Innovative Approaches to Economic Development

During my first weeks in Argentina, I have had the opportunity to travel throughout Buenos Aires to interview a diverse group of individuals from various sectors regarding economic development including:

• Government - Monica Sladogna, Director of Institutional Capacity Building fromt he Department of Labor
• Higher Education - Abraham Gak, University of Buenos Aires and Silvina Gvirtz, University of San Andres
• Foundations - Help Argentina (http://www.helpargentina.org/)
• Community Organizations - (http://www.comunidadesrurales.org/)

Throughout each of these conversations an interesting core theme has emerged as fundamental to moving people out of poverty - empowering individuals within communities by facilitating access to financial capital and educational or employment opportunities. Through connections to these opportunities, individuals and families can move toward self-sufficiency; they no longer need to rely on government systems to provide them with basic resources such as food and shelter. Previous government support systems and regulations have provided a critical and important safety net for individuals who cannot access necessary resources, but rather than break the cycle of poverty, often these government systems and regulations have had the unintended consequence of perpetuating the very cycle of poverty they are seeking to disrupt.


As I have found through these interviews and through my own experience at Congreso, government plays an integral role in reducing poverty, but government alone cannot create systems that promote self-sufficiency for two reasons. First, if government merely provides the basic needs of food, shelter, etc. for these communities, government policies are not focused on encouraging or facilitating a movement out of the cycle of poverty for the individuals or families receiving aid. Second, government has few remaining resources to invest once it addresses the basic needs of food, shelter, safety, and health care in these communities. For example, 80% of Argentina's economic development budget goes directly to fund food for families so that they can feed their children. Even this large amount of funds, approximately $27 per month for a mother with two children, is not enough to sustain a family. If this government program can barely cover food costs, there are few funds left over to implement initiatives that can move beyond food assistance to support individuals in their move up the economic ladder and out of poverty.


Nevertheless, through carefully investing government dollars, government does play a role and can serve as a support and catalyst for transforming individuals from benefit recipients to empowered community resident who are able to make their own path to self-sufficiency. In Argentina much of this investment revolves around two main strategies - 1) microcredit and 2) private/public partnerships.


At the core of the microcredit movement is the philosophy that we must ensure that our community members have access to financial capital to develop their own businesses and private/public partnerships. Microcredit is extremely important because in many communities finding work is not an option as jobs don't exist and one of the few options for employment is to create his/her own employment through small business development. Also, individuals in these communities are often unable to access credit through traditional banks and therefore it is more difficult for them to put their entrepreneurial ideas into action. Microcredit can change this dynamic. Individuals who normally can't access credit are able to do so through microcredit agencies. While focusing on the individual lender, this strategy of microcredit also requires investments in intermediary organizations as they facilitate the administration of government programs, enabling microcredit to come to communities. In more urban areas, the government is investing in public/private partnerships in which mid to large organizations are partnering to ensure training and access to these most vulnerable populations.


While the concept of microcredit is exciting, the question still remains - just how are transitions made from a system that perpetuates a cycle of poverty to a system that champions and encourages entrepreneurship, innovation, and self-sufficiency? La Juanita cooperative is an interesting exmaple of how organizations within Argentina are working with communities to create entrepreneurs and a vibrant community environment that champions self-sufficiency. Help Argentina strengthens Argentine civil society through the mobilization of donors and volunteers and the promotion of best practices. One of the projects that this organization has undertaken is with La Juanita cooperative in La Matanza, Argentina, where they are working to reconstruct social connections through education, employment, and participation in civil society.


La Juanita has rejected all government financial assistance as they are trying to break out of the cycle of relying on government provisions, building their own capacity to provide for their community. Instead of government assistance, community members in the cooperative are able to access microcredit loans through Help Argentina. Within this model, La Juanita members receive entrepreneurship training through volunteering at one of the community's multiple businesses and then have the opportunity to access microcredit loans if they have a desire to start their own business. However, core to access microcredit is that these individuals can't apply along, but must apply with at least four other individuals due to the importance of developing a strong community. This strategy has resulted in 250 microcredit loans of which 60% of the businesses are still in operation.


This emphasis on community is what makes the microcredit venture in La Juanita such a success - community residents and leaders are at the heart of this initiative. Most of the innovation that has occurred in Argentina around economic development is because individuals have decided that their future is not going to get better unless they take steps to make it better, and they cannot wait for the economy to improve or for government to find a solution. This is an important lesson to note because it indicates that economic development and sustainable change comes from within the community and government's role is to support and invest in community innovations when they are ready and have the capacity. The second lesson is that government's role is to invest in neighborhood capacity building so that the residents of neighborhoods themselves can start developing and organizing among their own neighbors.


Similar factors of success can be seen in the case of Apoyo Familiar (www.esperanza.org.ar). Dra. Ana Mon has created a simple model of training and capacity building that has allowed this organization to expand to communities around the world. Core to the organization's success is that communities must come prepared by self-identifying their leaders and a commitment to fund key positions. Apoyo Familiar provides these communities with the training and capacity-building they need when they are ready and lets the evolution of the centers evolve organically.


As we have seen through these two examples, the key components of the models in Argentina refer back to the principle that we are all connected and that the strength of individuals is intricately tied to community. We must simultaneously provide individuals and the community with the resources they need to be able to capitalize upon the strengths and ingenuity that is in every one of our communiteis. While governments play a key role in this, NGOs, community organizations, and community leaders all also play an integral role in ensuring that individuals and communities can move out of poverty.


These examples also demonstrate that it is key to create an infrastructure within our own education and employment initiatives that encourages innovation and entrepreneurship. By connecting our clients to opoprtunities that allow them to tap into their own strengths and ingenuity, we can facilitate independence and economic self-sufficiency in all of our communities.

Education and Entrepreneurship

I met with Horacio Itzcovich, a professor of Mathematics and member of curricula development and advisor to the secretary of education. During our conversation we explored the similarities and differences of our education systems. Both the United States and Argentina are facing the crisis of losing our young people from the education systems at the ages of 14 – 15. We agreed that both systems continue to instruct our young people in a system that was created for a different time and the system has not been able to evolve and respond to the needs of our young people. Mr. Itzcovich indicated that our young people are living in a culture of “Zappin” and “Lite” meaning that they change channels every few minutes like a remote control with the television and they don’t find the need to stay with a project through completion. We also agreed that unless we train our teachers to teach differently and adapt to the needs of our young people we will continue to lose them to things that can capture their attention.

As far as our proposed solutions, we thought that we first need to bring relevance from a young person’s perspective into our education system. Mr. Itzcovich gave some successful examples with groups of students including small business development or exploring key questions that have relevance to their lives. One young woman would wake up at 4:00 a.m. to bake bread and sell it before school to earn the money she needed. Mr. Itzcovich took her initiative and used it to educate his entire class on math calculations, business planning, project management, and marketing through scientific inquiry methodology. At the end of the project Laura’s business grew and the entire class developed relevant competencies for the real world. In another case, Mr. Itzcovich asked a question about a marketing strategy used by a certain company for yogurt that indicated it had less than 10,000 bacteria. Through scientific inquiry the students were able to relate to the question as they ate yogurt everyday and in the process learn both the process of discovery and specific math and science competencies.

We discussed that the only limitations to bringing relevance through business development and asking key questions is that the competencies learned are at a basic level and it doesn’t teach higher competencies or the exploration of ideas for intellectual growth. In addition, Mr. Itzcovich didn’t believe that we should put our young people in the position of operating a business because although it brings relevance into the education system it doesn’t allow for the exploration of ideas in the most formative times of a young person’s life. We thought that an approach might be to first bring relevance into the education system and then throughout a high school career slowly introduce more abstract thinking and exploration of ideas.

Finally, we agreed that if we were to change the education system we’d have to build a school based upon different principles. For example, instead of teachers teaching in isolation and six hours a day with little planning time a school would need to be built with instruction being limited to 3 hours a day and planning and implementation occupying about 60 percent of the school day.

Why Argentina and Chile

All nations are struggling with issues related to poverty, violence, health care, and human capital. All nations have also realized that we live in a global economy. Despite our particular histories and social contexts individuals, communities, organizations, systems, and governments are each creating innovative solutions to strategically address issues of poverty. As such, I’m heading to Argentina and Chile because they are two countries that have been forced to innovate in the struggle for stabilizing their economy and investing in the education and skill competencies of their residents necessary to compete in a global economy. I am excited to begin my journey and hope that you will check back from time to time to see how things are progressing.

Bob Wise, Alliance for Excellent Education

One key individual is Bob Wise who is the President of Alliance for Excellent Education http://www.all4ed.org/ and former Governor of West Virginia. I was able to have a personal conversation with him about what he meant when he stated that we needed to have higher standards. Bob made the reference that our athletes are competing and winning on a global level in the Olympics because they are preparing to compete under the highest standards and then prepare appropriately. However, in our education system we rank low in how we prepare our young people to compete in science and other industries of the 21st Century. I asked if he would agree that the conversation should shift to be not around standards, but around competencies that are demanded in today's workforce. In addition, I made the reference that our education system today because it hasn't resolved the issue of higher standards, but is trying to measure competencies is forcing our teachers to teach to the test which is more about test taking competencies then about real world competencies needed to compete in a global economy such as critical thinking, information discrimination, communication, teamwork, and abstract thinking.

Senator Obama and Senator McCain

Before heading off to conference I attended the National Council of La Raza conference and was able to hear from some key individuals and their ideas on Education and what needs to happen to ensure our young people graduate.

Senator Obama addressed the National Council of La Raza affiliates and demonstrated a clear understanding of our current struggles within the current civil rights movement. He spoke about how he understands that our Education doesn't work by quoting a young mother who stated that "maybe the system wasn't meant to serve people like us us". Senator Obama emphasized that the system my currently not be made to serve "people like us" but the United States was built on the foundation that with effort we can achieve our dreams and therefore it's our responsibility to ensure that the education system is built to serve all of our young people to ensure they graduate with competencies to compete in the workforce.



Senator McCain also demonostrated a clear understanding that our education system is not serving our community as our young people are not graduating and those who do graduate are not qualified to compete in a global economy. McCain emphasized that part of the solution is about investing in small businesses which would in turn create more jobs and grow the economy. He didn't speak specifically about the education system, but I would challenge his focus on job creation to grow the economy because the other half of the solution is ensuring that our young people and adults are qualified to compete for the jobs in a global enonomy and this requires investments in our education system.