All language subtitles for Poverty.Inc.2014.1080p.WEBRip.x265-RARBG2_English

( 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 )