Trickle Up; B. Sall

couple of years ago I was in Haiti for the first time. I was quite anxious about the trip, anticipating masses of starving peo ple begging for handouts of food and money. I was also expecting to see little work or activity amidst these incredibly poor people. The reality of Haiti was something quite differ ent. The level of human activity was tremendous. People were up at 5:30 A.M. walking to their favorite market spot, setting up lines of old Salva tion Army clothing to sell, picking bananas to take to market, and bringing in small catches of fish from the beautiful capes and bays. Tiny charcoal fires smoked up the towns and cities, children were off on errands, and women bartered and sold their produce. In the midst of all this were the lines of children, all dressed in identifiable private school uniforms, walking to open air one-room school houses. At 10:30 in the evening they were all still at it; Port-au-Prince abuzz with soft Haitian dialects and singing,and Cape Haitien resounding with the squawking of chickens and the undeniable rhythm of drums signifying a voodoo ceremony going on somewhere in the bush.

I tried to analyze why my preconceived notion of a dramatically poor country differed so much from the reality of Haiti. It must be, I realized, that my idea of what poverty looks like had been based entirely on what I had seen in the United States. Here in the U.S., and especially in the big cities, poor people are crammed together in government Barbara Sail is vice president of The International Alliance for Freedom and Peace,based in Boise, Idaho. housing projects and ghetto neighborhoods, iso lated from the rest of society by freeways and rail road tracks. The inhabitants are given welfare checks, food stamps, and sporadic, confusing "spe cial programs" designed to raise them out of poverty. Subsistence is provided, but opportuni ties for self-employment are very scarce. There's little productive activity in U.S. slums. But in Haiti there are no welfare checks. To sur vive, people must work very hard. They gather what little they can of value and spend the long hours of the day trying to find a market for it.

In my wanderings in the markets, I asked people how they managed to sell their Bic pens, bars of soap, record albums, and used clothing. One man replied that the price of rice had recently fallen 50 percent, which allowed some people the luxury of buying small consumer goods. I watched as a child sold Chiclets to a well-dressed matron in a brand new Cherokee wagon. And there was constant bartering among the inhabitants that allowed soap, food, and basic supplies to change hands. All this activity exists in what Hernando de Soto, Peruvian author of The OtherPath,calls the "informal economy." Participants pay no taxes, pass no regulatory guidelines for sanitation or market-stall location, and exist by their own efforts. In this way Haitians have been able to overcome Baby Doc Duvalier's monopolistic poli cies that strangled the middle class, to feed most (but tragically not all) of their children, and survive.

Poor Haitians aren't the only families in Third World countries working hard to keep body and soul together. People in Indonesia, Pakistan, 135 "Tap-taps"-private buses in theform ofconverted pickups-provide cheap transportation, a way to earn a liv ing for Haitian businessmen. Kenya, and Bolivia, among others, participate in free-wheeling "informal" market economies requiring tireless efforts to maintain extremely low levels of existence. The TrickleUp Program Marching into this wide-open system of the "informal economy" is a private program for assis tance that truly recognizes the ability of the poor to work hard and lead productive lives. It's called the Trickle Up Program and is directed out of New York by Glen Leet and Mildred Robbins Leet. During the past ten years of its existence, the Trickle Up Program, or TU~ has achieved some remarkable successes in Africa, South America, Asia, and the Caribbean largely by recognizing that element of self-help and entrepreneurism so rampant in undeveloped countries like Haiti.

Grants are made by TUP to selected groups of five or more people after a business plan is reviewed for them by unpaid TUP project coordi nators. The maximum grant is $100,and recipients must pledge to reinvest at least 20 percent of their profits in their businesses. In the past ten years, more than 90,000individ uals have participated, 15,000 businesses have been started in 86 countries, and over $7.5 million in profits have been generated from TUP-funded businesses. All of this has been achieved without the involvement· of governments, large staffs, or social researchers. By now, you probably see why it's called the "Trickle Up Program." Funds aren't lavished upon government entities in poor countries with the hope that a small portion will somehow "trickle down" to the very poor. The grants go directly to the cagey entrepreneurs of the streets, including those in Port-au-Prince, Haiti.

Here's how the program works in the clearest presentation I could find-the words of a project coordinator in Jakarta, Indonesia: Of the 81 women [in the project], Salima was definitely the worst off in all aspects of life. She and her husband Thkiman and three children lived in the smallest packing crate in the slum. Every week . . . Salima would greet us by beg ging for money. . . . Finally I said, there is a program where you can get money if you get five people together and produce something and sell it. Well, Thki man was already making some money by find ing old sandals and repairing them to sell. They found six other people who could either make 136 THE FREEMAN • APRIL 1990 or sell sandals and, with my help, they filled out the TUP business plan form and decided how they would spend the TUP $50 conditional grant. ... The Tup business report showed that eight people worked. . . . A total of 19 people bene fited from the business. They produced 180 pairs of shoes and sandals. Their income from sales in 15 months was $176. They saved and reinvested 65 percent of their profit in their business....

They were very enthusiastic when we met to' fillout the final report. When I asked them if the business would continue they said, "It will con tinue until we die." The joy of this program is the concrete proof it provides of the success of free market processes among the poorest people in the poorest countries of the world. It also confirms the fact that self worth and a decent life earned by an individual's own labor are far more precious than billions in relief funds. Why Are ResultsIgnored? The tragedy of this program is that its results are ignored by the dispensers of billions of dollars to the Third World nations. This is summed up by the Leets in their September 1989newsletter: The World Development Report of 1988pub lished by the World Bank concluded: "Poverty in the developing countries is on the rise. Between 1970 and 1980 the number of people without adequate diets in developing countries increased from 650 million to 750 million peo ple. Since 1980,matters have turned from bad to worse: economic growth rates have slowed, real wages have dropped and growth in employment has faltered in most developing countries."

If an amount equal to 10% of the $320billion [development aid spent by the 19 donor coun tries that are members of the Organization for Economic Cooperation and Development (DECD)] was used with the Trickle Up process it would give the opportunity for 1.5 billion of the poorest of the poor to start 206.5 million businesses in which they would invest 770.5bil lion hours of their underemployed time. This would end involuntary unemployment, which is the major cause of poverty on this globe. The Leets then ponder the reasons their suc cessful program has been ignored for so long by the major players in the Third World assistance game. They question. their own efforts at getting out the word of their success and point out that direct assistance to the poor runs counter to "con ventional wisdom." Unfortunately, they make one wrong assump tion about intergovernmental development agen cies. The Leets state, "They do care about pover ty." Although it's true they care about poverty, I'm afraid it's more in the manner described by Kimi Gray, welfare mother/housing advocate from Washington, D.C. "Poverty," Ms. Gray said on an October 1989 N·ational Public Radio broadcast, "has been very profitable for everyone but poor people."

Tapping the energy of poor people around the world and directing it toward free market pursuits could result in an enormous increase in world wealth. Continuing to subsidize inefficient, cen tralized, and crippling governments willonly keep those people and families on the edge of survival. After personally witnessing the strength, beau ty, and dignity in which the poor work for their own survival in Haiti, I became convinced of the ability of people to care for themselves and their families, if only they can be released from the eco nomic restrictions imposed by governments. By recognizing this fact, the Trickle Up Program is definitely part of the solution to world poverty. On the other hand, massive infusions of money and capital to Third World governments is definitely part of the problem. D Readers may contact TU~ 54 Riverside Drive, New York, NY 10024-6509,forfurtherinformation.