3 questions for development organizations to ask themselves in the wake of COVID-19

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Apr 30, 2020

Virtually every life has been touched, directly or indirectly, by COVID-19—the economic ramifications alone have been swift and indiscriminate.

But there’s one group of people that will disproportionately feel the impact of this deadly disease: the world’s poor. In many low- and middle-income countries, welfare programs such as unemployment insurance and social security are nonexistent. In addition, people living in poverty lack access to basic healthcare and credit, and food and water aren’t as easy to come by. Already starting from behind, they’ll experience the lion’s share of setbacks. With that in mind, development organizations are working tirelessly to not only help impoverished communities fight the disease, but also recover from the economic fallout. 

On April 14th, World Bank president David Malpass announced that the organization and its partners would deploy a total of $230-240 billion in funding to support the world’s poorest countries.

United Nations Secretary-General António Guterres also made an emotional plea, calling for $2 billion in funding for a global humanitarian response plan. “We must come to the aid of the ultra-vulnerable,” he said, “millions upon millions of people who are least able to protect themselves.”

While it’s absolutely essential that money be deployed to support economic recovery in poor countries, development organizations should avoid the temptation to perpetuate a broken system that creates dependency and prevents the world’s poor from lifting themselves out of poverty. Instead, organizations should seize this opportunity to reflect on their activities, and reconsider their approach to poverty alleviation. Rather than seek to address the symptoms of poverty—an inherently unsustainable approach—they should align their efforts with the progress people living in poverty are already trying to make. To that end, our research on innovation and economic development has uncovered three questions that can act as guiding lights.

1. Does our mission align with the mission of those we seek to help?

Sometimes the mission of an organization is in conflict with the mission of the people it is trying to help. When this happens, the work of a development organization can unintentionally impede progress in poor countries.

Consider the United States Agency for International Development (USAID) Food for Peace program in Tajikistan, which has delivered 700 tons of food aid to the country since 2007. In response to the coronavirus, the program, in collaboration with Avesto and Resource and Policy Exchange, Inc., has delivered nearly 60,000 kg of food assistance to aid health and social protection facilities and vulnerable Tajik households.

While direct assistance like this may be helpful and even necessary during times of acute crisis, to continue providing food assistance long-term could be detrimental. How will poor countries like Tajikistan develop their own agriculture, food processing, distribution, sales, and so on, if they continue to get free food from the United States? It may be the case that the mission of the USAID food aid program and those of the local farmers and others in the community are in conflict. Although the USAID food aid program may celebrate feeding more people, the people being fed will find it increasingly more difficult to develop market-based solutions to their food problems. 

2. Are we creating dependence?

In 1961, President John F. Kennedy called for “aid to end aid” and for American aid to “help people help themselves. Unfortunately, an unintended consequence of global generosity could be that funding for poor countries increases dependence. Instead, the goal of development organizations should be to render themselves unnecessary, following the example of innovators like Safe Water Network. The organization is committed to solving the access to water problem in poor communities, but rather than create dependence, it’s working to extract itself from its projects over time by ensuring their sustainability.

To make this possible, Safe Water Network has found that there must be a system, or a market, that can sustain the water investments it makes. As such, the organization identifies entrepreneurs within the community, provides them with the necessary equipment for pumping and purifying water, and trains them on how to sell their services. 

What if development organizations only pursued projects after first thinking about their exit?

3. Is our intervention creating or connected to a market?

The creation of new markets is one of the most viable and sustainable ways to eradicate poverty and create prosperity in poor countries because markets not only provide income for people to lead better lives, but they also generate necessary taxes for public services such as education, healthcare, and so on. 

In 1958, for instance, USAID set up the Office of Private Development in Taiwan to “promote a business climate which would encourage private local and foreign investment.” Thanks to its investments in companies like Formosa Plastics—one of the world’s leading plastics companies today—the organization helped Taiwan transition from poverty to prosperity in less than 50 years.

We understand that not every development project, market-based or not, will work. But projects that either create or connect to a market have a better chance of surviving and growing because of the market’s ability to sustain them. 

In times like these, it’s tempting to focus on providing quick fixes to the severe problems caused by the COVID-19 pandemic. But if development practitioners consider a more holistic approach, over time, just like Taiwan, many poor regions will no longer rely on development assistance.

Efosa Ojomo is a senior research fellow at the Christensen Institute, and co-author of The Prosperity Paradox: How Innovation Can Lift Nations Out of Poverty. Efosa researches, writes, and speaks about ways in which innovation can transform organizations and create inclusive prosperity for many in emerging markets.