Microfinance: Empowering the Poor to End Hunger and Poverty

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1 Microfinance: Empowering the Poor to End Hunger and Poverty An address given to the Los Angeles World Affairs Council On June 1, 2011 by The Honorable Tony Hall Executive Director of the Alliance to End Hunger; U.S. Representative from Ohio ( ); U.S. Ambassador to the United Nations Agencies for Food and Agriculture ( ) Well, thank you, Curtis [Mack].Ladies and gentlemen, I feel very honored to be here to address the Los Angeles World Affairs Council. I m honored because I realize that you ve had so many distinguished speakers, so I feel honored to be following them. I also feel honored to be in front of so many people that are knowledgeable about issues, not only in our own country, but overseas: doctors and diplomats and people that have worked at the UN. I feel like I m speaking to the choir tonight. Maybe I should be there listening to you. So it is exciting for me to be here with you. I ve had an interesting career, and I know when I first started off running for Congress, getting started, if a reporter knew your name, it was a miracle. I mean, it was very humbling in those days. I remember the first time I was running for Congress, I was a room like this, and it was a couple of weeks before the end of the campaign. I had my supporters in the room and we were discussing what was going to happen for the next two weeks. It looked like I was going to win. It was a very hard-fought campaign, a very decent campaign. We had something like 27 debates, and my challenger was a very decent man. And it looked like I was going to pull ahead. 1

2 One of my supporters came running into the room and said, Tony, TIME Magazine is on the phone. They want to speak to you. And I m thinking, Wow. Hardly a reporter outside of Dayton, Ohio knew my name, and for TIME magazine to call me and really want a quote from me and do a story about me. This is exciting. I ve really arrived. So I said, Well, get the name. And I ll call him back in ten minutes. So we got the name and I got my little group together. And I said, You know, this is my chance to really make an impact on America. People are gonna read some important things I m gonna say here. So I wanna say three things: what do you think? My supporters, they were excited, so I really had it down pat and I said, Let s get the person from TIME magazine on the phone. So here I am, waiting, this is a chance of a lifetime, and this is what this person says: Hi, Tony, this is Kathy from TIME magazine, would you be renewing your subscription to TIME magazine? I don t read TIME magazine anymore It s very humbling being in Congress. It s still humbling. I have to be careful of the time; I have so many things I want to say tonight. I hardly know where to begin. I remember a politician saying that, and a little eight-yearold girl followed up and said, Well, why don t you start somewhere near the end? So I hope instead of being longwinded, I hope I can leave you with one thing. That one thing I think many of you are already practicing, but that is to do the thing that s in front of you. I s what Mother Teresa gave me. I had the chance to meet Mother Teresa, I had the chance to be with her seven or eight times in my lifetime. First time I was with her was in Calcutta [Kolkata]. I was chairman at the time of the 2

3 Select Committee on Hunger, and I was traveling a lot in the world, and I always wanted to meet her, and it was my first experience in meeting her, and I was just overwhelmed with her. She took me downtown to the most populated area, certainly an area that was overpopulated, very squalid, and very difficult; people living on the streets. I think I made some kind of comment, Look at the people living here. How can we possibly make a difference? I mean, I m supposed to know something about hunger and humanitarian aid I m not even sure I can even take care of this street. She didn t say anything to me. She went and picked up this person that was lying in front of her, and got some men to take this man back home. He was sick; he was dying. And like she did with everybody, she washed him off and loved him and hugged him and rubbed him down and hugged him and loved him more. She came back to me later that afternoon and she said, You know, not everybody can come to Calcutta like you. But I always want you to remember, do the thing that s in front of you. That s always stuck with me. And her point was, to me, was: just do the thing that s in front of you. If all of us would do the thing that s in front of us, what s going on here in Los Angeles, what s going on in our neighborhood, what s going on with the things that we care so much about. If we did the things that were in front of us, we probably wouldn t need half the things the government does in the world. It would be a much better world. Well, why? Well, let s look at the world today. In the twentieth century, there were more people killed in the 20 th century than in all the others put together. That s an amazing statistic. There will be 25,000 people that will 3

4 die today. And they will die of hunger, and they will die of hunger-related diseases. And 25,000 died yesterday, and 25,000 will die tomorrow. Almost half of the world lives on less than $2 a day, and at least a billion and a half people live on less than $1 a day. In our own country, in America today, 50 million people 50 million go to bed hungry sometimes during the month two or three days. These are working people. These are working poor. These are, often times, senior citizens. I met, not too long ago, senior citizens, a senior citizen couple in Appalachia, in Ohio my state both living on social security, both in their late 70s, their only income was social security, and the lady had cancer, so everything they had was going for pharmaceuticals to pay for the cancer. They didn t have any money for anything else. When I met them, they were stretching a can of tomato soup for two weeks. And the working poor, they aren t making it. It doesn t seem possible that the world is like this, but it s what Charles Dickens said in 1859 in his book A Tale of Two Cities. He said, It was the best of times. It was the worst of times. It was the season of light. It was the season of darkness. It was the spring of hope, and it was the winter of despair. We had everything before us, and we had nothing before us. And sadly, it is the tale of the two worlds that we live in today: one very rich and one very poor. Today in dozens of poor countries all over the world, little boys and girls are born into poverty and disease and unclean water, and hunger and hopelessness and despair are their daily companions. And we, in America, we are fond of saying, I ve had a bad day. But when we think about it, even on our worst day, we are blessed with more food, more shelter, more clothes, more security, more health care and more than our poor brothers and sisters are on their best day. 4

5 When I talk about people that I ve seen in the world, people ask, How do they survive? And I say, Often, they don t. It s kind of strange to me that I ve been so involved with the hungry and the poor. I ve never been poor. I grew up in Dayton, Ohio. I went to school there and college in Ohio. I lived one hour away from the poorest people probably in the country, in Appalachia. And yet, I never knew them or saw them when I was so young. I just cared about life around me, my own environment, playing a good game of football. Then I went into the US Peace Corps, looking for adventure. That s when my life began to change. That s when I took my showers out of a bucket, and I slept under a mosquito net for two years. I lived among the poor, and I came back a different person, knowing that when I did something for somebody, I felt pretty good. Then I came home, and I became a small businessman. I got in the state legislature. I was in Congress. I was an ambassador. Anyway, my life really changed again in 1984, when, at that time I was still a fairly young member, and I was chairman of a subcommittee on international hunger. I was asked to go to Ethiopia, because they were having this horrendous famine. I couldn t believe what I was hearing and seeing. There had been, at that time, nobody from the United States no official that had really seen Ethiopia. If you remember, Ethiopia was under a very harsh regime. Haile Selassie was taken out of office by a man by the name of Mengistu, who came in and killed half of the people in his cabinet, and imprisoned almost everybody in Haile Selassie s family. The drought turned into civil war, and then the civil war turned into famine. He didn t tell anybody about it, because he closed the country down for six months. As a result, a million people in his country 5

6 died before we could even get in there and find out what was going on. How can a million people die in one country? In six months? So I went there thinking, I need to try and understand this. I need to walk around in it; feel it; smell it; try to get a feel for it so I can report back to Congress and tell them what I ve seen. So I went with Mother Teresa s group, Sisters of Charity. We went up country couple hours above Addis by small plane, and we landed in a very rural area. There was a small clinic, probably half the size of this room. I noticed that there were thousands of people waiting to get into this clinic, and I knew that there was no way that this clinic could handle this. So as I walked in, the doctor grabbed me. He said, Come with me outside. I m going to show you something. This is something you ve probably never seen before. And as I walked outside, well then, they thought I was a doctor. These women were handing me their dead children; many dead children. They thought that we could keep them alive. They were all dehydrated. They had been walking for well over a hundred miles, and they were dehydrated. You know, when you don t eat, and of course you drink dirty water, your immune system goes down. It s not the lack of food that kills you. It s your immune system that kills you. Your immune system is so far down that you re very susceptible to almost any disease, any germ that comes along. As a result of that, I saw 25 children die in a matter of minutes. I was handling dead children. Never saw anything like it in my life. For the next three days, that s what I saw, and I never got over that. I think about that all the time. I came back from that experience thinking, You know, we do a lot of things in Congress that really don t amount to much. And I thought, Well, this is what I m going to do. I m going to work on this. I m going to work on 6

7 humanitarian aid and hunger, and these kinds of issues. This is what my life is going to be about, and I m going to work on domestic and international hunger. So I got involved, and I traveled, and I legislated, and I helped start many programs on food aid, and immunization of children and water projects and basic education of mothers; food banks in America; cleaning programs. And I was tireless. I think I m still tireless in my pursuit of helping the hurting. Even today, I run a nonprofit called the Alliance to End Hunger in Washington, D.C. But over the years, the problem is sometimes we don t get to see what happens to people that we feed and immunize. We oftentimes have to go back to the same people, and sometimes we re making wards of these people. We don t get to see the benefits. We feed people and we keep them alive and we immunize them but we don t know how they re doing, and in some cases we go back to the same problems. But with microcredit I just want to talk a little about microfinance, microcredit, and Opportunity international people really get to pick their lives up, and they get to stay up. So after years of traveling to well over 130 nations, and some countries I ve been to a couple dozen times. All of these programs, you know, of immunization and feeding programs, and school feeding and water programs and sanitation, they re good and they re important, especially basic education of mothers. But I ve really locked on to microfinance and microcredit. I think, probably, the thing that got my attention was, I can t remember how long ago it was but it had to be at least 20 years ago, that I was in the Dominican Republic. We had loaned this shoe cobbler in the Dominican Republic just a small amount of money, something like $50. The story was that he now had 150 employees, and he was making and building shoes and exporting all over the Caribbean on a $50 loan. 7

8 I thought this was really amazing. I took that idea of microcredit and microfinance, and through my friend, like Muhammad Yunus, we introduced the first bill into the Congress of the United States, and was able to really get something started. I was looking for new ideas to help people get out of poverty and to stay out. And just feeding them, it did save them, but it wasn t helping them get on their feet. I remember going back to Ethiopia many times. I love Ethiopia and I tend to go back there a lot, and I remember going back and meeting with the Prime Minister, Meles Zenawi, and he told me, Thank you very much for this food aid and we really appreciate it and everything. But he said, We ve got to do something about helping our people get on their own, because my people have become so used to these handouts, that I m afraid I m just afraid that if we keep accepting this stuff we ve got to change our country. So, hopefully someday, we re going to be in Ethiopia with microfinance and microcredit. Poor people are the same as everybody else. They need jobs. And without jobs, at the end of the day, they still have nothing. We can teach a farmer the technology he needs to improve crop production. But if there is no one to buy his food, he is still unable to clothe and educate his children. We can build schools. But if families aren t earn enough to survive, their children will be forced to work and will have no time for school. Microfinance, and especially Opportunity International, they offer a way to break the cycle of poverty. In Malawi, for example, 74% of the people reported that they save money, but they kept most of their money at home. They bury it. They secretly bury it in the ground. This is the way they do it in Africa. They don t know about banks. They were losing money, and they were risking having it stolen or spent on unplanned purposes. 8

9 But Opportunity Malawi has this very affordable approach that allows them to open a savings account with as little as a single dollar. Now they have sixtimes more people saving than borrowing. Once there are enough of these savers, the local community bank can be completely self-sustaining. And boosting the savings rate doesn t determine the wealth of a country, but we all know that savings and investments are essential to long-term growth. Many microfinance institutions and commercial banks have avoided the rural areas, where Opportunity goes in, because it s expensive. You ought to see these roving mobile banks in Malawi, where they have smart cards and people put their thumbprints on cards, especially women, because women don t have a lot of status in some countries, especially in Africa. You know, in Africa, oftentimes, if the man dies in the family, the family of the man who dies comes in and takes over the house, takes over everything. The woman, and his children, they re out. And oftentimes, to make it, they have to turn to prostitution. But you can image, this exacerbates the HIV/AIDS and multiplies the effect. But with women, when you teach them, and 85% of the people that get these loans are women. And when you put their thumbprint on it, and enable them to save money, and for the first time, the husband, if he comes home and gets drunk, and he steals the card, it s not his thumbprint, it s hers. It s her money, she gets to keep it. This is something that Opportunity has really innovated in Malawi. It s really interesting how they ve done this. Opportunity International offers hope to people all over the world. Our banks lend money to women with no access to capital and no collateral. The kind of people that we loan money to and I m just an advisor to Opportunity International, I m not an expert on it are the people that if they walked into a regular bank today, they d get 9

10 thrown out. They re poor people, some can t read or write, but they re good people. They have no collateral. But 98% of this money is paid back. They have to be good people. It s pretty amazing. 98% of the money that s loaned out is paid back. It s one of the most effective approaches to addressing the long-term problems and ills of poverty I ve ever seen. I ve not seen anything better. Basic education of mothers, school feeding, sanitation and water, keeping people alive, and microcredit. You don t get any better than that. And when you do that, the gross national product goes up; the population of the country goes down, because the women get smart. They don t have to have as many children now, because they ve got money in their pocket. They re smart. They know how to read and write now. As you can see, I love microfinance and what it does for people. We just need a lot more of it. Let me change direction now, and tell you that not everything that I ve been involved with has been a great success. I ve had some ups and downs in this area. This area that I work in, this humanitarian area, these are the people, what we call in the Scriptures the least of these. These are the poorest of the poor. These people don t vote. They don t give money. Nobody knows them. Nobody cares about them. And the last group that talks about them are politicians. They re not even on their radar screen. In 1993, Congress eliminated my House Select Committee that I was chairman of, and that really floored me. I didn t know what to do. This was my life. I went home and said to my wife, I said, You know, you re not going to believe it that Congress eliminated my committee. Because, it was a time of high deficits, like today, they told the American people that we ve got to 10

11 start pulling in our belt a little bit. And they were right. Except sometimes, in politics, we throw the baby out with the bathwater. So I went home and told my wife and I said, I don t know what to do. The New York Times called our committee the conscience of the Congress. We re the most bipartisan committee in the Congress. We spend less money; do more; pass more legislation. Yet, these clowns, Democrats and Republicans, have eliminated my committee. What am I going to do? I m going to quit. And she said, Did you ever think about going on a fast? So we went and read Isaiah 58, which is an Old Testament passage, which is really an interesting passage from Isaiah 58. I thought, Well, Jen, I m not sure this will work, because Congress will never understand a Congressman fasting, going without food. This will never go over. I m not sure it will mean anything. You and I know why I m doing it, but will they know it? She said, Well, why don t you just step out and see? You need to be a little bold, don t you? You were going to quit Congress anyways, right? She was calling me on the carpet here. So I went and talked with some friends and they said, Go for it! So I fasted for twenty-two days. It was a water-only fast. I was really over my head, but it ended up being a beautiful thing. We had 10,000 high schools that fasted with us; 200 universities. A lot of great things happened. The World Bank called me, and this is what really got me to stop the fast, they said, We re going to do a world conference on your fast, because we are very moved by it. We ve been reading a lot of good press about it. We want you to make a speech. We re going to call Jimmy Carter. The Secretary-General of the UN was a fellow by the name of Boutros Boutros Ghali, that is a heck of a name: Boutros Boutros Ghali. I like that 11

12 name. Anyway, they came, and a lot of heads of state came. And they made a speech. And I ll be darned if they didn t give me a $100 million for the fast. And the money went for microcredit. Microfinance. Went to women. And that money is now up to half a billion dollars. That money has grown. Because of money paid out, interest coming back. One fast. It was an exciting time in my life. Today, I must say, almost twenty years later, the stakes are even higher. I just read to you what s going on today. Food prices and energy prices are going up all over the world. It s pushing many, many people into poverty. There are at least a billion people that are starving today in the world. There are at least 25,000 people that are going to die before the day is up. And there s 50 million people, now a couple years ago it was only 35 million 50 million Americans, today in America that are going to bed hungry. Two or three days out of every month, without food, in our country. Something s wrong here. So, I went on a fast. And I started March 28, I ended at Easter. I fasted for twenty-eight days. This time it was a liquid fast. I didn t do the water-only fast; I m older now. We had 50,000 people that fasted with us this time across the country. We had 30 Congressmen that fasted with us. They tell me because of some of the programs that we were able to save, that we saved something like 70,000 lives as a result of it. I don t know how they measured that, but this is what I was told. And I just think that it was really to get the people of the United States to start thinking about something that is a little bit outside of their neighborhood; that s outside of their environment. It s to start to get people to start thinking about doing the thing that s in front of them. It s to start forming a circle of protection because a lot of things that politicians do worldwide, whether they re Democrats or Republicans, the first thing they start to cut are the poor. 12

13 The poor never got us into this problem, we have to cut the budget; we have to severely cut it. But you don t hurt the poorest of the poor. Righteousness exalts a nation, and I think our country is evaluated on how we treat the least of these; the poorest of the poor. That was the reason for the fast. The fast is over. It is still successful. I still come back to the issue. I kind of feel like I m speaking to the choir here about doing the things in front of you. As I look around the room I see a lot of friends and a lot of programs that some of you people are involved in, so I know that many of you are doing the things that is in front of you. But then some of you probably feel, well, I m doing something that is so insignificant, but you know a reporter also said this to Mother Theresa once, Don t you think that what you are doing is a drop in the bucket? And Mother Theresa said, No. What I do is a drop in the ocean. But if I didn t do it, it would be one less drop. And that is kind of the way I feel, that this is my drop, and wouldn t it be something if we started to put our drops together; we really would have something. So that is what I wanted to tell you tonight, and it s good to be with you, and these are some of the issues that I care very much about. And I appreciate the chance to be here and to talk to you a little bit about it. Thank you. Speeches are edited for readability and grammar, not content. The views expressed herein are not endorsed by the Council. The Los Angeles World Affairs Council is a non-profit, non-partisan organization that pays neither honoraria nor expenses to its speakers. 13

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