To Fight Global Poverty, Start at the Grassroots

To the Editor

The spirit of your article on globalism (“Rethinking Global Giving,” April 20) raises the issue of how best to apply a global consciousness to the eradication of some of the most serious problems facing humanity in the world today. Combating worldwide poverty has to be one of the top agenda items on this list.

The World Bank, which in principle helps the poor through aid channeled from wealthier governments to governments of developing countries, has been under criticism from various parties concerned that funding to poorer countries has been focused more on top-end infrastructure development, often too removed from touching the lives of poor people in a direct way. Critics also argue that this method sometimes results in corruption, or that funding regulations require governments to first cut back in their own spending, thereby reducing social expenditures for health and education, which, paradoxically, adversely affects the poor.

The World Bank’s president, James Wolfensohn, said in Bangkok in February: “Poverty remains intractable despite economic growth in many countries. This partly reflects the problem of income inequality within countries. Income inequality in turn reflects inequality of opportunity. What is the cause? At least in part, the still tragically unmet need for equitable and inclusive investment in human capital.”

All my experience as a humanitarian worker helping to fight poverty in the developing world suggests that a global vision to ending poverty permanently requires an approach that works intimately and practically at the local, grassroots level.

Opportunity International, which I head, as well as many other organizations are now providing low-collateral or collateral-free microloans to the poorest of the working poor in developing countries.

Most of the world’s poor are women with children. A microloan enables a poor woman to buy a small business of her own, which lifts her out of chronic poverty and powerlessness. Our funding is disbursed directly at the grassroots level, getting underneath the crust of political and economic systems that too often don’t reach the people in greatest need. We know from experience that this is what works in reaching and creating real transformation in the lives of poor people.

It’s time for the World Bank and the International Monetary Fund to seriously reprioritize their funding policies, focusing at least equally on “bottom-up” grassroots programs that reach poor people in a direct way through non-governmental organizations and churches; and to reassess the quantity and quality of “top-down” programs that work through governments.

Mr. Wolfensohn seems to already be there in spirit, understanding that more needs to be done to touch the heart of poverty in the lives of poor people directly. He has made some initial steps in this direction, but so far his programs have been experimental and quite small.

The World Bank needs to pursue policies that dramatically marshal resources in grassroots non-governmental programs. These kinds of programs are what build true change and transformation in the lives of poor people, and what build economic democracy, giving workers the freedom to confront their governments over abusive work practices.

The microcredit industry announced in 1998 that it would try to provide 100 million families with entrepreneurial microloans by 2005. Reaching 100 million people with microcredit will require a loan fund of $10-billion to $20-billion and an up-front investment in staff training and systems development of at least $2-billion. While a loan fund of that size for the world’s poor seems huge, it represents only 0.2 percent of the $10-trillion growth in U.S. stock-market capitalization over the past decade.

What will be required is a new spirit of cooperation and collaboration between organizations like the World Bank and I.M.F., other private major banks (who see the profits to be made in funding the working poor), and microcredit organizations such as ours. There is both monetary and spiritual reward to be derived from this collaboration, for both givers and receivers.

It’s time for a new integration between capitalistic principles and humanitarian values, and time to see the additional value of working with the poor non-governmentally at the grassroots level. Let’s encourage with our hearts and minds those great organizations like the World Bank that have the capacity to reshape the face of poverty on our planet, to not only alleviate poverty but end it permanently.

Charles L. Dokmo
Chief Executive Officer
Opportunity International
Oak Brook, Illinois