Author Archives: Josh

About Josh

"Josh Weinstein is a visionary. I read his blog every day." - Bono

China in Africa: Maybe the West Is Wrong

For decades, the Western world has viewed Africa as a basket case in need of charity, giving huge amounts of aid to corrupt dictators who steal much of the money and squander the rest.  Critics of aid say it creates dependence, undermines the competitiveness of local industries, and keeps cruel dictators in power by giving them the financial wherewithal to secure their position.  Aid is a $40 billion a year business in Africa, and there isn’t too much to show for it.

China, on the other hand, has taken a different approach.  By investing in Africa to gain access to its rich natural resources, China might be helping Africa in a more dignified and some might say effective way:

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Pastor Rod: A Christian Evangelist’s Strange Role in the Sudan

A month ago I got cable television for the first time in 8 months so that I could watch the World Cup, which airs in the Philippines at 2:30 AM.  And lately, I find myself stopping at Daystar – “faith-based TV for today’s generation” – for a lot of different reasons.  For one thing, it is difficult to comprehend just how easy it is for these guys to ask for huge amounts of money.  For another, whenever I see these guys I can’t help but think of Bill Paxton, AKA Simon, in True Lies (“let’s face it Harry – the ‘vette gets ’em wet”).  There is one in particular, a fellow by the name of Pastor Rod Parsley, who is particularly intriguing, in part because of what he is doing in southern Sudan. Continue reading

Develop Economies Goes to Hong Kong

I’m heading to Hong Kong for four days of hi-jinks.  In the meantime, I’ll take the opportunity to resurrect a post I wrote that mentions Hong Kong as an example of how a colonial power created a model for a city that was exported to the mainland and catalyzed the development of China.  Can it be done somewhere else?  I’ll try to find out.

“Neo-Colonialism as a Development Strategy”

Interlude: Cool Discoveries in Nature

In nature news, there have been two major firsts discovered in animal kingdom.  In my previous life, I was a biologist, making this post a logical tangent.  An immortal jellyfish and a photosynthetic sea slug.  It is a banner year for fans of evolution.

1.  Immortality: Take It, It’s Yours

The turritopsis nutricula species of jellyfish may be the only animal in the world to have truly discovered the fountain of youth. Since it is capable of cycling from a mature adult stage to an immature polyp stage and back again, there may be no natural limit to its life span. Scientists say the hydrozoan jellyfish is the only known animal that can repeatedly turn back the hands of time and revert to its polyp state (its first stage of life).

The key lies in a process called transdifferentiation, where one type of cell is transformed into another type of cell. Some animals can undergo limited transdifferentiation and regenerate organs, such as salamanders, which can regrow limbs. Turritopsi nutricula, on the other hand, can regenerate its entire body over and over again. Researchers are studying the jellyfish to discover how it is able to reverse its aging process. Because they are able to bypass death, the number of individuals is spiking. They’re now found in oceans around the globe rather than just in their native Caribbean waters.  “We are looking at a worldwide silent invasion,” says Dr. Maria Miglietta of the Smithsonian Tropical Marine Institute.

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The Value Proposition of Microfinance

“The value proposition of microfinance doesn’t lie in it’s being the strongest tool against poverty that we can possibly imagine.  The value proposition lies in the fact that it is very helpful to cope with poverty, and it’s a very good value for money.” – Richard Rosenberg

The narrative of microfinance reads that it provides money to the poor to start businesses and, in doing so, lift themselves out of poverty.  The idea that everyone is an entrepreneur plays into this understanding of microfinance.  Perhaps the leading beneficiary of this narrative is my former employer, Kiva since people generally like the idea of empowering these proto-entrepreneurs to go out and change their situation.  People struggle to make an impact in their approach to philanthropy, but microfinance and Kiva specifically allows them to be a mini-venture capital firm.  But this narrative is, at least, an oversimplification of the reality on the ground.

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The Awareness Dilemma: How Nicholas Kristof Gets Us to Care

For those who do not know, Nicholas Kristof is an incurable optimist who writes a column for the New York Times on aid, development, foreign policy, and all things related.  In a video posted to his blog, he took questions from readers.  The author of one development blog point out that most of Kristof’s articles follow a standard narrative that: “one that often focused on the foreign, typically American “savior” helping the poor Africans in need, to the exclusion of efforts of black Africans themselves to bring about change on the ground.”  It is a good question, since most of the development workers in this world making things happen are locals, not foreigners.  Here is Mr. Kristof’s response:

I do take your point. That very often I do go to developing countries where local people are doing extraordinary work, and instead I tend to focus on some foreigner, often some American, who’s doing something there.

And let me tell you why I do that. The problem that I face — my challenge as a writer — in trying to get readers to care about something like Eastern Congo, is that frankly, the moment a reader sees that I’m writing about Central Africa, for an awful lot of them, that’s the moment to turn the page. It’s very hard to get people to care about distant crises like that.

One way of getting people to read at least a few paragraphs in is to have some kind of a foreign protagonist, some American who they can identify with as a bridge character.

And so if this is a way I can get people to care about foreign countries, to read about them, ideally, to get a little bit more involved, then I plead guilty.

I think this is a pretty thoughtful and right-on response.  Continue reading

A Litmus Test for Waging a War on Terror

The masters of war of late never seem to be the ones actually doing the fighting.  In fact, most of them have never fought, ever.  George W. Bush, Dick Cheney, Karl Rove, Paul Wolfowitz, David Addington, Douglas Feith, Bill Kristol, John Bolton, Marc Thiessen, and most of the other architects and cheerleaders of the miserably counterproductive and expensive War on Terror.  Fortunately, a news story from none other than fellow non-signer of the Kyoto Protocol, Somalia, has provided a model for proving the justness of the just war:

Dressed in camouflage and hunkering among his soldiers, Somali President Sheik Sharif Sheik Ahmed appeared on the front lines Thursday in an offensive against Islamic militants in his country’s shattered capital of Mogadishu, witnesses and government officials said.

Fierce firefights rumbled across the city on the 50th anniversary of Somali independence, a landmark spoiled by years of civil war, a refugee crisis and the rise of an Al Qaeda-linked Islamic group that controls all but a few of Mogadishu’s streets. Ahmed’s arrival on the battlefield was a dramatic gesture to raise morale among a contingent of African Union troops and underpaid Somali soldiers.

Subprime Time: Microfinance Debt Hits the Stock Exchange

Tell me more about this microfinance.

Right now, the hot topic in microfinance is the initial public offering (IPO) of SKS Microfinance, one of the largest microfinance institutions in India with a portfolio size of over US$1 billion.  This isn’t the first time a major microfinance institution has gone public, but it is more interesting because the CEO is a disciple of Muhammad Yunus, who believes what organizations like SKS are doing undermines the social mission of microfinance.  But there is other interesting financial news in the microfinance world that is flying under the radar.  This, for example:

NYSE Euronext and Microfis plan to set up the first organised market for listing and trading of bonds based on debt from international microfinance institutions and solidarity businesses as defined by the Economic Modernisation Act (LME).

The new NYSE Euronext market segment will offer investors a range of products in an environment that is secure and transparent.  Microfis will handle origination, analysis and tracking of high-quality assets, as well as their transformation into tradable securities and their syndication.  Scheduled for launch in the last quarter of 2010, the market segment is dedicated to responsible finance. Continue reading

The Development Umbrella: Systems Trump Solutions

William Easterly is a development economist who runs the blog Aidwatchers.   When I read his posts, I imagine an exasperated and pragmatic man who has had it up to here with people misunderstanding and oversimplifying the problems he has devoted his life to solving.  His latest post, titled “The Answer is 42! Why Development is About Problem-Solving Systems, Not Solutions” fits this category well.   He explains exactly why some things work and some things don’t, and reveals the key to creating long-term solutions.

Here’s why direct solutions to problems cannot foster development. Each direct solution depends on lots of other complementary factors, so the solutions can seldom be generalized across different settings; Solutions must fit each local context. Solutions that generate the highest payoff in each setting should be a higher priority than the lowest payoff solutions. Since there is little or no feedback on how well each solution is working in each local situation, there is little possibility for any such adjustments.

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Microfinance on Wall Street: The Debate Rages On

SKS CEO Vikram Akula disbursing money to a client at a center meeting

Given my post yesterday about the benefits of profitability, a new article in the Wall Street Journal about the IPO of the largest microfinance institution in India is serendipitous.  This isn’t that new of a story, though whenever microfinance makes it into the Wall Street Journal or the New York Time, you can guarantee that everyone in this industry will be talking about it.  Hopefully I will be one of the first to offer my opinion.

There are a lot of case studies that highlight the “capitalism vs. altruism” schism in the microfinance today.  After all, Compartamos in Mexico went public three years ago i topic I discussed at length one of my first posts on this blog – and there are dozens of private equity and venture capital firms focusing on the microfinance segment.  But this one is unique in that the two central players – Vikram Akula, the CEO of SKS, and Muhammad Yunus, founder of Grameen Bank and godfather of microfinance – are closely related and, on this debate, stand diametrically opposed.  Akula is a former disciple of Yunus, copying the Grameen model in SKS’ initial phases.  It is not dissimilar to Aristotle and Plato, or Luke Skywalker and Darth Vader.  My opinion on the matter has become a bit more formed over the last few months.  I tend to side with Akula and SKS in their decision.  First, some background on the path of the organization once Akula left Grameen Foundation to start SKS:

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