Unbiased Analysis of Today's Healthcare Issues

Out of Poverty

Written By: Jason Shafrin - Apr• 04•08

Paul Polak’s book Out of Poverty could have just as easily been titled “How to get rich: a guide for small-time farmers in developing countries” or “Marketing to dollar-a-day earners.” Polak’s book states that donations –especially those run through the developing country government–will not end poverty. They have not so far. One reason is that most donations are used to give away goods for free. But this destroys the incentive of any small businessperson to try to sell affordable priced goods to the poorest of the poor.

Polak’s NGO, IDE, develops products for those in extreme poverty in developing nations. Polak stresses that any good targeted to poor rural farmers must be 1) cheap, 2) small scale and 3) expandable. Drip irrigation is one great way for poor farmers to conserve water and efficiently irrigate their crops. Further, drip irrigation will allow farmers to grow crops during their more lucrative off-seasons, when the price from the crops is higher. Unfortunately, most drip irrigation companies make large, capital intensive products targeting large farms. IDE has taught farmers to use less expensive versions of these drip irrigation technologies to increase their income. IDE has also helped to spread the treadle pump technology to many farmers.

Another NGO with a similar philosophy as IDE is the Scojo Foundation. Scojo gives small entrepreneurs the materials and training to start their own firm selling reading glasses to the poor. Not only do these small-time entreprenuers profit, but customers who’s vision improved also appreciate the market transaction.

Another seemingly obvious point Polak makes is that the cure for poverty is to find a way for the poor to make more money. Increasing the education or medical care the poor receive is not in and of itself a means out of poverty. Poor children get little education because their parents need them to work on their farms to survive, not because they do not understand the value of eduation. Polak claims that once farmers in developing countries increase their income, they do increase their spending on education for their children, and medical care for their entire families.

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