Faith & Prosperity

• Tweet

Installment 8 of 15 – Andreas Widmer’s remarks at SECAM, Accra Ghana July 29. 2010

John Paul taught that poor people should not be regarded as a problem to be solved, but as people with potential. Many of today’s solutions that regard the poor as a problem end up trying to do away with them through abortion and birth control rather than actually eradicating poverty itself.

Our system is afraid of the poor or regards the poor as ignorant masses that need to be managed, or both.

Solving poverty should be done by creating wealth.

Small and medium enterprises (companies with 10 to 500 employees, companies that can “scale”) are the engines of prosperity in your diocese.

If they grow, your faithful have good and secure jobs, the local economy grows, a middle class can flourish and a local basis of philanthropy evolves. In short, your diocese becomes economically self-sufficient, but much of this depends on these entrepreneurs.

They have to be acting with a stewardship mindset.

They have to be catechized.

The have to have a strong and active relationship with Christ.

They have to see their talents and their work as gifts from God.

They have to have a strong moral culture.

Much depends on the moral culture of your local entrepreneurs.

• Tweet

Installment 7 of 15 – Andreas Widmer’s remarks at SECAM, Accra Ghana July 29. 2010

In the European Union, it is estimated that more than 20 million SMEs (with up to 250 employees) accounted for over 80 million jobs. In the United States (where small firms are defined as those having fewer than 500 employees), 99.7 percent of all firms fall into the “small business” category, account for half the nation’s jobs and contribute more than 50 percent of non-farm GDP.

In developing countries, this SME sector is almost entirely missing, which is a major contributor to the cycle of poverty.

Networks of productivity and exchange: John Paul defined poverty not as living on $1 a day, but suggested that a better way to describe poverty is the state of being excluded from networks of productivity and exchange. Starting from that problem formulation leads us to better solutions.

It is no wonder that if we start with the $1 a day problem statement that we end up with a solution that calls for redistribution of wealth. But the economy is not a zero sum game. Prosperity is created when business transactions happen, and business can create more money through trade. Increased business activity is needed, not a redistribution of wealth.

Another weakness in today’s system is that many solutions call for and create separate solutions for the poor – fair trade, third world shop, microfinance, handouts rather than integration, dumping rather than trade. This contradicts John Paul’s assessment that the poor are excluded from the world wide networks of productivity and exchange. What is called for is solidarity. The west needs to integrate the poor into the existing world wide networks of productivity and exchange, not create separate networks for the poor.

For example, an increase in trade among African countries by less than five percent would yield more than $70 billion in annual income to the local economy.

This ultimately would be more than the continent receives yearly in foreign aid.

• Tweet

Installment 6 of 15 – Andreas Widmer’s remarks at SECAM, Accra Ghana July 29. 2010

Pioneers of Prosperity 5 Minute Overview Video (w/ text slate) from Jeff Zimbalist on Vimeo.

The Pioneers of Prosperity Awards Program is based on SEVEN’s experience that great companies exist in even the most challenging business environments. We believe that greater prosperity can be achieved in emerging markets if these existing models of success are better understood and effectively replicated. Showcasing local success stories, focusing on small to medium size firms, will help to inspire a new generation of entrepreneurs that can serve as the engine of increased growth and prosperity for their country.

Pioneers of Prosperity will award winners with up to US $100,000 to invest in technical infrastructure and training for their companies, and connect them to networks of technical expertise, potential investors, and other cutting-edge entrepreneurs on the local, regional, and global level.

• Tweet

Installment 5 of 15 – Andreas Widmer’s remarks at SECAM, Accra Ghana July 29. 2010

Development, or the lack of it is a complex issue – culture, aid, economics, politics all play a role.  But I find that a key reason is because  local entrepreneurs are not encouraged by their own people, are ignored by the economic development groups and don’t have proper access to the financial system to grow their firms.

That’s a pity – because I believe that the best way to fight poverty is through investment, not aid.

The most effective poverty fighters are entrepreneurs. People who build local companies that employ 20-500 people. They bring about long-term employment. They create the middle class. They enable the local community to flourish. They enable our local churches to function.

But they are very normal people like you and me. What they have is a special gift. A special talent.

I realized this as I first came to Africa to advise companies on business strategy.

I worked with some of the best entrepreneurs in the USA and was blessed with a wonderful career. I learned a lot from these entrepreneurs and was now applying it to companies in emerging countries.

Then I met the emerging market entrepreneurs. And I was surprised: they were the very same kind of people that I worked with in silicon valley and I believe they could bring about the same kind of economic transformation and general prosperity if they would get the chance to grow their companies.

Take Ariff Shamji – of AAA Growers in Kenya. His company serves the market of premium and ready to eat vegetables in Europe and Africa – grown, packaged and shipped from a few farms in Kenya. He employs over 2000 people and they have schools and medical facilities on their company campus.

AAA Growers from DDC International on Vimeo.

Or Tokunbo Talabi who against all odds started a security printing company in Nigeria 12 years ago. He employs 300 people and has as his customers not only 17 out of the top 24 banks in Nigeria but they also gained the confidence and trust of 4 national governments to print their ballots and government checks. His employees have been trained to become the top experts in security printing in Africa and indeed around the world.

Or Carolina Lopez who built up her father’s transportation business in Nicaragua. She turned the 24 day wait for products at customs into 24 hours. This might not sound like a watershed event, but the value that her company creates in the local economy creates is almost immeasurable: with a 24 day wait you cannot import fresh food. With 24 hours you can. The financing needed for those 24 days prohibits many low margin products from entering the country and of course the strain on the local economy of having a 24 day delay in its shipping contact with the outside world suffocates a country’s competitiveness.

ADENICA from DDC International on Vimeo.

What these three entrepreneurs and all other entrepreneurs have in common is 5 simple traits:

1. They are not afraid of taking risks. To them, taking rational risk is opportunity.
2. They embrace competition.  To them, competing is the fastest way to learn.
3. They embrace failure. And they see failing not as a setback but as leading them a step closer to the eventual success.
4. They are economically motivated, but their model of economic win leaves everyone around them better off. And the money they make always finds its way back into the next job and prosperity generating idea.
5. And finally, they are people of action, not just talk. They are men in motion, not stagnation. They strive for excellence in whatever they do.

• Tweet

Installment 4 of 15 – Andreas Widmer’s remarks at SECAM, Accra Ghana July 29. 2010

Why is it that all this aid money had so little effect? Why hasn’t more progress been made?

The reasons are many and complex, but a few simple points stick out to me:

The World Bank has estimated that 60% of all foreign aid stays within donor countries, and is used to pay for consultants to purchase nationally produced goods and for transportation costs.

And as in any industry, the basic truth applies: if poverty is your business, more poverty means more business…

And the other 40% of foreign aid that stays here in Africa to help build the local economy is far outweighed by corruption and the anti-competitive impositions put on African business:

Farm subsidies in the EU, the US and Canada, and the US steel tariffs total over $300bn per year, are larger than the combined national income of sub-Saharan Africa, and dwarf the $50bn given in aid a year.

Europe subsidizes its agriculture to the tune of some $35-40 billion per year, even while it demands other nations to liberalize their markets to foreign competition.

Dairy subsidy in the EU is $2.50 per cow per day…(Japanese cows live even better, they receive an average of $7.50 per day)

While aid amounts to around $70 to 100 billion per year, the poor countries pay some $200 billion to the rich each year.

Sub-Saharan African countries, where aid constitutes over 10% of GNP, remain the poorest in the world. Countries with some success in combating poverty, such as India and China, depend little on aid (less than 1 percent of GNP in both countries).

Sub Saharan Africa’s share of world trade declined from 6% in 1980 to only 2% in 2002

Is that because there are plenty of starving children, but no entrepreneurs in Africa?

Is it because Africans are worse at business than we are?

Is it because they don’t want investments?

• Tweet

Installment 3 of 15 – Andreas Widmer’s remarks at SECAM, Accra Ghana July 29. 2010

The world gives Africa a lot of aid, but does not do business with Africa. Here are some numbers that illustrate what I mean:

The population of Africa makes up 12% or 1/8th of the world’s population.

According to William Easterly, since 1949 US $ 2.3 Trillion in aid was given by donor countries to the developing world.

In the last 50 years, Africa has received around US$ 1 Trillion, roughly $5000 per African living today.

29% of all the aid is given to a continent with 1.8^th of all people. That’s over 1/3^rd.

On the other hand, foreign direct investment into Africa only amounts to 1.4% of worldwide activity.

The world gives Africa a lot of aid, but does not do business with Africa.

• Tweet

Installment 2 of 15 – Andreas Widmer’s remarks at SECAM, Accra Ghana July 29. 2010

Nine years ago, I became the CEO of a business strategy-consulting firm. The company was founded by business professors from Harvard University and we focused on private sector business strategy in uncertain environments, specifically in developing markets.

I was exposed to the aid sector and its effort to foster economic growth. Drawing from my business expertise and my Catholic faith, I increasingly began to disagree with aid strategy.  Much of the current aid strategy does not work from a business strategy perspective, and is deeply dehumanizing, violating the dignity of the very people we are trying to help.

Most people think of development as humanitarian aid – or disaster relief.

A Christian Non-Negotiable: Natural reaction to disaster … Feed the Hungry, Heal the Sick,  Haiti, Darfur, etc.

Churches have a proud and effective tradition in administering charitable aid.

The charitable NGO and philanthropic sector in the USA alone is an annual $240bn industry.

But few people differentiate between humanitarian and economic development

Once the most urgent issues are resolved, life returns to some form of normalcy. The immediate danger of dying is over, and people want to go back to work…

We call this economic development…. This is a major part of what many aid organizations like USAID or DFID do, but many Churches and private NGOs also focus on economic development.

• Tweet

Installment 1 of 15 – Andreas Widmer’s remarks at SECAM, Accra Ghana July 29. 2010

Economic development does not come from abroad. You will slide further into poverty if you wait for the West to fix your economy for you.

Economic development does not come from the World Bank or foreign governments. It is created out of self-reliance and local communities linked into networks of productivity, what Pope John Paul II called “circles of exchange.” Business investment and business loans are needed, not government to government grants and aid.

Economic development and prosperity come from within your society itself.

To ignite prosperity, we have to enable our local small and medium sized companies (SMEs).  These are the companies that can provide high growth with good and stable jobs, local tax revenues, and locally generated philanthropic activity, which means that African churches and charities do not need to go abroad to find donations.

I want to propose to you a specific way of thinking about entrepreneurship and ministry to business leaders in your diocese.

Develop a program that would provide spiritual formation, business training, and collateral funds to gain access to bank loans for the best entrepreneurs in your diocese.

• Tweet

I recently returned from giving a presentation on Entrepreneurship and the Catholic Church at the 15^th Plenary Assembly and 40^th Anniversary celebrations of the Symposium of  Episcopal Conferences of Africa and Madagascar (SECAM) which was held at the Ghana Institute of Management and Public Administration (GIMPA) in Accra, Ghana.

My goal was to present to the leaders of the African Catholic Church the opportunities and issues of Small and Medium Sized Companies in their regions and to inspire a discussion around how the Church could reach out to help and encourage entrepreneurs both spiritually and professionally.

This is a meeting that happens every three years of the top African Catholic Church officials in Africa and the Vatican. This year’s theme was Self-Reliance: The Way Forward for the Church in Africa, a theme that I feel was providentially aligned with the discussion I was hoping to inspire.

The Mission of SECAM is “to promote its role as a sign and instrument of salvation and to build the Church as a Family of God in Africa”, to preserve and foster communion, collaboration and joint action among all the Episcopal Conferences of Africa and the Islands. Accordingly, the Symposium, through the Episcopal Conferences promotes:

i. Propagation of Faith: Stressing on primary evangelization of those who have not yet received the message of Christ, i.e. in-depth and on-going evangelization of the peoples of Africa and the Islands.

ii. Human Development: i.e. the integral liberation of the human person, Good Governance and Justice and Peace issues.

iii. Ecumenism: i.e. the pursuit of fraternal relations and inter-religious dialogue with peoples of other faiths.

iv. Formation: i.e. the establishment of theological/pastoral institutions and research centers
v. Consultation: i.e. on the major problems facing the Family of God in Africa and in the world as a whole.

Over the next several days, I will share my presentation at SECCAM with you and look forward to a lively discussion.

• Tweet

If you’ve got an idea worth spreading, I hope you’ll consider this random assortment of rules from Seth Godin. Like all rules, some are made to be broken, but still…

1. You can name your idea anything you like, but a Google-friendly name is always better than one that isn’t.
2. Don’t plan on appearing on a reality show as the best way to launch your idea.
3. Waiting for inspiration is another way of saying that you’re stalling. You don’t wait for inspiration, you command it to appear.
4. Don’t poll your friends. It’s your art, not an election.
5. Never pay a non-lawyer who promises to get you a patent.
6. Avoid powerful people. Great ideas aren’t anointed; they spread through a groundswell of support.
7. Spamming strangers doesn’t work. Spamming friends doesn’t work so well either, but it’s certainly better than spamming strangers.
8. The hard part is finishing, so enjoy the starting part.
9. Powerful organizations adore the status quo, so expect no help from them if your idea challenges the very thing they adore.
10. Figure out how long your idea will take to spread, and multiply by 4.
11. Be prepared for the Dip.
12. Seek out apostles, not partners: people who benefit from spreading your idea, not people who need to own it.
13. Keep your overhead low and don’t quit your day job until your idea can absorb your time.
14. Think big. Bigger than that.
15. Are you a serial idea-starting person? If so, what can you change to end that cycle? The goal is to be an idea-shipping person.
16. Try not to confuse confidence with delusion.
17. Prefer dry, useful but dull ideas to consumer-friendly ‘I would buy that’ sort of things. A lot less competition and a lot more upside in the long run.
18. Pick a budget. Pick a ship date. Honor both. Don’t ignore either. No slippage, no overruns.
19. Surround yourself with encouraging voices and incisive critics. It’s okay if they’re not the same people. Ignore both camps on occasion.
20. Be grateful.

Rise up to the opportunity, and do the idea justice.

What’s your big idea?