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Poverty Inc.

During our time here in India we’ve talked a great deal about foreign aid. Who gives it? Who receives it? Does it help? And in what ways does it hurt? Poverty Inc., a documentary profiling the problems associated with the global aid industry, helps answer these questions by shedding light on exactly who profits (or rather who doesn’t profit) from foreign aid.

The documentary’s central argument is this: the approach the West has taken to “make poverty history” has not only been ineffective but it has also ensured that the poor remain poor and the rich remain rich. Donor communities tend to operate under the assumption that the poor cannot help themselves, but the documentary passionately rejects this idea. It is not that Haitians or Ugandans are naturally helpless or dependent peoples. Rather, the billion-dollar poverty industry has inadvertently pushed people out of their own local economies and thus even further away from participation in the global economy. In the 1990s, Haiti saw a huge influx of subsidized rice from the United States under the Clinton administration. Our intention was good and simple: we will help feed the poor in their time of need. But once Haiti’s food emergency stabilized, the rice kept coming, and Haitian rice farmers couldn’t compete with our subsidized prices. Their farms went belly-up, and a lot of farmers moved to the already congested city of Port-au-Prince with the false hope of finding new opportunities. This is just one example used by leaders in the developing world to explain the immense harm caused by the current model of foreign aid. Some even go as far to say that global charity has ushered in a new colonial era.

So if our current system of administering aid is flawed, how should we be helping the poor? We need to abandon our “we know best” attitude and trust that the poor hold the power to create economic power for themselves and others. Instead of donating used clothing to the people of Malawi, and in turn threatening the job security of local textile workers, how can we help support their local textile industry so that it flourishes? Instead of flooding a country with cheap non-perishables, how can we help its farmers grow their businesses so that they can take pride in feeding their own people?

The documentary did not discuss the recent trend in providing the poor with microloans as a way of lifting people out of poverty, but my hunch (without doing extensive research) is that it would look more favorably on the microfinance industry. Although not without their own flaws no doubt, non-profit organizations like Kiva ( seem to address a need. A relatively small loan by Western standards can provide, say, a woman in Bangladesh the capital she needs to start or grow her business. Repayment of that loan, once her business reaps the benefits, gives her dignity and pride. It’s also easy to imagine the ripple effect. Growing one business creates opportunities for others as well.

I am just starting to peel back the layers of foreign aid, and I certainly do not have the answers. Eliminating poverty is a large task, even for Bono ;), but I like how this documentary turned my conventional thinking on its head.

This entry was posted in BMC.
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