The Importance of Economic Pioneers During the Global Downturn

A foreign minister of a northern European nation recently discussed how the global economic crisis could devastate the developing world.   She declared, “Urgent action is needed to counter this and development aid can mitigate the negative effects of the crisis on the poorest countries.”   The solution would center on critical public spending and by shoring up the private sector.

How did we get to the point where many leaders see development aid as the best response to urgent economic problems?   Why do many see it as the only effective solution to economic woes in developing nations, more than 75 years after the Bretton Woods Agreements?  Why does the need persist after years of poor results — is this aid ineffective or just under-funded?   Is development aid the best solution to stem the tide of the economic crisis that crosses the globe?

I recently spent time with five firms in Trinidad, Belize, and Guyana and caught a glimpse of an alternative solution.   Trinidad is the most economically developed of the three, with a per capita income of $18,500, followed by Belize at $8,500, and Guyana at $4,000.  Each of these firms was aware of the tough economic conditions, yet relentless in creating its prosperity.

I met management from two Guyanese firms, Bulkan Timber Works and Wilderness Explorers.  Bulkan Timber Works is a manufacturer of value-added wood products, and each employee earns above the national wage level.  The owner, Howard Bulkan, explains that one of the ways he competes against large Asian firms is enabling local suppliers to buy equipment, which helps to guarantee a steady supply.  It occurred to me that Howard is also responsible for employing many more people outside of the fifty in his firm.

Wilderness Explorers almost single handedly created the long haul, nature adventure market in Guyana, which has helped create employment not only for its company, but for other lodges in the country, in addition to a small burgeoning network of guides.

Robert Lopez of Belize’s Hummingbird Group, which produces fine furniture from local products, employs 50 craftsmen and utilizes a supply chain that works it way back into local forests, using sustainable practices.   These workers are trained and paid well by Robert, who began his business from his garage with one craftsman.

Two firms from Trinidad have also been innovating and creating high paying jobs.  Sacha Cosmetics was started by Kama Maharaj, and exports skin care products, according to Kama, geared to “people with exotic skins” in more than 20 markets.  Kama has developed his products from learning about local needs and transferring that knowledge across many regions.   The result is a successful business with 120 staff.  Kama is known for listening to everyone on his staff and he intends to grow the business ten-fold over the short term.

Namdeo Maharaj’s Analytical Technologies is just down the street from Sacha.  It is the only private lab in Trinidad’s oil industry, and the only one to monitor radioactivity or develop a biological product that purifies soil.  Namdeo has been satisfying the needs of large energy companies in the region for more than thirteen years.

They all have at least one thing in common, in addition to being innovative entrepreneurs.   The have all been recognized as Pioneers of Prosperity.   Further, Bulkan Timber, Hummingbird, Sacha Cosmetics and Analytical Technologies are all eligible to win the $100,000 Pioneer of Prosperity grand prize, which will be awarded in Jamaica on September 11th.   The salient point to this award is that these firms create prosperity — particularly for the owners and workers, but also for their communities, and in a way, even for their customers.

Is it possible to compare the effects of these entrepreneurs with that of development aid, and get to the point where urgent aid packages are not seen as the panacea?   Can innovative entrepreneurs and their firms create prosperity in difficult economic environments?    These pioneers are suggesting that the answer to these questions is yes.  If it is yes, then we should be finding ways to invest in these firms with the same enthusiasm that’s been associated with development aid.   We can join forces to institute an urgent investment fund as a new alternative for creating prosperity, instead of just funding the next urgent development aid program.

-Michael Brennan, Seven Fund