I’m always interested in innovative ways of getting aid directly to those who need it in the most timely and efficient manner possible. Kiva deals beautifully with one aspect of this – linking lenders in the ‘developed’ world with borrowers in ‘developing’ countries. But when it comes to financial aid to many of the rural poor – the man or woman on the street, so-to-speak – no mechanism exists (I don’t count giving to charity as being a direct donation, by the way). Not only is it a technical challenge to facilitate a direct donation (although mobile payments will soon unlock that particular door) there are other trickier issues, such as what we know about these individuals, or their needs and particular circumstances.
In times of famine or hardship, the typical Western response is to send over plane-loads of food aid. Although this might seem like the most logical thing to do, often it overlooks the chief cause of the famine. Lack of food generally comes below politics, political instability, access to resources and markets, and civil conflict in the famine equation. In other words, it’s rarely about a ‘simple’ lack of food. And flooding a country with food aid creates its own problems, from feeding the militia in conflict situations to destroying what’s left of the local and national agricultural market systems.
So, is there an alternative? Well, the UK’s Department for International Development (DFID) seems to think so, and they’ve just started a $3 million pilot project to prove it. They’ll be providing cash payments instead of food to tens of thousands of hungry people in northern Malawi. You can’t get more direct than that. Although the full impact – and effectiveness – of the program won’t be known for some time, the signs look good. As with many microfinance projects in developing countries, women are the main recipients of the cash, and many take their money and head straight to local markets to buy food. This keeps the local economy moving and the agriculture sector bouyant. That’s one problem solved, and two avoided, on my count.
(Incidentally, direct payments are nothing new in the conservation world. They’ve been tried for some years with varying degrees of success. The process is pretty much the same – give the conservation dollars directly to the people living in the conservation area, and encourage them to help preserve their environment through their pockets. I’ve always quite liked the concept, but appreciate how controversial it is. A PDF paper on conservation direct payments is available here).
Meanwhile, back in Malawi, you may be wondering what this project has to do with technology. Well, administering a system where piles of cash are handed out to tens of thousands of naturally very willing recipients needs to be effectively managed and controlled. So, each of the villagers in the scheme are fingerprinted, and their details held on a smart card which they present at pay-out.
The whole idea of making direct payments is appealing to both the donor and the recipient. If it works it could take hold as an entirely new model for delivering aid, providing it is scalable. The fact that a simple and tested technology has proved to be a key enabler makes it all the more interesting, to me at least.