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 
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 
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 ago.)9
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 
See Also: Martha Alter Chen, Women and 
Informality: A Global Picture, the Global Movement
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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