Poverty Inc. (2014) explores an important topic for the modern global community – the issue of aid to the developing countries and whether this strategy actually helps them. The traditional model of aid, which is sending food and clothes to an impoverished state, has proven to be a failure. As one of the women interviewed for Poverty Inc. (2014) states, she is although she is glad people want to help, this strategy does not work. This film, the research on the impact of aid on the states receiving it, and the economic outcomes of such actions suggest that aid is a part of the problem and not a solution to it.
The community of people who consistently donate money to aid funds or engage in the distribution of such help have years of evidence that point out to one conclusion – aid does not help. It does address the immediate needs of the people, such as food, when they do not have access to it or clean water in an area where it is difficult to find. However, Milovich (2018) argues that such help does not contribute to poverty alleviation because it does nothing to address the underlying causes of. Moreover, in a way, these endeavors contribute to poverty development because the encouragements for working, producing goods and services that exist in traditional economies are not present in states that receive aid. An important factor is the difference between aid as providing resources and viewing aid as a financial investment. In the latter case, it should generate a return and result in some developments, such as having businesses or manufacturing facilities established in the state at which the aid is directed.
Notably, the donations impact the local economies and mitigate the odevelopment opportunities It is unlikely that people in impoverished states will buy something, things that may be manufactured locally and sold by the members of their community if they receive it for free from international organizations. One example is the cotton farms that suffer from the imports of second-hand clothes, affecting the local demand. According to Nicholls (2017), the cotton industry established in Kenya by the British Empire has almost completely disappeared, with factories’ clothing down. The reason is the increasing imports of second-hand clothes and cheap textiles from Taiwan and Singapore that make it unprofitable to manufacture cotton clothes. This industry, however, was one of the most important for Kenya, leaving significant damage to the state’s economy.
Therefore, Poverty Inc. (2014) points out the need to stop providing aid to the developing states because it does not help them improve their economies, educate their children, and develop. Instead, it gives more incentives to avoid having to work or buy things that would beneficially affect the entire country. As a result, it is important to focus on viewing the aid as an investment – something that should generate a return. Encouraging people to work, supporting the local businesses, and their efforts to create jobs within the community and locally manufactured goods is actually more effective than sending aid in the form of clothes and food. Investors that consider their investment option based on the positive impact that it will have on the environment, the community and ,the society of the state can bring a lot more benefits to the developing states. To conclude, impact investing, which prioritizes the development, both social and economic, of the society is much more effective when compared to traditional aid distributed to impoverished countries.
References
- Poverty Inc. Directed by Michael Matheson Miller. 2014. Amsterdam: IDFA, 2014.
- Milovich, Juliana Yael. 2018. “Does Aid Reduce Poverty?’ OPHI. Web.
- Nicholls, Christine. 2017. “The Rise And Decline Of Cotton Growing In Kenya.” Old Africa Magazine. Web.