COPENHAGEN, Denmark — The European Union has dubbed 2015 the European Year of Development to optimistically indicate that a stronger fight against worldwide poverty is underway. Bold claims notwithstanding, there are reasons to suspect that the EU will face obstacles including misdirected funding and miscommunication between donors and recipients.
By way of example, in 2013 the European Union provided 1.7 billion euros in development aid to Tanzania. The money certainly helped by drastically reducing the number of malaria cases among children by paying for mosquito nets, but half of the Tanzanian population still struggles with poverty because the money does not always reach the right people.
When aid that was supposed to help fund Tanzania’s energy sector in 2014 was found to be stolen by government officials dissembling as energy contractors, donors put a freeze on their aid.
On the subject of aid direction the director of the Institute for Development Studies at the University of Dar es Salaam, Adalgot Komba stated that “Sometimes you can get aid in the area that is not your priority. You can say, ‘Our priorities are 1, 2, and 3. Take it or leave it.’ Then the donor will tell you ‘no, we have money for a different 1, 2, and 3. Take it or leave it!’”
In other words, not only is aid sometimes lost to fraudulency and scandal, but disparate priorities between aid recipients and donors. Komba goes on to conclude that “This is a serious problem in the development aid industry.”
So what can be done to combat misdirected funding and miscommunication between donors and recipients? One solution has arrived in the form of a “lean startup” approach that is being taken by some organizations.
Many startups, including government-backed startups such as the Tanzanian Energy Initiative, fail due to a minimum amount of hypothesizing and testing a product, as well as its possible delivery and reception. For this reason, three-fourths of development projects in Africa barely get off the ground.
The lean startup approach uses a hypothesis-based method based on three tenets: prototyping, experimenting and pivoting.
As an illustration, innovators with Nuru Energy, a for-profit development organization based in Rwanda, realized that reducing the use of kerosene for light and heat was an important issue. Kerosene is often harmful to health—indoor pollution causes more deaths in Rwanda than Malaria—and dangerous since it can start uncontained fires.
Using the three tenets of lean startups, Nuru developed a battery-powered LED light that is recharged by a stationary bike that they call a “POWERCycle.” Before finally settling on the POWERCycle, Nuru tried several products and would scrap each one based on criteria that ranged from practicality to financial viability. Once they did decide on the POWERCycle they then took into account how poverty-stricken people could possibly pay for their product.
To make the POWERCycle more financial feasible, Nuru then got in contact with several micro-financiers to ensure that their product would not just be pedaled to individuals, but would also add some sustainable business to Rwanda communities.
As long as the European Union is sure to consider more innovative means to help other countries develop, it might just be the “European Year of Development.”
– Jarad Sassone-McHugh
Sources: Instead Knowledge, DW Germany