THE PILLARS
In this section:
Group of 8: Reducing Poverty Through Trade
Jamaican Dressmaker Uses Credit to Build Firm
Global Drug Facility Improves TB Drugs
Free Shipping Program Moves $400M Worth of Donated
PVO Goods
ECONOMIC GROWTH, AGRICULTURE, AND TRADE
Group of 8: Reducing Poverty Through Trade
 |
|
Women in Sikasso, Mali, package and label mangos for
export to Europe.
Arouna Diallo, USAID/Mali |
Leaders of the eight largest economies of the world—known
as the G-8 or Group of Eight—were expected to discuss
trade as a strategy for reducing poverty in developing countries
at their meeting this month.
“By putting trade on the agenda, the Group of Eight
is recognizing it as essential for growing economies,”
said Anne Simmons-Benton, USAID representative to a group
of donors building developing countries’ capacity to
engage in trade.
This donor group brings business and government together
to identify barriers to trade and ways to overcome them using
an approach called the “integrated framework.”
USAID’s mission in Mali recently supported such a policy-setting
exercise.
The Bureau for Economic Growth, Agriculture, and Trade (EGAT)
contributed by sending a trade expert to Mali to help pinpoint
trade barriers. In December 2004, some 200 leaders from government,
business, and donors groups studied the findings and decided
which problems they would address.
For instance, Air France, the country’s only carrier
to Europe, charges exporters a premium because demand for
cargo space fluctuates dramatically, making it difficult for
the airline to plan. Now, exporters are working to develop
a system to provide Air France with estimates of the cargo
space they will need a week ahead of time.
Advisors are also encouraging exporters to use certificates
of origin. West African states do not charge tariffs on exports
from other West African countries if exporters confirm the
country of origin with a certificate, but few do so.
The European Union also would give preferential treatment
to Malian exports in exchange for such a certificate.
Advisors are also helping mango and shea nut production.
Mali grows high-quality mangos, but packaging is poor, which
hurts exports. The United Nations Development Programme and
USAID will fund pilot projects to raise the quality of mango
exports and packaging, and Canadian aid will help shea nut
producers raise their export quality.
USAID for the past two years has also funded a project trying
to increase Malian mango exports by working with farmers on
packaging techniques.
The World Bank and other donors have long worked with developing
countries to create poverty reduction strategies. Traditionally,
these focused on national policies, such as improving a population’s
health and educational status. But recently, more emphasis
has been placed on trade.
During the 1990s, the exports and imports of developing
countries jumped from less than $1.9 trillion to nearly $4.6
trillion. Countries that developed growth in trade achieved
higher and faster economic growth.
USAID spends about $650 million a year on trade expansion
projects around the world.
GLOBAL DEVELOPMENT ALLIANCE
Jamaican Dressmaker Uses Credit to Build Firm
 |
|
Business owner Lesa Collins, center, works with two
employees in her dressmaking shop in Mandeville, Jamaica.
A USAID-backed lender gave Collins three loans to expand
her dress shop.
JNSBL |
Mandeville, Jamaica—The garments Lesa Collins
and her staff make in her dressmaking shop here are in high
demand—so much so that Collins needed to expand Lesa’s
Dressmaking Ltd. to accommodate the increased business.
On the advice of a friend, Collins contacted Jamaica National
Small Business Loans Limited (JNSBL), which makes loans to
microentrepreneurs who would not normally qualify at commercial
banks. Through the program, she has received three loans over
the past few years to enlarge her business.
“I was able to purchase more raw materials and expand
my business,” said Collins, who is working toward doubling
floor space, machinery, and output at the shop.
“I realized that it was very easy to pay back [the
loans] on a weekly basis. The loan officer worked it out and
came up with an amount that would make it easy for me.”
Since 2000, when USAID/Jamaica provided a $1.25 million
grant to JNSBL’s parent company, the lender has awarded
51,000 loans totaling more than $22 million to small business
owners. The loans helped generate 3,000 additional jobs.
The grant emphasized training for loan officers and new
information management technology.
Small business owners and microentrepreneurs make up 60
percent of all businesses in Jamaica and contribute about
40 percent to the nation’s economy.
“We saw this project as an opportunity to assist the
development of the SME [small and microenterprise] sectors
of the economy, creating employment and fostering nationwide
development,” said Frank Whylie, general manager of JNSBL.
“Increasing our role in nationbuilding through the
provision of financing to this crucial sector is very important
to us.”
Loan recipients must be at least 18 and have run a business
for at least a year. Applicants can put up refrigerators,
sewing machines, and other atypical items as collateral.
First-time borrowers can receive between $80 and $800. Over
time, repeat customers can qualify for higher loan amounts,
up to a maximum of $5,000. Payment terms range from 10 to
50 weeks, with an interest rate of 1 percent per week.
JNSBL has also formed a number of strategic alliances to
help it distribute and collect funds. The Jamaica Post Office,
for example, provides disbursement and collection services,
and Pan Caribbean Financial Services retails credit funds.
“JNSBL is an industry leader, as many financial institutions
are hesitant to offer credit that exclusively serves small
and microenterprises,” said James Burrowes, a business
development specialist with USAID.
JNSBL plans to increase the maximum loan amount (also called
loan cap) for current clients who have maintained good credit
ratings and to launch new loan products in response to customer
demand.
Another new service will provide loans to people who want
to establish new businesses.
GLOBAL HEALTH
Global Drug Facility Improves TB Drugs
 |
|
Sputum collection cups being distributed in a TB clinic
in Dhaka, Bangladesh.
Jad Davenport, WHO |
As it marks its fourth year, the Global Drug Facility (GDF),
a part of the global Stop TB Partnership, continues to tackle
the challenge of infrequent and poor quality drug supplies
for tuberculosis (TB) patients in developing countries.
Since its inception, the GDF has treated 4 million patients.
Its experts procure drugs from suppliers around the world,
sending shipments to countries that need them and following
through to ensure delivery to TB clinics.
Although a cure for tuberculosis has existed for more than
half a century, the disease is rarely treated properly. It
continues to infect and kill some 2 million people every year,
according to the World Health Organization (WHO).
Nearly 9 million people will develop TB during 2005.
The GDF has stockpiled TB drugs and helped reduce the price
of the medicines by about 30 percent. A six- to eight-month
course of treatment of DOTS (directly observed treatment,
short-course) now costs less than $10.
Most developing countries have been paying at least twice
the prices obtained by the GDF—and sometimes even three
or four times higher—due to inefficient procurement mechanisms.
“There was a time when the principal obstacle to TB
control was drugs,” said Susan Bacheller, TB team leader
at USAID. “But with the GDF and the Global Fund, the
lack of drugs is no longer an excuse.
“We must continue to strengthen labs to diagnose TB,
train more health workers, mobilize communities, and to involve
all providers in DOTS. And, in countries affected by HIV/AIDS,
we must ensure that all persons living with HIV/AIDS have
access to prompt TB care. “The GDF is a critical resource
to addressing TB globally.”
Some 50–70 percent of people with infectious TB die
annually if untreated, according to the WHO.
The number of cases increases by 1 percent every year, largely
because of the HIV/AIDS epidemic, inadequate investments in
public health systems, and emerging TB drug resistance.
TB tends to threaten the poorest and most marginalized groups
of people. It disrupts the social fabric of society and slows
or undermines gains in economic development.
An overwhelming 98 percent of the 2 million annual TB deaths—and
some 95 percent of all new cases—occur in developing
countries.
On average, TB causes three to four months of lost work
time and lost earnings for a household.
USAID has been a key player in the Stop TB Partnership,
an effort of more than 350 partner governments and organizations.
Aside from funding, the Agency invests in the Stop TB Partnership
and GDF by providing technical support. This helps poor countries
improve their drug management systems, trains local TB experts,
and helps health ministries draw up comprehensive TB strategies.
USAID has been particularly involved in administering DOTS,
a system of observing people while they take the full course
of medicine to prevent drug-resistant strains from developing.
Chris Thomas contributed to this article.
DEMOCRACY, CONFLICT, AND HUMANITARIAN ASSISTANCE
Free Shipping Program Moves $400M Worth of Donated PVO Goods
 |
|
A woman in Ecuador gets fitted for a wheelchair provided
by Counterpart International. The PVO received funding
from USAID’s Ocean Freight Reimbursement Program
to transport wheelchairs and other walking aids to Ecuador
in 2004.
Hope Haven Ministries International |
Private voluntary organizations (PVOs) regularly deliver
items—clothing, medical supplies, and meals—to poor
people in developing countries by tapping into USAID’s
Ocean Freight Reimbursement (OFR) Program.
Managed out of the Office of Private Voluntary Cooperation-American
Schools and Hospitals Abroad (PVC-ASHA), OFR provides small,
competitive grants to PVOs to help defray some of the costs
of shipping goods overseas for use in privately funded development
and humanitarian assistance programs.
The Agency awards about 50 grants to U.S. PVOs each year.
The PVOs are responsible for costs related to commodity acquisition,
warehousing, insurance, local transportation, and distribution.
In 2003, the OFR budget was a modest $2.7 million, but that
sum helped move more than $400 million in goods and services
from PVOs to people who needed them.
By leveraging donated and purchased goods and volunteer
time, the overall private-public match for these activities
was 148 to 1.
This past December, for example, the PVO Counterpart International
used part of its 2004 OFR grant—the total was $36,510—to
transport a 40-foot container filled with winter clothing,
shoes, medical supplies, office supplies, and educational
material to the Afghanistan Relief Organization in Kabul.
Counterpart paid the initial cost of shipping the container
and was reimbursed by USAID. The PVO paid its own costs to
collect, store, and distribute the donations.
Counterpart also shipped specialized wheelchairs, crutches,
canes, walkers, and spare parts for the walking aids to Ecuador
in 2004. While Counterpart handled the transportation logistics
and expenses—and was later reimbursed by USAID for the
cost of the ocean freight—Quito-based Fundacion Vista
Para Todas distributed the items and Iowa-based Hope Haven
Ministries International sent in a team of technicians to
custom fit the wheelchairs and provide occupational therapy
to recipients.
Overall, there were over 250 beneficiaries—many of
them children with multiple sclerosis or cerebral palsy—spread
throughout Quito, Santo Domingo de los Colorados, and surrounding
areas.
During each two-year cycle, new PVOs are introduced to the
program, said Tom Kennedy, chief of PVC-ASHA’s Program
Development and Management Division.
Though it is highly competitive, the process to qualify
is not complex. PVOs must be registered with USAID and receive
at least 20 percent of their total annual financial support
for international programs from non-U.S. government sources.
“Due to the nature of the Ocean Freight Reimbursement
Program and the fact that the criteria can be met by PVOs
of all shapes and sizes, it has always been a great opportunity
for small and newly registered PVOs to get their feet wet
in the USAID grant process,” Kennedy said. “With
this program, everyone is starting out on the same level,
regardless of their size or longevity.”
More than 10 percent of grantees during 2004 and 2005 were
first-time applicants, and almost 10 percent were newly registered
PVOs.
The OFR program is on a two-year cycle, and the next request
for applications will be this fall, covering funding for 2006
and 2007.
Back to Top ^
|
