Poverty and its effects are both devastating and seemingly intractable. The statistics are becoming all too familiar:
- 1.2 billion people live on less than $1/day
- Every 3 seconds a child dies from the effects of poverty
- 100 million children live in the streets
- There are more than 25 million slaves today, two hundred years after abolition
Aid Isn’t the Answer
Such a scandalous situation cannot be successfully addressed by public aid or private philanthropy. Africa has received nearly $4 trillion in development assistance since 1950 - the equivalent of four Marshall Plans - yet the continent is little better off today than it was 50 years ago. The chart [left] shows conclusively that aid cannot buy development.
While there is no doubt a role for grant assistance, aid too often fosters dependency, distorts markets, misaligns incentives and rarely yields scalable, sustainable impact. By contrast, the recent examples we do have of sustained economic development - think the “Asian Tigers”, China, India - all share at least two things in common: 1. they received little or no development aid; and 2. their economic growth was fueled by local entrepreneurship. So the evidence leads us to encourage private enterprise by supporting entrepreneurs with the character, competence and ambition to grow innovative businesses serving the basic needs of low income households.