AID is charity, one of the most noble expressions of humanity, but it is for emergences only. It should not, and it cannot become a way of life. A prosperous community requires productivity and enterprise. Social and Economic Justice are inseperable and cannot be divided. One cannot exist without the other. GSEI is The Global Sustainable Economic Initiative it is a Program of Micro Venture Support a US 501 C. 3 non profit corporation. We believe that in Global Economic Development, Sustainability is not the important thing. It is the essential thing!
This is the face of Haitian poverty … Pervasive and chronic. It is transgenerational and part of the AID culture.
Five years from now. The capital will be rebuilt … there will be a new palace, possibly a new hospital, new roads, and new hotels * and poverty will still be rampant. Traditional economic development disproportionally benefits the power elite. It has always been thus …
If we want things to change we have to change how we respond … In Albert Eitstein’s classical aphorism, he said that, “… a defiinition of I nsanity is to keep doing things the same way and to expect a different outcome.” If we want change to occur: “We must change the system.”
In Haiti there are many obstacles to overcome to end poverty. The worst of these: Lack of Opportunity and Despair
First we know that traditional US sponsored AID is NOT the answer. Why? Because charity is NOT a solution to poverty. It has not worked in the past … Why should we expect it to work now … are we insane? So, what can one do? How do we solve the problem? You cannot take money from one group and give it to another that is a formula for political instability. You cannot redistribute the wealth … BUT, *we can redistribute the opportunity!
New Jobs do not come from large projects, or big business. New jobs are created mainly by Small Businesses Community Economic Development comes from building one business at a time …
Certainly Opportunity requires Capital, but in a sustainable development model, the *Capital is not an open ended need. Dramatic enhancement of human capacity will be needed (a major challenge) and *a strategic deployment plan to assure widespread distribution will be necessary
Microfiniance Investment Vehicles have proven extremely popular in helping to fund the proliferation of MFI’s and the capital to loan to the poor. installment lending however, has limits and a growing business needs patient capital to fuel its growth: It needs investment. Traditional investors want to fund hard capial assets and not the expense of human capacity. In order to respond to the needs of both investors for capital return and the donor communities need for social return, The Micro Venture Investment Vehicle is a hybrid model and accomodates both.
This is a Sustainable Development Model … this means that at a point in time, additional funding will not be required It will be self funding and therefore … Sustainable. First ,let me draw your attention to the first block at the top of the model. This is the MVIV, the funding mechanism we discussed in the last slide. Notice that each element in this functional model has both an input and an output Note also that this is a two year program and that each of the new business are guided and mentored up the ladder of prosperity from micro finance to the traditional economy and the commercial banking system. *This is … Clearly the point of the spear here is the Business Center. If it fails the system fails. Incidentally, each element is supported by a detailed functional model and an operating process. *Let’s look at the Center Model.
This is how the center functions within the MicroUP Development Model. This models provides us the ability to scale the operation to meet the needs and demands of the process. We can, for example, function with as few as two staff, but the normal cadre will be five. For large populations or for cities we can easily scale up to twenty of more.
In order to achieve community level economic development a critical mass of prosperous growing businesses are necessary. We know that the small business is the largest producer of new jobs and provides the source of medium and large businesses. To achieve this level of development a multiplier effect must be achieved. We intend to do this through the establishment of a number of Business Centers strategically located within the overall population so as to reach the maximum deployment in the shortest possible time.
Haiti brief 1
When the AID is over … only the Poverty will be Left Sustainable Economic Initiative for Haiti There Can be no Social Justice Without Economic Justice - Pope Leo XIII
Pervasive Chronic Poverty Citie Solais - Port-au-Prince, Haiti
Before … <ul><li>80+% Live Below Poverty line </li></ul><ul><li>Rebuilding Haiti Will NOT End Poverty </li></ul>
To Change the Outcome We Must Change the System
Problems <ul><li>Chronic, Pervasive, Structural Poverty </li></ul><ul><li>Barriers to Economic Development </li></ul><ul><ul><li>Absence of Opportunity </li></ul></ul><ul><ul><li>Culture of Despair </li></ul></ul>
How Do We Solve the Problem? Redistribute the Opportunity
Redistribute The Opportunity - How? <ul><li>Create NEW Jobs </li></ul><ul><li>Small Growing Businesses </li></ul><ul><li>Community Economic Development </li></ul><ul><li>One Business at a Time. </li></ul>
Opportunity Means … <ul><li>Investment Capital </li></ul><ul><li>A Sustainable Development Model </li></ul><ul><li>Intensive Training & Development </li></ul><ul><li>Strategic Deployment Plan </li></ul>
Micro Enterprise Investment Grants Social ROI <ul><li>Donor Funding </li></ul><ul><li>Training </li></ul><ul><li>Mentoring </li></ul><ul><li>Metrics/Evaluation : </li></ul>$ $ GSEI FUND Global Sustainable Economic Initiative <ul><li>Investor Funding </li></ul><ul><li>Capital Assets </li></ul><ul><li>Market Development </li></ul>Investment ROI Donors Investors $ $ Development Model MVIV Micro Venture Investment Vehicle A Hybrid Fund Model 1. Investment Capital <ul><li>DONORS fund </li></ul><ul><li>Human Capital </li></ul><ul><li>Receive Social Return </li></ul><ul><li>Capital Investment </li></ul><ul><li>Capital Return </li></ul><ul><ul><li>Patient capital </li></ul></ul><ul><ul><li>Limited return </li></ul></ul>
Global Sustainable Economic Initiative Micro Venture Investment Vehicle (MVIV) MFI Sustenance Borrowers Ladder of Prosperity Level Two Exit Strategy Level Three Transition to Local Banking Level Four Socially Responsible Venture Capital Local NGO MicroUP Development Model 2. Sustainable Economic Development Model Investment Funds Management Small Growing Businesses MicroUp Business Centers (2 year program) Donor Funds Candidates <ul><li>Model </li></ul><ul><li>Process </li></ul><ul><li>Program </li></ul><ul><li>Management </li></ul>In-Counrtry Program Experience Equity Repurchase Micro Enterprise Micro Enterprise Micro Enterprise Micro Enterprise This is REAL Progress Out of Poverty! How do These Centers Work ?
Sustainable Development Model MFI Borrowers Partner Training Partner Management Venture Support Team Finance Group Center Management IT Marketing Group Budgets Reports Information Feedback Direction Feedback Feedback Venture Partners BDS Services Venture Candidates Capital Investment Equity Training/Support Incubator How Does the Incubator Work?
3. Intensive Training & Development Performance Improvement
4. Strategic Deployment Each Box Is a NEW Center <ul><li>Year 4 </li></ul><ul><li>356 New Growing Businesses </li></ul><ul><li>3.5K New Jobs </li></ul>
Progress out of Poverty Level 1 Microfinance <ul><li>Level 2 </li></ul><ul><li>Patient Capital </li></ul><ul><li>Training/Development </li></ul><ul><li>Level 3 </li></ul><ul><li>Formal Economy </li></ul><ul><li>Exit Strategy </li></ul><ul><li>Level 4 </li></ul><ul><li>One Percent </li></ul><ul><li>Capital Markets </li></ul>