A couple of weeks ago I attended a screening of a movie that really made me think about how we westerners ‘help’ developing nations. The documentary, Poverty Inc. explains how aid to developing countries can actually do a lot more harm than good. In the event of a crisis, be it a natural disaster or war, these countries know that we go in there with good intentions. We just want to provide relief and help them get back on their feet. But then we outstay our welcome. We stay so long and keep giving them food and other resources, until we actually destroy their industries and they have no hope of ever developing their own sustainable economies. These developing nations become completely dependent on international aid.

red cross truck- poverty inc

The film focuses on how poverty has become a multi-billion dollar industry. It looks at how aid started and what it is actually doing to the developing countries. It considers the work of the countless NGO’s that have popped up and asks, who actually benefits from international aid? Unfortunately, it is not the people to whom the aid is apparently directed. Foreign aid is now a complex global industry.

While aid and its effects on the agricultural industries were a major focal point of the film, it also touched on how foreign aid impacts the fashion industry, in regards to social entrepreneurs. Social entrepreneurs are people who start a business which revolves around trying to solve a social problem and basically make the world a better place. Their business model is different from your typical corporation. They put people and the environment above profits in an effort to create social change. They sound really good, right? And of course they are. They have the right intentions. But it is not as straightforward as it might seem.

TOMS shoes was a specific case that was mentioned. In case you don’t know them, TOMS are an American shoe brand. They are also a social enterprise. They have developed a business around the concept of ‘One for One’. This means that for every pair of shoes they sell, they give a pair to a child in need. Honestly, this sounds like a great idea and they have been very successful since they were founded ten years ago.

toms

But this film took a closer look at TOMS as a social enterprise and it really gave me something to think about. TOMS are giving away shoes. For free. Local businesses cannot compete with free. Who is going to pay money for a pair of shoes when TOMS are giving them away? Images are shown of kids rushing up to the TOMS truck as they eagerly await the arrival of their new shoes. They have come to expect and rely on the free shoes. On one hand, yeah it is good that the kids get new shoes, but what about the local shoe industries? How can the these shoe makers support themselves when westerners are coming in and giving away freebies? They can’t grow their businesses and are then forced to close down, which only allows the cycle of poverty to continue.

So instead of just barging in there and giving them the finished product, if we are going to help these developing countries, we need to help them develop their own industries. We need to find out exactly what they need to improve their situation, not just throw cash and supplies at them.  We need to ask more specific questions, for example, why don’t the kids have shoes? Maybe in the region there is a lack of business skills, a lack of equipment, or people lack the funds to start a business. Whatever the case, these people aren’t poor because they are stupid.

slum- poverty inc

It all come back to that old saying: if you give a man a fish, you feed him for a day; teach a man to fish and you feed him for a lifetime. Social and environmental problems in the fashion industry are so complex, that there is no easy, one step solution to solve any of them. Therefore, social entrepreneurs have to be very careful about what they do. They have to consider all possible repercussions of their actions and be sure that their plan is not going to create even more problems. Good intentions are unfortunately not the solution.

All pictures taken from the Poverty, Inc. trailer.

 

 

Social enterprise & the poverty cycle
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