Out of Poverty

Just finished a great book called Out of Poverty, by Paul Polak. Polak is the founder of an organization called International Development Enterprises, which develops and markets products to help the 800 million rural farmers around the world that live on less than one dollar per day of income.

I respect what he has to say because he is a genuine practitioner, not an academic or foundation "expert", but a man that has spent decades talking face to face with the world's poor, and creating solutions to help them.

I suppose his biggest point is that we need to stop giving things to the poor, and start selling them products that will help them make more money and begin a cycle of continued income growth.

The problem comes from the fact that virtually no one designs and markets income generating products that the rural poor can afford. Polak speaks of the need for designers and manufacturers to "design products that the other 90% of society can afford" rather than focusing solely on the 10% of society that can afford high income products.

His most successful product for the rural poor might be an ultra-low cost treadle pump, which allows farmers to pump existing water from under their farms to grow vegetables during the dry winter season. During the winter, when water is scarce, vegetables also become scarce and prices rise dramatically. As such, growing even a small volume of vegetables in the winter can provide big increases to a rural farmer's income.

Polak also makes the point that charity, i.e. giving things away, doesn't solve any problems. When recipients aren't vested in the gifts they receive, and have no ability to communicate exactly what they really need, the gifts provide no long term solutions. Besides, all of the charity in the world isn't nearly enough to give all of the world's poor what they really need to rise from poverty. Only marketable products, provided by market-oriented companies at extreme low cost can scale up to meet the demand.

My short synopsis is not doing justice to the convincing arguments Polak puts forth, which I remind you are based on decades of on-the-ground experience, talking with rural farmers, developing products for them, selling those products and watching the farmers' income grow.

Its convincing stuff, and Out of Poverty has given me lots to think about.