Combating Global Poverty, With Kate Schecter

LINDSAY:
Welcome to The President's Inbox, a CFR podcast about the foreign policy challenges facing the United States. I'm Jim Lindsay, director of Studies at the Council on Foreign Relations. This week's topic is combating global poverty. 

With me to discuss progress in setbacks and trends in promoting global economic development, especially in the world's poorest countries, is Kate Schecter. Kate is the president and chief executive officer of World Neighbors, an international development, non-government organization that operates in fourteen countries. Before joining World Neighbors, Kate advised the World Bank as a consultant specializing in healthcare reform in child welfare issues in Eurasia and Eastern Europe. Kate, thank you for joining me on The President's Inbox.

SCHECTER:
Thanks for having me.

LINDSAY:
Now I want to discuss trends in global economic development, Kate, especially in the world's poorest countries. But I'd like to begin, if you're willing, by hearing about the work that World Neighbors does.

SCHECTER:
Well, I'm always thrilled to talk about the work that we do, and thank you again for having me on the show. We work in fourteen countries in Africa, Asia, Latin America, and in Haiti. And the organization is seventy-three years old, so we're edging up on our seventy-fifth anniversary. And we have a very specific methodology, which can be challenging at times because we really strive not to give away anything. No, in-kind donations, no cash transfers, to really focus on developing, as they say in the development sphere, capacity. So training people to create their own businesses, their own jobs, and to improve their lives with their own capacity. So really creating self-sufficiency and the ability to then improve their lives for the long term. Of course, we all talk about sustainability, but we really focus on that from the get-go, coming into poor communities and looking at how we can help them, but also how we can leave developing an exit strategy from the get-go.

So the organization has been very successful, but in terms of the topic of the day, I think that there are many, many challenges ahead in this year. We're seeing that there are these two terrible wars that we don't see an end to very soon, and they do affect probably disproportionately the poorer parts of the world. That's something that we're always focusing on. And one of the things that we want to make sure is that people are not just learning how to do better agriculture...Oh, one thing I should clarify is that we work only in rural areas, very difficult to reach communities, and communities that many times have not had any assistance from any other development groups.

LINDSAY:
So Kate, give me a sense of what that means in practice. Pick out one country that you work in, one program that you have, and just give us a sense of how it operates.

SCHECTER:
Well, I think a really good example is in Guatemala. Central America is a hotspot, has been for a long time. United States is challenged by the droves of people leaving Central America and coming to the United States wanting to better their lives. And so the work we do there is really focused on figuring out how to keep people in their countries, how to motivate them to want to stay.

And we focus primarily on women. We are going into these communities and a lot of times the men are either day workers who go off to work on other people's farms, or in many cases they've left and left the wives and the children behind and are sending home remittances. And I would say 90 percent of the countries that we work in, we are seeing these villages where there's always women who are having to do the farming themselves, raise the children themselves, and are dependent on the remittances that they're getting from their husbands.

So Guatemala is a really great example because we've had a lot of success in keeping people in Guatemala. And one of the things that is a kind of a big focus and a core thing that we do is not microfinance, which is the famous Grameen Bank methodology of giving small loans to people at low interest rates. Instead, we do something called savings and credits. And that's what's really kind of happening now in the development sphere is there's a move away from microfinancing, which was a problem because even-

LINDSAY:
So wait just a second, Kate.

SCHECTER:
Yeah.

LINDSAY:
If you could explain me the difference between microfinancing and savings and credits?

SCHECTER:
Sure. So with microfinance, you're getting a small loan from a bank, say it's a hundred bucks, and you've got a low interest rate. And many times there's all sorts of mechanisms in place to allow the borrower to not have to pay back immediately, but nevertheless, they have to pay back a bank. And $100 may not seem like a huge amount of money to you and me, but to some small farmer, it can be the difference between life and death. And so you still get into the problem that they owe a bank, and there were still plenty of defaulting. 

With savings and credits, you basically cut out the bank and you have small groups of people gathering funds together and saving together. One thing that is really a big focus of World Neighbors and is not really, how should I put it? It's not something that is encouraged within development sphere is saving money. There are these huge grants that development groups get, but there's always this focus on spending the money as quickly as possible. And that's something that we're really trying to change. We're encouraging people to save their own funds and to then lend to each other at low interest rates. But the big difference with savings and credit is that they are lending to each other. They know each other. When somebody gets sick or there's a terrible flood and they're not able to pay back right away, there is a community attempt to help each other. And this mechanism of savings and credits is happening not just at a small organization like ours, World Neighbors, but the Gates Foundation has really changed over to this methodology as well. And there are others who are doing it. 

We've seen incredible success with this methodology. You start out, and I'll be honest with you, when I first joined World Neighbors, I was very skeptical. I thought, "Okay, well, these people don't have any money, and even if they save a little bit together, how are they going to accumulate capital?" It happens so quickly, Jim. You would be surprised. I love to tell the story of going way into the mountains of Timor-Leste, which is where we work, is very rough terrain. It's just rocks from my perception-

LINDSAY:
And just for people who don't know where Timor-Leste is, think Indonesia.

SCHECTER:
Well, they wouldn't like hearing that.

LINDSAY:
It's not part of Indonesia.

SCHECTER:
No.

LINDSAY:
Just trying to geographically locate it for people.

SCHECTER:
It's East Timor, and they actually had a war with Indonesia and they became independent. They're one of the more newer countries in the world, but it's a very poor country with very difficult terrain. And I went up way into the mountains and we visited with a small community there, and we sat down and I said, "So how are you guys doing?" And they said, "Well, we started a savings and credit group, and this year we saved $36,000." And I thought, "Whoa, okay, maybe you should get that into a bank because that's a lot of money."

And they explained to me that the reason they were able to save so much money was because of a road that had been built by the government. So that's another aspect of our work that I think is important to emphasize, is we have registered everywhere where we work. We have MOUs, memorandum of understanding, with the governments where we work. And our goal is to get the government to take over and to pay for the kinds of things that we are initiating.

LINDSAY:
So how does that work, Kate, in countries where governments aren't able to deliver on services? I know that World Neighbors operates in Haiti. Haiti is a country in which the central government to some extent has ceased to exist or has been handicapped by the rise of a multitude of gangs that control big portions of the country.

SCHECTER:
Absolutely. I mean, it's a big challenge, not just in...Haiti is the sort of the obvious example of a lack of government. We have seen communities that have just created their own water systems, where they know that they're never going to be linked to a central water system. We see a lot of kind of leaping over non-renewable energy because they're not able to get on the municipal grids and moving towards more reliance on solar and renewable energy sources.

So we see that not just in Haiti though. I mean, you see that all over the world, that people are going to become self-sufficient because they recognize that they're not going to get the assistance that they are supposed to be getting if they had a better, a more stable government. But we're not sort of giving up. We're trying to get local governments to engage with these communities and to have them invest.

It's better for them, they look better, they get reelected. And it also obviously leads to much more rapid development. In India, we work in one of the poorest states in Bihar, India. And there you have a lot of women who are illiterate, they're from lower casts, and they just simply don't know about the benefits that they are entitled to. And one of our big efforts is at the same time that we're doing all these things that I've just described, we're also linking them to make sure that they're aware of benefits that they're entitled to. And then what's happened in Bihar is that we've seen women start to rise and become elected to local municipal governments so that then they're directing the attention and the resources to their communities.

LINDSAY:
So help me understand one distinction that I often hear coming up when we talk about combating poverty around the world, and that's the distinction between development work and relief work. How do we make sense of that distinction, if it is even a distinction?

SCHECTER:
Jim, that's a really good question, and I think that's a challenge that we face a lot in, we call ourselves a long-term sustainable development group. So we're trying to go into places that don't have a lot of conflict and where we feel like investment that we're making can really lead to change. But as everybody knows, you can't pick and choose your conflicts, and you also can't predict extreme climate events that could hit you.

And so we find ourselves very often in a place where we are caught between this desire to do long-term development investment versus emergencies. So humanitarian aid is really about emergency aid. It's about saving lives during a very, very urgent kind of crisis. And that could be wars and just helping civilians, or it could be, as I said before, an extreme climate event. My first experience with World Neighbors of this happening was I had just been to Nepal in 2015 and-

LINDSAY:
Nepal is one of the fourteen countries you work in, correct?

SCHECTER:
Correct. Right. So yeah. We work in two South Asian countries, India and Nepal. And I got home and within two weeks of getting back to the states, there was this terrible earthquake in Nepal and really devastating. And a lot of the villages that I had just visited were damaged badly.

And I made the decision, even though I just told you earlier, that we don't give away anything and we don't do in-kind donations, we don't give away cash. Well, in this case, I've just made the abrupt decision that we were going to bring in food and tarps and other things that were needed just to help people to make the transition back to recover from the earthquake.

LINDSAY:
So I want to go back to the bigger question of what the challenges are facing global development. You've just mentioned one, which is the potential for natural disasters. Disasters, if they occurred in a wealthy country, the government would have the capacity to respond to and deal with. If it's a poorer country, not going to have that kind of resilience in the face of a natural disaster.

You've also mentioned war. Obviously we had the war in Ukraine where there was a great deal of concern about its impact on food prices because Ukraine, but also Russia, exports so much in the way of food in oils to the rest of the world. There's climate. How are you seeing climate change affecting your work?

SCHECTER:
So of course, a big focus of ours is on what we call food security. Many farmers that we work with are subsistence farmers that when we first start to work with them, they're with the old expression hand to mouth. I mean, they're growing enough food basically to get by. But one of the problems that a lot of farmers have had is growing what we call cash crops, growing crops to sell and not thinking about a diversity of crops, and also not thinking about crops that they might need to eat just for their own consumption.

So we really push this idea of a diversity of crops. And we also are going into villages where a lot of times the farmers are buying vegetables in the market. So everywhere we go, we teach people to grow their own vegetables. And many times, especially with women who might have not really been working outside of the home, these kitchen gardens become very lucrative because they're eating the food and they're also selling it.

There's a lot of work going on around the world right now to create more resilient crops—crops that can grow during drought, crops that can grow during flooding. And we're very much involved in all of that. We are also involved in helping farmers to try to manage changing rainfall patterns. So in Indonesia, we have developed an app where farmers, they send information to a local university that does research on rainfall prediction work and there's a kind of symbiotic relationship between the farmers.

They're writing in to say, "Well, we got three inches this week," and then the university is sending them rainfall prediction maps of when to plant the crops. And that has been around now for almost ten years, and it's been incredibly effective in helping farmers to have more than one or two crops a year because they're doing this sort of rotation of different types of crops.

So all in all, this issue of food insecurity has really been a big focus, and we've made a big dent in terms of communities having food year round as opposed to only for six or eight months. And then on the question of climate change, I just wanted to tell you that even though of course there are terrible earthquakes or tsunamis and things where people can't protect themselves, there are things that can be done to at least prepare for the possibility of an extreme climate event.

LINDSAY:
What would those be?

SCHECTER:
So doing what we call disaster risk reduction is the acronym, DRR. And that is to create community plans so that if there is some sort of earthquake or something damaged, they are prepared ahead of time and they have a whole phone chain and a plan. It's sort of like knowing what to do in terms of a fire, and we're all trained in those things. Well, this is on a much larger scale. 

And that has actually also really saved a lot of lives. We had a situation in Indonesia where there was a series of earthquakes on one of the islands, and the communities that we had worked with were able to quickly go into action and figure out where people might've been hurt and get the help that they needed much faster. Then on a sort of individual level, we're doing a lot of work to make people's homes much more safer and cleaner, and to have them have a better standard of living.

So there's another issue that's a big problem around the world that people don't talk about very much these days, which is that one of the highest killers of mothers and babies is smoke inhalation. A lot of people cook in their homes with open fires. This has been a big push to change the stoves around the world, particularly by the World Health Organization and the Pan American Health Organization. And World Neighbors does a lot of work on just...It's a really pretty simple fix. It's to change your stove from an open fire to a chimney that lets the smoke out. So smokeless stoves, using organic fertilizers and pesticides, teaching people how to make their own pesticides and fertilizers so that they're not buying them. In fact, they're actually selling them now because they've learned how to make them organically. Kind of trying to get away from dependence on imported food from Ukraine, for example, and from Russia so that there's much more self-sufficiency.

LINDSAY:
So Kate, help me understand how an organization like yours intersects with government aid programs, with international government relief organizations and the like. Is it mutually symbiotic? Is it overlapping? Is it conflictual? Something else?

SCHECTER:
Well, it's very, very symbiotic. One thing I didn't mention is that we are not a one sector organization, so we don't only focus on agriculture or women's issues. What we try to do is have a holistic approach to development and we also stick with these communities for a very long time. One of the problems that I mentioned earlier is this need to spend, spend, spend, but also get results quickly. Impact is a big catch word in our field. And of course that doesn't happen very quickly in this sphere, but we're finding that United States Agency for International Development, USAID, and many other foundations that provide funding are starting to move towards a more holistic approach. Sometimes it's called a more integrated approach. 

So understanding that if you fix the water system but you don't address the energy supply, then you're really not going to get anywhere. If you're only focused on healthcare and you're not focused on food security, again, you're not going to get anywhere. There's more and more of an awareness that you have to really look at it from a holistic point of view. There's a big catch word right now at USAID: localization. So trying to have more activity on a local scale and having local community-based organizations receive grants so that the funding is actually going to what it's supposed to be going to. And of course, World Neighbors has been in the localization business for seventy-three years now.

LINDSAY:
So you have some practice at it?

SCHECTER:
Yeah, right. So we're getting a lot of support from many different foundations and from USAID, and we're grateful for all of that. And I think it's more and more of an awareness about both the holistic approach, that you've got to take a longer time, you can't expect everything to happen quickly, that they need to save money, they shouldn't just spend it all, and just more of a trust and respect for local capacity.

LINDSAY:
I'm curious, Kate, World Neighbors works in some countries with real security issues. You mentioned Haiti already, but also you do work in Mali, in Burkina Faso where there have been violent extremist movements. How does an effort to try to promote economic development go forward in a country facing that kind of security situation? And is there an opportunity to use development to actually derail or blunt violent extremist movements?

SCHECTER:
I would argue that yes, our efforts have helped. One of the biggest challenges that West Africa faces, but also many poor countries is of course employment or unemployment. And a lot of times the reasons that young men especially join extremist groups is because they're getting work and they're getting paid. We've seen this not just in West Africa, but recently tragically we've seen it in Nepal where young men are going off to Russia because they're getting paid and they're dying over there in the war.

So of course, one of the biggest efforts that we're always making in any community is to create what we call livelihoods or jobs. And that's one of the things that we encourage with the savings and credit groups, is for people to start businesses, small businesses that are... We're dealing with primarily agricultural communities, so to enhance their market, knowledge of the markets, to enhance their ability to sell their food, but also to start other kinds of businesses—small shops, handicrafts, anything that they feel comfortable with. A lot of times we're dealing with illiterate communities. So we've really made a big push for literacy campaigns and then teaching basic finances, basic math so that people can run their own businesses. And again-

LINDSAY:
So do you see a significant payoff, Kate, from investing in literacy?

SCHECTER:
Absolutely. Not just literacy, but the ability to run your own business, to have the motivation to stay on the land because you're making money. And we see that with the young men in West Africa that when they see what's happening in these villages, they want to be a part of that. Now, of course, it's a challenging environment. I'm not going to be a Pollyanna about this. 

It's difficult, and I sweat a lot when our teams go out to the field, especially when they travel to Mali from Burkina Faso. I'm in touch with them the entire way. And sometimes we've had to just have meetings with the farmers in the capital cities because it's just too dangerous to go out to the field. But it's been remarkable. I mean, the programs continue to thrive. We have more and more people joining, and there's always new innovations that are coming up even in places like Burkina Faso and Mali.

LINDSAY:
So I have to ask you, Kate, we've been talking sort of on the local level, the efforts taking place, but you spent a lot of time thinking about development, and you've seen a lot of programs come and go. You've seen the efforts of different countries, different international organizations. If you had ten minutes of time with President Biden or Samantha Power, the head of USAID, what advice would you offer them on how the United States should think about promoting global economic development?

SCHECTER:
Well, I've learned a lot from my staff, especially during this period in West Africa, about why, I mean, when the coup happened in Niger, I sent articles that I was getting from Council on Foreign Relations to my staff, and boy, did I get some interesting responses. So I think it's not just about localization, it's also about decolonization.

If we're talking about creating capacity on the ground, we have to really step back and we have to acknowledge when we have gone into a country primarily to get natural resources channeled to us. So I think that what I, I mean, I don't know exactly how I would phrase it, but something to the effect of really understanding the local conflicts and the perceptions that they might have. For example, the West African countries of Burkina Faso, Mali, and Niger have just announced a couple weeks ago that they're breaking away from the Economic Community Of West African States.

LINDSAY:
ECOWAS.

SCHECTER:
ECOWAS, exactly. And from the perception of the United States, it doesn't make any sense. Why would you break away from a community and a organization that has, from our perception, has been incredibly helpful and has really supported the growth, economic growth of these countries? But my staff have said to me, "You really don't get it. We want to have real independence."

And so when France has sort of said, "Why would you want to push France out of these Francophile countries?" Their response is, "Well, you need to not only take our natural resources, but invest in our countries." So I think it's a matter of more awareness about the perceptions on the ground. And I think once we have better awareness, there's been incredibly good development in some of these places when there's that kind of level of mutual respect.

LINDSAY:
I'm curious, Kate, as you know, we live in an era of renewed geopolitical rivalry among the great powers. The Chinese have been very active overseas with their Belt and Road Initiative investing in a lot of countries. How are you seeing the Chinese efforts showing up in the countries World Neighbors operates in, if you're seeing it at all?

SCHECTER:
Oh, I've seen it quite a bit in Africa, in East Africa. You can't go to East Africa and not see the impact that the Chinese have had there. It's not loved, let's put it that way. There's definitely resentment on the part of the East Africans that I've been working with in terms of the Chinese coming in, bringing their own workers, deciding where they want to build factories or bridges or whatever it is that they're investing in. And there's no integration as far as I've seen with-

LINDSAY:
So no localization?

SCHECTER:
Right. There's no localization whatsoever. Yeah. So a lot of resentment there. Fascinatingly, I have been studying what's going on with sort of the remnants of the Wagner Group and the Russians in West Africa, and of course, from our perspective, it's terrifying that the Russians have made as much of an inroad as they have. The West Africans that I know are not as worried. That has to do with where we are, where we live, and our perceptions of the global sort of carving up of the world.

LINDSAY:
So what is it that the people you're talking to in West Africa particularly, I would imagine in Mali, see as the advantage of having the Wagner Group around?

SCHECTER:
Their attitude, and it is pretty hard for me to understand, but is that "they're coming and they're helping us, and they're also addressing the extremist problem." One of the points that was made in the declaration to leave ECOWAS was that ECOWAS had done nothing to address the problem of extremist terrorism. And from the perception of the West Africans, the Russians are doing... Wagner is there, they're bringing mercenary soldiers, and they are fighting the terrorists. So that's one place.

LINDSAY:
I would also imagine it's partly because the Wagner group is not worrying about the niceties of Democratic government. In Mali, we've had a coup. And I think part of the reason for the breakup of ECOWAS or the decision to leave ECOWAS is that ECOWAS countries had one point threatened to send military forces in to try to restore democratic government.

SCHECTER:
Right, right, right. Yeah. No, I mean, we're very lucky to still be working in West Africa given all of this turmoil, but there seems to be an acknowledgement that despite what's happening on the political level, there's still a need for assistance on a sort of very, very grassroots level.

LINDSAY:
On that note, I'm going to close up The President's Inbox for this week. My guest has been Kate Schecter, CEO and president of World Neighbors. Kate, thank you very much for joining me.

SCHECTER:
Thanks so much for having me.

LINDSAY:
Please subscribe to The President's Inbox on Apple Podcasts, YouTube, Spotify, wherever you listen. And leave us your review, we love the feedback. A transcript of our conversation is available on the podcast page for The President's Inbox on CFR.org. As always, opinions expressed in The President's inbox are solely those of the host or our guests, not of CFR, which takes no institutional positions on matters of policy. 

Today's episode was produced by Ester Fang, with Director of Podcasting Gabrielle Sierra. Special thanks go out to Michelle Kurilla for her research assistance. This is Jim Lindsay. Thanks for listening.