The two readings we had to read for this week were similar in theme, yet different in how they approached or concluded to the themes. In Banjerjee and Duflo’s article, “Reluctant Entrepreneurs,” Banjerjee and Duflo go in depth about the many aspects related to micro financing.
What struck me as shocking was the point even if a high interest rate is imposed on the poor, they are still able to make the interest payments and even pay back their loans. Bajerjee and Duflo states “the sheer number of business owner among the poor is impressive. After all, everything seems to militate against the poor being entrepreneurs”(Banjerjee and Duflo 210). For the poor, they lack the resources, connection, and viable potential loans. If they are approved for the micro finance loans, they end up having to pay a high interest rate of 4% per month. However, even with the high interest rates, they are still able to have a profit: “the fact that even after paying very high interest rates, the poor still manage to make enough money to repay their loans… must mean that they are earning even more money per rupee invested” (Banjerjee and Duflo 211). If people are given a chance, they are able to reach their full potential. All anyone needs is a chance to excel.
Banjerjee and Duflo go on to talk about how many poor people do not grow their business, since for most of them, “it is too hard” (Banjerjee and Duflo 223). Is says that if a “micro entrepreneur realizes that she is probably stuck in the low part of the S-shaped curve and will never be able to make that much money, it may be difficult for her to be fully committed.” (Banjerjee and Duflo 223). While it is true that if given a chance and the opportunity, there is a significantly higher chance of success, if the individuals themselves are not willing to put in the effort and/ or get discouraged with the immediate results, then the “chance” given would be meaningless in a sense. In conclusion, Banjerjee and Duflo’s article reinforced the idea that anyone can succeed if given a chance and the opportunity to do so, but that individual effort and strong will are also factors that need to be incorporated.
In “The Parable of the Black Sheep,” Vijay Sharma starts off with a poem that, in all honestly, surprised me. The poem, when referencing to poverty, states “… and I cannot leave you because you love me even more,” (Sharma 37). I’m not really sure if this was being sarcastic, but I took it quite literally, and it seemed to me that the poet was suggesting that some people can’t help being poor, and that they even insist on being poor. The author goes on to say that when she was young, she used to think that the poor people were comfortable with where they stood in society, and that “they did not want change” (Sharma 38). I think it’s insensitive to say that the poor are comfortable with being poor and that they are “comfortable: with where they stand. I believe that the poor, and especially the poor, was change more than anything, but that they just simply are not given the chance to escape from their current situations.
The author states that “it takes only a little bit of courage to go beyond,” (Sharma 38), and I agree with that to a certain degree, but I don’t necessarily think it fully applied to the poor. It is horrible to say, but in most cases, if not all, the poor are rejected from society, and most turn a blind eye on them. Even if they had the “little bit of courage,” most people, especially businesses, would not be willing to give them a chance. However, I do agree with the author that proper use of knowledge is also important to help “prevent poverty” (Sharma 47). The author in this reading, like Banjerjee and Duflo, point out the overlaying importance of trying ones best, and putting in the effort, to succeed or “prevent” poverty. Acquiring a chance is also important, but one must be willing to make the chance into something worth even more; one has to be willing challenge the satus quo.
In Jacqueline Novogratz’s chapter titled, “The Education of a Patient Capitalist,” Novogratz discusses how her idea and wish of improving and building am organization that would better incorporate philanthropy and business, became reality, and about the importance of recognizing entrepreneurs. Novogratz wanted there to be an organization or institution that can “build more transparency and greater accountability into the work at all levels and treat the poor as customers with a real voice, not as passive recipients.” For Novogratz, this became reality, even if she was faced with many trials and difficulties in the process.
Novogratz states that her foundation/ institution “invests in entrepreneurs who have a vision and the ability to solve local problems with market- driven ideas and approaches,” instead of just “simply making grants.” Novogratz would “direct [her] efforts toward building strong organizations that they would gradually help bring to financial sustainability.” It was inspiring to learn how she had had such a strong vision of what she wanted to achieve, and how, through effort, she was able to achieve them.
At one point, Novogratz was offered to work at a major financial institution, instead of at the Rockefeller Foundation. If she had taken the job offer, she would have earned a salary that was seven times her salary then. Novogratz chose to not take the job offer, since she thought it better to remain at the Rockefeller Foundation, a place with freedom and innovation. Most people would have taken the job offer at the major financial institution, if given the chance. It was again, inspiring to learn that Novogratz had the willpower to select a choice (that although might seem to provide less personal benefit, such as monetary benefits), that would help her better achieve her vision for social justice.
Novogratz was able to form a public charity called Acumen Fund, and through this fund, they were able to invest in entrepreneurs that had the potential to influence and make change in the world for the poor. Novogratz was able to hold true to her mission of creating a “sustainable system where government or charity alone had failed poor people.” Novogratz was able to invest in good entrepreneurs, and was able to create a system in which the poor people were not, ironically, forgotten in the acts of charity. It is people like Novogratz who see the big picture, and are not easily swayed by personal and monetary gains, that are able to bring about real change for the poor.
In Sarah Besky’s “Colonial Pasts and Fair Trade Futures,” Besky discusses the negative impact fair trade certification has on the Darjeeling Tea Plantations. Before reading this chapter, I had always thought that nothing negative or bad could come out of Fair Trade and being fair trade certified. However, in Besky’s chapter, she talks about how the workers of the Darjeeling tea plantations feel : “how deplorable and often illegal the conditions of their life and employment really are,” (Besky 98). Besky continues to talk about the “problems that fair trade certification, with its emphasis on direct trade, have created for workers on Darjeeling tea plantations,” (Besky 99).
Although the main point of ‘Fair Trade’ is to help the workers, and individual small farmers, in the case of the Darjeeling tea plantations, being fair trade has actually benefited the owners and not the workers. The owners of the Darjeeling tea plantations are seeking to earn fair trade certification on the basis that it not only “attests to the equitable treatment of workers, but it also provides owners a way to get their tea directly to foreign and boutique markets,” (Besky 99).
What I found unbelievable was that even though fair trade is supposed to benefit the workers and promote social welfare, it has failed to serve its purpose within the Darjeeling tea industry. Before the adaptation of fair trade policies and standards from the Fair Trade Labeling Organizations International (FLO), the plantations had to adhere to very strict Colonial regulations. Namely, the Plantations Labor Act (PLA), required that “owners provide workers houses, medical facilities, firewood, and food rations,” (Besky 99). To learn that the plantation owners are adopting Fair trade standards to avoid having to adhere to the PLA regulations is very disheartening.
Reading the chapter has made me see how fair trade can have negative impacts on certain industries when not implemented for the right reasons. As Besky states, in the case of the Darjeeling tea plantations, “fair trade is actually a destabilizing force, which erodes the headway that older, colonially rooted modes of regulation have made in maintaining the quality of life on plantations” (Beskky 101).
Similarly, another factor that stood out to me as very striking was the statement that one of the reasons fair trade certifications attracts owners is that “fair trade standards are more flexible than labor law, and since there is minimal oversight, owners can often cut corners on labor practices and still keep fair trade certification” (Besky 104). It was quite upsetting to learn that there exists a case where fair trade standards are considered lax when compared with the colonial regulations! It was upsetting to learn that owners are seeking to be fair trade certified to AVOID having to follow the strict labor laws, thus getting out of the legal obligation to provide for the workers and promote good working conditions.
If the plantation owners are seeking to be fair trade certified for the wrong reasons, and if they continue to dishonor the core ideals of fair trade, perhaps it is for the best to keep the old laws and to not adopt fair trade standards (at least for the Darjeeling tea industry). It pains me to even suggest not seeking to be fair trade. However, if the owners are abusing fair trade standards and what it means to be fair trade, and IF the workers would have been better off if the plantations followed the old PLA regulations, then I believe it is better for them to be not fair trade (given that this option will lead to even a slightly better conditions and treatment of the workers).
In Anna Hutchens’ article, “‘Game-Playing’: Rethinking Power and Empowerment,” Hutchens talks about the various ways in which power can be defined. Very too often, when we think of ‘power,’ we automatically assume an individual or group having power over another individual or group. At least for me, this was the case. To me, the word ‘power’ had more of a negative connotation than a positive one.
In business classes today, too often, power is described as being able to get things done effectively, even if it means having to exert ‘power over’ someone, or even if it may not be fair for everyone. In business settings, too often, one uses power to exploit another to achieve an end or a desired result. Too often, people are fighting to have power over another; people are always seeking to have the greatest power over another.
What stood out to me the most in Hutchens’ article is the concept of “power with.” On page 11- 12, Hutchens defines “power with” as “the capacity to achieve with others what one could not do alone.” Hutchens continues on to say that ‘power with’ “connotes a cooperative relationship in which individuals work together to multiply individual talents and knowledge.” To be completely honest, I have never thought of ‘power’ in this sense. While it is true that working together produces results that one could not produce alone, I have failed to see how ‘power’ comes into play in this concept. Hutchens, by attributing a collaborative concept to the term power, reveals an eye opening perception, and allows us to see how power can be described as a term other than domination. We have the power to collaborate with others. We have the power and capacity to work together to achieve something great. By working together (power with), we are able to share and combine ideas and to come up with end results that one could not have possibly produced alone.
Furthermore, Hutchens discusses the term ‘defiance.’ I’ve always thought of defiance as going against the societal norms. Again, up until this point, I have associated the word ‘defiance’ with a negative connotation, since to me, ‘defiance’ meant breaking the rules and order accepted by the majority.
Hutchens, brings new light to the word ‘defiance’ by defining it as “an attitude or behavior that social actors adopt when in a conscious process of questioning or rejecting ‘the path laid out for them by an authority’.” From this, ‘defiance’ can describe an individual advocating change for the better. While we are instructed from early on to follow societal rules, or any other rules for that matter, sometimes, we need to advocate change, and to ‘defy’ these said rules, if that will lead to a greater benefit for all. This ties into the principle of Fair Trade, in that we, as consumers, should be conscious of what we buy and support.
In “Harnessing Entrepreneurial Energy,” William Foote, Founder and CEO of Root Capital, discusses how his company, Root Capital, came to be, and the importance of funding capital to the associations and cooperatives of rural farmers. According to Foote, a cooperative typically involves “farmers coming together for mutual benefit, to fulfill common economic and social needs” (Foote 92). While the farmers in various rural areas like Tanzania, are forming cooperatives in the hopes of increasing revenue and success, most are unsuccessful due to lack of capital funding.
Since these cooperatives are “without access to capital and viable markets for their crops, small- scale farmers in the developing world are trapped in a cycle of poverty” (Foote 93). This is where Root Capital comes in. Root Capital is a “nonprofit organization that grows rural prosperity in poor, environmentally vulnerable places in Africa and Latin America by providing capital, delivering financial training, and strengthening market connections for small and growing agricultural businesses” (Foote 93). While most, if not all, financial institutions are not loaning to these farmers, Root Capital took the initiative to fund loans to these farmers. William Foote, unlike many financial institutions, saw the potential for growth and revenue, and understood that the problem of poverty in these areas, can be mitigated if these farmers were funded and had a higher chance for success.
Root Capital, by not only providing capital, but also the training needed to comprehend financial statements and financial management, was able to significantly help these farmers and to increase their potential approval for capital. Thanks to the efforts and initiatives of Root Capital, places like Guatemala and Uganda, which are stuck in the “missing middle,” are now able to gain access to capital and to grow their operation; they are now able to gain business connections.
In addition, I found the high statistics of loan repayments by the farmers to be very surprising. Foote notes that the farmers maintain a “98 percent repayment rate from the borrowers and a 100 percent repayment rate to the investors” (Foote 98). From this, I realized that possibly, the only obstacle that is standing in the way of success for many of the farmers and cooperatives, is the lack of capital. Clearly, once the farmers and cooperatives are funded, they are able to (in many cases) more than double the revenue. Once other financial institutions realize this and start taking part in the movement, I believe that we would be able to help many families escape from poverty.
Furthermore, another point I would like to bring up is the fact that the farmers are resulting to illegal logging, fuel wood collection, and slash- and- burn, due to the lack of capital funding. These practices are environmentally harmful and, as Foote mentions, will ultimately “trigger environmental degradation and actually WORSEN poverty over the long term” (Foote 94). By providing capital to these farmers, we would not only help increase their success, but also help sustain the environment. I really hope Root Capital can achieve their goal of “spurring other organizations to begin addressing the missing middle” (Foote 99).
In John Bowes’ article, “Introduction to a Brilliant Idea,” Bowes expresses the problem of poverty as “appalling collective failure of human society” (Bowes 2). I found this to be a very striking and accurate representation. Like Bowes mentions, there is so much income disparity in the world. Bowes mentions that the “poorest 40% account for just 5% of the global income,” while the richest 20% have account for three quarters of the global income. While I understand that it is practically impossible to employ equal distribution of wealth, I cannot help but to wish the global income was a bit more fairly distributed. Many problems in the world, such as poverty, can be classified as “collective failure of human society,” since most of us lack the motivation or power to do something to change this.
Bowes later on, mentions how much the Fair trade mark means, and what the producers and traders are obligated to do. It is said in the article, that a long lasting partnership is preferable, that the importers are “required to be prepared to pre-finance up to 60% of the purchase value of the seasonal crops,” that producers have to demonstrate that they are following specific requirements, etc. It is inspiring to learn that so many of the companies, especially in the UK, are promoting fair trade practices (even with the many requirements that must be met and followed).
Bowes later states that these many obligations must be met “if the integrity of the Fair trade Mark is to be protected” (Bowes 7). This statement really helped me realize how much the Fair Trade Mark meant and symbolized. It is not just a simple mark; it represents the hope, pride, and dignity, for which the integrity of the mark must be protected.
Although Bowes determines that many of the businesses will “switch out of fair trade” (Bowes 12), and that to some, fair trade is just simply a “partner of convenience,” I really hope that this is not the case, and that many more businesses will join in on the fair trade movement. Since some companies and businesses have “reluctantly” been drawn to fair trade due to “changing customer expectations,” it is especially important for consumers to keep raising awareness and demanding fair trade, in the hopes that one day, fair trade won’t be a “small part role [but] a full scare trading revolution” (Bowes 16).
In the first half of the article, Fair Trade: A human Journey, Pierre recounts many sad stories of Bangladesh women, and how the various charity foundations and Fair Trade organizations were able to rescue them. One of the statements that was very striking to me was how a mere $30- $40 a month can provide so much for the Bangladesh women. Pierre states: “this is what a middle manager in a rich industrialized country is paid for one hour of work, but for these women it is enough to put food on the table as well as to clothe and educate their children” (Pierre 16). Just thinking about how much money I waste on a daily basis, whether it is buying a shirt on impulse or buying a certain type of food just to try the flavor (and often end up throwing out), when these women are working so hard to provide for their family, made me angry at myself. Reading this part of the article made me re-evaluate my spending habits and made me really appreciate all that I have.
Another point I’d like to point out is how big a role these fair trade organizations have played on the lives of these women. Pierre expresses that some of the women are “rescued” from the red light districts. These women had nowhere left to go, and in order to survive, had to result to working in the red light district. One woman, Fatima, recounts her story of how she was raped by her cousin and was kicked out of her home. She had “lost everything (Pierre 28),” and had no choice but to work in the red light district. She expresses her gratitude for Mennonite Central Committee (MCC) program. The program was able to give many women, including Fatima, a new life. The program was able to show these women that they too can obtain a job filled with dignity.
In the second part of the reading, regarding fair trade and globalization, one thing that stuck out to me was Pierre’s statement that fair trade must not be measured only in terms of numbers,” since you can’t “quantify hope, pride, and dignity” (Pierre 233). Up until this point, I have failed to see the association of hope, pride, and dignity with Fair Trade. From a consumer’s standpoint, I have always just thought of fair trade as raising awareness of social justice, and rooting for ethical standards. It was eye opening to read Pierre’s words and realize that Fair Trade represents so much more than what it shows.
While fair trade means movement towards social justice and ethical standards in the eyes of the consumer, to the artisans themselves, fair trade also represents “hope, pride, and dignity.” For all the artisans, Fair trade means hope of a better life and equal standards. For all the artisans, Fair Trade means pride for the work they do, and pride for the beautiful works they create. For all the artisans, Fair Trade means they can work, and earn with dignity. Learning so much about fair trade makes me even happier to purchase fair trade products.
The documentary explains and depicts how the use of a mineral called coltan, is leading to wars and massacres in the Congo. According to the documentary, the tiny electronic circuits in our mobile devices need a precious mineral called coltan to work. Coltan is a natural resource that is only found in the Congo and coltan is being mined at the cost of hundred thousands of bloodshed. There are internal wars among the villagers, as well as the external conflict with the foreigners that steal the coltan from the Congolese. Although there are countless deaths and rapes because of coltan, since these problems do not affect the mobile companies directly, most are indifferent towards this horrible situation.
The documentary also expresses that the companies are indirectly funding the war and massacres, by buying the coltan minerals. The coltan mineral trade pays for permanent war, and although the illegally mined coltan is the cause of the many problems in Africa, companies are ignorant of these problems and are doing next to nothing to help prevent it. It is very important for people to become aware of the horrors associated with coltan mining. Just as the documentary stated, even if the mobile companies state that they do not support coltan mining, people should be aware that just because the companies state this, doesn't mean that they actually follow it. If more people become aware of these “blood coltans,” and help to stop the illegal mining and exploitation of natural resources, as well as the indirect funding of the wars and massacres, perhaps the horrors of coltan mining might start to mitigate.
Similarly, in a powerful speech given by Bandi Mbubi, we come to realize the horrors of coltan mining. Mbubi states that over 5 million people have died since 1996 due to the quest to acquire coltan minerals. It is clear that the purchase of coltan “fuels the ongoing war in the Congo,” and I find it very powerful that Mbubi expresses the idea of mobile phone as both an instrument of freedom and oppression.
Just like Mbubib states, “we need to continue mounting pressure on the phone companies to change their [coltan] sourcing processes.” It doesn’t make sense that countless people of the Congo have to suffer rape, torture, slavery, and oppression, in order to sustain the mobile/ technology industry. People should work harder to raise awareness of the ‘blood coltans” and keep demanding fair trade phones.
I am also a student in Professor Combellick's Fair Trade: Entrepreneurship class at Fordham University. Nice to meet you all.
I recently watched "The Dark Side of Chocolate" documentary, and here's what I thought:
I was aware of the use of child labor and trafficking in the cocoa industry; however, watching the documentary, “The Dark Side of Chocolate,” has helped me realize how ignorant I was of the reality of the matter. It was depicted in the film that almost all companies in the chocolate industry accept that child labor and trafficking is horrible, but are doing next to nothing to prevent it. While the largest chocolate manufacturers have signed the Harkin- Engel Protocol of 2001, promising to end the use of child labor and child trafficking in the cocoa industry by 2008, journalists have found evidence which indicates that this is not the case.
In fact, child trafficking is still prevalent in Mali. According to Idrissa Kanté, the general secretary of the driver’s union in Sikasso, in 2008 and 2009, he “discovered over 150 children that were being trafficked” to the cocoa plantations in the Ivory Coast. During an interview with one of the rescued children, Mariam, when asked how her parents will react when she returns home, she replies by saying that her parents “will be angry” that she didn’t come home with money. It is heartbreaking to learn that poverty has affected these families so much that these families are becoming desensitized to the values of familial love. It is sad to learn that poverty has caused these families to condone child trafficking, and that some are even willing to sell their own children. In addition, it is later mentioned that sometimes the plantation owners come to the village market, to take the children away without letting the parents know. These children have to live with the fear that they can be taken away any day. I was amazed at how immoral people can become when driven by greed and money.
Furthermore, another point that I found tragic is the corruption within the Ivorian government. When the documentary stated that the Ivorian government showed interest upon hearing of the investigation led by the journalists, I had initially thought that maybe the government was going to help the journalists. However, it was shocking how the government tried to hide the occurrence of child trafficking. When the journalist brought up the problem of child labor, the man “officially in charge of the fight against child labor” responds by saying that child labor “is not a problem” since they (the government) “know what’s happening and know how to deal with it.” He continues on to say that there are no work (in the cocoa industry) in July to September, so the children on the buses, coming to the Ivory Coast are simply coming on “vacation.”
It was shocking to hear the Ivorian government official imply that these children, being trafficked, are actually coming to the Ivory Coast for a “vacation.” He also implied that because there exists laws prohibiting child labor and trafficking, there are no more child labor and trafficking. In order to check the validity of the official’s claims, the journalists went to the plantations to investigate. They found several children working and some were even carrying machetes. It is extremely sad that people are aware of the fact that child labor and trafficking is occurring, but are choosing to ignore, or deny the practice of it. It is scary how wicked people can become when driven by money.
Tue Nov 19, 2013 12:54 am
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