not at unprecedented levels, and global grain production in recent years has actually increased even with some regions like Australia suffering drought conditions. The big story is not that there is less production but where it’s going – into gas tanks and into emerging nations’ growing appetite for meat. The result is that the 30-year trend of falling real food prices has been reversed. How much higher food prices will increase in the future depends on production for the next few years. Any significant production problems in the major exporting countries will send already record-high prices into the stratosphere.

Crop production often fluctuates 25% from one The Marketplace May June 2008

als has been flat but the demand for meat has roughly doubled.

The conversion of grain into meat is about 8:1 for beef (it takes eight pounds of grain to produce one pound of beef) and 3:1 for pork. This has a significant impact on grain usage. As economies grow and citizens have more disposable income, one of the first places to spend it is on more pleasing meals. The trend is clear that as long as there is economic growth, the more developing economies will spend on meat.

ternatives. Perhaps there will be fewer visits to restaurants and certainly there will be less disposable income for discretionary spending. It’s obvious that those most affected in every country will be those with relatively low disposable income. In well-off countries expect to see even more demand on food banks at the same time that food banks have fewer resources available.

In poor countries the impact will be even more

pronounced. The United Nations World Food Programme (WFP) is bracing for their biggest crisis estimating that they will need an extra $500 million to merely maintain their program. Emergency food aid budgets will be insufficient. Expect to see emotional appeals for donations for emergency food aid. Agencies administering food aid will need to make What is hard decisions about who not to help. The decision astounding is to subsidize or mandate biofuels in this context will that the latest be challenged and likely reversed. food shortage is Food scarcity contributes to inflation and happening in a political instability in poor, import‑dependent countries time of relative and governments will be tempted to distort markets through price and export abundance. controls. A stronger agriculture economy creates an opportunity to support sustainable domestic production and stem the flow of people to cities from rural areas.

Transitions create opportunities and threats. We are entering a new era — and a transition that will challenge how we think about how food, energy policy and, once again, the gap between rich and poor will be magnified through the lens of food security.

The UN estimates that by mid‑century food production must double from current levels to feed everyone.

The world, through new agronomic technologies, may be able to support a biofuels industry while also feeding its people. But, is it really that simple and is that the end of the story? We should be asking ourselves: What prices are we prepared to make the world’s poor pay for food? As a developed society we will have the capability to produce both food and renewable fuel, but what will be the cost to those who can least afford it? What is our responsibility? ◆

It’s the end of an era — food will become more

expensive unless economic growth wanes and alternatives to relatively inefficient biofuels production are not pursued.

The clear signal to farmers is — grow more. And there is plenty of productive capacity. There has been large investment in global fertilizer production capacity.

Seed technology offers huge potential. Expect idle land to come back into production. None of these are without debate about long-term sustainability but the point is that there is productive capacity both short and long term that will be employed unless prevented by government action.

In particular, developing countries have an opportunity to further develop their own agriculture economies — supported by high prices and higher demand, something that elimination of agriculture subsidies and removal of trade restrictions in the rich world could have accomplished.

This will create greater production volatility as farmers auction their land to the crop with the highest price. For example, as farmers respond to higher corn prices, land comes out of wheat production resulting in higher wheat prices attracting more wheat acres.

These are good times for agriculture companies as higher prices attract investment in production inputs and biofuel infrastructure. For farmers there are better times ahead but this is mitigated somewhat because all farmers respond to higher prices.

Ron Enns They bid up the cost of land and other capital inputs, so that one day’s higher price becomes the next day’s higher cost. Similarly, agriculture‑related investment funds are hot — creating a boom mentality. The typical boom/bust cycle is that in good times capacity expands too rapidly and those with debt levels that are unsustainable when prices retreat, suffer massive losses.

Consumers are in for a rude awakening as the ripple of higher prices flows to kitchen pantries and menus.

Consumption patterns will likely shift to cheaper food al-

Ron Enns has been in the agriculture business for over 25 years. He was senior vice-president of Agricore United, Canada’s largest agribusiness, until it was taken over by Saskatchewan Wheat Pool (now called Viterra) in 2007. He lives in Winnipeg.

The Marketplace May June 2008

How the potato changed my life When twin disasters wiped out the rice crop, Bangladesh needed a new “famine food” that would grow quickly. Now, in the International Year of the Potato, a former development worker looks back on the adventures that followed.

by Arthur DeFehr

M

y mother’s garden always included potatoes.

I grew up eating them and actually learned a fair bit about how they grew but never thought the humble potato might have a significant influence on the development of my career.

I came to appreciate potatoes during my early days as director of the MCC program in Bangladesh following the 1971 civil war and the trauma of the 1970 tsunami that killed up to a million people in the coastal areas. The combined effects of these twin disasters wiped out the usual rice crop that was the only difference between life and death for most rural Bengalis.

Independent of our MCC work some relief authorities supported by the Dutch government had come to the correct conclusion that given The timeline the timing and season, the only available famine food outside of imports was tight: get would be products that could be grown quickly by thousands of the people themselves in the cooler winter season. sacks of potato Potatoes were known in but not widely seed off the ship Bangladesh grown since they required irrigation and it was hard and into the to retain seed during the hot and humid monsoon ground within season. On the other hand, given good seed, water, the omnipresent sandy silt a week.

The Marketplace May June 2008

and winter temperatures, the result would be a bountiful harvest within three months.

The Dutch government had donated a full

shipload of quality potato seed and dispatched it on a German freighter. Like too many things organized by governments, the ship was late and scheduled to arrive just prior to Christmas of 1972, toward the very end of the possible planting season and the timing that would give the crop a chance. There were discussions to abandon the project and simply distribute the seed as food.

By this time MCC had determined that crop diversification (meaning use of the dry and cooler winter season for growing different crops such as oilseeds, vegetables and grains other than rice) would be its primary agricultural activity. Catholic Relief Services (CRS) had funds, experience and logistic resources but not the agricultural expertise that MCC had accumulated by this time. We formed a partnership to salvage the project.

In the absence of phones, faxes, cellphones or virtually any other form of electronic communication, we resorted to a Porter Pilatus short takeoff and landing plane owned by CRS as our message service. They would fly around the country landing on soccer fields or whatever and deliver messages. I personally was on one such flight when the 600 HP engine failed to reverse on a soccer field and the amazing pilot aimed for a spot next to the goal posts — there were buildings just beyond — and used his engine to make a high-speed power turn around those goal posts and then stopped on the return length of field.

(There were many other harrowing stories and the plane 10

Along the way

translate well and too many ropes were released and the non‑motorized barge carrying a crew plus Jeffrey — the local head of CRS — drifted away on the strong Bay of Bengal tidal current into the moonless night. We took the only motorized barge and headed into the darkness in the approximate direction, turning off the motor periodically and shouting “Jeffrey” into the black mid‑ocean silence.

We did eventually find the barge and towed it back to the well‑lit German ship so unloading could begin.

By mid‑morning we had developed a loading and distribution pattern so that barges were already on their way up the rivers and others were arriving to be loaded.

The ship offered us a ride back to Port in a motorized lifeboat and that produced another adventure. We were hailed by another lifeboat containing several Greek sailors who turned out to be captain and senior crew of a ship that had experienced a mutiny during the night. They were a bit of a mess, with blood‑soaked towels wrapped around their heads, and were trying to find help. Their crew had taken over the ship during the night, put the captain and senior staff into a lifeboat and taken off into the darkness of the Indian Ocean. We helped them to Port and never did find out what happened to that ship.

did crash a few months later but all survived.)

UN system of— mutinied sailors feredThe a fleet of trucks that could reach many and a barge destinations but given the limited infrastructure cut adrift on a of Bangladesh at the best of times, the 3,000 bridges not yet repaired moonlit sea... from the recent war and the fact that many destinations could not be reached by road at all, that was only a limited solution. We also gained access to a fleet of “mini‑bulkers” used by the post‑war relief system to get supplies up the shallow rivers that dominated the delta that is Bangladesh. These were essentially 100‑200 capacity flat‑bottomed barges with an engine.

The next challenge was to get the product off the

ship and to destinations around the country. The Port was in hopeless condition with no available dock space. We decided to anchor the ship 12 miles offshore in the Bay of Bengal and use our mini‑bulkers plus non‑motorized barges to move the thousands of sacks of potatoes from the ship’s hold into the smaller carriers that could be sent up the rivers directly or towed to shore where they could be hand‑carried to trucks. The goal was to get all of the seed off the ship and into the ground within a week — in a country with no infrastructure or communications.

The ship radioed that it would arrive around midnight so we decided to meet them in the middle of the Bay of Bengal with a small flotilla of barges and start unloading immediately. As senior managers of MCC and CRS we rode the barges out to meet the ship so we could make decisions on the spot.

There were a few

glitches. We tied one non‑motorized barge to the side of the big ship but found it needed to be relocated to another point farther along the side of the ship. Since language was a problem we used a package of cigarettes to represent the barge and explained with motions how ropes should be released or loosened so that the barges could be shifted simply by using the strength of the tidal current — plus careful handling of the ropes!

Something did not

Within days hundreds of truckloads fanned out

across the country wherever roads would take them.

Motorized barges found their way up remote rivers and channels where our omnipresent Porter Pilatus had arranged for laborers to haul it to shore and various partner agencies, cooperatives and other groups were waiting to plant within hours of arrival.

We did not achieve 100% planting but estimate that at least 80% of the entire shipload was in the ground within 10 days and produced a substantial crop a few months later.

In later years we switched to promoting the sweet potato over the white potato because of its superior nutritional outcomes and its less demanding requirements for seed retention. The experience also taught us invaluable lessons about logistics, he United Nations has proclaimed 2008 as communications, partnerships the International Year of the Potato to raise and the incredible willingawareness of the importance of this “hidden ness and ability of the Bengali treasure” in overcoming global hunger and poverty. farmer to respond to chalOver the next two decades the world’s population lenges if given the chance. is expected to grow by an average of 100 million The lessons taught by this people a year, more than 95 percent of it in develpotato adventure were the oping countries where pressure on land and water foundation for many other is already intense. The potato, the world’s fourth programs in agriculture and leading food crop, is seen as a key player to ensure refugee work in later years. food security for future generations. For more, go I owe the humble potato to www.potato2008.org and click on a short video a debt of gratitude. ◆ titled “Potatoes On the Front Line Against Poverty.”

Arthur DeFehr is CEO of Palliser

Year of the Potato

T

Furniture in Winnipeg.

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The Marketplace May June 2008

The garden of MEDA

T

Over the years MEDA’s programs have he Bible begins and ends in the garden.

In the first chapter God orders the earth to bring forth plants yielding seed and trees bearing fruit (Gen. 1:12). In the last chapter we see the tree of life with 12 crops of fruit, one for each month, and the “leaves of the tree are for the healing of the nations” (Rev. 22:2).

The first humans tend the garden and eat from it. And there, amid the foliage and vegetation, God walks in the cool of the day (Gen. 3:8).

The Israelites in exile are encouraged to “plant gardens and eat what they produce” (Jer. 29:5).

Jesus speaks of sowers, mustard seeds, vineyards and fig trees. His final prayers and arrest take place in a garden.

Paul employs tree grafting as a compelling image of the Gentiles’ inclusion under the new covenant.

The garden, as a parable of the kingdom, spans the spectrum of human behavior and aspiration. Its rhythms depict the ways of God with humanity – planting, watering, weeding, thinning, pruning and harvest.

And there, along the furrows and trellises, is where we work to bring forth bounty that nourishes and sustains. ◆

The Marketplace May June 2008

produced a United Nations of crops, a sample of which are shown here.

Haiti — cocoa Jamaica —

Nicaragua —

sorrel, guava

sesame, beans

Costa Rica — bananas

Cong

Peru — asparagus, snow peas

Bolivia — beans Paraguay — rice, peanuts

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Afghanistan —

Tajikistan — tomatoes, apricots

cucumbers

Pakistan — potatoes

India — rice, sorghum, lentils

go — coffee Tanzania — corn, beans, peanuts

Mozambique — citrus

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The Marketplace May June 2008

Getting into the world Silence, solitude and simplicity may seem “spiritual,” but most of us live in a world of noise, crowds and complexity.

by Gregory Augustine Pierce

I

f you are like most people, your ideas about spirituality were formed by both your religious training and the popular culture. What both of these disparate sources have in common is that they tend to portray spirituality as somehow set apart from the world — especially the world of work.

Popular culture (TV, movies, literature, news, even comic strips) tends to view spirituality as something cute, quaint, and mostly irrelevant to people’s daily lives. Most of these are harmless enough. They are either so far out as to be non-threatening (such as Buffy the Vampire Slayer, Ghost Whisperer, or Joan of Arcadia) or they are so sweet and syrupy that no one could mistake them for real life (such as Seventh Heaven). Television shows and movies that purport to show real people dealing with real issues from a religious or spiritual viewpoint seem to be able to do so only if one or more of the major characters are priests, ministers, nuns, or at least mystics of some sort.

Think about it. Do you really know the spiritual views of the people on Friends or Seinfeld or Survivor? How about Jimmy Stewart’s character in It’s a Wonderful Life or Gregory Peck’s in To Kill a Mockingbird? Do any of John Grisham’s characters go to church or allow their spirituality to infuse their actions?

One of the most popular comic strips in recent years has been Dilbert, which is really a one-joke cartoon. The joke is that work is hell and that there is zero spirituality in the workplace. Actually, one of the popular shows that has dealt with religion and spirituality over the years is The Simpsons, although the portrayal of most church-going folk is none too flattering.

And when the news tries to cover religion, it seems that it can only focus on the controversial (abortion, gay marriage, euthanasia), the bizarre (Mary’s face on a grilled cheese sandwich), or the other-worldly (apparitions, miracles, near-death experiences). When Fortune magazine ran their cover story on spirituality in the workplace a few years ago, the only cover image they could come up with was the sun breaking through clouds. When the media wants to cover “spirituality,” they often head for the nearest monastery — or at least rectory, parsonage, or chancery office.

The bottom line is that you could wander through The Marketplace May June 2008

popular culture and never get the impression that religion and spirituality is important in most people’s lives at all.

The same, by the way, is true of the media’s depiction of work. Unless he or she is a doctor, lawyer, cop, or schoolteacher, a character’s work is usually irrelevant to the plot.

So when we come to explore the spirituality of work in popular culture, the pickings are slim indeed.

Organized religion doesn’t do much better in its depiction of spirituality and work. Most books on spirituality push one version or another of a “get away from the world, at least for a while” approach that has its roots in monastic contemplative spirituality and a spirituality practiced by religious professionals who do this sort of thing for a living. (Truth in advertising: I make my living publishing books on spirituality and religion, It’s easy to so I should be suspect here as well; however, remember to my own spiritual search has primarily been about “be spiritual” in finding God in my daily work on my job, with a church or on my family, and in my community activities. I a mountaintop. have never been especially interested in or good at “finding God” It’s much harder by getting away from the hustle and bustle of when there is an my daily life.)

How about you? irate customer How and where do you practice your spirituality? on the line or Silence, solitude, and simplicity are the hallyou have to fire marks of most spiritual practice, whereas noise, someone that day. crowds, and complexity are the realities of most lay people. Are the laity to say that we are mere amateurs in the spirituality game and throw up our hands in frustration that we can never achieve holiness? Or can we look for ways to raise our awareness of the presence of God 14

Ray Dirks photo

in the midst of our daily lives and allow that awareness to sanctify everything that we do?

There is nothing wrong with contemplative spirituality, of course, unless it is proposed as the best or the only spirituality. Jesus’ admonition of Martha, “Mary has chosen what is best, and it will not be taken away from her” (Lk. 10:42), has always been taken as proof of the superiority of contemplative spirituality over a more active spirituality, such as the spirituality of work. We forget, however, that Jesus loved Martha, busy as she was, and it was Martha — the “type A” personality and workaholic par excellence — who finally recognized Jesus for who he really was: “I believe that you are Christ, the Son of God. You are the one we hoped would come into the world” (Jn.11:27).

Much of Christian spirituality, especially in the Catholic tradition, has been “other worldly.” We Catholics love our candles and stained glass and incense and sacred music and vestments, but if we aren’t careful, it isn’t much of a leap to equate spirituality with those accoutrements, when the real stuff of spirituality lies right at our fingertips each day.

is present to every person in every circumstance. So the Buddhists say, “Before I was enlightened, I chopped wood and carried water. After I was enlightened, I chopped wood and carried water.” And thirteenth-century monk Brother Lawrence wrote in The Practice of the Presence of God: “When I am in my Much of Christian kitchen, with everyone coming at me from every side, I am just as much in spirituality has the presence of God as when I am at the altar, been “other ready to take communion.” worldly,” pushing The key to all spirituality is remembering some version of to be spiritual. We do this by designing prac“get away from tices (some call them disciplines or pieties) that remind us of what we are it all, at least for trying to accomplish. So if we find God in silence, a while.” solitude, and simplicity, then we try to create practices or disciplines that will recreate that experience. And if we get really good at it, then we try to teach others to do the same.

Likewise, if we wish to find God in the midst of our daily work lives, then we can devise practices and disciplines to raise our awareness of the divine presence in the midst of the noise, crowds, and complexities of our workplaces. If we do so, then the spirituality of work will help us remember to be spiritual — even on our best days and worst days, even on jobs or tasks we love or on those we cannot stand and wish we did not have to do. And if we get really good at it, then we may even try to teach others to do the same. ◆

Spirituality is a lot simpler than most of us have been led to believe. In fact, the hardest part of spirituality is remembering to be spiritual! If we remember, we tend to do it, because we humans are spiritual beings just as much as we are physical, psychological, emotional, and intellectual beings. But we often forget this when we are caught up in the chaos of daily life. Perhaps this is why contemplative spirituality is so popular and attractive. It is easy to remember to “be spiritual” in a church, at a monastery, or on a mountaintop. It is more difficult to do so when there is an irate customer on the line, your boss wants a report due last week, your teenager just banged up the car, and you have to fire someone that day.

Spirituality is supposed to help us remember to be spiritual, but what does that really mean? One thing that all religious traditions have in common is that the goal of the spiritual life is to raise awareness of a reality that

Excerpted from The Mass Is Never Ended by Gregory Augustine Pierce.

Copyright 2007 by Gregory Augustine Pierce. Used with permission of Ave Maria Press, PO Box 428, Notre Dame, IN 46556.

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The Marketplace May June 2008

Microfinance, then and now

Ray Dirks photo

A banker’s-eye view of a dazzling movement.

It’s not plain vanilla anymore.

by Spencer Cowles

I

t was May, 1989 and I was in Kingston Jamaica, my first visit to a developing country and my first exposure to microfinance. I was visiting MEDA’s relatively new microfinance operation because I had heard a presentation about MEDA’s involvement in microfinance and, as a former commercial banker, I was fascinated by the idea that a $100 loan could make a difference in a person’s life; that these were true entrepreneurs, no different, except for the number of zeros in the loan, from the entrepreneurs I had been lending millions of dollars to; that repayment rates were only a percentage point or two below those in the U.S. But in Kingston I saw all of this come to life: a shoemaker who received a loan for a better sewing machine that allowed him to increase his rate of production, a furniture maker who purchased some new power tools, a baker who had a new oven, a tiny street vendor who could now afford to buy enough inventory for an entire day. The operation was managed by a seasoned expatriate couple that had little or no banking experience. The account officers were young Jamaican women with perhaps some secondary education and little financial training.

There was a single office, records were kept by hand.

Microfinance was a cottage industry. Very few people knew of its existence. Even in 1989, less than 20 years after it had become institutionalized, microfinance was still very much in the toddler stage. It was a market‑oriented solution to poverty but few microfinance institutions (MFIs) could cover their operating costs, much less their funding costs. The industry was sustained by donations, soft money grants from the governments of developed nations, and western technical assistance.

Fast forward to 2007 and Kumasi, Ghana, where a colleague and I were performing a due diligence visit at Sinapi Aba Trust (SAT), a rapidly growing Ghanaian MFI that MicroVest, a US‑based, commercially‑oriented microThe Marketplace May June 2008

finance investment firm, and two partner organizations were considering for a loan syndication totaling $1,750,000 (U.S.).

Most of the senior staff at SAT have MBAs, several from the UK. Account officers and the administrative staff have at least two years of education beyond high school.

SAT has 18 offices, blanketing the northern two‑thirds of the country, and a state‑of‑the‑art computer and software system designed specifically for the microfinance industry and directed by an IT professional with a graduate degree in MIS. SAT is financially self‑sustaining: the rapidly growing loan portfolio totaled $7.6 million at FYE 2006 and portfolio quality was high with loans overdue by 30 days or more totaling 1.48%. SAT’s net income for the year was $202,000 representing an ROA of 2.54%. Our financial analysis of the company was based on audited financial statements prepared by Ernst & Young. SAT had already tapped into funding from a Ghanaian commercial bank, a West African regional bank, and a microfinance investment fund located in Belgium. Competition is becoming brisk in Ghana as banks are moving down‑market into microfinance in search of profits and growth. But the unmet need for microfinance is still tremendous. Ghana’s economy and governance is on the move after seven years of sound economic reform by a democratically elected government; country risk is declining, resulting in a more favorable climate for foreign investors.

Innovation and institutionalization in microfinance is moving ahead at a rapid pace. SAT is about to host a 16

Spencer Cowles photo

graduate degree in public affairs.

He is typical of the highly trained professionals at MicroVest and at many global microfinance Despite its state-of-the-art evolution, the microfinance industry still has a huge organizations. MicroVest interns unmet need for capital to serve its ultimate customers — markets like this one in could work anywhere, what with Ghana. their Ivy League educations, stints team from France’s Planet Finance, one of several global at major Wall Street investment banks, and significant agencies that rate MFIs based on their own due diligence. international experience. But the draw of working in this These ratings enable potential investors to assess risk socially responsible industry lures top notch professionals. across a wide array of financial, governance and country factors. Other developments in the industry include Where microfinance is heading hand‑held PDMs with custom software that increase loan officer efficiency in the field by enabling them to access Today, microfinance is a growing $25 billion global indusreal‑time client informatry; 113 million borrowers received microfinance loans in They could work tion, credit bureaus for 2005. Estimates put the number of microfinance institumicro-entrepreneurs, and tions at anywhere from 7,000 to 12,000. A pioneer in the crop insurance programs industry, Muhammad Yunus, has won the Nobel Peace anywhere, but for small farmers. SAT is Prize. one of a dozen MFIs that MicroVest is part of a wave, a flood really, of money top-trained Ivy are now part of eBay’s moving from private and institutional investors, banks MicroPlace initiative and multi‑lateral financial institutions into microfinance.

Leaguers with — for which MicroVest Consider the following. In addition to its MV I, LP fund serves as a sub‑advisor which totals close to $30 million, MicroVest created a $39 Wall Street savvy — that enables average million package of loans to MFIs that was sold by Lehman Americans to invest a Brothers to a commercial emerging markets investor in are drawn to the minimum of $50 in their 2007. Also in 2007, Blue Orchard, a Swiss investment chosen MFIs and earn management firm, partnered with Morgan Stanley to sell industry’s social a return through their on$110 million of bonds backed by loans to microfinance inline brokerage site. stitutions. TIAA‑CREF has announced plans to invest $100 Microfinance has bemillion in microfinance. Pierre Omidyar, founder of eBay, mission come a highly sought‑afhas given a $100 million endowment to Tufts University ter career path in both receiving and sending nations. that must be invested in microfinance. Large international My colleague on the due diligence visit to SAT worked banks such as Deutsche Bank are putting together funds for a major MFI in India, decided to get more educational that will invest in microfinance. Much of the money is training, and then studied at Princeton where he earned a from international sources but increasingly it’s coming 17

The Marketplace May June 2008

from domestic sources as private investors and banks recognize there’s an opportunity here to make money. To make money? In microfinance?

The universe of MFIs that are qualified to receive commercial funding is relatively small in light of the total number of MFIs, somewhere between 300 and 400. These are the institutions that MicroVest and other international commercial funds are investing in, but that role A shake-out may be a transitional one.

Why? Typically, MFIs have is coming, but been organized as NGOs, those with sound which is disadvantageous in two ways. First, it raises the MFI’s cost of capital credit analysis, since most external funds for expansion are in the diligent financial form of the debt. It is not uncommon for an MFI monitoring and to be growing by 50% + annually and the need to access enough coma good dose of mercial credit can be a challenge. Second, MFIs patience will frequently are not a part of the financial regulatory endure environment in many developing nations, which can be an impediment to investment. The larger MFIs are addressing this by converting into banks, which allows them to accept deposits to fund loan growth and places them within a stronger regulatory environment.

field and other types of equity. Only 6% of microfinance investment to established MFIs is equity. MicroVest is taking the next logical step by focusing heavily on equity investments in the coming years.

Second, the transitional role that MicroVest plays through debt financing is a continuous one as more and more MFIs build the scale and the quality needed to attract commercial capital. This is an integral part of the mission: to move MFIs on to the next stage by providing capital for growth and by the enhanced credibility that international commercial funding brings to an MFI. Microfinance also needs institutions and investors that are mission‑driven and committed to the industry for the long haul. Inevitably — in the view of this former banker — there will be a shake‑out in the industry. Why? As discussed above, money is pouring into microfinance and there continues be a large funding gap, that is, the shortfall between the need for funds and the availability for funds. But despite the funding gap, there remains a capacity gap because the universe of MFIs that are ready for commercial funding is limited. Inevitably, there will be too much money chasing too few good deals and investment will begin to migrate into MFIs that are less credit‑worthy.

You know what happens next: some of those MFIs will default on their debt, investors will react, and there will be less capital available for investment in microfinance.

Microfinance investment funds like MicroVest that have sound credit analysis, diligent financial monitoring and patience, however, will remain attractive to investors.

But that is only one side of the picture. The needs of MFIs will continually evolve over time and it will be the entrepreneurial firms like MicroVest that respond to those needs. MicroVest was the first U.S. firm to successfully offer a commercial, collateralized loan obligation backed by loans to MFIs, but other types of funding are needed.

The next phase of pro‑poor financing will expand beyond “plain vanilla” microcredit debt for business capital and into a broader range of financial services such as microinsurance, microloans for housing, education and disaster relief. MicroVest continues to develop financial instruments that meet those needs including equity funding, mezzanine and quasi‑equity funding, and local currency funding. These are challenging projects but, then, that is the role of any entrepreneurial organization: to recognize a need in the marketplace and to find a way to meet it. ◆

What microfinance needs and what MicroVest is doing about it So what is the role of a commercial investment fund like MicroVest in this rapidly changing environment? I see it as a two‑fold mission. First, the largest barriers to conversion are frequently regulatory capital requirements; most MFIs do not have access to external capital and can build their capital base only through retained earnings. By using borrowed funds MFIs are able to build the scale needed to generate and attract the capital needed for conversion.

But more equity capital is needed. Money may be pouring into microfinance, but most of it is in the form of debt and MFIs are begging for capital. Roughly 75% of investment has been in debt instruments, and 20% in green The Marketplace May June 2008

Spencer Cowles, a former commercial banker with a major New England bank, is chair of the department of business and economics at Eastern Mennonite University, Harrisonburg, Virginia. He recently spent a sabbatical working with MicroVest.

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Soundbites

Look around and enjoy The pursuit of more things — to the point of “gaining the world” — distracts one from contemplating or appreciating what one already has, and therefore guarantees that one lacks happiness. After all, what businessperson spends time contemplating his loyal and happy customers, appreciating the relationships of trust they share, expressed in an ongoing exchange of money for goods and services rendered? Doesn’t the average businessperson forget his current customers almost entirely, focusing instead on an abstraction like market share? (Many modern pastors, I have noticed, do the same, focusing on growth rates in attendance and giving and other abstractions, rather than on the faces and names

of real people they are serving). — Brian McLaren in Everything Must Change: Jesus, Global Crises, and a Revolution of Hope

God’s world More than anything else, the kingdom of God is about us “bearing fruit.” What is important is that we take the talents we have been given and do something with them. It is the doing something with our talents that constitutes our work, and it is our work that will help make the world more like the way God would have things.

— Gregory Pierce in The Mass is Never Ended: Rediscovering Our Mission to Transform the World

Lucky us?

Ah-hah in Calcutta

Ours are the most fortunate generations that have ever lived. Ours might also be the most fortunate generations that ever will. We inhabit the brief historical interlude between ecological constraint and ecological catastrophe.

— George Monbiot in Heat: How to Stop the Planet from Burning

Visiting Mother Teresa in her Calcutta home many years ago, I had an ah-hah moment: Looking around, I recognized that almost every poor person in that poverty-stricken city put food on the table through trade and commerce, not through employment, and not through aid. — Gerhard Pries, MEDA Investments director

More power to them I have a proposal to make: Every theological student preparing for pastoral ministry should spend a semester in the workplace listening and learning how to empower people for full-time service in the marketplace. Every pastor should spend one day a week with members of her church in the workplace setting, listening and praying. Every professor of theology in a seminary should spend two weeks each year in a professional office or a factory. Every theological faculty should include people who model full or part-time ministry in the world, since education is essentially an imitation process and students become “like” their teachers (Luke 6:40). Every local church that has members traveling to other countries for business should pray for them and “send them off” as missionaries in the same way we currently pray for short-term mission teams to Mexico. Every church should open its pulpit, at least occasionally, to thoughtful business people to speak God’s Word from the integrative perspective of being a business person, a school teacher, or a lawyer.

— R. Paul Stevens in Doing God’s Business: Meaning and Motivation for the Marketplace

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The Marketplace May June 2008

Reviews

What the poor really need Out of Poverty: What Works When Traditional Approaches Fail. By Paul Polak (BerrettKoehler, 2008, 232 pp. $27.95 U.S. $30.95 Cdn.)

W

hen Paul Polak looks at a slum he doesn’t see dilapidated shacks and dirty streets. He sees a market — a market for products like low-cost treadle pumps.

When he goes to a village he sees the residents as people to interview to get a better grasp of what they really need to overcome poverty.

His new book, which carries a cover endorsement by Paul Newman and has been described by The Economist as “wise and engaging,” lays out his vision for transforming the lives of poor people with products designed specifically to improve their economic lot in life.

A former psychiatrist, Polak switched over to the world of development in the early 1980s, founding International Development Enterprises (IDE) with several MEDA members.

“I became convinced that the most significant positive impact I could have on world health was to work on finding ways to end poverty,” Polak writes.

For him and his colleagues at IDE, that meant helping “dollar-a-day” farmers boost crops with simple, affordable irrigation technology like treadle pumps and drip kits, something at which IDE has become a world leader.

His approach is a blend of compassion for the poor with strong business fundamentals (see sidebar). One of them is to listen to the market and hear what customers are saying.

“Talk to the people who have the problem and listen to what they say,” he counsels. “If you haven’t had good conversations, with your eyes open, with at least 25 poor people before you start designing, don’t bother.”

Along the way he has plenty of critique for massive topdown programs that overlook the obvious as they concoct flawed responses that have

Listen to the market and hear what customers are saying little impact at the bottom of the pyramid. He has little use for giveaway programs that shrivel on the vine when donor dollars dry up.

Excerpt:

“Unleash market forces” What he wants to do is help poor people put more cash in their pockets.

Do that, he says, and you give them a direct path out of powerlessness. Helping them increase income “allows them to make their own choices about which root causes of poverty to address.”

He notes that there are 525 million farms in the world, of which 85 percent are smaller than five acres. Yet very little agricultural research goes into finding ways for these small farms to increase their produc-

I believe the first step in finding a solution to just about any problem is to find ways to unleash market forces to solve it.

If there is one thing I believe has created more obstacles to ending poverty than subsidies, it’s the commonly held notion that you can donate people out of poverty.

To move out of poverty, poor people have to invest their own time and money. The path out of poverty lies in releasing the energy of Third World entrepreneurs. The good news is that the small-acreage farmers who make up the majority of dollar-a-day people are already entrepreneurs, and they are surrounded by thousands of other small-scale entrepreneurs operating workshops, stores, and repair shops. All these entrepreneurs are willing and able to invest in creating their own wealth if they can gain access to opportunities that are affordable and profitable enough to attract them.

— Paul Polak in Out of Poverty

The Marketplace May June 2008

20

tivity and income.

He cites examples of people who purchased IDE treadle pumps, earned more money as a result, and invested in other improvements. “When poor people earn more income, they often invest in home improvements such as replacing a thatch roof with corrugated tin that doesn’t leak.” Other improvements follow — nutrition, health and education, to name a few.

Poor people who gain access to new sources of income “continue to astonish me with what they are able to do for themselves.”

And while his approach is grassroots, he can still think big. “If you don’t think you can sell at least a million units at an unsubsidized price to poor customers after the design process is completed, don’t bother.”

This goes for other products besides inexpensive irrigation pumps and drip systems. “Hundreds of markets, comparable in size and impact to the mass market for motorcars and computers, are waiting to be discovered,” among them items like inexpensive eyeglasses and home water filters. This will take “an army of entrepreneurs” whom he wishes to mobilize with this book.

Out of Poverty is friendly and easy to read. Its style, like Polak’s approach to poverty, is down to earth and rich with his irrepressible exuberance.

Businesspeople will like the way it champions the discipline and skill-set of the market as a high-impact development solution, providing the prominence it deserves but seldom receives in the battle against poverty.

— WK

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The Marketplace May June 2008

News

Customized shoes put spring in their step A keen eye for innovation, complementary talents and a shift in footwear trends — is that a recipe for business success?

Mark Springer and Tyler Springer hope so.

Although unrelated, the two Goshen College business seniors took their same last name as a sign to combine their talents in Springer Design, Inc., a custom shoe and apparel design company.

They were aided by a $5,000 entrepreneurship grant from the college’s Entrepreneurship Learning Center, which encourages students to start businesses and aims to keep Indiana college graduates in the state.

Over lunch one day the two young men discovered they had similar aspirations and complementary interests.

Mark, from Stanford, Ill.,

The Marketplace May June 2008

Personalized fashion templates: Tyler Springer (left) and Mark Springer had hoped to start his own design business but wasn’t as comfortable with the management and sales responsibilities.

Tyler, a native of Carlisle, Pa., had plans to start his own screen‑printing and embroidery business but the artwork side

was a deterrent.

“We complement each other extremely well,” says Tyler. “Mark is incredibly gifted artistically and has a keen eye for design, while I am very managerial minded.”

After teaming up, they set to work devising a business plan. This included going to national trade shows, contacting distributors and talking with dozens of people in the industry.

Their research revealed an emerging market for distinctive, individualized footwear among buyers who are not content with someone else’s fashion template.

“We allow our customers to come up with their own design or we can come up with one for them,” says Tyler.

They see themselves as on the leading edge of a shifting market. A few other businesses sell customized shoes of comparable quality, but at a price of hundreds of dollars.

“That is why you will only see celebrities wearing them,” says Tyler. “We price our shoes much lower so that everyone is able to have shoes customized 22

by Springer Design.”

He says this is made possible by an innovative production system that allows for quick turnaround time as they produce everyday walking shoes and athletic shoes for the 30-and-under crowd.

Springer Design also creates logos for businesses and bands and does screen‑printing and embroidery for corporations, schools and teams.

Community involvement has helped their business grow. Tyler coaches fifth and sixth grade boys basketball and Mark has helped coach baseball camps.

“We want to play a proactive role in our community,” says Tyler. “While it is our job to sell decorated apparel, we feel that it is our duty to make a positive impact in the communities we sell that apparel in.”

The Entrepreneurship Learning Center, through the Lilly Endowment, Inc., provides services for student entrepreneurs and business owners and offers grants up to $5,000 to start and run a business or nonprofit organization. So far, seven Goshen College students have received such grants.

— Emily Dougherty, Goshen News Service

A gift of reading Know any young people starting out in business?

Consider sending them a gift subscription to The Marketplace. Only $25 a year. Contact subscription@meda.org

New MEDA energy fund aims to offset carbon footprint Air travelers who want to compensate for the exhaust emissions their travel generates now have a new place to turn — a carbon offset program launched by Mennonite Economic Development Associates (MEDA).

The Sarona Green Energy Fund will help develop renewable energy sources by investing in both start‑ups and the growth of current businesses in developing countries.

People who want to participate can calculate the effect of their lifestyle choices — such as air travel — and make proportional donations to “offset” that to zero. These donations will then be invested in businesses with a proven environmental impact.

While this is the first carbon offset fund initiated by a Mennonite agency, a growing body of data is available to help concerned consumers reduce their carbon footprint.

A dedicated Sarona Green website will provide links to reliable “carbon calculators” to help donors tabulate their own environmental impact. Many such calculators suggest that a $50 investment can offset one metric ton (2,200 pounds) of carbon emissions.

A key feature of acceptable carbon offset businesses is that they satisfy rigorous “additionality” standards, meaning they must be new initiatives with proven benefits to the environment.

Money donated to the Sarona Green Energy Fund will be invested in a new biofuel company in Paraguay which makes ethanol from sugar cane, a much more efficient renewable resource than corn-based fuels produced in North America. In addition to its environmental benefits, the Paraguay company supports smallholder farmers and provides high-impact local employment opportunities.

“This should not be seen as a sin-tax,” says Ed Epp, who devised the initiative for MEDA. “It’s an opportunity to achieve a triple bottom line, bringing sustainable benefits to the environment while preserving non‑renewable energy sources, growth in the local economy and reducing poverty.”

MEDA is identifying other new ways to invest in businesses that reduce carbon footprints, says Gerhard Pries, director of investment fund development. “We are review-

ing opportunities in the solar, wind, bio-diesel and bio-gas fields,” he says.

“These investments will encourage the developing world to avoid the environmental mistakes of the West, and help them to ‘leapfrog’ to the next generation of sustainable economic growth and development,” says Pries.

In its pilot phase, Sarona Green will be capitalized through donations. Initial target audiences will include air travelers, travel agents, MEDA chapters, churches, schools and other affiliated organizations.

People wanting more information can go to www.meda. org for appropriate links. ◆

Menno-Hof director Executive Director. Menno‑Hof in Shipshewana, Indiana, is a vibrant Amish/Mennonite interpretive center celebrating 20 years of successful operation. Looking for an executive director to exhibit creativity and work with the board of directors to expand and refine vision for the future. Desired qualifications: strong knowledge of the Anabaptist faith tradition; ability to communicate issues of faith and culture passionately. Complete job description at www.mennohof. org. Send resumes or inquiries to Leanne Farmwald c/o Menno‑Hof, 510 S Van Buren St, Shipshewana, IN 46565 or lfarmwald@aol.com

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The Marketplace May June 2008

Pew?

The Marketplace May June 2008

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