We can't build our way out of poverty

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In our last post we borrowed a term from economics to explain a dynamic a lot of communities living in poverty are trapped in: a negative balance of payments or deficit. It means the community as a whole doesn’t produce enough wealth, either in the form of the wages of the families that live there and/or there are few businesses pulling currency into the community. Families then do what countries in steep deficits do - drastically cut their expenses (and hence, their quality of life) and try to get by. If the community can’t invest in things that create wealth – education, new businesses, infrastructure, then over time they’ll see their quality of life get worse as their houses go without maintenance, more children are born (more mouths to feed), animals die, tools break and the families do not have the means to repair them.

Time, then, is not on the side of families living in slums. Their poverty is too great to be overcome without some form of external investment, but it must be on two general fronts: building stuff and building capacity. Building stuff happens often enough; I think it’s our gut reaction when we are in the middle of a run down or very poor neighborhood. We see all that’s lacking – new and better houses, a school, paved roads, bathrooms for families, a water pump, trees. This is what the bulk of charity work is invested in – the infrastructure needs and emergencies, from donating food and clothes to building houses, schools, clinics, digging wells, giving medical attention, etc. Poverty is, unfortunately, more complicated than just lack of infrastructure. It is all good and necessary but insufficient – it must be accompanied by some form of investment in building capacity – productive capacity. This is because the new investment made – the new house or school, creates new expenses for the family or community for operating and maintaining it. Many of the benefits of new constructions are not monetary, and if they are, they are not immediate, but the expenses they generate mostly are.

Let’s imagine a family from a slum that lives in a small, dark shack made of waste material, with a leaky roof and dirt floor. Along comes a nonprofit that builds it a small house, a proper one, made with solid wall of wood or cement blocks, a firm roof and cement floor, nice tall windows, space for a bathroom. The benefits of moving into a house like this for the family are many. There are health benefits since the family is moving into a warmer, dryer space and they won’t be on a dirt floor that exposes them, especially the children, to a myriad of health risks. The separation of sleeping spaces, mainly of parents and children and boys and girls creates a much safer physical and psychological environment, the family in general feels more secure behind solid walls and feels better about themselves since now they have a home they are happy and proud about. 

Again, these are all good things. But the house also comes with some expenses that are new to the family. They’ll most likely have to finish and equip parts of it as they transition to something better, like the kitchen and the bathroom. There might be bills now – gas, power, water. And there’s a lot more now to maintain, everything might hold out for a while but the house slowly will deteriorate and will need the upkeep. The family has now a new home but the house didn’t help them raise their income to cover the new expenses the house brings with it.

Same happens when a community receives a school. Many nonprofits will go into a community, build a school and equip it and then leave, but running a school means high monthly expenditures – paying teachers, materials, power, water, grounds maintenance, security, etc.  If the families are barely getting by to begin with, how is the community expected to come up with the money to cover the new monthly operating expenses of a school? Most of the times it simply can’t. That’s why they wait and fight and lobby for the government to build schools – because it will also foot the operating costs month to month.

The leg that’s missing in this picture is capacity building – helping families participate in the economy so they can earn a living and lift themselves from poverty. Teaching job skills, trades, helping a family start a business or look for a job all helps families carve out an income that can allow them to invest in health, nutrition and education for themselves. Getting poor families on an upward spiral pertaining work is a much more complicated endeavor that requires a deeper level of trust with the community, specific personal and professional skills set and a longer time investment. But it’s absolutely crucial in our efforts to eradicate poverty.  In our next post we’ll review typical responses to these needs in communities.

kevin moforteComment