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Problems with Entrepreneurialism Relief Projects

What are some alternative Strategies for Poverty Relief?

The last decade has witnessed a transformation on how financial aids are managed to impact on the livelihood of the poor people. Initially, financial aids were given in the form of cash hand outs. However, such a strategy was found to lack any impact on poverty reduction. As a consequence, a new aid design was created. The design was crafted to assume entrepreneurialism aid relief projects in the form of inclusive business models, in which the poor are assisted to establish or improve businesses. The conviction was illumined by the reason that money is managed better once invested either in the form of physical or human capital (Adepoju, 2014). Inclusive business models are designed to integrate the poor people both as suppliers and customers at different stages in the value chain. The model thus links the gap between people with meager income and businesses for reciprocal benefits. Furthermore, this kind of models can be crafted to utilize readily available environmental resources. As a result, the business becomes financially sustainable, hence, turning the poor to emerge as entrepreneurs and customers within the business value chain (De La O, 2015). Such aids projects can thus make poor people have increased income and productivity, consequently becoming easy for them to meet their basic needs. The objective of the research, therefore, is to analyze the problems associated with aid projected which help the poor to establish or improve businesses. The essay will further investigate some alternative strategies for poverty relief as well as highlight examples of aids projects that are anti- entrepreneurialism.

Entrepreneurialism relief projects like inclusive business models are strategies which have been designed by the International Development Assistance Agencies such as Local and International NGOs, Religious Organizations, as well as Development Consulting Firms to elevate poverty levels in the world. However, most often of these International Development Assistance Agencies are not inspired by authentic interest to reduce poverty but to monitor and respond to the political, economic, and religious interests of the donors (Haveman & Wallace, 2015). In most cases, International Development Assistance Agencies operate in developing countries while their headquarters are based in the developed nations where they battle for donations from public and private donors. As a consequence of huge budgets and massive funding, aids projects disallow any attempt to hire the local experts or partnering with local businesses (Hickey & Du Toit, 2013). The agencies thus initiate entrepreneurialism relief projects without adequate understanding of the local situation to appeal to the people sentiments of compassion and solidarity with the poor. Such appeals make them attractive to the public, therefore, creating an opportunity for them to achieve the priorities of their donors (Randel & German, 2013).

Alternatives Strategies for Poverty Reliefs

Additionally, the relief strategies are marked by little or no participation of the poor, whom they are meant to assist (Katz, 2013). It is rather unfortunate that the International Development Assistance Agencies do not integrate the opinions of the in developing these strategies. Participation of the poor into the formulation of these projects is reduced to some informal meetings characterized by meager consultations and information sharing. As a consequence, implementation of such strategies is faced with major hindrances because the local poor people lack the sense of ownership of such projects. Such exclusion in decision making confirms that the agencies intention is not to alleviate poverty but to appease their donors. This conclusion is guided by the fact that, if they are guided by a genuine fight against poverty then the poor should be their primary client or principals and not the donors. The fear of being accountable is another reason why they object to such mind set. In fact, they argue that the poor lack skills, knowledge and education to evaluate and assess strategies imposed on them.


Other problems associated with relief strategies include urgency and limited resources which make the projects unsustainable. Led by the desire to make the donors feel they assisted some poor people International Development Assistance Agencies hastily start new projects to ensure a constant flow of funding. It is thus outright that their annual reports and brochures only include the presumed achievements in poverty elevation but not failures. Most of the aids projects are evaluated within the funding period o they can appear successful. Another reason why aids strategies are unsustainable is because International Development Assistance Agencies prefer to initiate new projects than improving or continuing with the old projects. Such thinking is adopted because donors respond so readily to new visible changes more than the maintenance of old existing projects. Such mentality, therefore, halts aid projects once the funding ceases.

The problem of poverty is multifaceted. It extends outside economics to entail other issues such as cultural, social, and political concerns. As a consequence, poverty relief strategies should not be founded solely on economic policies. In actuality, they demand a comprehensive and well-coordinated set of measures. In reality, such a foundation forms the reasoning behind any well-thought poverty relief strategy. The key to poverty elevation is in the structural measures the poverty relief strategy seeks to enforce. Some of the measures include improved governance, regulatory reforms, trade liberalization, civil service reform, banking sector reform, and privatization of parastatals (Hout, 2016). An alternative strategy to the poverty relief strategies, therefore, must enhance policies that favor easy distribution of assets and income within a society. The policies must address fundamental issues like measure to maximize opportunities for the poor to access loans from financial institutions at a friendly rate, land tenure reform, and pro-poor public expenditure. Only such vital elements will constitute an alternative strategy for poverty relief.

Although poverty is a multifaceted phenomenon, it is influenced by a single significant factor which is economic growth. Therefore, macroeconomic stability is a necessity in the realization of high and sustainable economic growth rate. As such, macroeconomic stability is a core component of any alternative strategy for poverty relief. Alternative strategies must have structures which ensure government budgets are sustainably financed. Moreover, the strategy must entail articulated policies and specified objectives which are well costed and funded in a comprehensive government budget.  In case a government foresees the inability to fund the alternative strategies by the use of the available resources such a government should seek assistance from International Monetary Fund and World Bank. Nonetheless, in circumstances where the funding is still insufficient government should revise the priorities of the strategy. Though, the intent of macroeconomic stability must always be upheld. The conclusion is inspired by the fact that macroeconomic stability is the foundation stone of any sustainable economic growth and increased private sector development. It is indisputable that macroeconomic instability drives both domestic and foreign investors away, thus, diverting resources elsewhere.

Alternative strategies acknowledge poverty issue is a complex reality and can only be solved through diversified strategies. Hence, such a strategy must prioritize the fundamentals that affected society feels are the appropriate remedies to poverty issue affecting them. Some examples of alternative strategies for relief strategies include (Panican, & Johansson, 2016);

  1. Sustainable livelihood
  2. Good governance and Job creation
  3. Education of both boys and girls
  4. Increased remuneration
  5. Gender equality
  6. Encouraging Micro-financing
  7. Transparency in government spending
  8. Cancellation of debts
  9. Access to sanitation and drinking water
  10. Access to Health care
  11. Proper nutrition to pregnant mother and infants

Sustainable Livelihood Strategy

Sustainable livelihood is a unique strategy which is people-centered and not donor-centered. It emphasizes securing the livelihood of the poor people as well as empowering them. The strategy is, therefore, founded on three pillars which include;

Those underprivileged/poor people particularly in rural set up control massive resources and activities which can sustain them.


The poorest are excessively dependent on the public or common asset for their survival. Government resources are such as forests, fisheries, and public grazing land.

That successful poverty reduction strategy goes beyond the public budget to include assets and services like equitable justice systems, markets, and financial services.

The strategy thus approaches the issue of poverty from a realistic, holistic, and manageable point of view. Such a broad approach aid the strategy to take into consideration the available opportunities for development and their impact on the lives of the people in question. Furthermore, the strategy positions the people and the priorities they hold dear at the core of its analysis (Krantz, 2012). 

The strategy encourages the use of resource/vulnerability method while analyzing the livelihood of the people in the narrative. It further underlines the significance of understanding the institutional and organizational environment as well as the vulnerability context in which the poor people draw resources of various kinds to execute a livelihood strategy. The strategy offers an explicit definition of five kinds of assets: natural capital, physical capital, social capital, financial capital and the human capital.  The main strength of the strategy is its goal to include a range of resources and activities which are familiar with people in its project implementation. The strategy, therefore, offers a framework which addresses comprehensive policies which touch on the lives of the poor people. It does not only advocate for easier access to education and health but also smooth access to personal security, markets, and finance. Fundamentally, this strategy advocate sustainability, participatory approach, need to change the prevailing circumstances, and the need for people to at the center of any project implemented. Such inclusive strategy, therefore, can work at various levels from local to national in conjunction with both private and public sector (Serrat, 2017).

Good Governance and Job Creation

Global poverty levels are on the increase despite the constant relief projects to elevate poverty concentrations in the world. The increase in global poverty is thus a clear indication that the solution to this problem is not founded on the relief projects but good governance and job creation to the affected population. Good governance entails of the processes of creating and executing decisions. The essence of good governance, therefore, is good decision creation processes (Ayre & Callway, 2013). It is characterized by such qualities such as; transparency, accountability, the rule of law, inclusivity, equitability, participation, and efficiency. The strategy to utilize good governance as an alternative to relief projects ensures job creation and their sustainability. Guaranteeing education opportunities for all, availability of employment and access to health care as well as drinking water are some of the indicators of reduced poverty. However, such achievements are not possible in a country which is characterized by poor governance. Weak development model features poor governance and depending on the external aids instead of creating internal policies which will transform and enhance economic growth (De la Croix, & Delavallade, 2013). 

Good governance is proactive, that is, it is responsive. As such it development plan inspires its financial regulation policies, macroeconomic policies, the development agenda of the private sector, the tariffs and taxation policies as well as public debt management policies (Biermann & Kabiri, 2014). Unfortunately, many governments and especially in the developing countries fail to prioritize such critical policies to ensure relief projects are constantly in their countries. Similarly, good involves taking responsibility for the decisions implemented. Equality, the government should be ready to offer answers to the questions the people represented may have. Good governance encourages local solutions to the local problems that perpetuate poverty thus increasing investment opportunities (Bott, Gigler & Young, 2014). For example, improvement in the infrastructures such as energy, communication, and transport present immense opportunities due to reduced cost of trade, thus enhancing investments. Underdevelopment, poverty and poor governance are different faces of the same coin. Therefore, good governance is the most effective alternative strategy to relief projects and aids (Kwon & Kim, 2014).

Examples of Aid Projects moving away from Entrepreneurism

Funding of community projects is sourced from various sources which include; private sector participation, aids from external sources in the form of subsidized loans or grants, users of the project, tax through government budget. However, sourcing money from an external source is not always sustainable because of donor and development agencies fund projects for a limited duration. As a consequence, many aid projects that are detached from entrepreneurism collapse shortly after funding ceases. Some of the aid projects that have moved away from entrepreneurism include;

Nutritional Improvement Projects

In these kinds of aids project donor and the development, agencies collaborate with both the private and the public sector to address the challenge of malnutrition among the poor people. Therefore, most projects initiated within this mind set are agriculturally based meant to offer nutrition remedies (Ortuño, & Vitoriano, 2013). There are numerous projects which are funded by the U.S. Agency for International Development (USAID) to solve nutritional challenges. Examples of these projects are like; Global Alliance for Improved Nutrition (GAIN) and Strengthening Partnership, Results, and Innovation on Nutrition Globally (SPRING).  Such programs are thus aimed at improving food security policies for nutrition. Hence, they do not fund agricultural projects with the intention of encouraging the community to embrace agribusiness but for dietary purposes.

Conclusion

In conclusion, it is indisputable that the quality of aid projects is in most cases deficient; hence, the need to carefully evaluate the effectiveness of such projects. It is also important for the donor and the international agencies to encourage the local to actively participate in the projects they intend to initiate for them. Such inclusivity will ensure continuity of such even after the donor funding ceases. Besides, it has emerged that the most effective strategy to deal with the poverty question is good governance. Although some countries are in need dire need of aid projects, it is worth understanding that relief projects are not the solution to the increasing global poverty; therefore, the need for the world to appreciate and promote the available alternative strategies.

References

Adepoju, R. I. (2014). A Critical Analysis of Poverty Alleviation Strategies of Al-Hayat Relief

Foundation in Nigeria. Journal of Islamic Finance, 3(2), 49-59.

Ayre, G., & Callway, R. (2013). Governance for sustainable development: a foundation for thfuture. Earthscan.

Biermann, F., Stevens, C., Bernstein, S., Gupta, A., & Kabiri, N. (2014). Integrating governanceInto the sustainable development goals (No. 3). UNU-IAS.

Bott, M., Gigler, B. S., & Young, G. (2014). The role of crowdsourcing for better governance inFragile state contexts (pp. 107-148). Open Development Technology Alliance.

De la Croix, D., & Delavallade, C. (2013). Why corrupt governments may receive more foreigaid. Oxford Economic Papers, 66(1), 51-66.

De La O, A. L. (2015). Crafting Policies to End Poverty in Latin America. Cambridge UniversityPress.Haveman, R., Blank, R., Moffitt, R., Smeeding, T., & Wallace, G. (2015). The war on poverty:Measurement, trends, and policy. Journal of Policy Analysis and Management, 34(3),593-638.

Hickey, S., & Du Toit, A. (2013). Adverse incorporation, social exclusion, and chronic poverty.In Chronic Poverty (pp. 134-159). Palgrave Macmillan UK.

Hout, W. (Ed.). (2016). EU development policy and poverty reduction: enhancing effectiveness.Routledge.

Katz, M. B. (2013). Poverty and policy in American history. ElsevierKrantz, L. (2012). The sustainable livelihood approach to poverty reduction. SIDA. Division forPolicy and Socio-Economic Analysis.

Kwon, H. J., & Kim, E. (2014). Poverty reduction and good governance: Examining the rationaleof the Millennium Development Goals. Development and Change, 45(2), 353-375.Ortuño, M. T., Cristóbal, P., Ferrer, J. M., Martín-Campo, F. J., Muñoz, S., Tirado, G., &Vitoriano, B. (2013). Decision aid models and systems for humanitarian logistics.

survey. In Decision aid models for disaster management and emergencies (pp. 17-44).Atlantis Press.

Panican, A., & Johansson, H. (2016). Strategies Against Poverty in a Social Democratic Local

Welfare System: Still the Responsibility of Public Actors?. In Combating Poverty in

Local Welfare Systems (pp. 155-177). Palgrave Macmillan UK.

Randel, J., & German, T. (2013). The Reality of Aid 1997-1998: An Independent Review of

Development Cooperation (Vol. 10). Routledge.

Serrat, O. (2017). The sustainable livelihoods approach. In Knowledge solutions (pp. 21-26)Springer Singapore.

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