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.