I spent much of last week writhing in agony in a ballroom at a Managua hotel. I was at an annual encounter of project executors for a large international development agency. I spent my days squirming in my chair trying to keep myself from running screaming from the room. What was so hard for me to hear? I’ll share with you a few snippets: “When the private sector decides it wants to do something, it happens. Without the private sector we are nothing.”
“The middle man must exist, and we have to help the middle man so that the poor can be involved in the economy because they can’t do it themselves.”
“The poor are an unexploited market worth $6 billion dollars a year in Central America alone.”
Needless to say, there were no “poor” in that room. Just a roomful of smug, back-patting consultants with knowing smiles and obscene annual salaries. In most cases, these consultants are a perfect example of what Mike refers to as those who “started out to do good and ended up doing well.” They are the ones who think up and carry out “development” projects in Nicaragua, in many cases with the goal of what one mentioned as the need to “maintain our relevance” (read: salaries).
Are these consultants bad people? Not inherently, but they are servants of a system that does not work...in fact it does more harm than good. Yet they believe that they are doing good, which makes many of them self righteous and arrogant and dangerous. Sitting there, I can’t help but calculate that just one year of the combined salaries of the consultants in that room would build three Genesis spinning plants and equip them with machinery, creating jobs for 180 people. I, for one, would happily trade all of them for that.
And what are the projects these consultants are patting themselves on the backs for?
“We just approved a new project with the Free Trade Zone Commission to teach 600 young Nicaraguans English, with the goal that 400 of those will find work in Call Centers.”
“We have a successful project with a financing company to provide factoring to pulperías – the small corner stores in Nicaragua, which they will be able to pay using their cell phones.”
“We are working with large businesses to get them to use small farmers as suppliers, to include the ‘bottom of the pyramid’ in successful companies.”
Are these projects 100% evil? No. There are good aspects to most of the projects, and a few of them are even pretty good in general. What has to be evaluated is who is really benefiting here and who is just being used?
Do the 400 call center jobs really represent – as the development agency continually saying – any new “innovation”? No. It’s the same low-paid unstable jobs for young Nicaraguans that are offered in the textile sweat shops, disguising itself with a polo shirt and air conditioning.
I am not against pulperías having access to credit – I certainly spend a good share of time talking about how important it is to finance small businesses. But let’s ask ourselves why a factoring agency wants to give credit to pulperías? Because nobody else is doing so yet and they are an untapped market. The factoring agency wants to make money, so what kind of interest will they charge the tiny pulperías? This agency received a grant – that they will never have to pay back – and they will make money off of this hand over fist. That ain’t development…That ain’t right.
What about the “inclusive” companies benefiting the “bottom of the pyramid’? Those large companies are benefiting much more than the small farmers who aren’t granted exclusive contracts and are themselves responsible for financing the improvements needed on their farms in order to meet the standards of the large company. What drives these large companies to the project? More money, as the presenter himself admitted.
During my week in that hotel ballroom, I heard little mention of the project “beneficiaries,” as the development agencies call them. This word generally refers to the poor people whose poverty is purportedly alleviated through development projects. I loathe the word “beneficiaries.” It calls up an image people who sit back and receive while doing nothing. The women of Genesis are NOT beneficiaries. They are people, owners of their own business, who have made their project work and have made extraordinary sacrifices to do so. They are anything but passive receivers.
All of what I heard was from middle men and about middle men. The JHC-CDCA has spent the last 17 years in Nicaragua getting rid of the middle man – in agriculture and industry – and you know what? It works. I believe there is a place for someone who can connect those who have – money, skills, time – with those who have needs – financing, advice, markets…as long as that connector does not do at the expense of the poor. 
If we focus development on helping the middle man, you will never reduce poverty because it’s the middle man – and his executive cousin the consultant – who keep people poor by seeking to make money off of them.
We cannot achieve “development” through yet another project that sees the poor as only a market. It is only through projects that stop viewing the poor as passive beneficiaries but the owners of the projects that we have a chance to bring about the systemic change these folks in “development” claim they want.
But we have to take risks. You can’t have systemic change without risking yourself. And we have to share those risks with the poor…the poor as owners, agents of their own destinies. No middle man required. – Becca
