re/third world- Frances Moore Lappe: Creating Real Prosperity


Richard Moore

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YES! Magazine Winter 2007 Issue:  Go Local!

Creating Real Prosperity
by Frances Moore Lappé

Critics of "go local" movements warn that buying local deprives people in the 
Global South of jobs that could lift them out of poverty. But are multinationals
really helping?

There's only one thing worse for the poor in the Global South, we're told, than 
a job in a sweatshop: It's the alternative--no job. That's basically what New 
York Times columnist Nicholas Kristof argued recently. If true, then "buy local"
campaigns in the North that cut imports could harm the planet's poorest people.

But before accepting this heart-rending story, let's ground ourselves in the 
real global economy.

Shedding corporate-media filters, we see that the poor are not languishing in 
their sad villages and grimy shantytowns just waiting to be saved by corporate 
giants from abroad. Many poor people are themselves creating the real job growth
in much of the Global South. They are the small shopkeepers, street vendors, and
home-based workers whose jobs make up what's called the "informal economy" not 
counted by authorities.

In Latin America, 85 percent of new jobs created during the 1990s were in this 
sector, not the corporate one. Informal jobs account for more than half of all 
jobs in Latin America and the Caribbean, and as much as 80 percent in parts of 
Asia and in Africa.1

"The informal economy is anything corporations can't make money on,' social 
entrepreneur Josh Mailman quipped to me recently. 'That's why it's invisible.'

Many of the jobs the poor are creating are not what the wealthy minority abroad 
might imagine--one individuals scrambling, say, to power a pedicab in Dhaka or 
sell fruit on streets of Caracas.

Millions are working together, through microcredit institutions and people's 
movements, to further both economic and social goals. Among the biggest are 
Bangladesh's largely self-financing Grameen Bank, BRAC (formerly the Bangladesh 
Rural Advancement Committee), and the Association for Social Advancement, whose 
combined microloans have gone to roughly 16 million poor people, mostly women, 
enabling many to create their own village-level enterprises.2

Grameen-mostly owned by its borrowers--reports that more than half the families 
of its borrowers have "crossed the poverty line." Assuming Bangladesh's other 
two large micro-credit efforts come close to this success rate, rural 
Bangladeshis' self-directed initiatives have freed more than four times as many 
from poverty as the number employed in export garment factories, where insecure 
jobs offer 8 to 18 cents an hour.

Overall, the number of microcredit users worldwide--many of whom are creating 
their own work--is roughly four times the 23-million people directly employed by
all multinational corporations.

BRAC alone employs almost 100,000 people, not in order to return a profit to an 
investor but, as BRAC says, "with the twin objectives of poverty alleviation and
empowerment of the poor." With its members' groups now in more than 140,000 
Bangladeshi village organizations, BRAC is creating not only health services and
schooling but its own small enterprises, to--from fisheries to printing to a 
tissue-culture lab to an iodized salt plant. They operate mostly for local 
consumption and are controlled by BRAC itself.

We citizens of the North think of global capital as the only jobs-generator. But
more people in the world are members of cooperatives--around 800 million--than 
own shares in publicly traded companies.3 Many are helping build locally 
controlled economies. Over the last three decades, women in India have, for 
example, built a network of cooperative dairies raising the incomes of more than
11 million households.4 Compare that to the 1 to 2 million jobs created by the 
high-tech corporate sector in India.5

Worldwide, co-op membership doubled in the last 30 years, according to the 
Geneva-based International Co-operative Alliance. In Colombia, the Saludcoop 
health care cooperative is the nation's second largest employer, providing 
services to a quarter of the population.6

And to those who still see global capital as the poor's savior, I am tempted to 
respond, "Let's get real!" Even if it were a path to real advancement, U.S. 
direct investment in the poorest continent, Africa, is close to zilch 
anyway--representing about 1 percent of all U.S. direct investments abroad.7

Benefits for North and South

Relocalizing economies in the North isn't an all-or-nothing proposition. 
Importing tropical products like coffee and bananas from the Global South makes 
sense, as does importing artisanal goods, linking cultures by spreading beauty 
and appreciation of difference. The real challenge is ensuring that exports 
don't undermine basic food security and that producers for export get a fair 

That means, in part, expanding the fair trade movement, which is already making 
a huge difference in the lives of over 1 million farmers and farm workers. It 
also means challenging monopoly power among food processors as well as 
encouraging more local processing so that a bigger share of the end-value stays 
in producer communities.8 (Today, just a tenth of the value of coffee stays in 
coffee-producing countries, down from almost a third of the value just ten years

Getting serious about ending poverty in the Global South does not mean abetting 
the reach of global corporations. Instead, we can work to remove the barriers 
U.S. corporate-driven policies place in the way of thriving local economies 
abroadï¿‹policies like NAFTA and U.S. farm subsidies that have drowned Mexican 
corn farmers in a flood of subsidized U.S. corn.

In building local, living economies here, we stand shoulder to shoulder with the
citizens of the Global South.

Frances Moore Lappe is a YES! contributing editor. She is the author of 
Democracy's Edge: Choosing to Save Our Country by Bringing Democracy to Life.


Editor's Note: some of the figures given in this article have been updated from 
the print version.

1 Gustavo Capdevila, Dim Outlook Despite Economic Growth, Says ILO, IPS, 23 
August 1999, Geneva.

"The incomes of the informal sector, crucial to the region's economy, also fell 
an average of one percent from 1990 to 1998 - a trend that has major 
repercussions, the report stressed, as a full 85 percent of new jobs in Latin 
America and the Caribbean were created in the informal sector. Indeed, the 
creation of new jobs remained stagnant last year in the formal economy, while 
the informal sector grew 4.5 percent, mainly due to the dynamic performance of 
micro-enterprises. The informal economy presently provides 58.7 percent of jobs 
outside of the agricultural sector, formal employment in large private sector 
firms 28.4 percent, and the public sector 12.9 percent.

See Also: Martha Alter Chen, Women and Informality: A Global Picture, the Global

SAIS Review, Vol. 21, #1, Winter-Spring 2001, pp. 71-82, Johns Hopkins 
University Press

"Even before the crisis, official statistics indicated that the informal sector 
accounted for nearly half of total non-agricultural employment in East Asia, 
over half in Latin America and the Caribbean, and as much as 80 percent in other
parts of Asia and in Africa. 1 In terms of urban employment, the informal sector
accounted for well over half in Africa and Asia and a quarter in Latin America 
and the Caribbean.

[Table 1] Not only its size but the contribution of the informal sector in 
income terms is significant in many regions. For example, in several African 
countries, it accounts for nearly 30 percent of total income and over 40 percent
of total urban income. The contribution of the informal sector to gross domestic
product is probably also sizable. For those countries where estimates exist, the
share of the informal sector in non-agricultural GDP is between 45 and 60 

2 16 million estimate made up of the following: the website of Grameen Bank 
indicates that it has 6.67 million borrowers, 97 percent of whom are women. The 
number of borrowers from the Association for Social Advancement (ASA) is 
estimated at 4.6 million (see page 5 of ASA annual report, June 2006). BRAC 
borrowers were estimated at 4 million in a statement by Bangladesh UN 
Representative H.E. Dr. Iftekhar Admed Chowdhury, to NGO briefing on 
'Microfinance and poverty reduction' in New York, October 13, 2005, and are 
listed at 5 million in a BRAC press release July, 2006.

3 Estimate from International Co-operative Alliance and David Thompson, long 
time analyst and author about the global cooperative movement.

4 'State of Food Insecurity in the World 2004, Food and Agriculture 
Organization, U.N., 26.

5 A conservative extrapolation from a statistic given by Vijay Joshi in The Myth
of India's Outsourcing Boom, published simultaneously in India Daily and The 
Financial Times, Nov 16, 2004: "IT-related output is currently less than 1 per 
cent of GDP. More significantly the sector employs less than 1 million people."

6 Oscar Arias Sï¿‹nchez, The Cooperative Revolution, Ode, Issue 31.

7 S. Bowles, R. Edwards, F. Roosevelt, Understanding Global Capitalism, 3rd 
Edition (Oxford University Press, 2005), 400.

8 For more information about on the impact of Fair Trade choices see

9 Bill Vorley, Food Inc.: Corporate Concentration from Farm to Consumer, UK Food
Group, 2003, 24.

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