The Solutions to Poverty and Unemployment Will Look Something Like This: An Interview with Rachel Cook

Rachel Cook is a friend of mine from college who let me interview her about her upcoming film, currently titled the Microlending Film Project. Rachel shot footage for Kiva - an awesome organization that has stoked the fires of entrepreneurship in Africa, Southeast Asia, and around the world, and is now stoking the fires of entrepreneurship here in America:

    

The Microlending Film Project (film title TBD) was conceived as a passion project by Futures Trader turned Director/Producer Rachel Cook after she read a Nicholas Kristof op-ed in The New York Times late one night at a Chicago trading desk.  The article was about how empowering women in the developing world with tools like microfinance can bring about positive, sustainable change (Saving the World's Women).

The project has been undertaken with the best interests of poor women at heart, as the film seeks to show a balanced, comprehensive picture of microfinance through the lens of the personal stories of the women it impacts. The issue of transparency and its paramount importance to the industry is a key focus, as is showcasing best-practices and suggesting how microfinance can most effectively be used as one development tool in a larger box both domestically and abroad, specifically in terms of the opportunities mobile banking and crowdsourcing promise.

The Microlending Film Project is holding a DVD pre-sale and offering other perks to raise funding for post-production.  To view a trailer and/or purchase a DVD, please follow this link: http://www.indiegogo.com/Finishing-The-Microlending-Film-Project?a=238586&i=addr

       

The filmmaking crew is also actively seeking out investors at multiple levels. If you have an interest in learning more about investment opportunities in the film, please contact Rachel Cook at rachel at microlendingfilm dot com.

   

Anyways, here comes the interview:

    

Christopher Carr: How did you come to where you are now? Describe your life after graduating from college. How did you choose your current path? Where do you see yourself going after this?

     

Rachel Cook: I knew I wanted to do something involving writing and film, and after studying for a semester in Los Angeles junior year at Duke I knew I hated that "city". I'd heard about Second City/iO and all of the comedy writers and performers it had produced, people like Bill Murray, Chris Farley and Tina Fey, and studying there seemed like it provided more of a sort of clear path than would toiling in obscurity somewhere else, so I moved to Chicago. While there, I picked up an equities trading position to pay the bills, and I took a ton of improv classes and put on a few shows.

   

While it was gratifying to put on a show and have 30 people come, or even say, 5, obviously film can reach a much larger audience, so I think that notion was percolating in the back of my mind through the Second City period. Meanwhile, a few years in to my Chicago tenure, I started trading Futures on the European shift, which was in the middle of the night of course, Chicago time.

  

The trading environment was so surprisingly sexist that it really affected me. I worked at four firms total - three in Chicago and one in Manhattan - and I was always the only girl trader, or one of a few. It was definitely one of the last bastions of old school sexism and it was infuriating and upsetting. So I guess that's why, one night in September 2009 when I came across a Kristof op-ed in the NYT about the positive impact of microfinance globally, particularly on poor women, that I immediately felt compelled to text my sister and tell her that I was going to make a film on just this topic. Microfinance appealed to both my feminist sensibilities, and to the interest in good investment I'd cultivated while on the trading desk.

   

From there, it was just a matter of figuring out how the hell to make a global feature film, because I definitely didn't know how to do that, and we ended up shooting on four continents. In hindsight, I'm glad that I was arrogant and ignorant enough about the process to take all of this on; and it's grown from here. I quit the trading job I was working in Manhattan in November of 2010 and started working on the film full time, and we just wrapped principal photography this past week in Detroit, so we'll be heavily editing from here on out.

  

Going forward, I plan to collaborate with Duke and the iHub, a shared start-up space in Nairobi that we discovered when filming, to launch a social gaming application that facilitates mobile-to-mobile microlending across continents. It's in its very early stages, but we have high hopes.

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Industrial Agriculture and Solutions to World Hunger

In this essay, the author discusses the right approach to combating the problem of hunger - an attribute shared by closed to 900 million people worldwide.  He takes issue with the arugula-eating liberal elites, like Food First, a California-based organization that opposes the technological advancements of the Green Revolution.   Modern improvements in agricultural technology and sciences create higher crop yields.  When land ownership is limited to a few hectares, it is critical to maximize the output on these small plots,  which is what industrial improvements in agriculture enable.   It is true that there are downsides to the Green Revolution, including further marginalization of subsistence farmers and, in some regions, a widening of the income gap in the agricultural community.  But what cannot be said about this approach is that the food it produces is either inferior to organically-grown crops or that the process is any less sustainable.  Industrial technologies, chemical fertilizers, and improved seeds generate more food, feeding more mouths, reducing malnutrition and generating income.

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A New Way Forward on Development

The Obama Administration recognizes that the successful pursuit of development is essential to our security, prosperity, and values.  In a world shaped by growing global economic integration and the fragmentation of political power; by the rise of emerging powers and the persistent weakness of fragile states; and the potential borne of globalization and risks posed by transnational threats, development is a strategic imperative to the United States.  Our investments in development – and the policies we pursue that support development – can facilitate the stabilization of countries emerging from conflict, address poverty that is a common denominator in the myriad of challenge we face, foster increased global growth, and reinforce the universal values we aim to advance." - "A New Way Forward on Global Development"

This is an excerpt from the opening paragraph of a memo leaked to Foreign Policy magazine the other day.  It is a draft version of the National Security Council’s Presidential Study Directive on Global Development Policy (PSD-7).  The 7-page documents details plans for an overhaul of U.S. approach to development and foreign aid.  I am still reading through the document and the commentaries that have already been posted, but the approval ratings from the development community have so far been positive.  My first thoughts are that the document is classic Obama: simple and pragmatic, intuitive and ambitious.  It proposes consolidating the fragmented government agencies to reduce waste, bringing more accountability to aid distribution by applying quantifiable metrics to programs and investing in those with a proven return, and building in-country capacity to produce sustainable solutions.  In a world of limited resources and an industry with a reputation for squandering those resources, the report proposes selectively choosing sectors that yield the most far-reaching and broad results.  Simultaneously, the U.S. will hold countries responsible for keeping up their end of the bargain by utilizing funds appropriately.  The U.S. will take a multi-lateral approach, working with other foreign governments, NGOs, philanthropy organizations to divide the labor and financing according to sector expertise.  Lastly, the U.S. will create a new "modern architecture" to ensure that government agencies are working in tandem.  Here, the memo delineates the strategy for the future:

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One Way to Help Haiti

What is the role of microfinance in the aftermath of a natural disaster?   The short answer is that, under the circumstances, microfinance is ineffective.  A prerequisite for microcredit is a functioning economy.  Goods and services need to be worth money for capital infusions to make a difference.  For example, NWTF lends money to a woman for the purpose of opening a general store.  The woman uses the loan to buy soap from one retailer and soft drinks from another.  She hires a local contractor to build the addition on her home, or at least purchases the materials.  The money flows around community, and everyone becomes wealthier.  But in the after a natural disaster, the communities served by microfinance are so devastated that money is worth less.  There is no electricity, no fuel, no food, no water, and no shelter.  Homes have been destroyed and people are starving.  A sack of rice becomes invaluable – to a starving person, no amount of money would lead them to part with food.    So it becomes a barter economy, if there is anything to barter at all.  As with everything, these points are best illuminated by example.  The most obvious is the recent earthquake in Haiti.  In reality, Haiti needs aid money, and it needs aid workers to deliver services.  Microfinance – microcredit, in particular – cannot immediately help during the relief period because there is no economy to stimulate.

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Babies and Bathwater: Microfinance and Small and Medium Enterprises

In March of 2008, ames Surowiecki wrote an article for the New Yorker titled "What Microloans Miss" suggesting that the disproportionate amount of attention given to microfinance has steered funding away from other avenues for development.  A year and a half later, the Boston Globe included a piece titled “Small Change” about two studies of microfinance that questioned its efficacy. Both articles revolve around the same central premise: microfinance, while effective at relieving some of the burdens of day-to-day living, does not create jobs.  It is rare that a microbusiness receiving a loan has paid employees.  So while microloans allow, mostly, women to start businesses, these independent businesses do not help to alleviate poverty on a macro (national) scale.  Small- and medium-sized enterprises (SMEs), according to Surowiecki, are the engines of development.  Here he discusses what considers to be the problem of the cult of microfinance:

Both socially and economically, microloans do a lot of good, working what Boudreaux and Cowen call “Micromagic.” But the overselling of their promise has made us neglect the enterprises that could be real engines of macromagic. The cult of the entrepreneur that the microfinance boom has helped foster is understandably appealing. But thinking that everyone is, and should be, an entrepreneur leads us to underrate the virtues of larger businesses and of the income that a steady job can provide. To be sure, for some people the best route out of poverty will be a bank loan. But for most it’s going to be something much simpler: a regular paycheck.

The benefits of increasing support for SMEs in a country are real and quantifiable.  Consolidation into the formal sector provides more people with steady jobs and offers workers better health and wage benefits, disability and pensions.  These businesses help to reduce the size of black markets and generate taxable income.  What's more, a majority of microentrepreneurs would prefer a steady paycheck with job security to their current situation.  I don’t disagree with the idea that vehicles of mass production – a factory, or a plant, or a farm – create strong upward momentum for poorer people without employment.  But every country has a different profile, and the success of the development approach depends on the different strategies of development.

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Yunus v. Compartamos

Within the international development community, a debate for the heart of the movement recently came to the fore with the IPO of Compartamos, the largest microfinance institution in Mexico.  Divisive and controversial, Compartamos’ decision to sell shares and publicly list on an exchange is perhaps the most clear manifestation of where the two sides diverge.  One side, led by Muhammad Yunus, founder of the Grameen Bank and winner of the Nobel Peace Prize in 2005, contends that, at its core, the sole fundamental mission of microfinance is poverty alleviation.  The other side argues that the goal must be profit – extending services to a previously unbanked population and expanding via revenue growth.  Just about everyone has an opinion on the decision and, at the very least, it allows for a great philosophical and economic debate about the most effective way to assist the billions of people who live below the poverty line.

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