Tag: kenya

Microfinance is Saving the World’s Working Poor

By Ryan Lau | @agorists

In a world full of immense suffering, many see it as their job to try to alleviate it. In a number of such instances, governments take it upon themselves to try to solve the crises. However, their actions are not always effective. So, there is still a considerable market for private charities and companies to aid the poorest of the poor. Thus, the microfinance industry came to be.

What is Microfinance?

Microfinance is an economic practice where startups lend small amounts of money to small business owners to help them become more profitable. Though more of the poor are getting bank accounts, there are still many in third world countries without access. Moreover, even some areas with a bank do not allow women to open accounts, as many third world countries have yet to reach gender equality.

This poor reality is an iron chain on social mobility. Without basic access to lending and borrowing, it can be very hard for a poor family to start a small business and begin to increase their standard of living. Despite this, there is still hope for them, as microfinance is beginning to turn the tides.

A Method of Proven Success

SHARE Micro Finance Limited, a company based in India, lends women small amounts of money so that they may further their businesses. Each client receives only one payment equal to $50 to $100 in USD. The money may go towards buying them equipment to transport products. The women may also use it to begin moving their operations online.

So, what have been the results? A staggering 77% of these women have seen income increases. Over a third have risen their incomes enough to no longer be living in poverty. With these results, SHARE has become India’s largest microfinance industry, serving over 200,000 people.

SHARE is not alone in its success. Countless other stories throughout the developing world show similar increases. From Kenya to Colombia to Pakistan, microfinance is accelerating the path of families away from poverty.

A Home-building Industry

In Kenya, 36% of people live below the poverty line. Nairobi alone is home to a quarter of a million people without a roof over their heads. Clearly, there is an urgent need for these people to have more adequate housing. Once again, microfinance may be the clear answer.

Sandra Pietro, global director of operations and financial inclusion at Habitat for Humanity, believes microfinance is a clear way forward to improve housing access. She believes that without it, “It could take up to two generations for people to build their home incrementally”. In areas where life expectancy is low, this means they will never reap the benefit of decades of hard work.

With microfinance, women in particular are able to access loans to build their homes. With loans as little as $50 USD, these women are able to increase their quality of life. After giving three guarantors, they can obtain the deed to their new property.

This is only the first step to a long process, but without the spark, no fire is possible. Current banks rarely serve the poor, and thus, they need another option. Microfinance, for a growing number of poor men and women, is that option.


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Common Misconceptions About The Universal Basic Income

Isaiah Minter | United States

Some years back, Professor Walter Williams of George Mason University showed that we could give the poor enough money to lift them out of poverty at a fraction of what it now costs us to maintain a severely bureaucratic welfare system.

In other words, not only does the US welfare system spend a lot; it spends this large sum badly. One proposed solution to the said ills of our current welfare scheme is a Universal Basic Income. Under this measure, all citizens would receive an unconditional sum of money from the government. Some proposals of a UBI give money to both adults and children, other proposals give money to just adults. In any case, this approach has many objections, and I will address those most common.

Perhaps the greatest quarrel with the UBI is its supposed cost.  Multiplying the estimated American population of 327,270,267 by the UBI, which we’ll say is $10,000, runs a calculated cost of $3.26 trillion. Even when we apply the UBI to just adults, an estimated US adult population of  249,485,228 yields a price tag of $2.49 trillion. 

While multiplying the total US adult population  by the UBI is the common way of calculating a UBI, this approach is wrong, as Dr. Karl Widerquist explains:

UBI is–and must be understood as–a negative tax. When you pay the government, that’s a tax. When the government pays you (without you having sold something to the government), that’s a negative tax. It doesn’t cost you anything for the government to give and take a dollar from you at the same time. If you want to know someone’s total tax burden, you need to subtract the negative taxes they receive from the positive taxes they pay.

Allow a scenario. Imagine that we have a group of four people with incomes of $10, $20, $40, and $100. If we tax them at 40% and divide the revenue evenly among everyone,  total tax revenue is $68 and each person receives $17.

In this system, everyone but the individual with $100 is negatively taxed, meaning they receive money. For example, the individual with $10 pays $4 in taxes but receives $17 back, representing a total amount paid of -$13, as they gained money, and an income increase of $7. The poorest three individuals, in total, receive $23, while the richest person loses that same amount. Ultimately, the richest individual is positively taxed, meaning they lose money, and the three poorest are negatively taxed, meaning they receive money.

By failing to account for the net transfers of the tax system through negative and positive taxation, the majority of UBI cost calculations grotesquely overestimate the price tag of a basic income. In respect to the real cost of a UBI, Widerquist found that:

The net cost of a roughly poverty-level UBI ($12,000 per adult, $6,000 per child) with a 50% marginal tax rate is $539 billion per year: about one-sixth its often-mentioned but not-very-meaningful gross cost of about $3.415 trillion. The net cost of this UBI scheme is less than 25% of the cost of current U.S. entitlement spending, less than 15% of overall federal spending, and about 2.95% of Gross Domestic Product (GDP).

Another common concern with a UBI is that, by offering a free sum of cash,  it would decrease the incentive to work and therefore lower employment. However, the data does not support this claim.

One study done on Iran’s UBI found the following:

The report found no evidence for the idea that people will work less under a universal income, and found that in some cases, like in the service industry, people worked more, expanding their businesses or pursuing more satisfying lines of work. The researchers did find that young people — specifically people in their twenties — worked less, but noted that Iran never had a high level of employment among young people, and that they were likely enrolling in school with the added income.

Likewise, a working paper by the National Bureau of Economic Research found that unconditional cash transfers from the Alaska Permanent Fund Dividend had no significant effect on Alaskan employment, even increasing part-time work.

In truth, this claim would only have validity if the needs and desires of people could be met without having to work, which a poverty-line UBI does not achieve. However, under our present welfare system, we actually do see a disincentive to work courtesy of the welfare cliff. Therefore, the claim that a UBI would provide a disincentive to work is not only false but is also applicable to our current welfare system.

Even the claim made by Nathan Keeble of the Mises Institute, that a UBI would not help alleviate poverty, is demonstrably false. One working paper found that net transfers in Iran as a result of the nation’s 2011 UBI reform reduced poverty. Similarly, cash transfers in Kenya, India, Uganda, and Namibia have all proven that simply giving cash is highly effective at alleviating prosperity and promoting prosperity in the developing world.

Ultimately, the UBI represents a refreshing approach to welfare policy that is based on practical liberty and true poverty reduction. Compared to our current welfare scheme, it is significantly less intrusive on, and more equitable to, the pockets of Americans, offering an unconditional sum of money to all Americans but with a lower price tag. With an estimated $2.48 trillion boost to GDP over eight years, it is a measure we can, and must, pursue.

Image Source World Economic Forum

The Land Of Upright Men: Thomas Sankara & The Marxist Revolution of Burkina Faso

By Spencer Kellogg | AFRICA

I am often asked, ‘Where is Imperialism?’ Just look into your plates: you see imported corn, rice or millet. This is imperialism. Our country produces enough to feed us all. We can even produce more than we need. Unfortunately, for lack of organization, we still need to beg for food aid. This type of assistance is counterproductive and has kept us thinking that we can only be beggers who need aid.

Africa has long been a testing ground for some of the world’s most appalling and dangerous ideas. Raped of their land and wealth, Africa as a continent still lags severely behind all other land masses though their nations are blessed with a bounty of natural resources. Even after the uprising and reclamation of many African nations from their colonialist masters, today these countries still suffer at the hands of the International Monetary Fund, the World Bank and other global political & economical conglomerates that seek to push through often failed large-scale agricultural and industrial projects to the detriment of Africa leaving these poor people mired in unresolved debt and slaves to a new order – that of a globalist economy. In 1983 in the former French Upper Volta, one man was determined to stand against the tyrants who used his land and abused his people for wealth to be exported to the other side of oceans and seas. This man was Thomas Sankara.

Landlocked to the North by the Malian desert and cut off to the Atlantic Ocean by The Ivory Coast and Ghana to the South, The Former French Upper Volta has long been one of the poorest nations in the entire world. Although the country achieved independence in 1960, the following two decades were known best for their lackluster development and incompetent leadership often bankrolled by their former colonizers in France. Dressed in military garb and sporting the classic red beret, Sankara immediately went about slashing the salaries of public servants, eliminating all colonial taxes levied on the country and breaking up powerful unions that hoarded wealth while reinvesting the nations small abundance back into the communities that lived in abject poverty. Socially, Sankara rejected the patriarchal undertones of colonialism and allowed women to enlist and serve in the military alongside men while also creating a holiday where men would go to the market to buy goods while the women stayed home. This challenge to societal norms set a precedent not only for Africa but also for countries far and wide which still reverberates today.

When you are bearing arms that can spit fire and death and when you can receive orders standing to attention in front of a flag without knowing who will benefit from this order or this arm you become a potential criminal who’s just waiting to spread terror around you. How many soldiers are going around such and such country and bringing grief and desolation without understanding that they are fighting men and women for the same ideals as their own. A soldier without any political or ideological training is a potential criminal.

Sankara questioned the use of force and allegiance to a war machine that often pitted mutualistic philosophies against one another. As we are witnessing throughout the Middle East today, African nations were wrought by civil and border wars often gaslit by European powers seeking to gain footholds in their shadow wars against other global and regional enemies. Here, Sankara reads like Rothbard with his condemnation of war for tribe’s sake and suggestion that his people deserved a greater understanding of the impact that their blood and death played outside the battlefield.

While many African leaders promised reform and advancement for their people, Sankara wasted little time enacting policies to make a concrete change in his burgeoning country. He set up a nationwide vaccination program to tackle the deadly trio of Polio, Measles & Meningitis and within one month had vaccinated over two and half million citizens earning him the respect of the World Health Organization. To increase physical activity, he instituted once a week sporting rituals and himself participated in the new decree by playing soccer and suggesting the practice was important to promote “a healthy mind and a healthy body”. By the early 1980’s, Africa was just beginning to recover from a generational drought and Sankara took the lead by planting millions of trees and instituting policies against the desertification of Burkina Faso. While building new housing for the impoverished cities Sankara also poured money into building railroads and highways that would connect the disparate villages and cities of his nation.

For all of his Marxist tendencies, Sankara showed a reliable libertarian streak in his aims to decentralize and localize the production of goods and services in his land. His arguments against the global economic structure that stood against the needs and prosperity of his own people were rooted in the idea that what is locally produced by his people was best for his people’s economic and ideological strength. While the majority of Africa was used as a production hub for cheap labor, he rallied a new way in Africa by demanding food and goods come from Burkina Faso for Burkina Faso. In his aims to transform Burkina Faso into a truly independent state, he championed the “Faso Dan Fani” (History of Faso Dan Fani) a local cloth woven of cotton that all public servants were required to wear. While skeptics could point to this institutionalized clothing requirement as authoritarian in nature, it could also be seen as a liberating force that stood to question the reliance of outside industrialization that was the driving force of Africa’s weakened economic and philosophical power.

We think that France’s politic in Africa is very French. That is to say that it resembles other French politics. In the past, the French were present in such and such African country in order to either support one particular leader, one kinglet, or to take away another chief and fly him out. France still proceeds that way today.

At the Vittel conference of 1983 in France, the French President François Mitterrand met with Sankara and other African heads of state. In the preceding weeks many, including the French-owned state of Côte d’Ivoire, had expressed doubt and worry over the revolutionary ideas of Sankara and Burkina Faso. Most of the nations that met at the Vittel Conference were dependent on the French treasury and there was a sense that Sankara and his ideas needed to be suppressed before uprisings and counter-revolutions sprang up throughout the continent. There, Mitterrand reminded the nations of their precious alignment with the west and struck out against the sovereignty of rising independent states who sought new allegiances with the Soviet Union and Cuba. At the Organization of Africa Unity Summit later that year, Sankara pointed accusingly at the African heads of state who grew richer while their people grew poorer. He spotlighted the mounting debt and rising interest rates hoisted upon Africa by their former colonizers and called on leaders to stand with him against the global economic tyranny of African nations.

I would like this conference to clearly declare that we cannot pay the debt. Not in a rebellious spirit. But just to avoid being assassinated individually. If Burkina Faso is the only one to refuse, I won’t be at the next conference. When we are saying that we should not pay the debt, we’re not refusing our responsibilities or not keeping our words. It’s just that we don’t have the same moral standards as others. Between the rich and the poor, moral standards cannot be the same. The Bible or the Koran cannot serve those who exploit people and the exploited ones, in the same way. We should have two editions of the Bible and two editions of the Koran. Brothers, with everybody’s support, we will make peace at home. We’ll be able to use Africa’s full potential as well to develop our country because our land is rich. We have enough manpower and we have a very large market, from the North to the South, the East to West. We have enough brainpower to create or at least to go and learn science and technology where it can be learnt.

Mister President, let’s present a united front against the debt here in Addis Abbeba. Let’s make sure that this conference will decide to limit the arms race between poor and weak countries. The clubs and knives that we buy are useless. Let’s make sure that the African market belongs to Africans. Let’s produce in Africa, manufacture in Africa and consume in Africa. Burkina Faso came here to show you our locally produced cotton woven in Burkina Faso and tailored in Burkina Faso to clothe our people. I, along with my delegation, am dressed by our tailors, our farmers. Not a single thread comes from Europe or America. I am not presenting a fashion show here but I simply would like to say that we must accept to live the African way, it’s the only way to live in freedom and with dignity.  Our homeland or death, we will win.

By 1986, Sankara was paranoid by threats mounting from political opponents in every direction. He tried enemies of the state and the upper-class citizens of Burkina Faso became agitated by his authoritative demeanor. For crimes against the country, Sankara forced the guilty to address their treason on radio and television for all to see. Public servants found guilty were often made to work without pay and the trials administered by The People’s Revolutionary Tribunal did not guarantee rights to a lawyer or proper defense. Even worse, the prosecution was not tasked with proving the defendant guilty. Instead, the defendant was presumed guilty of charges and expected to prove his innocence. The once shining beacon of new liberty on the African continent was being extinguished by the very man who lit the flame.

Later in the year, French President Mitterrand would visit Burkina Faso with the aims of squashing the increasingly important player in international politics. The environment was heated as many saw Mitterrand as representative of the same policies that had created and fostered apartheid in South Africa. P.W. Botha, President of South Africa, had visited France only months before Mitterrand made his way to The Land of Upright Men and Sankara, with an international audience watching, took the opportunity to speak out in protest against Mitterand’s relationship with the South African ethnostate:

Killers such as Pieter Botha have had the right to travel through beautiful France. They dirtied it. With their bloodied hands and feet. And all those who allowed them to act the way they did will bear the responsibility for it, here and elsewhere, now and forever.

Though Sankara could not be bought or sold, his second in command, Blaise Compaoré, was growing weary of the revolution and seized on a section of the nation who wished for a more liberal regime. Compaoré, in collusion with the newly elected right wing of France, began to speak out against Sankara. Once close friends, by 1987, Compaoré had disowned Sankara and used his control of the nation’s army to lead a coup against his closest friend. Within weeks, Sankara was murdered in a staged attack by Compaoré’s associates and buried in a shallow grave before nightfall. In the following weeks, Compaoré championed many of Sankara’s ideas while back peddling into a subsistent relationship with the French. In France & The Ivory Coast congratulations were extended to Compaoré and Sankara’s name was dragged through the mud. Throughout Africa however, Sankara’s name still remains synonymous with Pan Africanism and the struggle for complete independence and liberty from neo-colonialist empires.

The modern prism by which we view and define the failures of Marxism is often distorted by the ills of the Soviet Union archipelago and the postmodern academic bastardization of collectivism as seen throughout Asia in the late 20th century. In Africa and South American too, Marxism has played chief doctrine to the murder and widespread poverty of millions of citizens. However, we are aggrieved if we cannot also correctly assert that Capitalism and its determined march against the sovereignty and freedom of poor people is not also to blame for massive death and unrest. Sankara was a poor man who stood for a poor people. He refuted the tone and nature of ‘Afro-pessimism’ and believed wholeheartedly that his people deserved respect, dignity and ultimately freedom. His message today still strikes with the tone of Jefferson. He carried a torch where once no light existed.  In a world full of slanted men hungry for money and power, Sankara stood upright with pride and love of his country and people.

These 10 Places Could Become the World’s Next Countries

By Jake Melkun | Worldwide

Recently, there has been a big resentment of big government and more regionalism in today’s world. Read on to see which places could actually become the next countries in the world.

 

10. Venice

Venice, the city where people transport themselves not by car, not by train, but by boat. Venice is the third-richest region in Italy, and brings in a lot of tourism from foreigners wanting to experience an almost car-free city. But, the region of Veneto has a growing separatist movement, trying to break away from Italy. In 2014, a non-binding referendum showed that a stunning 89% of Venetians supported independence.

9. Flanders/Wallonia

No, we are not talking about Ned Flanders here, but we are talking about the northern half of the country of Belgium. Belgium is made out of mainly two distinct regions which all have different backgrounds, traditions, and cultures. The one on the North is Flanders, which is closer related to the Netherlands and Dutch is spoken. Wallonia, on the other hand,  is the southern part which speaks French and is closer related to France. Many people on both sides want to either separate or gain more autonomy, although many Wallonians have spoken in favor of joining France.

8. Québec

We all know Canada as the home of ice hockey, maple syrup, moose, and poutine, but could it also be the home of the next independent nation? Québec already has many cultural differences to the rest of Canada, as they are the odd ones out when it comes to language because Quebec is officially a Francophone province. Many Québécois feel that they are not a true part of Canada because of the language and cultural barriers, and that they would be better suited to be a part of the French-speaking world.

 

7. South Ossetia/Abkhazia 

South Ossetia and Abkhazia go hand-in-hand because they both are autonomous regions claimed by in Georgia (the country, not the state) and Russia. The people of these regions are not really ethnically nor culturally related to the Georgians, and they have backing from their neighbors to the north. Some people support the states joining Russia as autonomous oblasts or completely separating from both countries. South Ossetia and Abkhazia were both supported by the Russians during the Russian invasion of Georgia in 2008, leaving the two territories in a sticky situation.

6. Transnistria 

Transnistria is a small strip of land on the eastern side of Moldova, a country bordering Ukraine and Romania. Transnistria is also an autonomous region, which it sets out a lot of its own border and passport control, meaning that to cross through it you need a special stamp. Transnistria uses the Moldavian SSR (Soviet-Era Moldova) flag, and has very close ties to Russia. We have an article on Transnistrian independence here.

5. East African Federation

Kenya, Tanzania, Uganda, South Sudan, Burundi, and Rwanda have proposed a plan to unite their countries into the East African Federation. This proposed union could either end up being a glorious unification, or, as it likely will, end up in a civil war and a huge mess. African nations already have a tough time getting by, but could this proposed union help to turn the region into a superpower?

4. Kurdistan

The Kurds are a major ethnic group who live from South-Eastern Turkey and stretch throughout Iraq, Syria, and even major parts of Iran. They have a huge separatist movement, referendums, and support from global superpowers like the United States. Why haven’t they gained independence yet? First of all, Turkey, which is highly opposed to letting the Kurds free, is also a member of NATO. This means that it would put the US in a tricky spot with aiding both the Kurds and the Turks. Secondly, ISIS and the Syrian Civil War has put a big stop to the Kurds’ mission, as the area is too war-inflicted for another war to take place. Maybe once the cards are in the right place, Kurdistan might join the list of nations of the world, but as of now an independent Kurdistan seems unlikely.

3. Scotland

You might be saying to yourself, “Isn’t Scotland already a country?”. Well, yes, it is a country, but not an independent one. The United Kingdom is a country of countries, which the independent countries don’t really have much independence. Many Scots are not happy with this. They believe that Scotland should be able to make decisions for themselves on the global stage, but under the UK they can’t. In 2014, Scotland made the decision to stay in the UK in a referendum, but after Brexit, could there be another referendum on the horizon?

2. Kosovo

Kosovo is an Autonomous Region located in Southern Serbia, but they do not like being ruled by the Serbs. The majority of Kosovoans are of Albanian ethnicity, and they would much rather be their own nation instead of being under the Serbian flag. It has also been proposed that they join Albania instead of being their own nation. Kosovo is recognized by the United States, but they still only have about one-third of the world’s recognition. Kosovo is very close, but not there just yet.

1. Catalonia

Catalonia is a region that has been in the news lately as they partook in a referendum that overwhelmingly supported Catalonian independence. The Spanish did not take to this well, though, because the Spanish police injured over one thousand poll-goers in an attempt to stop the fair referendum. The Catalonians are currently planning their next step, as they are supposed to release their Declaration of Independence soon. You can read our article on this here.

 

Of course, the independence of these areas are not certain, but it will surely be interesting to watch and see how all of this plays out.