Thursday, January 14, 2010

Changing the World One, Goat at a Time...GREAT STORY!!!

A VERY creative and market orientated solution to helping people in Southern Sudan (HT: AID WATCH), and specifically in a place that has a traditional economy and money has very little use.  The problem is that this is a solution that is perhaps only good in limited areas of the world, so it cannot be used as a ubitiquous solution to poverty...
"...research found tribes in the area bartering with grain, gold, goats, chickens and cattle. The small amount of circulating bills barely survives local termites, which can devour a pile of cash in just a few hours. Grain is commonly used, but attracts rats, which in turn draw poisonous snakes. In addition, grain needs seed and time for cultivation, depends on unpredictable rainfall, requires storage for excess supplies, and is more vulnerable in times of war. Searching for a better cash-less solution, we found goats. Goats are portable, require relatively little care, and since tribes in the region universally trade goats, this solution doesn’t exclude anyone."
Goats seving as a medium of exchange!!  The only thing that gives money its value is what it can buy, or be traded for.  If everyone you trade with recognizes the value of a goat and how much it is worth relative to others things, then it can function as "money". 
"We made three loans of three locally-sourced breeding goats each (one male, two females), for a total investment of $300. The loans were two years, and “repayment” was a reciprocal set of goats (from the progeny), so there was no interest or expense. The loans went to three community leaders, chosen by the communities. Our intention was to reinvest the “repaid” goats back into the village, making the program self-perpetuating. But the villagers had other plans. Of the three loans, only one was repaid to us, an abject failure in finance terms. Instead, goats were contributed to other villagers to start herds, “paying it forward” rather than paying us back. Instead of continuing with our program, borrowers assumed responsibility and perpetuated the project not just to feed their own families, but to help the whole village.
Five years later, these villages no longer need external food assistance, this program no longer exists..."
Helping whole villages become self-sufficient with a VERY small investment...This is an excellent example of addressing and solving a problem with market-based solutions.  I would love to see more of it!!
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