Buying Local Doesn't Hurt the Developing World

By Frances Moore Lappe, YES! Magazine. Posted November 22, 2006.

There's only one thing worse for the poor in the Global South, we're told, than a job in a sweatshop: It's the alternative -- no job. That's basically what New York Times columnist Nicholas Kristof argued recently. If true, then "buy local" campaigns in the North that cut imports could harm the planet's poorest people.

But before accepting this heart-rending story, let's ground ourselves in the real global economy.

Shedding corporate-media filters, we see that the poor are not languishing in their sad villages and grimy shantytowns just waiting to be saved by corporate giants from abroad. Many poor people are themselves creating the real job growth in much of the Global South. They are the small shopkeepers, street vendors, and home-based workers whose jobs make up what's called the "informal economy" not counted by authorities.

In Latin America, 85 percent of new jobs created during the 1990s were in this sector, not the corporate one. Informal jobs account for more than half of all jobs in Latin America and the Caribbean, and as much as 80 percent in parts of Asia and in Africa.

"The informal economy is anything corporations can't make money on," social entrepreneur Josh Mailman quipped to me recently. "That's why it's invisible."

Many of the jobs the poor are creating are not what the wealthy minority abroad might imagine -- lone individuals scrambling, say, to power a pedicab in Dhaka or sell fruit on streets of Caracas.

Millions are working together, through microcredit institutions and people's movements, to further both economic and social goals. Among the biggest are Bangladesh's largely self-financing Grameen Bank, BRAC (formerly the Bangladesh Rural Advancement Committee), and the Association for Social Advancement, whose combined microloans have gone to roughly 16 million poor people, mostly women, enabling many to create their own village-level enterprises.

Grameen -- mostly owned by its borrowers -- reports that more than half the families of its borrowers have "crossed the poverty line." Assuming Bangladesh's other two large micro-credit efforts come close to this success rate, rural Bangladeshis' self-directed initiatives have freed more than four times as many from poverty as the number employed in export garment factories, where insecure jobs offer 8 to 18 cents an hour.

Overall, the number of microcredit users worldwide -- many of whom are creating their own work -- is roughly four times the 23 million people directly employed by all multinational corporations.

BRAC alone employs almost 100,000 people, not in order to return a profit to an investor but, as BRAC says, "with the twin objectives of poverty alleviation and empowerment of the poor." With its members' groups now in more than 140,000 Bangladeshi village organizations, BRAC is creating not only health services and schooling but its own small enterprises, too -- from fisheries to printing to a tissue-culture lab to an iodized salt plant. They operate mostly for local consumption and are controlled by BRAC itself.

We citizens of the North think of global capital as the only jobs-generator. But more people in the world are members of cooperatives -- around 800 million -- than own shares in publicly traded companies. Many are helping build locally controlled economies. Over the last three decades, women in India have, for example, built a network of cooperative dairies raising the incomes of more than 11 million households.Compare that to the 1 to 2 million jobs created by the high-tech corporate sector in India.

Worldwide, co-op membership doubled in the last 30 years, according to the Geneva-based International Co-operative Alliance. In Colombia, the Saludcoop health care cooperative is the nation's second largest employer, providing services to a quarter of the population.

And to those who still see global capital as the poor's savior, I am tempted to respond, "Let's get real!" Even if it were a path to real advancement, U.S. direct investment in the poorest continent, Africa, is close to zilch anyway -- representing about 1 percent of all U.S. direct investments abroad.

Benefits for North and South

Relocalizing economies in the North isn't an all-or-nothing proposition. Importing tropical products like coffee and bananas from the Global South makes sense, as does importing artisanal goods, linking cultures by spreading beauty and appreciation of difference. The real challenge is ensuring that exports don't undermine basic food security and that producers for export get a fair return.

That means, in part, expanding the fair trade movement, which is already making a huge difference in the lives of over 1 million farmers and farm workers. It also means challenging monopoly power among food processors as well as encouraging more local processing so that a bigger share of the end-value stays in producer communities. (Today, just a tenth of the value of coffee stays in coffee-producing countries, down from almost a third of the value just ten years ago.)

Getting serious about ending poverty in the Global South does not mean abetting the reach of global corporations. Instead, we can work to remove the barriers U.S. corporate-driven policies place in the way of thriving local economies abroad -- policies like NAFTA and U.S. farm subsidies that have drowned Mexican corn farmers in a flood of subsidized U.S. corn.

In building local, living economies here, we stand shoulder to shoulder with the citizens of the Global South.

Reprinted from "Go Local," the Winter 2007 YES! Magazine, PO Box 10818, Bainbridge Island, WA 98110. Subscriptions: 800/937-4451 Web: www.yesmagazine.org.

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Frances Moore Lappé is a YES! contributing editor. She is the author of Democracy's Edge: Choosing to Save Our Country by Bringing Democracy to Life.

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