GOOD

What A Box of Sea Cucumbers Teaches Us About Foreign Aid

“If the Chinese can eat this for the last 2,000 years, it means that the Haitian can export it for another 2,000 years forward.”

“This is slimy stuff,” says Ernst Charles. “It’s smelly and everything. I’ve never heard of it, never seen it.”


That was Charles’ reaction when a Haitian fisherman from the coastal town of Cap-Haïtien brought a box of sea cucumbers to his Port-au-Prince office in 2008 and told him that he could make good money exporting the echinoderm. Charles, who stands about 6’4” and litters his speech with business school jargon, dumped the box in the yard and forgot about the visit. A year later, when a fisherman from Haiti’s southern peninsula brought him the same slimy creature and made the same suggestion, he knew he’d made a mistake.

Largely thanks to an NGO based in New York City and Ottawa, Charles says he has exported 10 metric tons of sea cucumbers to Asia. There, the fare is a delicacy, supposedly an aphrodisiac that’s packed with health benefits. The Chinese eat them by the boatload when they celebrate their New Year.

Charles, a Haitian-American who grew up in Boston, moved to Haiti in 2005 to build cell phone towers for a telecom company. Once he finished his two-year contract, he decided to stay in his parents’ native country and start Sonac Agricole, a lobster exporting business. He later branched out into cocoa bean exports, and, eventually, sea cucumbers.

He credits Building Markets, an organization that connects local businesses to regional and global supply chains, with much of his export success. The NGO’s database of verified Haitian businesses gave Sonac Agricole essential credibility with Hong Kong importers.

But Charles’ business is an outlier—most of Building Markets’ (formerly known as Peace Dividend Trust) work involves helping Haitian firms apply for contracts from organizations like USAID and the United Nations.

In Haiti, USAID awarded only 0.02 percent of contracts for fiscal years 2010 and 2011 to local firms, according to the Center for Economic and Policy Research. By contrast, nearly 80 percent of such contracts went to government contractors in Washington, D.C., Virginia, and Maryland. Chemonics and Development Alternatives, Inc., two of USAID’s top six vendors for fiscal year 2011, combined to receive more than $1 billion of the Agency’s $15 billion in global program funding for the year.

A prominent goal of USAID Forward, the agency’s reform agenda, is to increase the amount of funds spent through local entities from a global average of 11 percent in 2011 to 30 percent by 2015. Building Markets' work demonstrates potential ways to channel more aid money through local businesses, in lieu of spending it in the United States.

The organization began in 2006 in Afghanistan. “Haiti’s experience is not unique,” founder Scott Gilmore wrote in an open letter to Haitian President Michel Martelly last year. “Again and again, the international community responds to war, tsunami, and earthquake the same way. Billions are pledged. Less is disbursed. And almost none enters the hands of the local community.”

Building Markets’ Afghanistan operation played right into the Afghan First strategy outlined by former U.S. Ambassador to Afghanistan retired Gen. Karl Eikenberry that aimed to place Afghans at the center of their own development. The organization has helped 680 Afghan businesses win contracts valued at more than $1 billion. It started in Haiti in 2009 and has also worked in Timor-Leste and Liberia.

According to Building Markets’ records, the organization facilitated nearly half-a-million dollars in subcontracts for Haitian hardware and construction suppliers from August 2010 to March 2011. A local paper company, MGR Papeterie, provided UNDP with about $500,000 in office supplies. Another large contract went to a small business that sells energy-efficient air conditioners to NGOs, the Haitian Government, and local businesses.

The organization hosts an online database of nearly 4,000 Haitian small and medium firms. It includes data such as owners’ contact information, languages spoken, and office GPS coordinates. Firms must be registered with the Haitian Government and pay taxes, requirements that increase accountability and help strengthen local government.

“It’s like a Yellow Pages for local businesses,” says Ségolène d’Herlincourt, Building Markets’ Haiti country director. The organization can’t verify every last detail about every company in its database. But clearing the NGO’s vetting process, which includes a site visit to each firm, and being listed in its database helps bridge the gap in trust between, say, Hong Kong seafood importers and a small Haitian exporter.

“We make a point of telling the potential buyers,” d’Herlincourt says, “if we cannot vouch for somebody to be honest, at least we can vouch that the business exists. A logistics company says on the website it has five trucks—we’ve seen the five trucks.”

Charles says that since he was just a guy on the other end of a phone call with potential Asian buyers, he couldn’t vouch for himself in any meaningful way. “Haiti is not known for sea cucumbers,” he says. “It’s something very new. When Building Markets came, it was a middle ground that screened me and said, ‘Yes, I can validate this man as a genuine sea cucumber exporter.’”

Building Markets has also trained 1,000 businesses in how to navigate international organizations’ procurement procedures and has facilitated more than $30 million in contracts for Haitian firms.

After three years in Haiti, the organization's grant from the Canadian International Development Agency will soon expire, and Building Markets is closing shop here at end of June. d'Herlincourt says that they've worked themselves out of a job—the group is handing over its services to the Ministry of Commerce and Industry. Building Markets employees have been working closely with the Ministry, which will continue the training programs, and a list of tenders currently available from international organizations has already been transferred to the government.

“Ultimately, we want these countries to be able to function on their own and to participate with us in a different relationship, more about investment and trade,” says Larry Nowels, a consultant to several foreign aid organizations who served on President-elect Obama’s transition team examining U.S. foreign assistance agencies. “One of the ways to move them out of foreign aid and into these other types of relationships is through letting them manage their own development more directly, and that’s the whole intention behind procurement reform.”

More local aid contracting can improve local firms' capacities and also expose them to global supply chains. But for development to sustain in countries like Haiti and Afghanistan, local businesses will one day have to transition from supplying the aid economy to trading in the private sector. The World Bank estimated that in 2010, 97 percent of Afghanistan’s GDP was derived from economic and military aid from foreigners.

Similarly, while Haiti’s post-earthquake aid sector may be the biggest show in town now, it’s ostensibly ephemeral and will dwindle one day.

“I think that what is actually missing into that equation, in terms of the reconstruction,” says Ernst Charles, “is that a lot of the American or European NGOs are not actually putting enough time to invest in the small and medium sized business.”

If U.S. aid reforms can focus on strengthening local firms, they could eventually help foster more Sonac Agricoles—companies with long-term business plans that rely on more than just aid dollars—in lieu of simply cultivating more UNDP vendors.

“If the Chinese can eat this for the last 2,000 years,” Charles says, “it means that the Haitian can export it for another 2,000 years forward.”

Photo via (cc) Flickr user mdid.

Articles

The global climate change strikes on Friday are said to have been the largest protest for climate change in history. An estimated four million people participated in 2,500 events across 163 countries on all seven continents. That included an estimated 300,000 Australians, but a total of zero were in Hyde Park in Sydney, despite a viral photo that claims otherwise.

Australian Youth Coal Coalition, a pro-coal Facebook page, posted a photo showing trash strewn across a park after what appears to have been a large event. "Look at the mess today's climate protesters left behind in beautiful Hyde Park," the photo was captioned. "So much plastic. So much landfill. So sad." The only problem is, the photo wasn't taken after a climate change protest. It wasn't even taken in Australia.

Keep Reading Show less
The Planet
via GOOD / YouTube

Last Friday, millions of people in 150 countries across the globe took to the streets to urge world leaders to enact dramatic solutions to combat climate change.

The Climate Strike was inspired, in part, by Greta Thunberg, a 16-year-old girl from Sweden who has captured worldwide attention for her tireless work to hold lawmakers responsible for the climate crisis.

The strike gave people across the planet the opportunity to make their voices heard before the U.N. General Assembly Climate Summit in New York City on Monday.

Keep Reading Show less
The Planet
Photo by Casey Horner on Unsplash

As world leaders meet to discuss new ways to tackle climate change at the U.N. Climate Action Summit, they might miss one very big part of healing nature – nature. In a new short film, youth climate change activist Greta Thunberg and George Monbiot, a writer for the Guardian, talked about how we need to use nature as a solution to climate change.

There's a huge push to curb emissions, but it's not the be all end all of handling climate change; we also need to remove CO2 from the atmosphere. While we don't have technology to do that for us, there is another solution. "There is a magic machine that sucks carbon out of the air, costs very little, and builds itself. It's called a tree," Monboit says in the film. Researchers found that we could get rid of two-thirds of the carbon dioxide that we've emitted during the industrial era just by growing trees. That amounts to 205 billion tons of carbon. Right now, deforestation of tropical forests is responsible for 20% of current greenhouse emissions.

Keep Reading Show less
The Planet
Climate Action Tracker

In 2016, 196 countries signed the Paris Agreement, pledging to combat climate change by taking action to curb the increase in global temperatures. The Paris Agreement requires countries to report on their emissions and what steps they're taking to implement those plans. Now that the countries are coming together again for the U.N. Climate Action Summit in New York City, it's worth taking a look at what kind of progress they've made.

The Climate Action Trackerkeeps tabs on what each country is doing to limit warming, and if they're meeting their self-set goals. Countries are graded based on whether or not their actions would help limit warming to 1.5 degrees C.

According to a recent article from National Geographic, The Gambia, Morocco, and India are at the head of the class. "Even though carbon emissions in The Gambia, Morocco, and India are expected to rise, they'll fall short of exceeding the 1.5-degree Celsius limit," the article reads. Saudi Arabia, Russia and the United States, on the other hand, get a big fat F. "Projected emissions in Saudi Arabia, Russia, and the United States are far greater than what it would take to limit warming to 1.5 degrees Celsius."

Keep Reading Show less
The Planet
Screenshot via Sweden.se/Twitter (left) Wikimedia Commons (right)

Greta Thunberg has been dubbed the "Joan of Arc of climate change" for good reason. The 16-year-old activist embodies the courage and conviction of the unlikely underdog heroine, as well as the seemingly innate ability to lead a movement.

Thunberg has dedicated her young life to waking up the world to the climate crisis we face and cutting the crap that gets in the way of fixing it. Her speeches are a unique blend of calm rationality and no-holds-barred bluntness. She speaks truth to power, dispassionately and unflinchingly, and it is glorious.

Keep Reading Show less
The Planet