The global recession is hurting developing countries’ economies and societies more than it’s damaging the developed world. Nevertheless, the surge in global philanthropy, remittances and private investments that has been building over the past several years is easing the pain.
Three high-powered leaders in the field of global philanthropy and international aid recently discussed among themselves and then with a selected audience new trends and challenges in the creation of economic growth in developing nations. The Forum on Philanthropic Giving and U.S. Foreign Policy was organized by the Council of Foreign Relations in Washington.
Carol Adelman, director at the Center for Global Prosperity at the Hudson Institute, pointed out in the just-published Index of Global Philanthropy and Remittances 2009 that “philanthropy and remittances will play the most important roles in helping developing countries weather the financial crisis that began in 2008.”
Jane Wales, vice president of philanthropy and society at the Aspen Institute, predicted that the spread of information via innovative technology, the translation of “all the world’s knowledge into the languages of the developing world, may turn out to have greater and more sustainable impact” than any philanthropy. “[M]any of the problems we face, and many of their solutions, will lie in the individual choices made by millions, hundreds of millions, of individuals; and … informing those choices could be the most important thing that we do.”
Mrs. Adelman cited Gillup Roth at the World Bank, who said that remittances were still growing as late as the end of March 2008 - though at a smaller rate than the previous year. Mr. Roth projects, Mrs. Adelman said, that in 2009 “they are only going to decline by 5 to 8 percent.”
“Considering what we know is going to happen with private capital flows and other flows,” she said, “… that’s a good-news story.”
Trevor Neilson, president of the Global Philanthropy Group, raised the issue of leverage that U.S. philanthropy has in places like Pakistan. Ms. Wales acknowledged that the Obama administration readily admits that the series of simultaneous crises it is facing cannot “be solved by government alone,” and therefore it has been “very forward-leaning” in reaching out to philanthropists.
As of 2007, global private philanthropy, remittances and private investments have surpassed government aid, or official development assistance (ODA), by 83 percent to 17 percent. It marks a stark departure from the aid structure of the 1950s, ‘60s and ‘70s, when ODA provided the bulk of assistance.
In the case of the United States, $213.4 billion flowed to the developed world via philanthropy ($36.9 billion), remittances ($79 billion) and private capital (97.5 billion), compared with $21.8 billion in government aid.
Mrs. Adelman’s favorite private aid project is Pedals for Progress. In many developing countries, people are held back from pursuing good jobs and education by a lack of transportation. In 1991, Dave Schweidenback started Pedals for Progress, collecting donated bicycles in the United States and shipping them to nonprofit organizations in developing countries, including Nicaragua, Ghana and Sierra Leone. The nonprofits repair and tune up the bicycles and sell them for about $15. Since it started, Pedals for Progress has distributed more than 115,000 bicycles and $10.8 million worth in spare parts to 32 developing countries. Pedals for Progress annually helps some 8,000 people rise out of poverty.
Two encouraging new trends are Web-based philanthropy and the use of cell phones for money transfers as well as for raising funds. Web-based social networking through Facebook, Twitter and similar outlets has inspired younger donors and many first-time and small-money philanthropists. On Feb. 12,202 cities held Twestivals, bringing together Twitter users for an evening of fun and fundraising for the aid organization charitywater.org. The first Twestival well was drilled April 11 through 14 in Ethiopia. So far, Twestivals have raised about $250,000, which will fund 55 clean-water projects in Ethiopia, Uganda and India for about 17,000 people.
Considering that out of 3.6 billion cell-phone users worldwide, 2.45 billion live in developing countries, it is not surprising that “cell phones are being used to make it faster and easier for migrants to send money, and even goods, home and to link poor people to formal banking networks,” says the Hudson Institute’s Yulya Spantchack.
Experts agree that the remittances migrants and immigrants in developed countries send back to their home countries decrease poverty. The top receivers of remittances from the United States were Latin America and the Caribbean (43.5 billion) nations. The ongoing global financial crisis will test the relative stability of remittances’ and philanthropy’s flow to developing countries.
• Christoph Wilkening, a publishing consultant, writes on global cultural and social issues. He lives in Prince George’s County.