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Economic development through savings and credit groups w/ World Neighbors CEO Kate Schecter – EP140

Kate Schecter leads World Neighbors, an international NGO helping poor communities in developing economies lift their living standards through local savings and credit groups among other measures. In Economics Explored episode 140, hear Kate describe how these local savings and credit groups differ from Grameen-style microfinance. Also hear Kate describe how on-the-ground, practical measures can give people a hand up, not a hand out.

You can listen to the episode using the embedded player below or via Google PodcastsApple PodcastsSpotify, and Stitcher, among other podcast apps. A transcript and relevant links are also available below.

About this episode’s guest – Kate Schecter, Ph.D.

Kate Schecter, Ph.D., joined World Neighbors as President and CEO in June, 2014. In her previous position, she worked for the American International Health Alliance (AIHA) for 14 years. As a Senior Program Officer at AIHA, she had responsibility for managing health partnerships throughout Eurasia and Central and Eastern Europe (CEE). She also managed a blood safety program in Ukraine, Central Asia and Cambodia from 2012- 2014. In the early 2000’s she managed a program on the prevention of mother-to-child-transmission of HIV (PMTCT) in Ukraine and numerous pilot sites in Russia and Central Asia.

Through her work with over 35 partnerships addressing primary healthcare, chronic disease management, hospital management, maternal/child health, Tuberculosis, blood safety and HIV/AIDS, she has extensive experience successfully implementing AIHA’s health partnership model.

Before joining AIHA, Dr. Schecter worked as a consultant for the World Bank for three years (1997-2000), specializing in healthcare reform and child welfare issues in Eurasia and CEE. She taught political science at Tel Aviv University in Israel for a year (1992) and at the University of Michigan in Ann Arbor for four years (1993-1997).

She has written extensively about the Soviet socialized healthcare system and was a principal investigator for the Carnegie Corporation’s Russia Initiative where she researched the issue of social cohesion in Russia. She is the co-editor and co-author of Social Capital and Social Cohesion in Post-Soviet Russia (M.E. Sharpe, 2003), author of a chapter in Russia’s Torn Safety Nets: Health and Social Welfare in Post-Communist Russia (St. Martin’s Press, 2000), and an entry on Chernobyl for Scribner’s Encyclopedia of Europe 1914-2004, (2006). She also has made three documentary films for PBS about the Former Soviet Union. Dr. Schecter holds a Ph.D in political science from Columbia University in New York and an M.A. in Soviet studies from Harvard University.

Links relevant to the conversation

A New Paradigm for Microfinance: Savings and Credit

COVID-19 and the Global Food Supply: Big Lessons from the World’s Small Farms

Videos – World Neighbors

Transcript of EP140: Economic development through savings and credit groups w/ Kate Schecter

N.B. This is a lightly edited version of a transcript originally created using the AI application otter.ai. It may not be 100 percent accurate, but should be pretty close. If you’d like to quote from it, please check the quoted segment in the recording.

Gene Tunny  00:01

Coming up on Economics Explored.

Kate Schecter  00:04

We went way up into the mountains in Timor-Leste. And they had saved this community in a couple of years, had saved $36,000.

Gene Tunny 

Wow!

Kate Schecter 

And we were able to then loan to each other and start to develop really wonderful businesses.

Gene Tunny  00:23

Welcome to the Economics Explored podcast, a frank and fearless exploration of important economic issues. I’m your host, Gene Tunny. I’m a professional economist based in Brisbane, Australia, and I’m a former Australian Treasury official. This is episode 140 on economic development, through savings and credit groups. My guest this episode is Kate Schecter, President, and CEO of World Neighbors, a non-government organization supporting economic development projects in emerging economies across the world.

I got a lot out of my conversation with Kate. In particular, I learned about the power of local savings and credit groups in rural areas. I also learned a lot from Kate’s stories in the field working on economic development projects. For instance, I learned that Guinea pigs are a delicacy in Peru. Why is that fact relevant? Please listen to the episode to find out. Unfortunately, the internet connection was a bit unstable early on in the conversation, but it gets better later on. So please stick around. As Kate has a lot of really valuable things to say about economic development. Please check out the show notes for relevant links, any clarifications, and details of how you can get in touch with any comments or suggestions? I’d love to hear from you. Right on, now for my conversation with Kate Schechter of World Neighbors. Thanks to my audio engineer, Josh Crotts was assistance in producing this episode. I hope you enjoy it.

Kate Schechter, President and CEO of World Neighbours, welcome to the program.

Kate Schecter  01:51

Thank you for having me.

Gene Tunny  01:52

It’s a pleasure, Kate. Keen to speak about the work of your organization and the work you do in economic development worldwide. Could I ask you first about World Neighbors, a bit about the organization? What it does, and also its history please?

Kate Schecter  02:13

Oh, thanks so much for asking. World Neighbors is a 71-year-old organization. So, it was founded in 1951. It is a non-sectarian, it’s not a faith based organization. But it was founded by a Methodist minister in Oklahoma, in the United States. And it has; the founder was very, how should I say it, but he was quite prescient about some of the challenges that we all face in the development sphere. He realized very early on that he wanted to create a methodology that would not create dependency, that would allow people to lift themselves out of poverty, as opposed to sort of handing out things to people. And he created this organization that really tried to reach the poorest of the poor, in the most remote, isolated rural areas of the world. And the organization has thrived despite all the challenges that, you know, all of the people who want to do good for the poor have faced over the years. And we’ve been, at this point, we’ve been in 45 countries. Today, we’re in 14 countries in Asia, Africa, and Latin America. We reach about 600,000 people a year. And the way we do that, we have; it’s a relatively small organization. We only have 57 staff around the world, with offices in the capitals of some of these countries. But the way we do it is through community-based organizations. So we go into these very poor communities, we look to see are there any kind of community organizations formed to kind of, lead the charge, and if we don’t see that there is a leadership formation, then we help them create their own community-based group that will follow through on all of this training that we’re going to do. So, the basis for our work is training. And I think a lot of organizations will tell you that, you know, the best way to help people is to do capacity building, and to create demonstration sites, etc. The big challenge there, of course, is you can train and train but if somebody doesn’t actually follow through, and watch to see that, that everything that you’ve invested is really happening on a regular basis, then, of course, it’s kind of, it could be wasted effort. So, we create these community-based organizations to be the eyes and ears on the ground and to mentor and to lead within the communities. The organization focuses on, obviously, like everybody, on sustainable development. We’re not, although, we do differentiate ourselves from humanitarian aid, we try to go into communities that are relatively stable so that we can help them to lift themselves out of poverty, and then become independent. We have a methodology that recognizes though, that this kind of change in these very rural areas can take a long time. And so, we stay in a community for 8 to 10 years. And we; with different levels of funding at the beginning and at the end, but in the middle, we’re really kind of, we’re at a high point of a lot of training and a lot of mentoring, and then ratcheting it down as we tried to help them figure out how to attain funding for all the things that they want to do. It’s, of course, focused a lot on women, because we’re trying to help women in these poor and rural communities to have more of a voice. Many times, we go into the communities, the men have to go out to, to get jobs in the cities or even out of the country. And then they send home remittances. So of course, one of our goals is to try to help these families stay together, and to have thriving farms and thriving businesses so that they don’t have to be separated. So, the model is taking from many different places. We’re partners with, wherever we can be with other organizations or with umbrella organizations are focused on innovations in agriculture, in new forms of energy, and whatever might be happening on the ground. We are part of several umbrella organizations in Africa, especially, that are doing a lot of innovative work in growing crops that are more resilient to climate change. And that can last longer, so that the communities will have more food security for more of the; for a year. And that’s happening in India and Nepal, as well. And in Indonesia, and Timor-Leste.

The other thing that’s kind of exciting about having an organization like this is that we can share these innovations around the world. So, I have a, you know, the opportunity and get to see what’s happening in all of these different communities. Well, before COVID, I was travelling a lot, to see what was happening. And I would be able to say to farmers that I met in Peru, for example, who were trying to figure out the changing rainfall patterns. Well, you know, that kind of work is also going on in Indonesia. And we could share some of the innovations that are happening there. So, that kind of; we have globalization, you could call it that or, or sharing of innovations is something that’s happening, not just at World Neighbors, but in a lot of these smaller grassroots types of development groups that are working on the ground and in agriculture, especially.

Gene Tunny  08:33

Okay. Can I ask you about whether you get support from World Bank or any of the other development banks or the overseas development assistance organizations in different countries? I know Britain has, there’s a lot of funding from Britain and then there’s USA. Is there; you’ve got; there’s an Aid organization in the US. Do you get support from those organizations?

Kate Schecter  08:59

Yes, we do. We get grants from the United States Agency for International Development USAID. But I’ve tried to not become like a lot of other organizations in the United States, who are primarily dependent on US government funds. So, we’ve tried to keep a diverse portfolio of funding. We have funding from the US government, but we also have funding from private foundations. We’ve been able to get corporate funding from corporations that have separate foundations that they’ve formed to provide funding to nonprofits. We have family foundations in the United States, that are, individual families that are interested in these kinds of work. And then we have individual donors that we reach out to and many of them have been giving, for as long as World Neighbors has been in existence, so, we are dealing with generational giving as well. So, it’s a wide portfolio of funding sources. And that’s something that we try to keep it that way. We don’t want to become dependent on one source.

Gene Tunny  10:18

Right. Yep. Fair enough. I think that’s, that’s a good strategy. So, you mentioned two countries that are close to Australia. And I mean, I’ve had some involvement with one of those – Indonesia. So, I’ve done some work with their finance ministry and their Economic Development Ministry, just short courses. We, our foreign affairs, office, funds, short capacity building courses for foreign officials. And so, I’ve managed to, you know, meet a lot of people from Indonesia and learn about their challenges. I mean, it’s, it’s similar to other emerging economies where you have still a large agrarian workforce, lots of people in the informal economy. And I mean, it sounds like you’re, so you’re part; you’d be partnering with, say, a local organization in Indonesia. So, would you be relying on the local organization to go out to the community; define the communities where you can set up these – what did you call them? You set up local organizations, community based, right? So, would you, you would rely on partners in these countries, but, and you’ve got your people in, in Oklahoma City or in other places? And would they go out and they would help; they will coordinate? Or do they need to be on the ground? Or do you rely on the people in those countries? I am just trying to understand how it all works.

Kate Schecter  11:47

Yeah, that’s a great question. And I neglected to say that, we only hire, our staff are all local people. So, they’re all people who are from the countries where we work. We do that, so that, well, for very many different reasons. One is that they are able, they speak the languages, many times we’re dealing with dialects, not just the sort of main language. And you know, that’s true in, in Indonesia, for example, that every, most people speak Bahasa, but then of course, there are other dialects. And we, so we really try to only hire people who are from the countries. We are not the kind of organization that does such grassroots that we don’t, you know, keep in touch with the government. So, one of the other motivations for having local staff is that they have relationships, and can negotiate and make sure that we’re in compliance with all national and local laws. So, we’re trying to coordinate with national programs. And Indonesia is a very good example of that. We have, we are registered in every country where we work as an international NGO. And then we create MOU – memoranda of understanding, to make sure that we’re in line with the other development groups, and with the national programs, because our main goal here is to help and then, hand over so that the villages, the communities can get the assistance that they might have, you know, might have access to local government that they don’t know about. So, we’ve become a kind of liaison for that. And in terms of identifying the communities, that’s done in conjunction with our staff. So it’s not that, you know, that the local people tell us, oh, this is where you should go, it’s more of a process of going out, making sure that we’re working in an area, in Indonesia, you know, we agree to work only in particular, on particular Islands in particular areas. Because there are so many other groups. And that’s true in many countries, too. You know, for example, in Haiti, you have a situation, there’s so many different development groups. So, you want to make sure that you’re working in a place where there’s a real need for you, there’s a real demand for you. And of course, you know, when there is a need, and there is a demand, and people are helping themselves, and there’s going to be more ownership of the changes that that are implemented. And of course, that leads to far more likelihood of sustainability in the long run.

Gene Tunny  14:41

Right? Yep, absolutely. Okay. And so, in Indonesia, have you been helping improve sustainability of agriculture is that one of the things you’re doing? I’ve seen, I saw on your website, there was an article climate change and Indonesia’s slash and burn agroforestry can help

Kate Schecter  15:00

We’re working in agriculture, we’re working in all kinds of aspects of water, making sure that people have clean potable water that they are, you know, that they have enough water for irrigation, but also managing the water so that you catch it when it rains. But then you have it when there’s drought, a lot of work on savings and credits, which we, I hope to talk more about, to help people to save money so that they can then invest in individual businesses or in their communities. We do a lot of work on disaster/risk management, or preparing for disasters, because as you know, Indonesia is very prone and at risk for all kinds of natural disasters. So, creating community groups that will then manage the situation, should there be an earthquake or, you know, a tsunami or whatever. And that has actually been very successful. We’ve had several situations now, where, on Lombok, there were some earthquakes that our communities were more prepared for, and then could help neighboring communities to manage the situation when the earthquakes hit. So that’s another thing I wanted to mention is that we work in individual communities, but the idea is to have this kind of grow organically, and not to just restrict it to only the community that we are investing in. So, we’re looking for growth, not necessarily that we’re going into every single one of these communities, but allowing neighboring communities to come in to join in the trainings, to emulate their neighbors, and in some cases, we have really great examples of farmers and community members then going and kind of becoming consultants on their own. So, once they learn these skills, they then kind of, leverage them to teach their neighbors and become quite successful as trainers.

Gene Tunny  17:21

Yeah, yeah. Okay. I would like to ask you now about the savings and credit. So, you’ve written a really nice piece – this is about five years ago for Stanford Social Innovation Review, a new paradigm for microfinance, savings, and credit. And you’ve developed or you’re implementing this new approach which is distinct from what many of us may sort of understand as the traditional or well, the micro financing in the tradition of, is it Grameen from Muhammad Yunus, if I remember correctly, won a Nobel Peace Prize. And you’ve written that to counteract the traditional short-term approach, more and more international development groups are moving away from micro-financing in the Grameen tradition, small loans from banks with low interest rates toward local savings and credit groups. So, Kate, it’d be great if you could explain, what was the, why you’re doing something different from that traditional micro-financing, and what the benefits you see of that approach. Also, I’m keen to understand how did you sort of, come across this approach? Is this something you developed in-house? Or was it something that I mean, I guess you developed it over the years of, of learning out in the field? Could you tell us that story please?

Kate Schecter  18:55

Sure. So, I think that World Neighbors is not the originator of this idea. I think it’s been happening for about 20 years and it’s evolving. And I know that there are much larger groups that also do different, slightly different permutations of this approach. The idea is well, there are a few things that it’s addressing. One of the problems with the more traditional idea of micro-financing, is that it is small loans to individuals from banks with lower interest rates, so that the idea is that the per se you know, the classic ideas is, we’ve seen is a seamstress who gets enough money to buy a sewing machine and then she starts her own business. One of the big problems that we found with that is that you’re still in debt to a bank. You have to have access to a bank. And then, what if you default on your loan? You could get into the same trap that so many people got into before the idea of microfinance that you’re still, you’re still in debt to an institution. And, you know, the, the interest is accruing and you’re, you’re getting into the trap that, that the whole idea behind microfinance was trying to avoid. So, one other things that you realize when you go out to these communities, which are very, very hard to get to, there are no banks out there, they don’t have access to this your traditional credit and loan environment that you would need for even for micro-financing. So, this evolved, I think, originally from traditional mechanisms that were already in place in communities. For example, in many parts of East Africa, they had something called a merry go round, where they were essentially doing the same kind of saving together. So, my sense is that about 20 years ago, maybe 25 years ago, at this point, this started to evolve. And it became more formalized through groups like World Neighbors. The Gates Foundation has put a lot of effort into this idea of savings and credits, sometimes it’s called savings and loans. But it’s all because they allow for communities to start to accumulate capital, they allow for, if there’s some kind of a default of one of the individuals who’s gotten a loan, then the community can kind of support that person and figure out how to help them. They are, in our case, in World Neighbors case where we’re helping women who would in other; without this kind of a mechanism, would really have no way of getting out of the home, and getting having enough access to credit to be able to start their own businesses. Of course, the groups are combined men and women. But what we find is that the interest is primarily from women who otherwise would have no other way. So, the way it works is we go into a community, we talk about how are you going to address the issues that are going to help you lift yourselves out of poverty. And when we initially talk about savings and credit groups, women will say to us, we don’t have any money, how are we going to save any money if we don’t have any money. And so, it starts very small. I mean, it could be, you know, 10 cents a week, everybody brings to the group and it starts to accumulate. What I found coming from my background is in big, giant, USAID grants for International Health Care Development, before I came to World Neighbors, so I was honestly quite skeptical about this mechanism. But I’ve been out to the field and I’ve seen in the, we went way up into the mountains in Timor-Leste, and they had saved, this community in a couple of years had saved $36,000. And we’re able to then loan to each other and start to develop really wonderful businesses. It does help when the government or your, local government or national government kind of, sees that this is working. And in the Timor-Leste case, they had built, or they had built a road that led up to this town. And all of a sudden with the road and with the savings that they’ve been able to make, they were able to really start to carry their produce down to sell in a much larger market area. And that, of course, was helping them to accumulate more and more money and then to be able to invest more into their communities. So, people invest in their children’s education, in health care, but we really try to make sure that as we’re teaching them this mechanism, that they’re not just investing in the family, but they’re also investing in some kind of business that will bring revenue in.

Gene Tunny  24:35

Right. Okay, we’ll take a short break here for a word from our sponsor.

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Gene Tunny  25:12

Now back to the show. So, you mentioned a figure. I can’t remember the exact figure, but it was something like was it $36,000 or so? So, can I ask what currency are they are they saving in? Were they saving in their local currency? Or are they saving in, I mean, were they using US dollars?

Kate Schecter  25:34

Yes. First thing you can think about Timor-Leste is they use dollars there, US dollars. Yeah. Okay. I mean, that was strange to me. But you’d see that sometimes in these very, very small countries. I mean, I worked for years in Kosovo, Kosovo is on the euro. Even though it’s been a real struggle for them to be on the Euro they are on.

Gene I just wanted to mention, because I realized I neglected to mention that we actually have gotten grants from; a long time ago, before my time, we got a big grant from the Australian government actually, in Timor-Leste. And we recently got a couple of smaller grants from the government of New Zealand in Timor-Leste. So, we have had support from your part of the world, in Indonesia and Timor-Leste.

Gene Tunny  26:28

Oh, that’s good. That’s really good. I mean, they’re important neighbors of ours. So yeah, that’s good to see that, that we’ve done that. Right. Yep. So that’s really interesting. So, I just want to understand what they’re doing. So, you mentioned, there’s no bank involved, or one of your principles. So, you’ve got six principles, which I really like you’ve set this out? Principle 5 is don’t involve banks, which I think is fair enough. But then does that mean someone in the community has to act as the banker?

Kate Schecter  27:02

Well, good, good question. And what you see happen is that, as the money starts to accumulate, initially, we just use lock boxes, and it’s passed around and you know, there’s this sort of very simple mechanisms for making sure that, the money is safe, but also not, you know, there’s no risk of somebody stealing it. But, very quickly, that becomes too simple, and people need a bigger, more institutionalized form of savings. So, the next step many times, is to create a community bank, a community-based bank, where it’s like a cooperative. And because they’re farmers, many times, they’re already very familiar with the cooperative model. So, it kind of, there’re these different stages that it goes through, from this very sort of localized and individual community based, saving together and sharing with each other.

The other thing I want to point out here is that, we have to teach people basic financial skills. I mean, sometimes we’re dealing with communities where people are semi-literate. And so, they may not really have the skills to figure out, you know, how to create percentages for loaning to each other. So, it enhances so many different skills beyond just allowing them to have access to some funding. Now, of course, you could get in, we have gotten into situations where it’s gone from just, so there’s a nice cooperative, in a central cooperative in the village and people come there. To them, it’s becoming more of a community bank model. Because, you know, there’s just, they’ve been saving for many years, more and more people want to have access to you know, you don’t want to shut people out. Initially, these are small groups of no more than 20 or 30 people. And then, as they grow, you want to make the capital more accessible to larger people, larger groups. There’s a really nice example. In Nepal, when I first started, I went to a community where they had been, beneficiaries of World Neighbors, but many years ago, and now, they had graduated years ago. And they had built a kind of a building that housed a cooperative bank, a clinic that they had built because the government had not really provided that. So, they were able to get a government worker to be the nurse at the clinic but they had built the clinic themselves. And they had a training center. So, they’ve kind of, gone from this small savings and credits model to a much larger kind of business that was addressing a lot of different issues within the community. And it had a cooperative bank for loaning to farmers.

Gene Tunny  30:24

Okay. And I’m just wondering, I mean, how, what sort of gains and living standards are you seeing through this approach? I mean, is this a way to really lift some of these communities from a subsistence level? Are you seeing really significant improvements in living standards in these communities?

Kate Schecter  30:46

Absolutely. So, I think the premise of the sort of real core value of World Neighbors is that; and you’ve heard this line many times, but I mean, we really adhere to it. We are giving a hand up, not a hand out. And it can be very tempting to just go into a very poor community, and bring things you know, material and medications or whatever, that people want to donate, or even just to bring money and to think that that somehow, is going to help them but you and I know that the real way to help people is to help them help themselves. And then, they’re going to feel a lot of pride and how they’ve been able to lift themselves out of poverty, their children will have a different; will have more access to education. So yes, we’ve seen incredible change around the world. And, and I think the main thing that I’ve really picked up is people want to be able to share their knowledge. If they’ve learned all these new skills, and they want to be able to go out and teach others, they don’t want to just, sort of, hold back on their private farm. And I think that’s the real kind of core aspect of this is that it creates pride, and it creates capacity that then is being shared and reaching more and more people every year. But I think the Nepal example is a great one, you know, you kind of imagine that you’re gonna go out to these very poor villages, and you get there, and they’ve built these beautiful buildings. They presented me with a PowerPoint presentation about their consulting firm, and all the trainings that they’re doing. And how they had, you know, built this clinic and how many people there are treating every year. It was very sophisticated. And that was eight years ago. So, I can’t even imagine today, what it looks like. And you see that all over the world. Then, of course, the farms are thriving. I mean, we haven’t even talked about genius that now with the war in Ukraine and this fear of the coming food shortage and fertilizer shortage, this kind of grassroots effort is so important because not only were our communities much more self-sufficient during the whole COVID pandemic, but they’re also going to be better off in not being dependent on imports and, and chemical fertilizers. Because they do sustainable agriculture.

Gene Tunny  33:42

Right. Yeah, I’m keen to chat about agriculture. But first, you mentioned Nepal, and you probably got a better idea than I have, because you’ve done more recent work in, economic development and field visits. How do they power themselves? Do they have a mixture of diesel generators and solar power in these communities? And what’s their internet like? Do they have satellite broadband? I mean, how well connected are they?

Kate Schecter  34:11

Shockingly, well connected. Yeah, I mean, it’s so real. It’s really incredible to me, I mean, the only place I’ve been where I did not have internet connectivity was when we went way, way up in the mountains in Bolivia. Okay, and the only time my phone literally just went black on me, you know, just went dark and I was honestly, you know, being way too dependent on connectivity. I was a little freaked out. But and, you know, they were kind of laughing at me and my staff were saying, okay, might be good for you to have a good day or two without connectivity. But, it’s surprisingly well connected. I mean, Nepal will face a very serious problem because they do import oil and gas. And that’s something that there’s a lot of concern about. But there also is a lot of work being done on solar energy throughout these very, very rural communities so that they’re not so dependent on the national grid. But, they’re more advanced than you would expect. Let’s put it that way.

Gene Tunny  35:28

Oh, that’s good. No, just wondering.

Kate Schecter  35:31

Everybody has these cell phones. They seem to be able to charge them. And it’s amazingly connected.

Gene Tunny  35:38

Yes, yes. Yeah, that’s right. Okay, very good. So, on agriculture. Now, the traditional way that economists think about agriculture and economic development; there’s this story that well, in developing economies, there’s too many people on the land, working on the land and agriculture labours badly, it’s underutilized in agriculture, very inefficient. And so, you get big economic gains, when you move people out of agriculture, you get more efficient in that – move them to the cities, and this is a big part of what’s happened in China. So that’s the sort of traditional economic development story. But, and so what I found interesting or fascinating is your article; so you’ve written an article in 2020: COVID-19 and the global food supply big lessons from the world’s small farms. And you’re talking about the benefits of small farms and locally produced fruits, vegetables, and meat. And so, this is, I want to understand this perspective and the benefits you see in small farms. And I mean, coming to you from a country where we have some very large farms, and you got to own a farm in Australia, and you hardly see anyone like that. But here, you’ve got still a lot of people on the land. So, are you arguing that you can still have people on the land working on the land, that don’t necessarily have to move to the city, they can have a sustainable lifestyle in their existing communities?

Kate Schecter  37:27

Absolutely, I think. I mean, I agree with you that there has been this, I would call it a bias that you know, who wants to stay in these rural places? Everybody wants to get to the city. You know, that’s where, they think that they’re going to be jobs. And, of course, there’s going to be higher level of technology. And so, there’s an attraction, which we all understand to moving to urban areas. Of course, you know, what’s happened, which is that, as more and more people move to the cities, the cities can’t necessarily absorb these people, then you get these urban slums with terrible poverty in urban areas as well. So, our goal is to try to help people to have better lives where they are, and not be tempted to either migrate to cities, and then get trapped in this urban poverty. Or as we have in the United States, a big problem with migration from Central America, to the United States. We want to try to help people to stay in their countries and to help them to make their farming profitable and attractive to them to stay there. You know, so trying to help them have better homes, access for their children, better health care where they are, as opposed to having these mass movements of people, which has created more and more poverty for them. And I would argue also, and I’ve written about this, I don’t think people really want to leave their homes, they leave because they have really no other alternative. In Central America, there are these gangs and crimes that’s pushing people out, in addition to climate change and poverty that they’re facing.

So how do we deal with that? We’re trying to enhance the value of their land by not doing sort of the massive Agro business type of approach of you know, mono cropping one commodity product, and so having multi cropping; having a variety of different sources of income from not just, you kno55w, sort of straight out agriculture, but also teaching them about having, you know, having animals and we do a lot of work on trying to help people to grow chickens, because they are such a lucrative business in Peru.

I know this is kind of gross to many of us, but they eat Guinea pigs and Guinea pigs are considered a delicacy, and they are not difficult to grow. And they bring in a lot of money. And so, we help women especially, to grow these very lucrative Guinea pig farms. We were focusing in on the health of the soil, the cleanliness, and the accessibility of water. One of the things that we’re really focused in on for example, and I forgot to mention this in Indonesia, is having the water much closer to the village, you know, so many poor communities, the women and the children walk for hours and carry water back. So, figuring out pretty straightforward mechanisms for canals, wells, water catchments, to have access to water, and make sure it’s clean. One of the wonderful small innovations that I saw early on is that in so many of these poor places, women and children walk for hours to get fodder for their animals in, you know, forests or jungles. And then they walk back, you’ve seen many pictures of you know, or we’ve travelled, you’ve seen them carrying it. So instead of this really sort of dangerous and time-consuming practice, we have started to teach farmers to grow the fodder right in front of their homes, they have a lot of wasted land a lot of times, patches of land, where they can grow nutritious fodder for their animals right there in front of them. And that’s been an incredibly successful and simple change. So, the whole idea is to kind of reverse a little bit what you just described, to help people to stay on the land, to enhance the quality of their lives, to diversify. Oh, another thing that I didn’t mention is encouraging people where they have access to water to creating fish farms, fish ponds. And that has been a lifesaver in Haiti, for example, where there’s so many natural disasters, our communities, which we work with are way up in the mountains. And they all have fish ponds, which provide protein to them when they can’t go down to the coast to get fish. And then they sell the fish. And that’s also created an income for them. We see fish ponds, in Mali, in Kenya, you know, all over the world. So, if you have this kind of diversified farming, where there’s various different income streams, and you’re working on better crops that provide, you know,  you don’t know. I saw, when I was in Kenya, that they’re growing a type of kale that produces leaves, all for eight months. So, they’re trying to get it to be more productive for even longer, during the year, and many different other kinds of crops also where they’re trying to extend their production. So, all of this is really to enhance life for people, not to prevent them from abandoning their, you know, their homelands and their farms and to create long term, healthy environments.

Gene Tunny  44:31

Right. Okay. So, your involvement, would it involve both assistance with some of the technology you talked about or the things on the ground, the canals, and I mean, maybe rainwater tanks, but also education in farming methods, is that right? It looks like you have a focus on organic agriculture. Is that correct?

Kate Schecter  44:53

That’s right. So yes, we would be involved in all of the different aspect of this that I’ve just described. You know, both training people, but also learning from them, we try, as I said earlier, you know, we might see that there’s a very innovative way, to do water catchment, and then we could share that with others. Our involvement is primarily training, and then following up to see that things are actually working, we don’t want to do a lot of training, and then come back, you know, after; oh, and the other thing we do that I think is done by a lot of different groups do agriculture is what we call Farmer Field schools. So, taking a taking a farm, that might be a real successful farm and identifying leaders, to train other farmers through basically demonstration sites, and then allowing; then those farmers might farm the land together, and sell the food that they’re growing together. But also, it allows for them to have a mechanism for continuing the training, after World Neighbors leaves. We have lots of these successful farmer field schools, where World Neighbors isn’t there anymore? We’ve moved on. We call them graduated communities, they’ve now, they’re running these on their own.

Gene Tunny  46:32

Great, okay. That’s excellent. Can I ask you about value adding? Is that one of; do you try to encourage some value adding to the crops where you can?

Kate Schecter  46:44

Absolutely, and honestly, Gene, in that case, we see them, you know, doing it on their own, and then we might help them to sort of, scale it up. But a lot of that happens through the community. So, a good example is women in Guatemala, who were, they had a savings and credit group. And then they got together and realize that they all knew how to make jams. So, they started to figure out how to sell the jam, not just locally, but start to move it into bigger cities. In Africa, there’s a lot of focus on value adding by drying different types of crops and making them last longer. They’re making soap in Burkina Faso, that they sell. So, that’s where we’re kind of allowing, you know, for ingenuity and innovation without directing it. I mean, we’re not in the business of telling people, you know, this is what you should do. We’re trying to get them to have that spark happen through their own work with each other.

Gene Tunny  48:06

Great. Okay. So, I’ll put a link to this article: “COVID-19, and the global food supply; a big lessons from the world’s small farms”, and you set it up quite nicely. You talk about how the COVID 19 pandemic has revealed both the strengths and limitations of globalization and the problems with the industrialized food production. So, I think there’s some good points there. And the costs of that system, the cost to the environment workers, small farmers into a regional individual nations food security, those costs have led many people to look once again at the benefits of small farms and locally produced fruits, vegetables and meats. So, I’ll put a link to that. So, if you’re listening in the audience, yes, yeah, I think it’s some;

Kate Schecter  48:58

One thing I didn’t mention is this whole concern now about the rising price of chemical fertilizers? And one of the things that’s also been happening, I don’t think a lot of people know about, is that, there has been more and more change and improvement of organic fertilizers. And we have been able to share these mechanisms for creating organic fertilizers around the world. So now, our farmers not only use, you know, manure, but also, all the waste from their animals and kitchen wastes to compost and they’re making so much of it that they can sell it. So, it’s not just being used on their farms, but they’re actually able to take their organic fertilizers and pesticides and sell them. So, there’s this kind of nice circularity to, to what they’re, you know, to all the wastes that they have. Yeah. And that’s true for the fish ponds as well. They don’t buy feed for the fish. They use their own kitchen scraps for feeding the fish.

Gene Tunny  50:20

Oh, that’s clever. That’s very economical and efficient and circular. You mentioned circularity before. So, I think that’s excellent. Okay. All right. Kate, do you have this; won’t it be nice to have a YouTube channel because it sounds like a lot of these things would be; they’d make great videos just to see?

Kate Schecter  50:41

We have some videos on our website. Okay. If you go to where it says news, and there you can see some videos there of work that we’ve done in India, Indonesia, and Timor-Leste. They’re a few years old now. But they do demonstrate quite a bit of what we’ve talked about today.

Gene Tunny  51:05

Oh, fantastic. Okay, I’ll put the link to the website and the show notes for sure. Kate, anything else to add? I mean, I think I’ve learned a lot and about what you’re doing and the savings and credit groups. I think that’s a great innovation I’ve been, I was stunned by some of the examples you gave and just how successful they’ve been. That’s, great to see. Any, other points before we wrap up?

Kate Schecter  51:37

Well, I really want to just thank you again, for your interest. I think that my sense of having done a lot of talking about this, and, you know, speaking with Rotary Club groups here in the United States, and various different, you know, churches and various places around the country, at universities, a lot of universities that we are all hungry to hear about and to learn about what’s happening out there. We are, I think, we’re more global citizens than we admit sometimes. And there’s so much, you know, focus right now on this horrible war. But I think that it’s important for people to educate themselves about these successful things, to not sort of think of the world as so divided between the rich and the poor. And the more that the people can kind of, educate themselves about these innovations and these successes, I think it provides a lot of hope that we will get through this and that we can then learn from each other.

Gene Tunny  52:50

Absolutely. Okay, I think that’s a great note to end on. So, Kate Schecter, the President and Chief Executive Officer of World Neighbors. Thanks so much for your time. I really appreciated the conversation again; I really learned a lot. So, thanks. Thanks again. And yeah, hopefully, I’ll catch up with you sometime in the future and learn about your latest successes. So, thanks so much.

Kate Schecter  53:20

Thank you.

Gene Tunny  53:23

Okay, that’s the end of this episode of Economics Explored. I hope you enjoyed it. If so, please tell your family and friends and leave a comment or give us a rating on your podcast app. If you have any comments, questions, suggestions, you can feel free to send them to contact@economicsexplored.com and we’ll aim to address them in a future episode. Thanks for listening. Until next week, goodbye.

Credits

Big thanks to EP140 guest Kate Schecter and to the show’s audio engineer Josh Crotts for his assistance in producing the episode and to Peter Oke for editing the transcript. 

Please get in touch with any questions, comments and suggestions by emailing us at contact@economicsexplored.com or sending a voice message via https://www.speakpipe.com/economicsexplored. Economics Explored is available via Apple PodcastsGoogle Podcast, and other podcasting platforms.

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