RDVP Class (10/4/2004)

The readings for the class were:

1. an excerpt (the first two chapters) of Stiglitz's Globalization and its Discontents, a scathing review of the IMF from the viewpoint of the former Chief Economist of the World Bank. He charged that IMF would try to force fit its "Free markets right now" agenda on every country, often to their detriment. Countries with sufficient resources to ignore the IMF (like the US) did so, but those that needed loans were forced to abide by the requirements of the IMF.
   
2. an article Who Benefits from the Digital Divide? in the First Monday online journal. A somewhat cynical view of the "interested parties" that are pushing the closing of the digital divide (vendors of telecom equipment, the middle class that will benefit from the new job opportunities, the development community, and the groups focused on civil society (Amnesty International, etc)).
   

Pingali Rajeswari (RDVF '02) was a guest at the class as well. She spoke briefly about her Computers on Wheels project and experience as a past RDVF, and actively participated in the discussion. She and Greg Wolff had both been at the Sustainable Resources conference that conflicted with the ESW conference at Stanford. After a brief (and yummy, thanks to his gift of Yachana "Jungle Chocolate", produced in Ecuador) trip report, Stuart led off with a current Mercury News article about world financial leaders agreeing that they needed to re-focus on poverty after being distracted by the war on terrorism.

Greg led off with a question from the Sustainable Resources conference: was telecom or electricity more important? He said that he had come around to thinking that telecom was, because it enabled participation in global markets, bringing in a source of revenue. That said, global conferences to assist with Information Systems (such as WSIS) can be a waste of time and diversion of needed resources.

Raj talked about the politics of poverty, saying that lots of money is set aside for development, but how much of it actually makes it to really help in the developing world? She said that 70% of multi-lateral organizations' money goes to bureaucracy, while only 30% makes it to the field. She was personally concerned with increasing people's ability to make themselves heard--increasing political activism. Therefore, she could use more qualitative metrics in measuring her success. Even if she enabled only 2 people to become effective spokespersons, she would deem her effort a success.

Margarita chimed in with the quote that the difference between the poor and the rest of us is that the poor don't have money; Raj objected slightly, re-wording it "opportunity". People who live in poverty have strength, wisdom, integrity, and capability. Their failure is due to the political system. But she said that not all change is slow, some can happen as the result of the rock hitting the hornets' nest. Greg worried about that image, thinking that such rapid changes tend to be destructive, more than creative.

There followed a discussion of the role of government, with Helen and Stuart taking the position that they can prevent you from succeeding; Durga the more positive view that they can help you to succeed; Jose adding that while the government partner doesn't contribute to the work, it's important to have them as a partner. Moulaye Ely said that the government needed to give its blessing, but wouldn't do so until people were already actively supporting the project.

There was a fair bit of skepticism around some government and multi-lateral initiated programs: Margarita saw an example of a Nepal gateway as "well-intentioned cronyism". Even outright donations aren't inherently good. Some telecom grants can be viewed as "electronics dumping", food donations as "food dumping". In each case, the dumped goods are not always what is needed or where it is most needed, and it can destroy the local economy producing the goods/food if it suddenly needs to compete against foreign, free competitors. Greg made the case that traditional charity is a form of "capital dumping" where it can allow inefficient businesses to survive (imported solutions with the wrong skills and wrong cost structure) and destroys the local investor community.

There followed a discussion about the non-profit/for-profit distinction, with Greg and Margartia (and Raj, I think) feeling this was a dangerous distinction. Margarita described her main take-away from the Venture Philanthropy conference as seeing that they (philanthropists) "don't realize that this is a capital market." She pointed out that some high-powered people (Mohammed Yunus and Al Gore) are now planning to devote time to the issue, so maybe it will change.

Renee asked the question of how much research you should do before you choose something. How can you find the best bang for your buck? Stuart said you can't change the world, but you can work with its systems of fight against it. Margarita pointed out that by addressing one problem, you may be creating another "higher-level" problem (but that's progress!) Greg said that we shouldn't think about it as solving a problem, but take a market-oriented view: choose a problem that you care about, but the definition of success is whether people are paying for your product or service. If they aren't, your idea deserves to go out of business...