Finance for All by 2020 in Order to End Extreme Poverty by 2030

Hello! I’ve been reading your blog for a while now and finally got the courage
to go ahead and give you a shout out from Kingwood Tx! Just wanted to say
keep up the good work!

Thanks Larry for your thought triggering comment. You have made me realize the magnitude of what I am suggesting. Indeed, the practicality of it would be daunting.

I like your classification, which can be simplified further by putting Microfinance inside financial inclusion. Therefore, we would have financial inclusion and livelihood as the duo regiments fighting poverty.

I don’t know whether Livelihood regiment has definition and scope challenges as we have in financial inclusion regiment. I suppose for financial inclusion to be considered a worthy army in a global poverty alleviation war, there will be need, in house keeping, to reconcile the warring camps of formal and informal financial inclusion and come up with a consensus based definition and language. This is important to avoid friendly fire during the war on poverty.

Each of the regiments, financial inclusion and livelihood, would be led by a commander in chief, assisted by as many generals as the regiments’ sectors. The two commanders in chief would lead in the poverty alleviation war

In the case of financial inclusion, the two generals deputizing the commander in chief will be formal inclusion and informal inclusion. So, cascading downwards, all sectors claiming financial informality will come under an informal inclusion commander and same with all formal sectors falling under the formal inclusion commander. As a result of this structure, you will find some microfinance institutions falling under the formal inclusion category while others would fall under the informal inclusion category. You can already visualize informal savings group and formal savings groups choosing to operate from either sides of financial inclusion regime.

Ideally, the two regiments should have an equal number of generals and if the livelihood regiment has more sectors than its counterpart livelihood, it can work at consolidation – livelihood regiment would likely have many sub-sectors because it covers all areas outside finance. However, it would be necessary to have an equal number of generals on each side.

There will be a need to deliberately set up a neutral arsenal( The Fund) to be called Global Fund for Poverty Alleviation (GFPA). All funders in the world desirous of helping in the poverty war will contribute money into the Fund, which would be managed by two globally known professional funds management firms. The Fund’s activities would be to receive funding and disbursement and will not be allowed to invest the money.

To access the money from the Fund, each commander in chief together with his/her generals will design strategic plans in consultation with all sub-sector stakeholders within the regiment. The strategic plan will outline poverty alleviation plans, programs and financial needs for each sub-sector.

It will be upon each sub-sector and its leaders to design compelling and workable solutions to poverty alleviation to get enough funding from the Fund through the executive.

In order to come up with accurate and feasible strategic plans, the regiments leadership will engage professionals within the regiment. That way, the commander in chief in each regiment will not need to be a technocrat but charismatic leader who knows exactly what needs to be done in the poverty war.

With this structure, we can hope that disagreement among professionals in the poverty alleviation field will subside and money will likely go to the intended programs. So far we have seen anarchy in donors funding programs designed to just attract funding and not alleviate poverty. We have seen technocrats who have no idea about programs design, leave alone implementation, being funded heavily only for the money to go to waste or being misapplied. Poverty alleviation today seems to be a jungle with no accountability and governed by survival for the fittest instincts. No war that ever was won was fought in the haphazard way we see poverty alleviation efforts today. We need a new regime and configuration if we are serious in the war against poverty. These disjointed and fragmented battles we are seeing today are examples of rag-tag armies and guerrilla gangs trying to defeat an organized army.

I am trying to think how much money needs to be in the Fund to help beat poverty senseless if not to finish it. I am not good at numbers but I am good at dreaming. If we are to think of subsidizing the poor for a year as the two regiments work out long lasting solution to poverty, how much money would we need? Let’s take 2.5 billion as the population of the poor in the world. Let’s assume they earn nothing and they depend on pure charity. How much would be required to sustain them for a year? If we are generous and give each $5 a day for a whole year, Is that $4.5 trillion? Can these funds be raised globally? So, all the poor are provided for, for a year. What happens to the $2 a day they earn? Let’s forget that for the moment. We are not under any pressure to go to such detail. What we want to assume is that we have a whole year of no pressure to come up with poverty alleviation programs. It is like evacuating people from a slum to construct new highrise flats for them. As you take them to a camp, you will have to feed them as long as the project takes, and assuming they do nothing to earn an income, holding everything else constant. Similarly, we are assuming we have evacuated the poor and have put them into a camp where we feed them for a whole year while they have no income of their own in earnings. So, every month they draw down the $150 each, all the 2.5 billion of them( money still circulates as they do all that the money does, so nothing is destroyed).

In this dreamland scenario, do we think that on month 13 when the poor come back to themselves they will live poverty free thereafter? Indeed, all this time, all poverty alleviation programs will still be going on preparing them for the new poverty free life. By the way, we can simplify and say that the Fund will only need $375 billion in the account each month for the next month, meaning that the whole $4.5 trillion does not need to be raised at once. We also assume that part of the program will be educating them all round including financial literacy and invigorating wealth mindset in them. Within the year, because we know what is needed, we shall work to remove poverty the way an army clears an enemy territory.

Though this is a dream-world scene, it is time we start asking ourselves hard question in a uniform and organized manner how much money we need to alleviate poverty and think, if we had it, what would we do and how. If each of us in the field draws the money to do whatever we think can have a dent on poverty, in a year’s time, how much of poverty would be removed? What about if we think of how to work together like a team, take a month to harmonize thoughts and plan, how much of poverty do we think we can remove?

In this knowledge era, we have the best brains on earth, yet poverty prevails. It means there is something we are not doing right and another century will come and still find poverty prevailing. We need to change how we have addressed poverty so far. We need a single global forum to ask ourselves what we have been thinking and doing wrong.