Original subtitles

( music playing )

( no audible dialogue )

MICHAEL: Machiavelli said,

"The reason there will be no change

"is because the people

"who stand to lose from change

"have all the power,

"and the people who stand to gain from change

have none of the power."

Machiavelli...

was describing

the global aid system today.

( indistinct chatter )

MICHAEL: So as we talk about development,

we have to talk about

who has the power and who should have it.

( metal grinding )

Hello.

( music playing )

MAGATTE: There's a certain paradigm

in which we try to help the poor,

and it comes with underlying assumptions

and images about poor people.

It comes from a good heart.

( children singing )

They give us food.

They bring us shoes.

They dig us wells.

They encourage others to give.

Give now

and lives will be saved.

Thank you.

BONO: We're gonna end extreme poverty,

we're gonna make poverty history,

that's what's fallen to us to do.

( indistinct chatter )

The problem is,

it does not work.

( music playing )

DANIEL: The way that we help the poor

needs to change.

MAGATTE: Everybody knows it.

It's failed everywhere it's been tried.

MAGATTE: Everybody talks about it.

BONO: Paternalism,

the old way we did development,

is no match for partnership.

And yet...

the icons of charity

remain the same.

It's not simply foreign aid

or religious charity

or NGOs

or social entrepreneurs.

The rich patronize the poor.

The poor resent the rich.

Every 10 or 20 years we try something new,

and then...

10 or 20 years later,

we look back.

What we find is that we're looking

at the same broken system.

The name of the system

is paternalism.

( music playing )

* It's Christmas time *

* There's no need *

* To be afraid

* At Christmas time

* We let in light

* And we banish shade

MAGATTE: The Christmas song

raised awareness,

and it was in response

to a particular crisis.

I understand that.

But it also perpetuates

a false image

of Africa as barren

and a sentimental image

of Africans

as helpless and dependent.

* Oh

* Where nothing

* Ever grows

* No rain or rivers flow

* Do they know

* It's Christmas time *

* At all?

* Oh

( music playing )

FINN: * It's Christmas time *

* There's no need to be afraid... *

MAGATTE: And here we are,

a generation later,

and the same song,

the same images are back.

With the same lyrics,

the same silliness

of Africa not having any rain,

not having any river,

and us Africans not knowing

that it's Christmas time.

People are taking these songs

so to heart,

and the Glee generation

are taking songs like

"Do They Know It's Christmas?"

and reimagining them.

and rearranging them

and, you know,

doing their thing to them,

and that gives new life

to that idea.

It makes me very happy indeed.

* And there won't be snow *

* In Africa

* This Christmas time

* This Christmas time, no

MAGATTE: What makes Bono happy about this?

By now, Bono should know better.

HERMAN: The international media

keeps telling Africans

and their locals that,

"Oh, Africa is poor, Africa is poor,

Africa is poor."

Africa has always been

a reservoir for resources

for the rest of the world.

The countries they are calling poor

are oil-rich, diamond-rich,

timber rich, and land-rich,

and gold-rich, and they are in good locations

for tourism.

The people here are not stupid.

They're just disconnected from global trade, that's all.

* Feed the world

* Let them know

* It's Christmas time *

* And feed...

* The world

* Let them know

* It's Christmas time *

* And feed the world

( whipping rice straws )

BILL: Since 1981, the United States

has followed a policy

until last year

so we started rethinking it,

thatwe rich countries

that produce a lot of food

should sell it to poor countries

and relieve them of the burden

of producing their own food, so thank goodness

they can leap directly

into the industrial era.

It has not worked.

It may have been good for some of my farmers in Arkansas,

but it has not worked.

It was a mistake.

It was a mistake that I was a party to.

I am not pointing the finger at anybody.

I did that, I have to live every day

with the consequences

of the lost capacity

to produce a rice crop in Haiti

to feed those people.

Because of what I did,

nobody else.

Everybody talks about rice because it's a famous example.

NARRATOR: Timothy Schwartz is an anthropologist

who has spent the past 20 years

working in Haiti.

He has consulted with USAID,

The World Bank,

and multinational charities

like CARE and World Vision.

He chronicled

his experiences in his book,

Travesty in Haiti: A True Account

of Christian Missions,

Orphanages, Food Aid,

Fraud, and Drug Trafficking.

TIMOTHY: In the early '80s, when we were able

to force Haiti or convince Haiti

to reduce their tariff to three percent,

which meant that U.S. rice was coming in,

but was already subsidized,

the levels would vary from 35% to 100%.

So, the Haitian rice producer had to compete

with subsidized U.S. rice

produced by agro-industry.

MARCELA: Agricultural subsidies

are a huge distortion

for world markets,

particularly the poor.

They happen because...

local interests

want to protect

their markets,

and they do that at the expense

of other countries

that don't have the same power

to negotiate the bilateral agreements

with large powers

like the U.S.

ANDREAS: What the companies

in the rich countries do

is they lobby their governments and say,

"We need to have protection

from competitors from poor countries,"

so they block them out,

first with tariffs and import duties,

and then they ask

their government for subsidies

so they can produce more.

Then they produce a surplus,

and guess what they do with the surplus?

The surplus goes

and is dumped into a poor country.

So what we end up doing

is destroying

the local market and destroying

the very companies

that we first blocked out

of our market.

JACOB: ( speaking foreign language )

FARMER: ( speaking foreign language )

FARMER: ( speaking foreign language )

FARMER: ( speaking foreign language )

FARMER: ( speaking foreign language )

( indistinct chatter )

JOEL: When you go to Haiti

or you see--I mean, it breaks your heart.

You see people,

impoverished people are hungry.

That is primarily

either a distribution

or an indigenous

lack of production.

( music playing )

NARRATOR: Joel Salatin is a third-generation

Virginia farmer

whose Polyface Farm

has been featured

in National Geographic,

The New York Times,

and Michael Pollan's

The Omnivore's Dilemma.

Salatin's books

argue for the virtues of sustainable biomimicry

and increased localized food production.

JOEL: A few years ago,

when I was a U.S. delegate

to Terra Madre,

which was the big international

Slow Food convivium

in Turin, Italy.

When I wasn't speaking, I went...

and attended as many

of the African delegation speakers

as I possibly could.

What each of these delegates

said was,

"You Americans...

"butt out.

"We don't need your foreign aid.

We can feed ourselves."

And they would list

these wonderful

perennial nut-bearing trees

and things that had now

been cut down

because of cheap

Western dumping, foreign aid,

into those cultures,

which depressed the price

of their locally

produced food,

and here we are poor

and we're not feeding ourselves,

not because we can't,

but because...

this Western dumping.

KENNETH: In the '80s, Haiti was...

self-sufficient in rice.

That is true.

In the '80s,

we ate rice twice,

at the most three times a week.

Rice was...

a luxury item.

The farmer

was producing other

and a more balanced

nutritional system that was

some sort of a Haitian culture.

When they started flooding

the Haitian market

with subsidized rice,

what actually happened is that

rice became a cheaper commodity,

and rice has become the center

of the eating habit.

From three times a week,

now we're consuming rice

three times a day,

seven days a week.

People eat rice for breakfast,

for lunch, and for dinner,

because rice has become so cheap

but it has become so cheap

because it was subsidized.

TIMOTHY: And none of that was an accident.

They knew very well in Congress,

and you read the minutes

and people have written about this

and I wrote about it in Travesty.

They would say this in Congress,

"We wanna turn Haiti into the Taiwan

of the Caribbean."

So you had a, kind of, a marriage.

The food lobby, the U .S. farmers

who wanted to sell more products

so Haiti could be shifted into

a consumer of U.S. agricultural products,

it's good for us.

Then you had the offshore venture capitalists

who wanted to promote

industry in this--

in the urban areas.

They argued it was good for Haiti

because it gives people jobs.

And then you had a third partner in this,

and that was the conservationists,

because Haiti, with the--

with the erosion

and the deforestation,

was considered a serious problem,

a serious ecological problem for the entire region.

You've got runoff

in the mountains, erosion,

you know, dirt going into the ocean,

smothering the reefs,

so we need to get the peasants off the hills

with their inefficient

hillside farming

of beans and corn.

We get them out of the mountains

and down into the cities and working in the factories

so we can preserve the mountains,

trees can grow back.

So it's this nice little picture

of all three, you know,

conservationists,

and offshore venture capitalists

who are promoting factories,

and the U.S. farm lobby.

And what beautiful logic. I mean, it could--

come on, you step back. How can you argue with it?

REPORTER: What brought about the change in your thinking

to have you issue your apology the other day

about the food policies?

We genuinely thought

we were helping Haiti

when we...

restored President Aristide,

made a commitment to help rebuild the infrastructure

through the Army Corps of Engineers there,

and do a lot of other things,

and we made this devil's bargain on rice,

and it wasn't the right thing to do.

DANIEL: Think about it.

If you are in the countryside,

you used to farm and you used

to produce rice competitively,

now there's a cheap rice coming in

and you don't have anything to do there.

KENNETH: Because farmers

could not make a living outside

in the rural area, they moved in

looking for better days

into Port-au-Prince,

and we overbuilt slums.

And what it did

is it actually

created more poverty.

TIMOTHY: I'm not saying they were wrong. I'm not saying

it was--and it wasn't-- it certainly wasn't evil,

but the side effects of this plan,

this social engineering

that came from the North,

was massive slums

built with concrete

and poorly constructed.

On a fault line.

MAN: This is CNN, Breaking News.

ANDERSON: If you're-- if you're just joining us

we are following the breaking news out of Haiti,

the largest most powerful earthquake

in the region's history

has crippled the country,

measuring 7.0.

Its epicenter was just a few miles outside

the capital, Port-au-Prince.

( music playing )

DANIEL: It hit when I was on the road.

And you think of your family,

you think of your

brothers and sisters,

and that night

was a nightmare.

The next morning we woke up

and the whole place

was down,

especially downtown was--

had the effect of a bomb.

After the earthquake there was a lot of needs.

It was good that

people came in and start helping.

The problem is that

the short-term natural disaster

turned into a long-term

unnatural disaster.

( indistinct chatter )

ANDREAS: When that earthquake hit,

there is no question,

it's a human non-negotiable,

to go in there and help at any cost,

except that once you are in that

feeling of helping people,

it actually makes us

feel good to help,

to be Superman, to show up

and save somebody,

and then we don't let go.

CORRIGAN: When the January 12th earthquake

hit in 2010,

this individual from Thailand

had emailed

because he had gone through

the tsunami in Thailand,

and he said, you know,

"I'm so glad that you survived

"this national disaster.

"I'm just praying that you'll survive

the arrival of all the NGOs."

And I didn't really understand

what he meant at the time.

The earthquake happened

almost three years ago now,

and there's still

free rice being delivered,

and it's still hurting

the Haitian economy.

It's not an emergency anymore.

DANIEL: It is a republic of NGOs

because there are more NGOs

per capita here

than anywhere else in the world.

I don't have the official number,

but they claim that in Haiti alone

there's 10,000 NGOs.

( music playing )

DANIEL: The NGOs, they do some help,

but they're trying to find ways for them

to keep giving away

free stuff,

as if they didn't want

the Haitians to stand up for themselves.

Do you see what I mean?

( metal grinding )

( music playing )

JEAN-RONEL: My name is Jean-Ronel Noel.

I am the cofounder of ENERSA.

My partner and I, Alex Georges,

we started in my garage

six, seven years ago,

making small experiments with the solar panels.

This is the raw material.

We work them to become

actual street lights,

solar street lights.

JEAN-RONEL: We wanted to be part

of something special,

and because both of us, we grew up in Haiti,

so you know, we know what the situation is.

We have plenty of sunshine,

so is there a way that you can harvest energy

from the sun and to resolve

the energy problem?

So this is something that is

completely different,

and it was something completely new.

At the beginning,

almost everybody thought,

"Those guys were really crazy.

"They don't have nothing to do?

"Spending their time making some experiment

"on solar panels

and LED light bulbs?"

And even now we come with the product and say,

"This is Haitian-made product."

Most people, they don't believe us.

At the beginning,

having a five hundred dollars contract

was great news,

because we have--

we have money for next week.

This is the way we started.

Now, we have like...

big contract

and we have...

62 employees right now,

so we think we found

the right track.

( metal grinding )

Most of the

employees we have

come from shanty towns.

Some from Cite Soleil,

some from Maissade, Cite Castro,

you know, a very populated area.

We train them here.

There is no Social Security Network

in Haiti.

So for our workers, we are

the Social Security Network.

If they were not working,

probably some of them would be

gang members.

In fact,

when we were starting ENERSA, I mean,

the situation was really, really bad in Haiti.

And some of the guys,

they are trying to recruit them

to become gang members,

I mean, they offer you like 500 US

and a gun,

and you are unemployed guy,

you have no future

in this city, so that you don't see yourself

as part of nothing,

so it's easy

to accept this offer.

I mean, the temptation is high.

And some of the guys at the beginning,

I mean, we were really smart

and they were calling me and say,

"Geez, I have no money. I have nothing."

I said, "Don't go there,

"don't go there,

because you have no future in the gang."

( machine whirring )

JEAN-RONEL: We have installed

200 lights in Cite Soleil.

They know that ENERSA

is hiring people from Cite Soleil,

and brought the light

to Cite Soleil.

When you do something, you can see the impact

on the population and you can say,

"This is because of me."

( music playing )

MAN: * Work for your money *

* You got to work *

* For your pay *

* You got to work *

* For your children *

* You got to work *

* For your pay *

FRANTZ: ( speaking foreign language )

-( speaking foreign language ) -( speaking foreign language )

( speaking foreign language )

( laughing )

( horn honking )

WOMAN: Sugar?

With your coffee?

Yes, yes, yes.

Coffee needs to be very,

very sweet in Haiti. It's more like

coffee syrup than coffee.

Right after the earthquake, you had a lot

of need for solar

because powers was completely out

in Port-au-Prince.

NGOs started to feel

the need for solar,

went to donors abroad

that sent

the solar equipment from abroad.

So then when we managed

after a few weeks

to be able to secure the facility

to get some production going again,

then the demand stopped,

because it's hard to compete with free.

Because we-- when you had companies

sending a thousand

solar panels to Haiti

for free,

how are you going to sell?

So it comes from a-- from a good heart,

I totally understand.

People didn't know that there was

any solar available,

and people had this conception that

"Oh, in Haiti, you know, there's nothing,

"So I have to come with everything,

even with water if I want it."

So we really suffered

from that perception.

( machine whirring )

ALEX: From an average,

before the earthquake,

of 50 street lights

a month in average,

we went from January to June,

we sold 5 street lights.

JEAN-RONEL: After the earthquake,

we are competing

mostly against NGO.

So NGOs were coming

with their solar panels,

solar street lights,

and they are giving them for free.

So what about local businessmen?

So what do you expect them to do?

MAN: Did you ever talk to those people

who were giving it for free and say, "Hey,

what are you guys doing?"

Oh, we met them many times.

Those NGOs, they are changing

the mentality of the people.

Now you have like a generation

with a dependence mentality.

ALEX: When it becomes

an industry of its own,

the industry of charity,

it creates more harm

than good to the country.

But there are different ways that can help.

( indistinct chatter )

JEAN-RONEL: We have done experience with

Partners Worldwide.

They are working in Haiti,

and these are NGO

that support businesses.

So they help you

set up your business.

They give you training,

they try to put you on their network,

they try to sell your goods.

( Speaks foreign language )

JEAN-RONEL: They do everything that can

help your business grow.

Some NGOs also are

training technicians,

construction workers,

mechanic guys, electricians,

and they are giving them possibility

to start their own business.

They are teaching them how to fish,

not to give them the fish every day.

Your goal should be

to give me a fishing rod

and to teach me how to fish

and then move out,

but after 40 years,

if you're still here,

there is a problem.

( music playing )

NARRATOR: The current model of development began

in the wake of World War II,

and the end of colonialism.

Many believed that one of the causes of the war

was the catastrophic economic condition in Europe

in the 1930s.

As the war came to an end,

leading economists

and delegates from around the world

met in Bretton Woods, New Hampshire

to create organizations

that would help stabilize

the international economic system.

They formed GATT,

the General Agreements

on Tariffs and Trade,

later to become the WTO,

the International Monetary Fund

or IMF,

and the International Bank

for Reconstruction and Development,

known as The World Bank.

The goal of The World Bank

was originally to help

rebuild war-torn Europe,

but this role was soon taken over

by the Marshall Plan.

MAN: In Washington, George C. Marshall

made known the principles of the plan

that was later to bear his name.

There is no doubt whatever in my mind

that if we decide to do this thing,

we can do it successfully.

MAN: Later, President Truman

drove to the capital to put the Marshall Plan

for European Aid before Congress.

HARRY: I am here today

to report to you

on the critical nature

of the situation in Europe

and to recommend action

for your consideration.

NARRATOR: As Europe's war-torn economies

began to turn around,

many credited the Marshall Plan

as playing a key role

in jumpstarting their growth

and this approach

of providing foreign aid

became the model for helping

the developing world as well.

The idea was that if you could build up

infrastructure, electricity, and education,

it would spark the process of economic development

and countries could make the leap

into industrialism.

The World Bank found its new mission,

promoting development in Africa,

Asia, and Latin America.

KIBAKI: Today,

the Board of Governors

of the International Bank

for Reconstruction

and Development

and the International Monetary Fund

meet for the first time

on the continent

of Africa.

NARRATOR: Foreign aid or what's called

"official development assistance,"

consists of government- to-government transfers,

and can take the form

of grants or loans.

Tax dollars go to governments

and international organizations,

which transfer funds to governments

in the developing world

for things like food,

infrastructure,

and healthcare.

The aid may include contingencies

requiring recipient countries

to implement policies

that donor countries deem beneficial.

Over time, as foreign aid

has expanded,

consultants,

non-governmental organizations,

and charities

also receive aid money

from governments

to implement projects

and will often contract

with additional charities and NGOs.

Catholic Relief Services

receives over 70%

of its budget from government money.

While in 2012,

World Vision received close

to $175 million,

and the international development firm

Chamonix,

more than $500 million

in government contracts.

A recent drive

for increased foreign aid

is the United Nation's

Millennium Development Goals,

with the aim of eradicating

extreme poverty

by the year 2015.

With over 400 proposed interventions,

the goals have been endorsed

by government leaders,

promoted by celebrities,

and thousands of charities

and universities

have signed on.

Foreign aid has become

the cornerstone

for the West's engagement

with what became known as

the Third World.

( music playing )

( engine revving )

TIMOTHY: The nice explanation

for development,you know,

the sympathetic explanation

is to relate it to the Marshall Plan,

relate it to the developing of Europe

and the--and the idea that we could go

into these developing countries

and help build an economy

and build infrastructure.

So yeah, the nice way to say it

and what people who are involved in the system,

the UNCID, and all these guys,

they all trace themselves back to the Marshall Plan,

because it was a success.

And yeah, that's the nice twist.

I think a better way to understand it

is in the context of the Cold War,

competing for the resources

in a Neo-Neo

type of colonialism.

You know, I've talked to Haitians saying,

"You know, we had colonialism,

"We had neocolonialism,

"We had Neo-neocolonialism.

And now we have development,"

which is just another colonialism.

THEODORE: I once spent

a rather happy afternoon

in a place called Malabo,

counting the number of vehicles

of different aid agencies.

NARRATOR: Theodore Dalrymple

is an English physician

who has worked in Tanzania,

Zimbabwe, South Africa,

and the Gilbert Islands.

He returned to the United Kingdom

in 1990,where he served

as a psychiatrist with prisoners

and in inner-city Birmingham.

He is the author of numerous books,

including Zanzibar to Timbuktu,

and Life at the Bottom.

THEODORE: Malabo is the

capital of Equatorial Guinea,

where the first democratically elected president

killed or drove into exile

approximately a third of the population.

And he used to keep

the national treasury under his bed.

When the president left the capital,

they turned the electricity off

as being no longer required.

So, I counted the number

of aid agencies,

and I think I counted,

in about three hours,

I counted 27

in large white Toyotas,

air-conditioned, of course.

And really the devastation of

Equatorial Guinea

was very good business for them.

The salary is very good,

it tends to be tax-free.

Unlike your life at home,

you will have servants

and I think it was Shumpita

who said that, "One servant is worth

a household full of appliances."

HERMAN: A lot of the donor agencies,

when I see their country heads

driving around in their posh cars

and living in their big houses,

I see multiple colonial governors.

This is the new face of the colonial governor.

NARRATOR: Guinean software entrepreneur,

Herman Chinery-Hesse,

is the founder of SOFTtribe and BSL.

He began in 1991

working out of his parents' home

to develop a line of software

especially suited

for the developing world,

and then began selling door-to-door.

A leading technology pioneer,

he has been called "The Bill Gates of Africa,"

and has been featured on BBC

and in newspapers around the globe.

He is now working

to connect rural entrepreneurs

to wider markets

through innovative smartphone applications.

HERMAN: I think that The World Bank

and other such donor organizations

have an agenda

outside the development

of our countries.

To a large extent, our governments

have been held captive

by the donor agencies,

the international donor community,

who are not, in my view,

particularly interested

in seeing the growth

of local business,

because then the tax base

will represent

a revenue source for the government

and therefore put the international donor agencies

out of business.

MAN: Thank you very much.

Thank you for your patience.

( applause )

JOHN: We are no longer getting excited

by aid

from IMF,

from The World Bank.

They perpetuate your misery

by giving you a loan,

make you a slave,

economic slave,

because you are chained

by the loan,

so it becomes

a way of colonizing

the economies

of the poor countries.

Now, there are a lot of Africans

who are very angry,

angry

at the condition of Africa.

The Cheetah Generation

is a new breed of Africans.

They're not gonna wait for governments

to do things for them.

That's the Cheetah Generation.

And Africa's salvation rests

on the backs of these Cheetahs.

In contrast, of course,

we have the Hippo Generation.

( audience laughing )

GEORGE: The Hippo Generation

are the ruling elites.

They are those who have monopolized

political power,

and they are those who are stuck

in their muddy pedagogical patch.

And they believe that the only way

you can solve the problems in Africa

is by giving the state more power

and more foreign aid,

and it is on the back

of this Hippo Generation

which the United Nations,

The World Bank, and the IMF have been trying

to hitch a ride with this

same old aid-driven boondoggle.

And that's why we're not getting anywhere in Africa.

Out of the 54 African countries,

only 16 of them are democratic.

Now, these leaders stay in office 10, 20, 30,

and even 40 years in office.

And they don't even step down.

They groom their sons to take over.

Africans are fed up

with this kind of leadership.

MAGATTE: When people support

more foreign aid for Africa,

the more they're condemning us in Africa

to live under dictators

who will not respect our rights

to access to rule of law.

No doubt originally

the idea was compassionate.

You saw people suffering from poverty,

and therefore your immediate response

is to give.

But unfortunately,

giving on a large scale

distorts.

Take a country like Tanzania

where I actually worked,

its greatest receipts

in foreign currency

were from aid,

and the whole of the political process

actually was who got their hands

on the aid.

MAGATTE: Make no mistake, I am not against

humanitarian aid.

Of course,

if something, a disaster happens,

we better rally and help each other.

But when humanitarian aid

becomes a way of life,

then we all have a big problem.

Emergency disaster relief

has become the permanent model,

and that model

is what I call

the current aid industry.

HERMAN: I have never heard of a country

that developed on aid.

If you know of one, just let me know.

I know about countries

that developed on trade,

and innovation, and business.

I don't know of any country

that got so much aid

and then suddenly became a first-world country.

I have never heard of such a country,

so the track is wrong.

That track ends to nowhere.

PAUL: There is a school of thought out there

that I don't agree with

where indeed people

think they owe the poor people

to give them money

without thinking about how

they are going to use this money.

Aid leads to more aid

and more aid and more aid

and less independence

of the people that are receiving aid.

Second is the wrong notion

for people who have money

or who give aid,

they feel good that they're helping,

but the best way to help

is to help people

to be able to stand on their own.

HERMAN: Our governments are not encouraged

to buy local.

Now, when we talk

to the international donor community,

they say it's not their policy

and that we're

in cloud cuckoo land.

When we talk to the government,

the government says,

"Hey, we're not allowed to buy,

with donor money, local products."

That's just the way it is.

It's their money, they decide who gets it.

For example, five companies in Ghana

got together to bid for a contract, together.

Now, everything was going very well,

we were competent to do the work,

guess what happens? We are bidding

against some European companies.

One of the companies got their government

to loan our government money,

very soft loan,

for the project.

Our folks in the government said,

"Hey, you know, we love you very much,

but nothing beats free money."

We lost our money.

You know what we ended up doing?

We ended up working as subcontractors

to the Europeans.

They gave us the worst part

of the business.

The most difficult and least profitable part,

we wound up doing it

because we were better at doing the work.

So they got the best of both worlds.

Their government paid,

we ended up doing the work,

they took the money.

That's not development,

that's not assistance,

that's...

thuggery.

THEODORE: A large part of aid is, of course,

the subsidy to the companies

that do the work

in African countries.

I myself worked on such a project,

and I saw myself

the incredible waste.

It was a road project actually in Tanzania

and the foreign aid amounted

to a huge subsidy

for a company that could not possibly

have got the contract in a--

in a real market.

And these can amount

to hundreds of millions of dollars.

( music playing )

THEODORE: And the so-called foreign aid

actually goes back to the people

working for the company,

and I suppose the shareholders

of that company.

And I, myself, am personally

a beneficiary of that.

Anyway, I-- in essence

I bought--

I bought my first house

from the proceeds of foreign aid.

Foreign aid has been excellent to me.

It's aided me immensely.

It's allowed me to have an interesting life,

to travel,

live in good conditions,

be well paid, no tax.

Couldn't be better.

TIMOTHY: Everybody in development agrees.

Everybody knows the system doesn't work.

They don't say it in public,

but when you sit down

and have beers with somebody,

or you sit down in a meal,

we all say the same thing,

the system is broke and it's not working.

It's not happening like it's supposed to be.

And everybody--

some people get very emotional about it.

Everybody in development knows this is--this--

there's something rotten.

They know.

We don't have to say anything

that everybody else doesn't know.

( music playing )

NARRATOR: What began as a plan

to jumpstart economies

and promote development

has, over time,

developed into a complex system

of global humanitarianism.

The system includes everything from governments

and multinational corporations

to aid agencies, NGOs,

charities, celebrities,

and social entrepreneurs.

The goal is to help,

but the incentives and the interplay

of these different components

ended up creating

a global poverty industry.

Perhaps the best way to understandit

is through what one of the founders of sociology,

French sociologist,

Emile Durkheim

called a social fact,

a broad tapestry

of norms, assumptions,

and social and economic institutions

that transcend any one individual

or organization.

The social fact puts constraints

on how we think and act,

leading us to take many things for granted.

It becomes simply

the way things are done.

This doesn't mean there is never innovation

or attempts to fix the system.

People are always coming up

with creative ideas

and approaches.

The trouble is that most of the innovation

takes place within the assumptions, beliefs,

and values of the social fact.

At its core, the social fact

situates the poor as the other,

as objects of charity

rather than as the subjects,

the active protagonists,

in their own story

of development.

People have the internal capacity

to rise out of poverty,

but they do so only

when they have certain key things

many of us take for granted,

like legal protection

from theft and violence,

justice in the courts,

the ability to get title

to one's land,

freedom to start

and register a business,

and links to wider circles

of exchange.

The difficulty is that

this ladder to prosperity

is missing in many places

around the world

and the current system

creates incentives for governments,

not to build it.

MICHAEL: Whenever you have an aid agreement,

those consultants come into the country

and they don't work for the country,

they work for the foreign aid establishment.

And so what you find

is that the aid establishment severs

the link between the leader

of a country and his people,

because you've got all these consultants

running around doing their thing,

purportedly to work for the people,

but in reality their masters

are in Washington and Tokyo

and London and Paris.

So that's what part

of what's broken with aid.

NARRATOR: Poor people have become the clients

of a vast global poverty industry.

If they climb out of poverty,

the industry becomes obsolete.

So a question we need

to ask ourselves is this,

who benefits the most

from the way things

are currently set up,

the people we are trying to help

or the people who work

in the poverty industry?

( vehicle honking )

EVA: When I was growing up,

we didn't have second-hand clothing

from Europe and the U.S. and Canada.

In Kenya,

my mother took me to a store

and she bought me a beautiful T-shirt

that said, "Made in Kenya.

Kenya Cotton."

Today,

I would struggle to find a T-shirt

like that for my daughter.

Why? Because the influx

of second-hand clothing

that makes its way here

from Europe and the U.S. and Canada

has negatively impacted

on our textile industry

in Kenya.

Massive layoffs in the '80s

and the '90s,

factories that shut down.

What happened to our cotton farms?

When I was growing up in this country,

we could have bought cotton

in varieties and types

that are incomparable,

but that's all gone

because of the impact,

the negative impact,

of the apparel imports

at a second-hand level.

PETER: Growing up, the model that I saw

was this model that we would have

a shoe driveat church

and we'd all give our excess shoes

and then our shoes, we never knew what happened,

but we knew that we were responding

to this desire that we had to help the poor,

the vulnerable.

What I experienced living overseas,

especially in Rwanda

was the end of the story.

The collection, in some ways,

is the easy part.

The distribution is where there are

a lot of complications.

And I had my eyes opened to this

through a friendship with Jean.

And Jean was a friend in Rwanda,

and he told me the story

that after the Rwandan genocide,

that he had a church from Atlanta

that started sending over eggs

and ended up just distributing eggs

in this small community outside of Kigali.

And that seems like a great thing to do, right?

The church wanted to help

after the genocide.

But Jono, a few years before,

had started a small egg business himself.

He put this investment in all

the materials that he needed

to start this egg business.

His business was starting to grow,

it was starting to take off,

and then all of a sudden in one summer,

there become this surplus of eggs

that were flooding the market in his area,

and so this desire that the church had

to really take care of a need,

it did take care of a need,

but the problem is that

it put Jono out of business.

He ended up selling his hens,

and then the next year, the church decided

to focus its attention

to somewhere else in the world.

Jono was out of business.

No one else was there providing eggs,

and so they had to bring the eggs in

from another community.

So this desire to help in that community,

according to Jono,

actually had a long-term negative impact

on that community.

MICHAEL: If you go to an aid conference now,

as opposed to 20 years ago, and say,

"How many people are involved with charities?"

Nobody raises their hand,

because charity has become a bad word,

so they call themselves social entrepreneurs.

NARRATOR: A recent trend in development

has been the increasing popularity

of social entrepreneurship,

which applies business models

to pressing social problems.

One of the leaders and most recognized

social entrepreneurs

is Blake Mycoskie,

the founder of TOMS Shoes.

( music playing )

BLAKE:About 15 months ago,

I was

down in Argentina on vacation,

actually trying to learn to play polo.

When I was down there,

I noticed that a lot of the polo players

and a lot of their girlfriends and wives

wore this shoe called the Alpargatas.

And the Alpargatas is very much like

the current TOMS shoe,

but instead it had a rope sole

and just came in like navy,

black, and maroon.

But everyone wore them around

and it was very kind of trendy and chic

to wear these to the bars at night

or to the-- to the shopping mall

or to the beach.

So, kind of seeing

this new cool shoe that all these people

were wearing in Argentina that I've never seen

and seeing lots of kids without shoes,

I came up with the idea

to start TOMS Shoes.

I said to my friend, you know,

"What if we took this original Argentine shoe,

"redesign it, you made it,

"you know, chic and cool

"and fun patterns,

"and sold it in fun,

"you know, good stores in the United States,

"and every time I sell a pair,

"we would give a pair back to these children

who don't have shoes."

( speaking in Spanish )

When I was at the SEVEN Fund,

we actually gave TOMS a prize

for a movie they made about their system,

about their idea with the--

with the shoes and everything,

and at the time, I actually also thought

this was a great idea.

The basic principle of TOMS Shoes

is called one for one.

He produces the shoes when you buy one here

at a marked-up price,

at the same time one pair of shoes

is sent over back into the developing world

and given to a poor child.

The unintended consequence of this

is that, of course, there is

a local cobbler there as well

who actually makes shoes

and sells them.

Can you imagine what happened to that guy

the day the truck shows up

with TOMS Shoes on them?

Why would you go buy something that's for free?

And then to add to this complex situation,

that truck doesn't show up all the time.

Our donations have

an unpredictable impact

on the local economy,

and that wreaks havoc on a lot of businesses,

especially small and medium-sized businesses.

DANIEL: TOMS Shoes, they found

the right model that,

I don't want to say exploits,

but capture this

love of people

who want to be generous

and helpful

and they combine that

tosome kind of NGO model

to keep dumping

free stuff on the market.

MAN: Okay. Blake is also trying

to do some new things.

He has been criticized for,

you know, sending shoes.

So he's trying to develop factories

in local places

where now instead of just giving it away,

they are at least producing it in those countries.

What do you think about that?

Well,

that's good.

At least he listens.

At least they made those factories

in countries where they produce

some jobs, they pay some taxes.

ANDREAS: Would I give that company

the prize again today?

We've all learned a lot

in the meantime.

TOMS Shoes has learned a lot.

I have learned a lot.

With hindsight,

I would love to have

given him the prize

and invite more people

to bring ideas into this,

especially people from--

who are actually going to be affected

by these shoe giveaways.

When you have a company

like TOMS come in

and try to be innovative,

the downfall of this

is that they're trying to be innovative

yet they accept

the given framework.

With that framework

that is actually harmful,

if TOMS is successful,

they're making a harmful system

more effectively harmful.

Okay. Watch this.

BLAKE: What if I started a shoe company

and every time I sold a pair of shoes

I gave a pair away?

In that way, if as long as I continue

to keep selling shoes, these kids will have shoes

for the rest of their life.

Okay. What do you think about that?

Look

it's--

there's no word to describe this.

Saying that he's going to supply shoes

for people for the rest

of his life

is implying

that he would want people

to stay without shoes

for their life

so he can give them shoes.

People don't want to be receiving things

for free for all of their lives

like he says he wants to do it.

No one in Haiti

wants to be a beggar for life.

It just doesn't make any sense.

You know what the poor people--

they get?

A poor image.

The first thing that I would say to those

who say that we must come and give,

otherwise, these people are incapable of

improving their situation

and getting out of their poverty

is to ask them why.

Why do you think that?

Why are these people uniquely unable

to get out of their poverty?

Are you actually saying

that they're in some sense inferior beings?

Are they different from us?

Can they not think for themselves?

Is there not evidence, in fact,

that when given the opportunity,

they do, in fact,

get out of poverty themselves?

And secondly, I would say that,

actually what you need to do is live

in the country for

two or three years,

not just fly in,

say, "My God, isn't it terrible?

"You know,

"All those babies

"with, you know, bloated stomachs

the next morning."

No doubt, it is terrible,

but compassion is not simply

vehement expression

of a point of view.

And that

the compassionate person

has to consider

the practical effects

of what he is proposing.

( singing in foreign language )

CORRIGAN: My name is Corrigan Clay,

and my wife Shelley and I

moved to Haiti in 2008

to adopt a child,

and we were thinking at the time

that we would probably start up

an orphanage also.

I saw a picture of a little Haitian kid

on the internet

and fell in love with

the idea of Haiti

and a child from an orphanage

and being able to give a parentless child

a family.

So, today

Today

we met Wilson

for the first time,

and he gets to stay with us

in the hotel

in Port-au-Prince, Haiti,

or somewhere near there.

And

he's my

new brother.

Yeah.

As we were pursuing adoption,

the orphanage director had asked us

if we wanted to meet

the child's mother,

and we were kind of surprised

because the thought was,

"Well, wasn't he abandoned

by somebody?"

Or, "Didn't he lose his parents?"

That kind of thing.

The director of the orphanage said

she comes to visit him

every couple of weeks.

I was shocked, and I

I said, you know,

"Why does she come and see him?"

And he said, "Well, she loves him

and she wants to make sure he's okay,

and she brings him gifts and things."

Then when we met her,

I asked her, you know,

"Why did you bring him to the orphanage?"

And she said, "I just didn't have enough money to feed him.

"I don't have a good place to live.

"I live in Cite Soleil.

"There's, like, gangs

"and violence,

"and so the orphanage

was the best solution for him."

So we asked her,

"If you would have had a job,

would you have kept your child?"

And she said, "Of course I would.

Yeah."

And it was like this

this shock,

you know, of I'm spending $20,000

on this adoption

to be able to raise a child

that this mother wants.

And the

injustice of that

really took me.

CORRIGAN: So we began to have conversations

with the families of these children,

and with the children themselves,

and the orphanage we're in,

there were 24 boys

that we were taking care of

at the time.

Two of them

did not have

living parents.

As we started to learn

about other orphanages too,

and ask questions and things,

we found out that was fairly typical

that I would say conservatively,

roughly 80%

of the kids

in orphanages in Haiti

are not true orphans,

but are poverty orphans.

( music playing )

TIMOTHY: This is another kind of corruption,

another kind of destruction of this whole system.

When I did the research for CARE,

and I wrote about this in Travesty,

I couldn't find any orphans

that didn't have parents, they all had parents.

And when you really get into it, well of course

they have parents, because orphan

is a coveted position.

It's school, it's books,

it's maybe even a visa,

maybe even an adoption.

But it does perverted things

at the lower level of the system, you know.

KENNETH: Some parents, because they cannot

take care of their child

and they hear that

somebody is opening an orphanage

because some donor

wants to do good

and wants to open an orphanage,

because he hears that children,

Haitian children are dying

or suffering.

The parent would turn

their own kid to the orphanage

and would often go visit the kid

once a month.

But you have relieved the parent

of the obligation

to educate his kid,

but you've also drained that kid out

of emotional ties,

of the love of a mother,

the respect of a father,

and that kid growing up

may not have all that sense

of responsibility.

So you are actually

creating that cycle

of destruction.

CORRIGAN: After living in an orphanage for a year

and getting to know the language

and the culture and the people

and really building relationships,

we began to kind of see

that the system

of addressing the needs

of orphans

was actually a system

that was creating orphans.

The way that

charitable organizations

are addressing orphans

in Haiti is symptomatic

of a larger belief that says

these are issues that must be addressed

versus these are people that must be addressed.

Issues are addressed institutionally,

programmatically.

People are addressed

in their story,

in reflexive dialog,

through questions and listening.

There was one child in particular

in the orphanage we worked in that,

when his adoptive family

was coming to visit,

I asked him, "Hey, are you excited?

I mean, your mom and dad are coming."

And he goes, "They aren't my mom and dad."

I said, "Well, I know they're not yet,

"but they're going to be. They're adopting you.

They're going to be your family."

He's like, "No, they're never going to be

my mom and dad."

This child is about 14.

He said,

"No, my mom and dad are here

"in Haiti. I know them.

"My Haitian parents

"told me that I'm like

"the special kid in the family,

"that I get to go to the orphanage.

"I'm just going to go

"To the United States with these people,

but they're not really my family."

I said, "Well, you know,

"their expectation is that

"you're going to be a part of their family,

"and they'd probably be really hurt to know

"that you have no intention of really

"being a part of their family."

We've adopted two Haitian children,

Jackson and Ember.

Ember's mother died after childbirth,

and Jackson's mother

abandoned him at the gates of the orphanage.

She came with him

and then was supposed to bring back papers

relinquishing him, but did not.

This is Jackson right here.

He's a big boy,

but when he was,

when he was in the orphanage,

he actually almost died of starvation twice

because this institutional approach

at caring for kids,

they were just plugging him with a bottle

and they didn't know he was lactose intolerant,

and so he was throwing up all his food

and just

almost died twice.

He had to go to the hospital.

And obviously now, he's eating just fine.

How are you doing, baby?

We're advocates for adoption.

It is broken

and not right

that a kid would grow up

without parents.

That's the very same thing

that influences us to say,

don't get involved

with orphanages and adoption

that are separating kids from their parents.

If I was in

a personal financial crisis

and I could not feed my child,

I could no longer pay for their school supplies

or for them to go to school,

I didn't have enough money for them

to ride the bus, whatever,

and somebody from some other nation

came in

and said,

"Hey, you know what?

We've got a solution.

What we'll do is we'll set up

a house

where all the kids that have that problem can come live.

They're not going to be your child anymore.

You're just going to have to give them to us,

but we'll make sure they have everything they need,"

is that the solution that you'd want?

And I think most honest people would say,

"No, I wanna raise my own child.

"I just need a job.

"I need some way to make some money,

and I'm going to take care of my kid."

( music playing )

SHELLY: So we had an intern

who was there for the summer,

and she knew what my vision was

as far as starting

some sort of artisan thing.

Because we had a bunch

of people in our lives and there was about

four women who had either given their kid up

for adoption already or who were at risk for that,

and so she said,

"Can I invite them over

"For two days a week and just teach them

how to make earrings?"

I was like, "Great. Let's do it."

Bonjour.

( speaking in French )

SHELLY: December of 2009,

we had a fair here in Haiti

and I think we sold $800

worth of product, and we were so excited.

We kept growing and we had about

probably 16 to 20 artisans working.

It was in our house,

in our living room and our garage.

And then probably 2011,

we started getting into retail.

We got involved with designers

like Donna Karan.

We've been carried in stores

like The Gap, Walmart.

Disney has stuff.

In 2011, in the month of December,

we sold $100,000 worth of jewelry.

We have about 220 people

right now working.

My vision

is a thousand people.

( music playing )

CORRIGAN: When my family first came to Haiti,

we had in our savings,

it was about $35,000.

I thought

that we'd start an orphanage

and then be asking people

to help us sustain that,

so it would be this constant

need for help.

Because we started a business,

now the amount that we came with,

that's the amount that we're averaging

in income for our artisans

every month.

It's not a charitable like gift,

"Here's a bunch of money every month."

But it's something that

they can look at and say,

"This is mine. I earned it.

"It's something that I can choose

"What to do with it,

"And somebody out there

"Valued what I did

and purchased it."

( music playing )

SHELLY: Makilene is a miracle story for me.

I was walking home one day

andwalked up to my gate,

and there's this woman sitting on the ground in the dirt

with a baby in her arms.

She was covered in scabies,

her baby is covered in scabies.

They hadn't eaten.

She came here looking for an orphanage,

so the last thing I wanted to do

was send her to an orphanage,

and I said to her, "You know what?

"I'm going to make you a deal.

"Go get all your kids. Come back here,

"and I'm going to invite you to work with us.

And I'm gonna just try it."

Here she is

in Port-au-Prince with her kids.

She's not making any money yet,

so she goes to live in a tent.

( speaking in foreign language )

SHELLY: Her kids were in a horrible situation,

but she started to work.

And she

is an amazing woman.

She's an entrepreneur.

Within about three months,

she had probably 10 employees of her own.

She was talking about needing a house,

and I said, "I don't have money for a house for you,

"So let's break it down into something

that you can imagine."

I said, "If you need $2,000

for land for your home

and you're getting $12 on a necklace,

how many necklaces is that?

It's less than 200 necklaces."

And her brain just about exploded.

I mean, you could see this click in her mind.

Her eyes opened up

and she's like, "I can make 200 necklaces.

That's not a problem."

And it was about

six months or something

and she bought her own property.

( speaking in foreign language )

SHELLY: She did it herself.

It's two bedrooms. It's her own.

She never has to pay rent again.

And she's now changed her life.

( speaking in foreign language )

SHELLY: You see mostly men here,

which a lot of people are surprised about.

We started out with women,

trying to do a women's work initiative

because that's sort of the thing to do, right?

And, um, we found that fathers

are parents too,

and we also found that

in a family situation,

if mothers are all that is needed,

what role is there for a father?

And that sort of contributes

to the situation in Haiti

of fatherlessness.

Most of the guys here are fathers,

and they're working

to take care of their kids.

He's got a baby on the way.

He's got two children. He's got a baby.

You know, and they're all doing a good job

being fathers to their children right now.

I think my biggest concern

in even doing this interview

is that I don't want to come across

as critical to those

who have helped

and who have tried to help.

As we grow and we learn

and we figure things out

in the same way that I've gone through that journey,

that there is a better way to help.

Giving power

to the parents

is exponential

in how many kids you can help.

I've estimated with 250 employees,

we're helping at least

750 children,

possibly 2,000 people

if we think they're supporting their whole families.

I mean, there is no orphanage that can be sustainable

to take care of 750 children.

I mean, an orphanage of a hundred kids

has to have a minimum

of $400,000 a year,

and they have to fund-raise for that,

and they have to pull out their flies-on-child pictures,

you know, in order to do that,

which then creates this whole model

of those poor people,

those poor, desolate people.

They're not desolate.

They have hope.

They have a way to get out of it.

There's a way to fix it.

MUHAMMAD: When I talk about poverty,

one example

I like to give

is the bonsai tree.

Go and look at the tallest tree

in the forest

and pick the best seed

of the tallest tree

and plant it in a flower pot.

You get about a meter high

or less than a meter high plant.

So what's wrong with this little one?

The wrong thing is the

flower pot.

If you had planted in the real soil,

it would be as tall as the tree

that you saw in the forest.

Poor people

are bonsai people.

Society doesn't provide them the base.

The laws

and the institutions

and the policies do not allow them the base,

so they remain stunted,

and we call them poor people.

JOSHUA: My name is Joshua Omoga

I'm a businessman,

operating a shop within Kibera.

I left my rural area

to come to Nairobi

to search for a job

and better my life.

I borrowed

some money from a friend

and started by selling

vegetables

by my doorsteps.

I live in the same place I work,

and this place is very small.

The place is not mine,

so you cannot expand it.

It's not easy to

register the business

because Kibera has

temporary structures.

And the government does not recognize

temporary structures to be registered.

So that's the-- one of the challenges

I am facing.

For now, I'm saving for my

son, so that

when he reaches this,

the time he is going to start

his school,

primary level,

I'll be having something

in the account to support

his education.

My future plan is to invest

heavily in my business.

And

I'm planning to relocate from Kibera

to another place,

where life's

more better than Kibera

and register my business.

PAUL: One careless

romantic vision of the poor

is that they are being so exploited

that they should just be left

to retreat into self-sufficiency,

the organic, holistic peasant,

uncontaminated

by the dirty business

of a market economy.

And of course, that is just

romantic nonsense.

People who retreat into subsistence,

disconnected from the market,

are poor.

The only ones who are not

start off as investment bankers

and then go and live out

this romantic fantasy,

and that's fine for them.

It's no good for today's poor.

Today's poor

need all the connections

they can get.

ANDREAS: I'm frustrated with this idea

that poverty means

living on one or two dollars a day.

That is a very

bad way to state the problem.

Being poor

has something to do with being excluded

from networks of productivity and exchange.

That means cell phones,

internet, banks,

financial systems,

educational systems.

CHARLES: I started a small company,

juice processing,

based in Ghana,

selling pineapple juice,

with four or five workers,

including myself,

and I've come to the state where I have 15 workers,

and at peak season, up to 20 workers.

We start small,

tend to want to expand,

but because you are a young guy

with no collateral,

no landed property, as they call it,

you cannot access any facility or loan.

And you want to do business in Ghana, it's frustrating.

At this stage, it's more difficult

because you can't move to the middle state

that you really, really can make some money.

Because like, you need to access

sizeable amounts of money,

which family cannot get,

our friends cannot get,

and you have to pay those interest rates,

it will kill your business.

We're looking about

six to ten percent monthly.

That's about 72%

to 120% annually

of interest rate.

There is no business

that can make such profit

that you can pay off your loan

with such interest.

In Ghana, we have

small-scaled,

small micro-financing companies

that will tend to lend out

to market-women, small shops.

That micro-financing companies,

we have a lot of them in the system.

Then we have the big banks

who tend to lend out to big companies.

So, there's a gap.

There's a gap between the small

and the large scale

big companies. But in between them,

we don't have those who want to lend out

to the SMEs.

They put all the papers around like,

"SMEs, come for loan" you go there,

they don't give it to you.

The process

is so long.

Plus you're definitely not going to get it

for someone, like, who doesn't have a landed property,

who doesn't have

a land or house.

So, growing is virtually

difficult. You are at a standstill.

MAN: If you look at the distribution

in prosperous countries,

you see that most companies

are small and medium size.

If you look at that same distribution

in emerging markets,

in poor countries,

you see that there's a lot

of very small companies

and a few very large companies

and nobody in the middle.

This is called the missing middle.

And that is so important because that middle

is what creates prosperity.

MARCELA: It's not that people don't have the capacity

to be much

more efficient, it's that

the access is not democratized.

NARRATOR: One of the key factors that creates

inclusion and fairness for the poor

is justice in the courts,

or what is often referred

to by development economists

as the rule of law.

MUHAMMAD: Rule of law is

that I know what I am,

what is the rights and responsibilities

around me,

and it's protected.

That's the rule of law.

Otherwise, it's a jungle.

The most powerful one

will take everything.

And that's not a good

idea for human society.

HERNANDO: Try and imagine

a football match without rules.

Or you don't get a game going.

The rules are crucial

to get that game going.

But everybody knows how to drive a ball;

everybody knows how to buy and sell,

so there's plenty of entrepreneurship

in the--in the world.

The problem

are the rules.

In two-thirds of the world,

there isn't yet the rule of law.

( speaking in foreign language )

What makes people

interested in the rule of law,

the first thing that they understand,

is that everybody on this earth

lives on a plot of land.

And so, if you come around and say,

"Look, we have found rules

"that determine how far you can go

and how far somebody else can go,"

are you gonna share or not share water?

Are you gonna have passing rights

or not having passing rights?

People start understanding

the value of standard rules.

Property rights are a terrible problem.

Terrible, terrible problem.

Like, 60%, 70% of our people are farmers,

and just imagine if you have 10 million farmers

who have no title to the land they are farming on.

We haven't got clean title in Ghana.

It's very, very difficult.

You buy land, you have to buy it four or five times.

If you're looking for farm land

as a small peasant farmer,

looking for five acres to buy,

you can get five acres from the chief

by giving him a drink,

but you don't own the five acres,

so you can't go to the bank with the five acres

as your collateral

to then borrow money to buy a tractor.

Last time I had a meeting at The World Bank,

I asked

The World Bank officials,

"Hey, you've been working with our government

all these years."

You know this is

at the bottom of our problems.

"What are you doing about it?

"Are you saying for 20 years,

"you just forgot that

"we have a situation where anybody's business,

"anybody's house

"can suddenly come into question,

"and they might just lose their investment

and that it wouldn't encourage people to invest?"

I don't see that a lot of work has been done there,

or a lot of progress has been made there.

You can't start an economy

without ownership

not being in question.

This is my fundamental.

NARRATOR: The lack of property rights

is just one area where the rule of law

is missing.

The poor lack access

to justice in the courts

and are often locked out

of the formal economy

by complex legal structures

that only the rich and well-connected

can navigate.

MAGATTE: When I use the term

"rule of law,"

I do not want for people to think

that I'm saying we don't have enough laws.

Most of countries in Africa

don't provide good rule of law.

On one end, they are completely excluded

from the systems of

productivity,

and on the other hand,

they are basically choking

under the heaviness

of these corrupt leaders

of theirs who have put together

the worst laws possible

to allow them

to try and make it through.

HERNANDO: We ask ourselves

in Peru why poor people

are not using the law

to create their businesses?

And the running argument, of course,

is that most poor people in Peru

are dumb,

they're not educated,

they don't know how to use the law.

We have got to train them,

they're primitive.

I had this debate

with one of our lawyer friends

who insisted on the previous theory

and said that the law was fine.

The proof is that

they had established a company for me

in something less than 30 days.

So, I said, "Yes, but what happens

"if you are poor? What happens

"if you don't have the connections

"like I do that allow you to talk to a lawyer,

"that allow me to pay you in advance,

"that allow me to use a driver

"to take my paper from one

place to another?"

And so, we established a small little shop

in the outskirts of Lima,

five kilometers from the center of Lima,

where we put two sewing machines

that were supposed to be

a shirt factory.

And we put four students

and one supervisor

to go back and forth

to all the legal offices

that they discovered as they went along

that had to put their stamp

of approval

on each document that was necessary

to make this

business legal.

And they did. And it took them

289 days

working 8 hours a day.

And that's when we discovered

that the law could be friendly

for some of us and could be

the enemy for the majority.

MARCELA: And we actually

have research that shows that.

That within each country

there's a big range

in which things

can happen extremely fast

and efficient in developing countries,

if you know the minister,

if you have connections,

and if you don't, you're on the other end.

MUHAMMAD: So, it's a very partisan system.

A system which is

limited to very privileged people.

HERMAN: You are stuck in a home,

in a village, with all your skills

and all your talents,

and that's just unfortunately

the way it is.

The people here are not stupid,

they're just disconnected from global trade.

That's all.

( music playing )

One very interesting facet

which is difficult to talk about

is the celebrity culture.

You've seen it, you know,

you see Brad Pitt go to Haiti

or Bono go to Africa,

Angelina Jolie and so on.

They go with the best of their hearts,

with a good heart, into this

and they see poverty and they say,

"I want to do something."

So, they go to the establishment

and ask to help.

There,

and this is the critical factor,

they learn the old framework.

These celebrities

incorporate this message,

these cultural messages,

these harmful cultural messages,

and turn them into their songs

and activities

and into what they're saying,

and they're, in a way,

selling this to the next generation.

*There comes a time*

*When we heed*

*A certain call*

*When the world*

*Must come*

*Together as one*

*There are *

*People dying*

MAGATTE: So, celebrities have big hearts.

I think I will give them that any day.

But that's not what's the question here,

absolutely not.

But as we all know,

caring does-- is not enough,

and in this particular situation

oftentimes we find it more harmful than not.

Think about it for a second,

all the material that they use,

all the visuals that they use,

certainly in the back of people's minds,

it's creating this impression

that the Africans

are helpless people

that cannot get anything done

for themselves by themselves.

You are contributing to basically

wiring their brains in that way.

The only relationship we have to them

is to helping them.

People who are better off,

they are wiring their brain to say,

"You are not my partner."

To the poor person,

and they're wiring the brain

of a poor person

to think, "I am not good enough.

"I can't do this.

"And these people are better than me.

They're superior to me."

And this is something difficult

to talk about because who wants to point

their finger at a big celebrity

and saying, you know, "Some--

you're doing something wrong."

If I had to pick

one celebrity just to talk about,

as a-- as a point in case,

I think the one to choose is Bono,

because Bono has been at this

for a very long time.

And he has done a lot

in the field. People listen to him.

People do what he says.

And he's shown that over and again

with concerts and aid and the ONE Campaign

and things like that that he's done.

BONO: So, we're looking for a million Americans

to email us,

to join the ONE Campaign.

We are gonna end extreme poverty.

We're gonna make poverty history.

That's what's fallen to us to do.

ANDREAS: And Bono is actually,

I would say, even one of the more

sophisticated celebrities.

His thoughts have more sophistication in it

than some of the other celebrities

who run around and talk about poverty.

The thing with Bono, though, is

you know how he

talks about rocking the world

and punk and this and that.

And while Bono

rocks a lot

on the stage,

as far as the poverty

industry is concerned

and the quest to solve poverty,

Bono is about as establishment

as you can get. He is, like,

center establishment.

I think that tells you a lot

about our system.

MAGATTE: My history with Bono is very interesting.

In 2007

in Arusha during TED Global,

I was there.

Bono was sitting

probably two seats away from me.

He is very,

very much pro-aid,

to a point that he will stand up

at a TED talk

to heckle one of the speakers

because the speaker was anti-aid,

Andrew Mwenda.

Does any one of you

know a country that developed

because

of the generosity

and the kindness of another?

Well, since I'm not seeing the hand,

it appears that what I'm stating is true.

I can see Bono says he knows the country.

Which country is that?

BONO: Yeah, it's an Irish hand.

MAGATTE: And then,

seven short years later,

Bono going on record

saying... Commerce,

entrepreneurial capitalism

takes more people out of poverty than aid,

of course. We know that.

Shocking. Shocking.

I was very happy, as you can imagine.

I was like, "Wow. He heard us.

"He heard us back at TED

in 2007 in Arusha."

BONO: Well, there's one rock above ground

that I can see now.

You know what it is?

It's a headstone,

big slab of granite.

And what we around here used to call,

"The donor-recipient relationship".

Paternalism, the old way we did development,

is no match for partnership.

But then in the same--

in the same tape he's saying,

aid does work,

and you must be brain-dead

or heart-dead

to not get that.

We need aid.

Of course, we still need aid.

Of course, we do. Does anyone disagree?

Anyone apart from brain-dead,

heart-dead ideologues

or professional controversialists?

So, I am very confused by Bono.

But the good news is,

I do still believe

that Bono is probably gonna be

one of our best allies.

I feel like he's still one foot in, one foot out,

but at least there is a foot out now,

and I think he will leave the poverty industry.

I think he will.

And you know what it is?

I am deeply, deeply convinced

that Bono really, truly cares.

He cares so much, actually,

that he was willing to have

intellectual integrity

in coming around,

and in his world,

it's not easy to do what he's done.

HERMAN: For the record, I love Bono.

I happen to know Bono.

So, I love his music and he's cool.

Now, somebody like Bono

can help the process,

not in an airy-fairy

"We love Africa" way.

That doesn't help us.

But working with African countries

to execute their own agenda,

not an imported agenda.

Africans know about Africa.

Only Africans can develop Africa.

We have to sink or swim

ourselves.

Look, I'm glad people wanna help,

but we don't need

one more celebrity

doing one more pop song

or one more campaign.

But what we need

is to no longer be excluded.

( music playing )

If you really wanna help poverty,

poverty industry as we know it

has to go.

In the past, we've had

too much paternalism.

That model didn't work, okay?

A better model would be

to let's say

form partnerships with the poor

and help the poor

achieve their own dreams.

* Factory by night *

* I work in a factory *

* By night *

* Just to feed my wife *

* And save a life *

HERMAN: See, in today's world,

what Africa needs

is not aid.

We need a door in.

EVA: What we need

is to create capability

in the citizens

of this continent

to becomecreators of wealth.

The sooner we begin

to tell a beautiful story

about the African entrepreneur,

that he or she is resident

in this continent

and is doing amazing work,

then we will begin to shift mindsets.

MICHAELS: Having a heart

for the poor isn't hard.

We all have that.

But having a mind for the poor,

that's the challenge.

Can we treat them as equals,

as partners,

as colleagues?

Can we allow them

to put the locus of responsibility

for their own future on themselves,

and then be willing to be guided

by their vision?

MAGATTE: Instead of focusing on feeding

more of that system,

we need to focus more on

how are we gonna make sure

that these people who have been excluded

can now have a foot in?

And once they have a foot in,

watch the magic happen.

It's gonna happen. It's gonna happen faster

than you've ever thought,

and it's gonna be beautiful.

* And I never wanted *

* To be found *

* I never wanted more *

* Than the one right now *

* I just wanted to find *

* A piece of ground *

* So, let me down *

* In the cold hard ground *

* In the ground *

* In the ground *

( music playing )