From April 25 to 27, 2023, dozens of innovators from around the world flew into Washington, DC to speak with lawmakers about the need for more innovation, transparency, and sustainable results in global development. The series of events was organized by Unlock Aid, an advocacy organization focused on transforming how the United States spends its foreign aid. I was invited to speak at a Capitol Hill reception honoring Congressman Joaquin Castro (TX-20) and Congresswoman Young Kim (CA-40). Below is a summary of my remarks.
Last week while I was in an East African country, one of the country’s ministers told me the following story.
As the COVID-19 pandemic began, leaders in the country suddenly realized they didn’t have the capacity to make facemasks. Quickly, they mobilized the necessary resources and were able to set up a factory that made facemasks.
This was a major victory for them, and it provided much relief. But the relief was short-lived.
When they approached the Ministry of Health to purchase facemasks for their staff in public hospitals, they couldn’t. The reason? Well, the ministry’s funds had been donated by a development organization and those funds could only be spent in the donor country. So, if the ministry was going to purchase facemasks for their doctors, nurses, lab technicians, and sick patients, they’d have to purchase from the rich and generous donor country.
But there was a problem. This was a global pandemic. And everyone was caught off guard, including this rich and generous country. And they didn’t have masks to sell this poor African country. So, this East African country found itself in an incredibly precarious situation.
Unfortunately, that story represents the current state of foreign aid and development. What’s painful is, as sobering as the story is, it isn’t surprising to many in this room.
Instead of the development organization to celebrate the fact that this poor country had built local capacity to make products it could sell to its citizens and possibly export, it prioritized a broken system even in the midst of a global pandemic?
Much of my research focuses on how a particular type of innovation—market-creating innovations—can transform nations. These innovations transform complicated and expensive products into simple and affordable ones and make them accessible to many people in society. They are the critical missing link in much of our development and foreign aid programs. Consider their impact.
Now, imagine a country with the following demographics. About 10% of children attend secondary school; electricity is a luxury for the rich; two out of five kids die before their 5th birthday; 70% of the population lives in rural areas; life expectancy is barely 50 years. What country comes to mind?
When I ask that question, almost always a poor African country is mentioned. Or maybe Yemen, or Afghanistan. But the country I speak about is the United States. Not today, of course. About a hundred years ago. So, how did the U.S. go from demographics like that to become the richest country in the world? By investing in and promoting a culture that fostered market-creating innovations.
Isaac Singer in the 1850s made sewing machines more affordable; Amadeo Giannini made financial services accessible to hardworking immigrants; and Henry Ford not only gave us the car but also the 40-hour workweek.
And so, if we are truly committed to development, the question we must ask ourselves is, how do we find and support the Singers, Gianninis, and Fords in poor countries today?
When the United States has done development this way, it has worked. And America has become richer and safer.
From the Marshall Plan and the rebuilding of Europe after the second world war to the development assistance we provided to South Korea and Taiwan, we have done this before. So, the United States knows how to do it.
Now here’s the thing. Transforming development like this will stretch us. Many will say it’s not possible. We will doubt ourselves. But deep down, we know it is the right thing to do.
That is why I am so excited about the work that Unlock Aid is doing. It is transformative and has the potential to change the development industry for the better. For this initiative to work, we will need the support of forward-thinking members of Congress. It gives me great pleasure to welcome Congressman Joaquin Castro, a leading champion for more innovation in global development. Thank you so much for your commitment to innovation. Please join me in welcoming Congressman Castro.