Latest postcard: People-sized solutions

In previous postcards I’ve talked about how with capital and an entrepreneurial outlook the inherent inequalities in
Malawi might begin to be tackled.  And, although it sometimes seems like a drop in the ocean, the formula works.  Lend small amounts of capital to individual women (whose life on the poverty line consists already of a fair bit of careful budgeting and making ends meet) and support them with business training and ongoing mentorship.  Lend only to individuals who form a group with around 18 other borrowers and who agree to guarantee each other’s loans.  Ensure the group has the full support of the traditional authority structures within their village.  If the organisation supplying the loans has effective backroom procedures and doesn’t splash out on shiny white Land Rovers, within a short amount of time the interest rates it charges will allow it to be self sustainable, not dependent on constant western fundraising.  Its repaid loans (the MicroLoan Foundation has a typical repayment rate of 95% – compare that to any
UK lender, or even better to the repayment rate for credit cards) can be ‘turned over’ and lent out again and again.

It seems to me that the reason for the success of microfinance, or at least of the MicroLoan Foundation here in Malawi, is that it follows the principal tenet of any social entrepreneur – to observe the situation before transferring resources to meet a need.  It offers a solution on a scale designed to bring the best out of the people involved.

E F Schumacher is probably the grandfather of such people sized solutions.   In his most famous book, ‘Small is Beautiful’ (misleadingly titled because he’s not advocating a return to cottage industries, just that the size of a production unit should match its purpose), Schumacher says, ‘…people can be themselves only in small comprehensible groups.  Therefore we must learn to think in terms of an articulated structure that can cope with a multiplicity of small scale units’.

Anybody who has heard me discussing the state of the
UK education system may chuckle now as they observe me trying to crowbar into this postcard a cause I’ve been ranting about for a little while now.  The average
UK comprehensive school strikes me as manifestly the most absurd and serious example of a unit size being utterly unfit for its purpose.

In education, if nowhere else, effective, subtle and complex human interactions constitute the most important process.  Yet we cram the kind of numbers together which can only result in unsubtle, often brutal, certainly unproductive interactions occurring.  As a deputy head of year and history teacher I had indirect responsibility for around 400 pupils.  I didn’t know all of their names.  Give me a couple of classes of 25 and I will call every child’s parents every week, actually implement differentiated lesson plans, and take them all out bowling every other weekend. (The reality in a good number of the charter schools I visited in New York and
Washington DC last summer.)  A federalised small school structure is probably best.  One school of 1000 pupils is divided into five units of 200 each with their own structure and leadership, but retaining the head teacher’s team to oversee whole school issues.  The charity ARK is, I believe, currently working on such a model in
London.  I’ve got more discussion on the benefits of small schools on my blog, and an article on innovation in the education system.

Such small schools, I suggest, would be easily affordable within the existing education budget.  But if the treasury was looking for extra cash I can think of no better way than (to crowbar in another favourite cause) to fund these schools from an annual land value tax. 

When government spends taxpayer money on infrastructure, land values often rocket.  Instead of putting this taxpayer cash into property owners’ pockets, capturing a percentage of the increase would finance the treasury without harming the economy. (It is not a tax, after all, on things we want to encourage, like employing people or buying things.)  An annual land value tax would be paid by the landowner and exclude any capital investments he’s made (so, the value of the building on the land isn’t taxed).  The use of an annual land value tax to fund school building seems particularly suitable.

The lesson of microfinance in
Malawi is that even in the coldest of transactions (it’s not often you think of money lending as affirming your faith in the human race) it pays to recognise the conditions under which individuals excel.  I wonder if small, federalised schools funded by an annual land value tax could put a little more   people-sized humanity into the
UK – no crowbars needed.


Rites of passage as transcending the self!

I’ve neglected the rites of passage issue on this blog for a little while.  Malawi has stimulated my thinking on questions of entrepreneurship. 


Not that I haven’t been thinking about r of p at all.  In fact a couple of weeks ago I gate crashed an after school Christian club and had an interesting chat with about thirty teenagers about questions of growing up in Malawi.  More on that to come.


On rites of passage, I think three things are important:

1. That the activity engaged in is ‘meaningful’.

2. That there is recognition (probably for the completion of the activity) by the community.

3. That a period of coaching or mentorship by ‘elders’ occurs.


It seems that r of p are principally about transcending the self.  After all this is what adulthood is about isn’t it?  Finding that there are responsibilities which tie us inevitably to a wider community?


Perhaps the word ‘transcend’ brings up connotations of a middle class guy ‘finding himself’ in the third world, but it’s about the feeling we have when we work in a team, care for people around us, see a great film or listen to a great piece of music…  It’s often in the things that societies do for no productive purpose, but it can also be when we are at our most productive.


Schools must, I should think, respond to the primeval instinct to transcend the self.  They sometimes do – maybe sports days, concerts, maybe some lessons, maybe even some assemblies.  But the very structure of the school year should be built around opportunities to realise we are a part of something bigger.


And let’s not forget that the majority of pupils who cause problems (some of whom later fill our prisons) are invariably the least able to get beyond a self centred, child-like response to the world.  Our very role as educators should be that they become (young) adults.


Latest Malawi postcard – entrepreneurialism in response to volatility

I was reminded me of an Economist article I’d read discussing Jacob Hacker’s The Great Risk Shift.  Hacker argues that in the US (although not confined there) over the last thirty years income instability has been rising whilst the ‘social safety net’ has been wearing thin.   Hacker explains this situation as caused by a shift in economic risk from government and companies to families.  Whilst Hacker is pretty downbeat about this increasing volatility for ordinary people, the Economist reminded readers that one person’s volatility is another’s dynamic, mobile society.  It is probably good for most of us that there are more jobs in Tesco than on ships.

The effects of volatility in Malawi are, of course, far greater than in the US, although the causes are different.  For the last two years lack of rain led to famine.  This year we’re lucky that the rains have fallen heavily, but at the moment people are still poor until the tobacco and maize harvest can be sold in the spring.  I was interested in how people respond.  There’s a ‘booze pub’ in Kasungu that encapsulates a couple of responses.  One is that of the customers drowning their sorrows.  Another is the owner’s.  He serves cheap ‘shake-shake’ beer and vicious spirits – not much profit on each sale, but the bar is packed seven days a week, all day.  And he’s diversified.  There’s a brothel out the back which makes a tidy profit minus a bribe for the police, but that’s recouped in the bribes he receives as one of the only people in Kasungu licensed to issue MOT certificates.  The owner’s response to volatility has been to recognise opportunities and to diversify and insure against the future. 

It is a little facetious to use the criminal bar owner as a positive example of how to cope with an uncertain world.  But he highlights the way that many Malawians I’ve come across use entrepreneurialism to manage economic risk.

However, the poorest Malawians, who could most benefit from such a response, are often the least able to engage in anything other than subsistence (or near-subsistence) agriculture.  For them, accumulating any assets is practically impossible.  One reason for this is that the majority of crimes in Malawi are crimes of need – poor people robbing poor people, causing a cycle of crime and poverty.  Added to this is the fact that, as the 2004 ‘Malawi National Crime Victimisation Survey’ says, ‘poverty is characterised…also by an inability to devise an appropriate coping or management strategy in the face of shocks and crises’.

The ideal way to manage economic risk is through a dynamic and mixed economy of the kind I witnessed in Cape Town.  We’re a little way off that in Malawi, but the MicroLoan Foundation, where I’m working, is perhaps helping the country take a tiny step in that direction.  Through the provison of capital and business education the charity helps the poorest to set up the kind of enterprises that give them at least a chance to take the initiative and prepare for what is, at the moment at least (and probably always will be as the modern world increasingly extends its reach), inevitable economic volatility.  

Latest postcard from Malawi

A man came into Keith and Jenny’s restaurant the other night holding a container under his shirt. Keith was unconscious drunk upstairs, so Jenny talked to the man. In the man’s container was a severed male member. The man was under the impression that Keith, being white, might want to buy it. Probably to sell to pirates who use them to catch magic sharks with gold in their bellies. In fact on previous meetings Keith had given the impression he was interested, plotting entrapment. For Jenny the member was going to cost 300,000 kwatcha (about ₤1,200). Jenny had to go to the cash machine. The man waited. She drove to the police station but the only police there were drunk. She tried to call the police chief but was out of phone credit and when she found a phone to borrow the line was dead. So she drove around town until she saw the police pick-up parked outside a bar. The police chief was relatively sober. They jumped in Jenny’s car, drove to the station, picked up their guns and returned to the restaurant. The man approached the car, pleased to see Jenny had come back. The police jumped out. The pick-up arrived. The man was bundled into the back. One of the policemen had left his rifle in Jenny’s car, and she was needed for interview, so she followed them to the station. The man was beaten up and admitted to planning the assault with a friend. They’d spent the day drinking local brew with his uncle and on their return home had attacked him with a rock and a razor blade. The uncle was found, still alive, in the bush. He died later that night in hospital.

When Jenny recounted this to me I had just finished reading The State of Africa by Martin Meredith. If ever there was a book to match with a sweeping political narrative the personal pessimism I felt then about Africa, The State of Africa is it. It details crime after crime against the African people. From the horror of King Leopold’s Congo, through dictator after dictator, incompetent economist after misconceived communist, through Rwanda’s ignored genocide, through Mbeke’s illogical arrogance and Mugabe’s insanity, to Sudan’s stage managed famine, the recent history of Africa becomes one of the impositions of ‘big men’, the resultant corruption, the failure of the rule of law, the retreat into localism, fatalism and subsistence.

Politics is so far failing to really tackle the problems. The owner of another Kasungu restaurant used to be a very rich man. He’s pretty much broke now. His downfall? Politics. He was said to fill balloons with cash and float them over the crowds at his political rallies. Malawi, and Africa, doesn’t need more of this kind of politics.

Education too appears to be grinding along, out of step with the needs and realities of the country. Paul Theroux postulated in Dark Star Safari that African leaders keep their populace uneducated because that way they’re easy to govern.

By some accounts humanitarian aid even is hindering the situation. In a middle class curry house in the capital I listened to a brutal take on this argument. A Canadian aid worker explained coolly the damage western donors have done to ‘natural population controls’. She then illustrated this nearly ambiguous statement, by, matter-of-factly and almost approvingly, describing the ‘natural’ situation she’d seen in which an aids-orphaned baby was starved with water and kasava by his poverty stricken grandparents to speed an early death.

The Canadian was grossly and immorally wrong. It’s apparently relatively common among long-stay development workers: a glazed, disillusioned view that sees problems and local apathy as so entrenched that nothing but the most extreme of structural solutions will make any difference, and that at the same time forgets any concept of the worth of the individual. It’s an extreme response to one of the international developmenter’s conundrums: Do you propose structural solutions and risk a utilitarian choice, or do you ‘do what you can’ and risk perpetuating a sticking plaster society?

If a place like Kasungu in Malawi is ever labeled ‘medieval’, sometimes it’s with good reason. The prevalence of superstition, the dreadful infrastructure, the short-termism of a pitiful life expectancy, the desperation of poverty blight Malawi and sometimes seem to crowd out all hope. Certainly I wasn’t sure the structural solutions I thought I’d seen (an entrepreneurial society, social networks etc.) stood up to that single act of brutality at Keith and Jenny’s or the fifty years of history according to Martin Meredith. I was beginning to conclude that there’s little reason for optimism here, and nothing that one volunteer can do to make a difference.

Then I found a disk of the Tim Robbins film Dead Man Walking. The film’s subject is just that perennial tension between some ‘big picture’ and the tiniest of acts of humane goodness. But in the course of the film the choice is proved a false one. Revealed as the coward’s excuse, the dichotomy is blasted away. The tiniest of acts are the big picture.

Questions over the efficacy and unintended consequences of aid must always be asked and societal structures must always be addressed, but without a deep conviction of the worth of every individual we risk inhumanity perhaps worse than that which we are attempting to redress. With that conviction, there is perhaps still hope.

Entrepreneurship and education in Malawi.

The core of my second Postcard from Malawi, without the anecdotes and illustration: 

The nuclear family it seems, despite its much reduced social network, is a more efficient economic unit.  This is perhaps one of the brakes that slow up Malawian entrepreneurship.  It is an interesting observation that while small scale native Malawian enterprise is evident everywhere, large scale enterprise isn’t, and it is the Indian and immigrant populations who have most visibly built small businesses into large companies and who have become the entrepreneurial business class.   Of course many factors help explain this situation.  Malawian history plays its part; Hastings Banda’s regime can’t be said to have stimulated free thinking entrepreneurs.  Lack of access to capital is also obviously crucial.  Less obvious, and more deep-rooted, is the lasting effect of colonial and missionary influence on education.  In schools you find even now that white collar occupations are valued and initiative is positively discouraged.

These factors combine into and are magnified by a further factor, a feature, I suspect, of poverty anywhere in the world:  a bias in favour of the immediate, the today, and against planning for the future.  This is partly a response to reality; subsistence living by definition does not leave any slack for insuring against or capitalising on the future.  Even when living is somewhat above subsistence, however, the mindset persists – fatalistic, short termist, suited to survival but not to aspiration.

This is the greatest, and most delicate, complaint levied against the Malawian situation.  I hear it everywhere and observe its effects.  It is a delicate complaint because it tight-ropes between reality, stereotype, and patronising western attitudes.  But if things are to improve Malawians must learn the lessons of commercial
Blantyre and the Indian entrepreneurs.  Personal aspiration may be better served by entrepreneurship than handouts or politics.

Entrepreneurship in Malawi

Perhaps it is due to the relative states of their economies, but business in Malawi doesn’t appear to be ring-fenced like it is in the
UK, where we misleadingly hear that “the CBI speaks for business” or “the government consults business”.  This misleading ring-fencing, I think, makes it easier for the various voices you hear in a debate on the position of commerce in society to judge business as either intrinsically moral or intrinsically immoral.  Intrinsically, of course, it is neither.  It is a law of free human interaction.


We can describe poverty as almost always associated with a lack of access to certain ‘human interactions’.  What has struck me already from my work at the MicroLoan Foundation, which lends start-up capital to the poor, securitised by group borrowing, is that the benefit of entrepreneurship for the disempowered poor is not only the access it gives to commercial interactions, but to other, perhaps social, interactions.  Because our only collateral is the group, women in a MicroLoan Foundation borrowing group make a contract with each other that is based explicitly on trust.  This trust inevitably extends beyond the financial management of the loan.  For example in the use of group savings, which are a requirement before and during borrowing.  These may be used if an individual falls on hard times, creating a measure of security for the very poorest in a way similar to the old ‘friendly societies’.  Any attempts to improve the lot of the poorest must, I suspect, recognise the importance of joining people together – of multiplying human interactions.