Hike, Capital and Out of Proverty

By Ricky

After the cliff diving at the sixth waterfall, I went alone to the last one to see the view there. I was extremely nervous because I didn’t know the exact path to the last waterfall, and it seemed to rain sooner or later. I walked along the river at first, and finally got back to the right track. However, it started to rain when I was in middle of nowhere, the only thing I could do was to speed up and get to the waterfall as soon as possible. Out of my expectation, there were two small bamboo house and a family at the waterfall. Because of the heavy rain, I asked them whether I could come in for the shelter. They accepted my occurrence without hesitation, but silence between the family and I went on for a while before a lady asked me whether I would like to eat lunch with them. They had a pot of wild frogs which were caught nearby the river, a few slides of roast pork chop and a box of rice. After the lunch, MaMa, the eldest lady invited me to their home for dinner. I asked yes immediately! Their house is one kilometer away from the resort we stayed, and they promised that they will ride me back to the resort after the dinner. Rica was the one who translated my words to her family if necessary. Her mom is MaMa’s younger sister, and they live next to each other. Rica told me she dropped out of college after her first year in school and plan to attend a call-center training program in November when she turns 18. There are three people in her family, her mom, her six-year-old brother and Rica. It was pretty dark when I got in because there are only three light bulbs, and the dark environment may cause eye illness in the long term. I didn’t ask Rica about her dad, but I guess her dad either left the family or passed away, and the sudden incident made Rica drop out of school and need to work in a call center to share the burden with her mom.

MaMa is relatively wealthier compared to Rica’s family. She owns two buses, some piglets and many chickens. MaMa offers free rides for kids to school both in the morning and in the afternoon. She explained that the distance from the kids’ houses to the school isn’t that far, and this is what I can do for them. After the dinner, one of MaMa’s cousin and an employee wanted to go to the hot spring in the resort, and I asked them why not everyone join together. Rica replied that they have to pay entrance fee plus the fee for the hot spring, and they have no money to use this facility nearby their home.

Rica’s family, as well as many others, has family members working either in other cities, usually in Manila, or abroad. They can only meet them once in a year, once in two years or even three years. Given that remittance from workers abroad accounts for 10% of the Philippines GNP, how family deals with “the missing mdavother”, “the missing daughter”, “the missing girlfriend”, and “the missing wife” was the first issue that I wanted to understand. Take Hong Kong for example, there are more than 200000 domestic workers from the Philippines. Even though the salary is fixed at 3000HKD per month, it is four times more than the average salary here. Beau told me that families here that have a grand house are all because some of their family members work abroad, and these remittances are also important for kids’ education. As for the missing-family-member issue, Rica told me that the family connection and loyalty of her mom’s generation is relatively firm compared to her generation. She also said that the eldest kid is usually the one who works abroad, and the rest family members will take care of his/her kids. It seems that the division of labor is clear, especially when the young generation has more opportunities to work abroad.

Another related issue is how employers treat their domestic workers. After interviewing some women that worked in Hong Kong before, their responses toward their employers were quite positive and some of them worked for the same employer for years. Gerly’s employer even gave her initial capital for her to start a business that can generate the same amount of money she earned in Hong Kong. I started to wonder whether there is any method to improve the relationship between employers and their domestic workers. What Beau and Fedora did may be a good method. Fedora’s helper, who has taken care of her family for more than 20 years, lives in Iloilo city, and due to this course, she at the first time had an opportunity to visit her helper and spent a couple days living with her. Visiting helpers’ homes can not only redefine the relationship because they are now in a new environment which is unlike the situation before that is dominant by employers, but also let employers realize how working abroad can do to help the whole family. To be honest, people in Taiwan are not friendly to those from Southeast Asia, especially when they gather at train stations on Sunday. Taiwanese think they are inferior because they are from Southeast Asia, and they are the ones who work in factories, nursing homes, construction sites and long term care industries which are all considered inferior jobs. If there are more and more people in Taiwan can visit Southeast Asia and stay with a local family for a month, it is likely that they will have different attitude toward Southeast Asia and those who work in Taiwan.

I don’t feel much of inequality in terms of wealth or income in the village, and a sense of capitalism compared to places I come from. Everyone has a home to stay, and houses here are always affordable. They all raise some poultry, and grow rice or corn in the fields. Most of the villagers own a small stores which sell exactly the same products. Men and women get up early but avoid working during noon time, and love to either play card games or drink in the afternoon. Many things here are conducted manually, it usually needs a lot of labor and time to do a thing. Here comes a question, is it better for the villagers to adopt what the first world does to increase the efficiency. Personally, I prefer not to modernize actively would not want this village to become places I come from. I really enjoy living in this village because there is less competition and comparison between people, and there is not much to worry about. To be short, I am happy. However, I am not saying that this village do not need progress, but rather being in progress and modernization is not the only value that should be pursue. Rural areas have their own identity, value and lifestyle, they don’t need to follow the rules set by middle class and mimic what urban cities do.

Back to reality, I still can tell which families are wealthier simply by the frequency of pork purchasing. Compared to fish and chicken, pork is the most expensive one which wealthier families purchase 3 times a week, while less wealthy ones only buy 2 times in a month. My host family is relative rich in the village, and there are someone who wash their clothes, cook their meals and clean their house.

Two more point that I want to mention are the importance of capital and how to improve people’s living standard in terms of income in developing countries. Gerly is one of the few cases that is lucky enough to have her initial capital to start the business, and she doesn’t need to pay interest. As for other people, they usually get their initial capital either from neighbors or relatives or borrowing from micro lending institutions, and their interest rates are relatively high; for some extreme ones revealed in Poor Economics, they are more than 200% annually. Even though the amount of money borrowed from either relatives or micro lending institutions enable them to start the businesses, it is hard to borrow more when businesses go south or when businesses owners want to scale up. Relatives may not be rich enough to keep lending money to businesses owners, and the high interest rates of informal lending institutions make businesses riskier when they want to scale up. Take Gerly for example, she spent more than 70% of the initial capital on construction fee and still need to borrow more than 100000 peso to raise two sows and their piglets till harvest weight, and she doesn’t have to borrow money after the third pregnancy of her sows. However, if she wants to raise more sows, she definitely needs to borrow money. Gerly may be lucky enough to either have another donation or an interest-free loan which enables her to scale up. Working with Gerly in the past month made me realize some things what I read but didn’t fully understand in Poor Economics, which are the difficulty of borrowing money to either start a business or scale up, and the extremely high cost to borrow money.

How to increase people’s income and living standard in developing countries has long been a complicated issues, and different approaches have been applied in different areas. One Acre Fund is an organization based in East Africa which provides agricultural education, farming tools, seeds, fertilizers, and low-interest loans to farmers. This organization aims to increase farmers’ yields and productively, which not only can increase their income, but also reduce environmental pressure because they can now farm less land. The impact of One Acre Fund is enormous and the number of farmers they served are increasing substantially, and the reason they serve is because farmers account for most of the poor in the world, and the knowledge and tools they need to improve their productivity is simple and easy to deliver. Undoubtedly, what One Acre Fund does is one of the first steps to eradicate extreme poverty and let farmers receive what they ought to deserve according to the time and effort they put in. In my opinion, it is difficult for most of the farmers, those who are family-based or working individually, to have a decent income except for a few who own a lots of land. What about next? How can we do to further increase farmers’ income and living standard? China, just like many other developing countries, faces a rural-development problem, which specifically stated as three rural issues, and they are agriculture, rural areas and farmers. In order to mitigate these three issues, Chen Zhi Wu, an economist who specializes in China economic and financial study, said Chain should concentrate on urbanization and industrialization instead on focusing on agriculture. There are several reasons for doing so. First, no matter how developed an economy is, the calorie that a person can consume a day is limited. Second, as people migrated to cities because of urbanization and industrialization, farm lands per farmers in rural areas increased. Third, the effects of genetic engineering and introduction of advance farming tools and fertilizers on boosting productivity in terms of yield per unit area are foreseeable and limited. Raising poultry, in my opinion, is the second step to further increase farmers’ income.

Danone together with Prof. Yunus launched a social enterprise called Grameen Danone in Bangladesh to provide children with nutrients that are missing from their diet, and Grameen Danone’s main product is a yoghurt. The interesting part of this social enterprise is how they cooperate with local farmers. They provide loans to for local farmers to raise cows which enables them to sell milk back to Grameen Danone to make the yoghurt. A couple weeks ago, Bill Gate stated that raising chickens is the most practical way to improve living standard, because the cost and space for raising is small and it only takes three months to have chicks. What I learnt in the Philippines was that raising pigs in your backyard is also another practical method to improve living standard in developing areas. If you have less capital, you can start from raising one piglet and then gradually rise the number of piglets and sows you are able to feed. Is it possible to have an organization that provides low-interest loans to farmers and teach them how to raise pigs scientifically and economically in Guimaras or other developing countries?

If it possible for me to be invited by someone randomly meet during my hike in Hong Kong?



Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s