Acumen Fund’s friend Iqbal Quadir – director of MIT’s Legatum Center for Development and Entrepreneurship and founder of GrameenPhone – wrote an op-ed in today’s Wall Street Journal (subscription required) entitled Foreign Aid, Bad Governments: Why helping entrepreneurs is the right approach. In it, he pushes the Obama Administration to ditch the Cold War aid regime and instead focus on helping entrepreneurs:
Tragically, the Cold War aid approach actually preserves suffering in poor countries. Aid empowers bureaucracies, promotes statism, and weakens government incentives to boost tax revenues through growth. Economic assets are often kept in the hands of the state, leading to monopolies, stagnation and extortion. All of this hurts entrepreneurs, who have the potential to create wealth and promote governmental accountability.
He goes on to call for the removal of trade barriers, an enhanced role for the International Finance Corporation (if it’s reformed) and for a matching grant program geared towards building health clinics in underserved communities. Iqbal concludes,
In short, America should stop pouring billions into bureaucracies to buy short-term alliances and focus its efforts on bottom-up entrepreneurship. This would increase America’s popularity, alleviate poverty, and promote real democratic change in these developing countries.
We at Acumen Fund agree with Iqbal that we need to focus on entrepreneurs, not aid. There is a role for aid to play, of course. But we know – through our investments, and our conversations with hundreds, thousands of customers – that everyone in the world deserves the dignity that comes from a day’s work, that comes from the choice to buy clean water or healthcare. We hope the readers of the Wall Street Journal will agree with Iqbal and join us in our quest to build a world in which everyone has access to the resources to help them shape their own lives – one entrepreneur at a time.