The Poor need Trade, not Aid
Together with our partners at Open Social, as part of the larger raiSE Festival for Good in Singapore,the documentary Poverty, INC was screened. The premise of the documentary is based on the fact that contrary to popular opinion, large NGOs and developmental aid do not actually lift people out of poverty. Rather, some of these efforts, while well-intentioned, sometimes ends up perpetuating poverty instead.
Firstly, we heard Stefan Phang from Sealed Air share his story on Soap for Hope, an initiative that partners with hotel chains to take discarded soap scraps and use them to bring local community residents out of poverty. Stefan shared how Soap for Hope has helped disadvantaged communities generate small livelihoods, improve hygiene standards as well as helped Sealed Air’s customer hotels protect the environment by diverting soap waste away from landfills.
We had an interactive, open and lively discussion, Some of the insightful questions included : “Why is the cost of social enterprises’ products often times more expensive? How do we balance profits with social impact? Here are some of the insights from the sharing
“No local business can compete with free”
1. Free Aid does not allow local enterprises to compete
In the film, a struggling business owner commented “no local business can compete with free.” When countries receive aid, the local businesses often suffer as they cannot compete with free items. When the aid stops flowing into the country, there might be no local suppliers left!
An example of this is the when the United States started flooding the Haitian market with cheap subsidized rice following the Haitian Earthquake in 2010. While well-intentioned, this hurt the Haitian farmers as there was no longer any market for their rice.
The poor are the protagonists of their own stories, not the NGOs
2. Co-Creating with The Poor
If we are to strive for greater socioeconomic equality and open doors for developing nations, we must stop seeing the poor as helpless recipients of our charity but rather see them as partners and innovators who are capable of changing their own destiny.
Instead of saving the poor, we should strive to serve them. We need to be humble, listen to, respect and embrace the solutions embraced by the people who are most affected by poverty. The poor deserve to be treated with dignity and respect. They have many interesting and innovative ideas to be tapped into, only if we would just listen to them.
The poor need trade, they need access to markets, not aid.
3. Trade not Aid
It is not aid that lifts nations out of poverty, rather it is trade and access to international markets. We believe that social enterprises — businesses that prioritise creating positive social impact before profit generation are the solution to alleviating poverty.
Social enterprises give communities access to training and markets, thus providing them with a form of dignified livelihood. For example, Toraja Melo created a market for the exquisite traditional weaving products made by indigenous Indonesian women. Today, the women in Toraja do not need to leave the community to work as domestic workers or engage in the sex trade. They are empowered to make a living as skilled weavers.
Read the impact stories of our social enterprises
Better Ways to Give
Our goal is not to dissuade people from donating to charities, but to think deeper about where the money really goes and to better inform actions that strive to create social good.
When you buy from one of the social enterprises we support, you are paying for a high-quality product that someone invested time and effort into making. That’s also why it costs more — because the workers were paid a fair wage.
Social enterprises are impact first. The profit generated is reinvested into the community, which we believe this is a more sustainable model of charity.
Support the social enterprises we work with by visiting our online marketplace.
If we want to make the world a better place, then we must strive to end poverty for good which begins by giving power and dignity back to the poor.
