How Investing in Emerging Markets Helps Us All
I spent much of the last two years working in Haiti and Honduras - the two poorest countries in the Western Hemisphere. During my many trips back and forth from the Caribbean and Central America, the primary question I was asked was - what do they need?
Before I would answer, I would share pictures and stories of how some of the world's poorest people live today. It is often hard for others to comprehend - how is it so that families can live on less than a dollar a day, struggling for life's most basic resources? People can relate to the hardships that our economy's cyclical downturns and recessions cause, but the thought of attempting to have a career or raise a family in an economy that is always in the great depression - that's hard to even imagine.
So, the conversation returns back to what is needed. Is it food, clothing, housing, education, or health care? Do they need people to travel there to build houses or teach in their schools? What do they need?
Each time I am asked, I respond with a simple answer - jobs. To make this point, I share a story about a friend of mine in Haiti. We'll call him Jacob.
When I first met Jacob, he was working a temporary job, the first time he had worked in years. He had two young children and had just moved to the capital city of Port-au-Prince, hours away (an eternity away with no money) from his young family in the countryside. Jacob had finally made the move after years of trying to find work in the countryside to no avail, and living off the small sums of money his mother could send him from her hospitality job in Miami.
When the money he received from his mother, known as a remittance, was not enough to meet his family's most basic needs, Jacob had to rely on others. His family needed free health care, free food, a free place to stay, and free clothes, just to get by.
Jacob had real talents though and an incredible work ethic. Over the next few months, he worked with me across Haiti, through the mountains of Cap Haitien in the north, to the coast of Les Cayes in the south. He worked hard, impressed everyone that he interacted with, and eventually earned himself a full-time job with an organization that I worked with. For the first time in his adult life, Jacob had a job and could provide for himself and his family.
A few months later, his life had completely transformed. He moved his fiancé and young children to live with him in Port-au-Prince. He found an apartment and placed a down payment for an entire year's worth of rent. His oldest child was starting school and he could pay the necessary fees. His family was eating healthier foods and was more food-secure. He even had plans to enroll his fiancé in a training program, to work at a salon once their smallest child went off to school.
Jacob and his family are not financially set for a lifetime - far from it. He still has to work hard each day to earn his job and he must use this opportunity to build a better life. But, he has an opportunity to break his cycle of poverty.
What made the difference?
In the end, what did he really need? Yes, he needed food, clothes, shelter, and access to health care and education. But, instead of hoping to get these things for free, his job empowered him to pay for them himself - creating more economic growth with his buying power and reducing the need for emergency aid. In the end, he needed a job.
The next question is always, What can we do to help? The answer - be a part of the solution. If you support organizations that are delivering results and working with local partners to build local capacity wherever possible - keep doing it! Donate, volunteer and advocate.
While essential human rights must always be delivered, economic development can be the trigger to a country's long-term sustainability. The public, private and non-profit sectors must collaborate to foster broad-based job creation and efforts that have this goal at the heart of their mission should be supported with vigor. Next time you think of helping those in need, consider investing in a social business that will create jobs in an emerging market. While investing is not an action that is normally associated with helping those in need, it is one of the most impactful things that you can do to give a hand up to those looking for an opportunity.
There are numerous social businesses that could put your investment to good use in an emerging market. A great example is Thread International, a company that embraces a triple bottom line business model to transform trash in emerging markets into dignified jobs and useful stuff that people love. Executives Without Borders, with whom I used to be a program director, is also an excellent example of a non-profit organization focused on job creation and building cross-sector partnerships that promote economic growth in emerging markets.
The ripple effect
Now, global poverty is far too intractable to be solved by a silver bullet. Economic development is not easy, and alone it cannot fundamentally change a country and a people's trajectory. Poor governance, violence, crumbling infrastructure, and a severe lack of quality health care and education are at the top of any laundry list.
But, successful economic development can create a ripple effect of positive outcomes and should be a key pillar within any development strategy. Good businesses create good jobs. More good jobs mean more people who can provide clothing, food, and shelter for themselves and their families - lessening the pressure on an already strained safety net. Strengthened economies provide opportunities for a broader tax base that can lead to needed investments in infrastructure, power grids, and water systems. A more stable and business-friendly market emerges, attracting new private sector investments, and unlocking the entrepreneurial potential that lies within so many who have been trapped in cyclical poverty.
Now here's the really important part. It's all of our business to make sure that these opportunities are created in emerging markets, because the return on these investments advance our own self-interests. It is in our real, selfish, best interest to invest in people like Jacob and to expand economic opportunity around the world and here at home.
It's all of our business because as markets emerge, they can become trading partners and consumers of American made goods as opposed to countries that need emergency aid. As markets emerge, stability is increased and our world becomes a safer place, and a new sense of hope and optimism emerges too, feeding the belief that if they work hard a better future is possible. Economic growth in emerging markets does not just lead to improved metrics, a drop in unemployment, or an increase in food security, it creates the opportunity for people like Jacob and so many others to take control of their futures.
We are all in this together, and expanding opportunity in emerging markets is not just the nice thing to do, it is the right thing to do - for all of our futures.
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