Trade, not aid please.
Here in Zambia it evident how some of the well meaning aid from the western world end up doing more harm than good.
On my first few days in Lusaka I was actually pleased with the amount of street vendors selling used clothing, obviously donated second hand clothing collected in the western world and sent here. Thinking it was nice it actually got here, and that the people selling it could make a living doing so. Until today Tue Andersen, the Zambian resident Danish entrepreneur we’re visiting, told me that it had totally destroyed the local clothing manufacturing industry. It goes without saying that local suppliers cannot pay staff and buy raw materials and then compete with free donations.
Perhaps the worst aspect of this, is that lots of manufacturing happened in the remote regions, so the income that is being generated has moved from smaller towns to the capital. The non-capital areas are already being depopulated due to lack of opportunity (causing the cities to swell to unsustainable sizes lacking sufficient opportunity). The people selling the clothes obviously make a living from it, but this is just a few people, compared to a whole industry.
Anyway, I thought we’d learnt this lesson after EU surplus food severely damaged the vegetable growing industry in Northern Africa?
PS: And dont argue it’s the only way to help. I am here because we’ve set up a competition for entrepreneurs, where they can win startup capital for economically sustainable companies that can generate growth, including jobs. We doing it together with Kukula Capital, a venture fund here started by same Tue Andersen. Setting up knowledge intensive businesses such as a VC here makes great business sense because the market is desperate for capital. And it employs local people in well paid professional jobs (which there are few of), plus helps local business people overcome one of the biggest hurdles to growth, namely finance. So we can buy people a fishing rod instead of a fish.
