Smart Aid: From Top Down to Bottom Up

“Just as the US now heavily uses smart bombs in warfare, it is becoming increasingly apparent that the equivalent is needed in aid efforts. It is not enough to spend, say, US$ 7 million dollars for five Tomahawk cruise missiles and then spend a fraction of that amount in building a peaceful community which does not merit targeting by missiles. Yet, that is what we have in this case.

It might be argued that the US and other wealthy nations have spent billions of dollars in aid to foreign countries just in the past decade. This is true, but hardly a good point. We need look no further than the example of Russia to understand how billions can be spent and almost completely wasted, for nothing. In fact, nearly US$ 20 billion in aid from the US to Russia disappeared in the mid-1990s and has yet to be accounted for. The only thing that is clear is most of the money vanished in Moscow, despite the fact that the money was intended for use by regions in all of Russia. Consequently, in 1998, Washington abandoned this big-money, top-down approach and began to focus on much smaller amounts to specific regions which demonstrated commitment to democratic principles and market reforms. This is what is needed now for the Crimean Tatar community.”

The extract is from a proposal for economic development in the Tatar community of Crimea, from which I’ve summarised key points in ‘Creating Shared Value’ in Ukraine

In his notes, author Terry Hallman describes the events which led to him blocking his own work to protect the social purpose of the project which was followed by his Op Ed in Kyiv post about corruption in Ukraine’s government

“Children die due to widespread social neglect and the ineptitude of most Ukrainians to manage their own community – and this doesn’t seem to bother many people. It may be a personal curse that bothers few: Me, my wife and too few others in this country.

It will be easy for those offended by this message to suggest I leave Ukraine if I don’t like it. That’s fair enough, but what would that accomplish? My departure would mean just one less voice raised in defense of starving children, one less voice challenging Ukrainians to realize the destiny that could be, as a strong, prosperous and vibrant country. “

Traditional approaches to development frequently involve aid funding for short-term relief. The core P-CED approach is to use this same funding to create new businesses in target communities.

The first step is to provide realistically accessible microcredit funds for the purpose of creating new businesses. Second is to create at least one new business whose profits will provide funding for critical social assistance such as food, housing, and clothing — the same targets as traditional funding. The P-CED distinction is its focus on using funds to create new businesses rather than using funds only for short-term relief. These new businesses in turn provide for both short-term economic relief and long-term economic development. This strategy creates long-term solutions by using traditional funding as investment capital. The investment in effect provides a means of creating more money from aid funding, thereby increasing the effectiveness of aid funding and reducing dependence on it. In short, the P-CED approach creates new revenue streams in the place of revenue drains.

In 2007,  The Smart Power Initiative was created within the Center for Strategic and International Studies.

The ‘Marshall Plan’ for Ukraine published online in August 2007, made this point about the war in Iraq and investing in social enterprise:

“The program will be based in eastern Ukraine, in Kharkiv, and will serve as a leading light and example for eastern Ukraine as well as all of Ukraine. Civil society is action, proof, clear examples demonstrated and carried out with the involvement and intelligence of Ukraine’s citizens who are Ukraine’s great reservoir for hope, prosperity, safety, and security. Nothing less than an opportunity to become actively, positively engaged in their own, their families’, and their neighbors’ well-being and improvement of social standards is needed.

 It is proposed that the United States of America be actively engaged in supporting this project, financially and any other way possible. Ukraine has clearly demonstrated common will for democracy. Ukraine has also unilaterally taken the first critical step to fulfill this program, thus clearly demonstrating initiative and commitment to participation required in the original Marshall Plan sixty years ago. The US side is presumably attempting to foster democracy in another country, which never expressed much interest and shows little real interest now. That of course is Iraq, where recent estimates indicate a cost of $1.5 billion per week.

 That same amount of money, spread over five years instead of one week, would more than cover the investment cost of the initial components of this project, and allow a reserve fund for creating new projects as Ukraine’s intelligentsia invents them in the Center for Social Enterprise. It is proposed that Ukraine and the US provide equal portions of this amount. Ukraine is certainly able to provide that level of funding, given that projects are designed with the same fiscal discipline employed in the traditional business sector. That means they pay for themselves, one way or another.”

Interestingly the economist Muhammad Yunus seems to be on the same page, as this cartoon illustrates:

The ‘Marshall Plan’ paper was followed up by a letter to USAID, copied to the Senate Committee on Foreign Relations who I’m informed are in overall charge of USAID funding.  In February 2008, Joe Biden chairs and Barack Obama is a member.  Obama I was told was the enty point in the political circuit for a’ swords to’ploughshares’ intiative  to create a scientific education facility where Russia had once developed their H Bomb.

“Thank you for your time and attention to this. I and others will look forward to hearing from you. I hope we continue to realize ever more fully that outside the box and inside the box have only a box in the way. We outside the box know quite a bit of what’s going on, many times in exquisite detail, perhaps in ways that those inside the box can’t quite as easily access if at all. We are grossly underfunded in favor of missiles, bombs, and ordnance, which is about 100% backwards. Now, with even the US Pentagon stating that they’ve learned their lesson in Iraq and realize (so says top US general in Iraq ten days or so ago) that winning hearts and minds is the best option, I and others shall continue to think positive and look for aid budgets and funding spigots to be opened much more for people and NGOs in silos, foxholes and trenches, insisting on better than ordnance, and who understand things and how to fix them. We can do that. We can even do it cost-effectively and with far better efficiency than the ordnance route. Welcome to our brave new world. Except it’s not so new: learn to love and respect each other first, especially the weakest, most defenseless, most voiceless among us, then figure out the rest. There aren’t other more important things to do first. This message has been around for at least two thousand years. How difficult is it for us to understand?

The global economic crisis which has ravaged Eastern Europe for a decade arrives in the US in the summer of 2008.

In November 2008 Skoll Social Edge reported on president elect Obama’s plans for a social enterpris agency:

Patrick O’Heffernan, (aka Dr. O) says that social entrepreneurship is on the cusp of the US national mainstream, thanks to President-elect Obama’s promise of its own agency and funding.

“The second thing I’ll do is invest in ideas that can help us meet our common challenges, because more often than not the next great social innovation won’t be generated by the government.”

With these words, candidate Obama promised to create a Social Entrepreneurship Agency within the Corporation for National and Community Service. He proposed $3.5 billion a year for social investment, paid for by ending the war in Iraq and eliminating corporate tax loopholes.

 The idea is still conceptual, but it was accompanied by words that indicate that President-elect Obama – a former community organizer – understands the importance of the NPO sector and the role of social entrepreneurs in the economy.

Founder Terry Hallman died in August 2011 leaving behind his legacy on Every Child Deserves a Loving Family

With these words on the need for a bottom up approach:

“This is a long-term permanently sustainable program, the basis for “people-centered” economic development. Core focus is always on people and their needs, with neediest people having first priority – as contrasted with the eternal chase for financial profit and numbers where people, social benefit, and human well-being are often and routinely overlooked or ignored altogether. This is in keeping with the fundamental objectives of Marshall Plan: policy aimed at hunger, poverty, desperation and chaos. This is a bottom-up approach, starting with Ukraine’s poorest and most desperate citizens, rather than a “top-down” approach that might not ever benefit them. They cannot wait, particularly children. Impedance by anyone or any group of people constitutes precisely what the original Marshall Plan was dedicated to opposing. Those who suffer most, and those in greatest need, must be helped first — not secondarily, along the way or by the way.”



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