Glasses are one key to improving the economic productivity of poor people in developing countries. Photo: deepchi1 (flickr)

Poor vision may not seem like an economic problem at first glance. But according to the World Health Organization, workers with poor and uncorrected vision cost the global economy hundreds of billions of dollars in lost productivity each year.

Many of these workers struggle to put food on the table, much less purchase an expensive pair of glasses, so their vision problems go untreated. This situation may change thanks to an innovative new series of affordable glasses designs that the New York Times recently highlighted. Their genius lies in two factors: their low cost and how easy it is to adjust them. Production is cheaper when a single model can be made to fit almost anyone, which also cuts out the need for expensive doctors to write vision prescriptions.

How can glasses be one-size-fits-all? One type highlighted by The Times has lenses whose refraction can be adjusted by injecting a clear liquid into them, while another has overlapping lenses that can be adjusted by the user. These models are already improving the lives of wearers in countries like Rwanda, Afghanistan, Ghana, and Tanzania and cost $19 and $4, respectively.

Despite their potential, low-cost eyeglasses still face problems. As The New York Times explains, the glasses could cost only $1-2 per pair if produced in great enough volumes, but supply chains don't yet exist to distribute such quantities of glasses to those who need them.

The field of low-cost eyeglass production and distribution is in its infancy, but keep your eyes open for great things to come.

A Mercy Corps small business loan helped Najeeba expand her successful baby cradle business in Kabul, Afghanistan. Photo: Cassandra Nelson/Mercy Corps

Over the past decade, Mercy Corps’ microfinance services have lent more than $1.5 billion, reaching more than one million people. Twelve Microfinance Institutions (MFIs) founded and supported by Mercy Corps operate all over the world, with 270,000 active clients — 65 percent of them are women. To better serve those excluded from formal financial services, Mercy Corps is working with these MFIs to develop and offer savings, remittances, and micro-insurance services as well.

I recently sat down with Zhanna Zhakupova and Jim Anderson who were in town for a microfinance conference hosted by Mercy Corps, to find out more about Mercy Corps microfinance programs and how the global economic crisis is impacting microfinance loans. Zhanna is the Executive Director of the Asian Credit Fund (ACF), headquartered in Almaty, Kazakhstan. Jim is Mercy Corps’ Financial Services Manager and works from UlaanBaatar, the capital city of Mongolia. Together, they have experience working in countries as diverse as Uzbekistan, Vietnam, Japan, Bosnia, Poland and Afghanistan.

Haley Dillan: Jim, tell me a little bit about Mercy Corps’ use of Microfinance.

Jim Anderson: Microfinance is an integral part of what we’re [Mercy Corps] doing as an agency. Mercy Corps works with a group of well-established MFIs to complement other programming. All these MFIs provide loans to individuals and small businesses, and in Mongolia and Indonesia our MFI affiliates also offer deposits. Many support agriculture and offer consumer loans for purposes like tuition payments and health care costs. A micro-loan can range from $65 to a Guatemalan woman raising chickens or piglets, to $7,000 for a Kazakh businessperson.

Microfinance is a great tool because, when managed correctly, it is sustainable. Projects can be established and continue on a sustainable basis: they don’t require ongoing injections of donor money. As the NGO, you create the legacy, and then it often continues independantly.

Haley: Why are the majority of loans extended to women?

Jim: Typically, women are the more common borrowers. From a broad source of statistics, women are more reliable borrowers. They invest their business profits to support the family — educating, feeding, housing, and providing health care for their children. As of this June, Kompanion in Kyrgyzstan had over 91,000 clients, of whom 98 percent were women. What’s the percentage for Asian Credit Fund, Zhanna?

Zhanna Zhakupova: About 93 percent of ACF loans are to women.

Jim: Yes, and the XacBank in Mongolia has over 63,000 clients, and women comprise about 55 percent of that. However, in certain countries, it’s not always clear that just because the borrower is a woman, she’s the one in charge of the money. In Afghanistan, for example, a female borrower may just give the loan money to her husband, and it’s hard to track that.

Zhanna: Also, men are less interested in small loans. When they think about business, they think about “big.” And after the global economic crisis, group lending has grown significantly, and women dominate group lending. Men are more reluctant to join groups.

Haley: What other impacts has the global economic crisis had on microfinance? Have you changed your lending criteria? Has it affected the ability for applicants to repay their loans?

Zhanna: As I mentioned, our portfolio has shifted towards group lending since 2008. So, yes, the global economic crisis definitely caused a shift in our lending. In Kazakhstan, the crisis has been quite severe. The GDP growth was averaging about 8 percent annually since 2000, from oil and mineral resources. A pretty strong middle class had emerged, especially in the two largest cities Almaty and Astana. The economic crisis really affected this middle class; the crisis led to a sharp decline in real estate and that hit a lot of people. It seemed like everyone had loans that were secured by real estate… and when the real estate bubble burst, MFI loans were under water.

The banks stopped lending, because real estate was the key piece of collateral for most people, and it has continued to fall in value. No one had sufficient assets to meet tougher bank requirements, and so couldn’t qualify for loans after the global economic crisis. Lenders accumulated loan repayments, but refused to relend that money, sitting on it instead of pumping it back into the economy. No liquidity — no lending — no economic development — falling living standards.

In the rural areas, lending was completely frozen. When I recently visited rural areas served by ACF, every village asked us to open a branch. Small loans were in big demand but no one was lending. Now, Asian Credit Fund has about $1 million dollars in group loans, with the average loan size at around $500 per person.

Haley: What's the difference between non-profit and for-profit microlending? Does Mercy Corps work with for-profit lenders?

Jim: Actually, microlending is for-profit in most areas of the world, particularly Latin America and Central Asia. Non-profit lenders are more often located in places like India and Bangladesh. So most of Mercy Corps' microfinance work is with for-profit MFIs, many of which source funding from for-profit socially responsible investors (SRIs).

If these SRI lenders were to calculate the true risk of the loans they’re extending to MFIs, the interest rate would be so unmanageably high — possibly 60 or 70 percent in places like Tajikistan or Afghanistan. But the individuals who invest with SRIs are willing to forgo a certain amount of return because they want to encourage social improvements by lending to developing countries. As a result, SRIs can lend to MFIs at affordable interest rates.

In order to help MFIs attract capital to expand and serve more clients, Mercy Corps utilizes various sources of investment, including equity and debt, typically with SRIs.

Haley: Is there an idea or sentiment that you are taking away from the conference?

Jim: At the conference participants included a diverse group of organizations, culturally, geographically and in terms of business models, yet we all face similar challenges and issues, and it’s great that we have an opportunity to come together and talk about that.

Zhanna: Yes, everyone was talking about development, and long-term goals.

Afghanistan is facing a dangerous new threat, but it does not involve suicide bombers or roadside explosives.

As the Washington Post reports, government corruption is threatening to topple Afghanistan’s fledgling democracy in the wake of a presidential election plagued by delayed vote tallies and reports of voter intimidation. The Wall Street Journal explains that corruption in Afghanistan is so pervasive that the United States and its allies are reconsidering their strategy in dealing with President Hamid Karzai. Allegations of misconduct are so prevalent that the U.S. has begun to view Karzai not as an ally, but as a liability in their effort to reconstruct the war-torn nation.

USAID recently released a report that said roughly two-thirds of Afghans had been victimized by a corrupt government official — the highest level ever recorded. In a country where the average person makes $700 a year, it takes a $400 bribe to be connected to the electrical grid.

If it's allowed to continue unchecked, the report says, corruption will make it impossible for Afghanistan to develop an economy capable of attracting foreign investment and aid.

Despite the obstacles to eliminating corruption, one organization has begun to make headway. The Christian Science Monitor reports how a multinational relief effort called the Aga Khan Development Network has begun to train Afghan villagers in basic accounting techniques. The villagers — who are now able to audit their community’s financial records — are better able to prevent embezzlement and theft. While the organization's efforts have so far met with success, they're only one soldier in the fight against a serious problem.

Afghan farmers holding up poppy pods in a field of poppy flowers. Photo: Mercy Corps

The United States is dropping the stick and picking up the carrot in combating the Afghan poppy trade. The new anti-drug policy ends the effort to eradicate poppy fields and will now focus on giving farmers financial and technical aid to help them replant their poppy fields with wheat and other food crops, according to the Wall Street Journal.

Past efforts to reduce the number of poppies, the basis for opium and heroin production, used a mix of incentives, but consisted primarily of eradication programs, like the cutting and burning of poppy plants. Richard Holbrooke, the senior American official for Afghanistan policy, tells the Wall Street Journal. "All we did was alienate poppy farmers," he said. "We were driving people into the hands of the Taliban."

While eradication campaigns may have made life tough for farmers, they did not materially impact the drug trade. Over the past decade, Afghanistan's share of global poppy production has grown from about a tenth to over 90 percent of the world total, according to an article in the Wall Street Journal.

Holbrooke bluntly informed the New York Times that "[t]he Western policies against the opium crop, the poppy crop, have been a failure". The new policy of crop substitution, while laudable, faces many of the same challenges that derailed the earlier plans.

Switching from poppies to other crops isn't a simple task. One of the reasons that poppy production is so profitable is that drug traffickers pick up the poppies at the farms. If they grow a food crop, farmers must build storage buildings and get the crops to often distant markets. While bearing these higher costs, they must also contend with prices both lower and less predictable than poppy prices. Even if they can subsist on the less profitable food crops, they have to deal with threats of violence from the Taliban, which opposes any switch to non-poppy crops.

What's more, the Afghan political elite has a vested interest in the poppy crop. The United States intelligence community estimates that only $70 million out of $3 billion dollars of drug receipts go to the Taliban, according to the Senate Foreign Relations Committee. In a Committee report, officials related that many of the recipients are U.S. allies and members of the government.

"These warlords later traded on their stature as U.S. allies to take senior positions in the new Afghan government, laying the groundwork for the corrupt nexus between drugs and authority that pervades the power structure today."

Most business owners wouldn't invest in a high-risk product with low returns. So it's understandable that Afghani farmers aren't making the switch from poppies to wheat in droves. There are likely to be some parts of the country with sufficient security and strong enough markets for the program to succeed, as Ganesh Sitaraman, a lawyer for the Counterinsurgency Training Center Afghanistan, notes in a New York Times op-ed.

The U.S. is to be applauded for switching from a destructive, ineffective policy to a constructive, potentially effective policy. This new policy will only be part of a larger effort, that will have to include greater security for farmers, to reduce the scale of the Afghan poppy crop.

Zahria, a 35-year-old mother of five, took out a loan from Afghanistan’s Mercy Corps-supported Ariana Financial Services to begin an almond-selling business. Photo: Miguel Samper/Mercy Corps

Our work to lend to the so-called "unbankable" is noted in September's O Magazine in a bit about Half the Sky. (The "O," of course, stands for Oprah.)

Mercy Corps-sponsored microfinance institutions reach more than 244,000 clients. Many of those are women in Afghanistan, where we founded Ariana Financial Services, a woman-led agency that has lent more than $11 million to 45,000 clients to date — nearly 75 percent of them women.

Mercy Corps is among several other organizations — including Hellen Keller International and American Assistance for Cambodia — mentioned in Half the Sky and noted in the O Magazine list for "Three Things You Can Do To Empower Women."

The article, unfortunately, isn't available online. But you can find it in the September issue of O, which is already at your local grocery-store or bookstore newsstand.

This piece was originally posted on One Table.

Barbers from the Swat Valley have more freedom in IDP camps than they did in their home towns under Taliban rule which found shaving off beards un-Islamic. Photo: Elias Pirasteh (flickr)

Barbers from the Swat Valley were forbidden to shave off the beards of their customers under Taliban rule, which condemned the practice as "un-Islamic." Since the Taliban took over the area, the Pakistani army has been trying to regain control over their territory. The resulting violence has made the beautiful and serene area a dangerous place to live. BBC News spoke to some of the men who fled the area, and are now living and working in camps for internally displaced people.

One of the barbers interviewed tells the BBC:

The Taliban threatened to attack the barber shops and their houses if they kept shaving customers' beards. Before the Taliban came along with their restrictions I used to do 15 to 20 shaves a day so as soon as they took over I saw my income plummet.

Most of these men want to return to their homes but also want the freedom to practice their livelihoods without the constant threat of violence. For now, the camps have become their home and source of income.

Read more about the Swat valley in Global Envision's post: The Economic Fallout From Pakistan's Taliban Troubles.

The world is buzzing about the U.S. election results, and Afghanistan — where I'm collecting stories on Mercy Corps projects — is no exception. When we arrived at Mercy Corps' Kunduz office on Election Day, everyone there was quizzing us on the Electoral Vote count, and what states Obama was winning or close to it. In the days since, I've broached the subject with everyone from a group of young hotel employees to a trio of farmers in the hills east of Kunduz. Everyone had something to say about it.

"We hope that he will increase assistance to Afghanistan," said Syeed, a wheat farmer in Burka Province. He and his companions were happy about Obama's pledge of financial support to their country. "We will support anyone who says they will bring that kind of help to our country."

Many Afghans were elated about Obama's Muslim heritage, even if Obama himself is a Christian. "Simply having those roots in his family is big for us," said Enyatullah, one of our waiters at a Kunduz hotel. "Our religion has been seen as so terrible in the United States."

I was sure I'd hear at least some concern about Obama's pledge to send more U.S. troops to fight the Taliban and Al Qaeda. Surprisingly, though, that's one of the reasons people said they were thrilled with Obama's election. Amanullah Amin, a civil engineer I spoke to, was convinced that Obama "will attack the roots of terror in the country. There is a saying here: If you want a clean river, don't go to the middle, don't go to the end — go to the source."

We were driving through the desert Wednesday morning while Obama spoke in Chicago's Grant Park, but Miguel and I watched the replay on CNN that night in our Kunduz hotel room. Photo: Miguel Samper for Mercy Corps

How'd you like being a bicycle messenger on roads labeled "decrepit" and "all but impassable?" What about delivering documents by bike in a country where suicide bombings seem like a daily occurrence?

Now imagine doing it with only one good leg.

With some financial help from a German donor, that's just what a group of Afghan amputees is doing to support themselves and their families.

NPR reports that the men take to the street each day on their bicycles, delivering everything from documents to pizza, and insist that the absence of a limb is not an obstacle at all. The business has helped men like Abdul Khalil provide for his wife and eight children for the past six years.

The young businessmen face difficulties eking out a living in war-torn Afghanistan where one-in-ten people are disabled, but one thing is for sure — they're all glad not to have to beg to feed their families.

In Afghanistan, war and a severe winter followed by harsh drought are compounding problems of high food costs, leading to a situation in which a quarter of the Afghan population may face severe food shortages.

As winter approaches the food shortages are already affecting the country's internal security, and things are likely to get worse when snow falls next month, reports the New York Times.

Returning refugees are already converging on the cities because they cannot manage in the countryside, and they make easy recruits for the Taliban or other groups that want to create instability, said Ashmat Ghani, an opposition politician and tribal leader from Logar Province, south of Kabul, the nation’s capital.

A photo slide show from the New York Times' depicts the crisis through haunting images of Afghanistan's landscape and citizens.

Photo: knottleslie(flickr)

Afghanistan’s economy is getting a boost from a very unlikely source — Reality TV. In a new show called “Fikr wa Talash," or “Dream and Achieve,” Afghan entrepreneurs propose new business ideas to a panel of local business leaders, who award winners with up to $20,000. According to the International Herald Tribune, the show is wildly popular, and its creators hope that its success will help foster entrepreneurial growth all over Afghanistan.

Not only could the show popularize entrepreneurial spirit in one of the world's poorest countries, but it also shows promise for promoting gender equality. Two of the top five finalists in “Fikr wa Talash” are women entrepreneurs — a new concept in a country that only permitted women to work seven years ago.

It will be interesting to see if the viewing power of Reality TV, a traditionally tawdry genre in the U.S., can be successfully harnessed for social and economic benefit elsewhere.

Photo: Michael Foley Photography (flickr)

Pouring aid money into Afghanistan seems to be like pouring water into a sieve?

For a country that has received billions of dollars in international assistance since 2002, some may be surprised to hear that many Afghans still don't have access to clean drinking water, sewage systems, electricity.

As of this year, the World Bank says "only 13% of Afghans have access to safe drinking water, 12% to adequate sanitation, and just 6% to electricity."

"What puzzles poorer Afghans," writes a BBC correspondent, "is why so many basic problems haven't been solved, despite the billions of dollars of international aid."

So, where has the billions of aid dollars gone?

One Afghan schoolteacher told BBC to look at the lavish lifestyle of corrupt officials. "Go and see who owns these expensive houses in (the suburb of) Wazir Akbar Khan and who is driving land cruisers," he says. "Karzai should ask these officials how they got so rich overnight, instead of making empty promises again and again."

Afghanistan is considered one of the world's most corrupt countries. It ranked 172 out of 179 countries last year on Transparency International's corruption-perceptions index.

Karzai's government insists they're trying to tackle corruption, but, as this Q&A between BBC.com readers and Afghan villagers reveals, people still feel like this government is letting them down.

Many, including Afghanistan's former NATO commander, think the country still risks becoming a failed state. U.S. Presidential candidate Barack Obama called Afghanistan's situation "precarious and urgent" during a high-profile visit there last week.

But perhaps addressing that urgency requires a different tack. Oxfam America issued a call on Saturday, timed to coincide with Obama's visit, for overhauling U.S. assistance to Afghanistan. "In particular," they said, "the U.S. should spend less on achieving short-term measures of success using costly consultants who are hamstrung by security constraints, and find more creative and sustainable ways to deliver the long-term development and security that Afghans really need."

Before U.S. troops showed up, it’s doubtful that Afghan boys in Jalalabad had ever seen a golf ball. Today, some spend their time chasing after them.

Today’s Wall Street Journal shows that “war creates an economic logic of its own” by highlighting the sometimes-bizarre economy of northern Afghanistan, where the U.S. military “pays out as much as $25 million a month to Afghan companies” and soldiers buy blocks of ice, fragments of spent rockets and, yes, used golf balls from locals.

The golf balls are the same ones soldiers blast from their makeshift driving range atop a latrine building. Local boys collect those that sail over a river and come to rest in terraced fields, then sell them back to the soldiers for 10 cents each — until recently, that is.

The market has been disrupted by a middleman who pays the children a dime and raised the retail price to 20 cents, according to the soldiers. The troops consider the price-increase exorbitant and are holding out for the children to regain control of the golf-ball business.

It seems even a market as trivial as golf balls in Afghanistan isn’t safe from war profiteers.

Photo: Sun Pictures / Lakshman (flickr)

Ever heard of a 13-year-old bank manager?

It’s not an uncommon sight at the Children’s Development Bank (CDB), a unique initiative by the Delhi-based NGO Butterflies that helps street children help themselves. CDB, founded in Delhi in 2001, offers street and working children the opportunity to invest in a different lifestyle.

Fear of theft and lack of future planning have often led working children to spend what little they earn on short-term pleasures, such as cigarettes or cinema tickets. By providing a safe place to hold money, however, CDB encourages them to start a savings habit.

CDB is particularly innovative in the way it is run. It works as a cooperative, in which children are both the owners and decision makers. Rules, membership standards and loan criteria are set by members who are all between the ages of eight and 18. The idea is for kids to "put money aside for themselves without worry that it will be lost or stolen, save for things that they need or want, such as clothes, (and) plan to improve themselves, by saving for education and training."

CDB now boasts more than 8,250 members and operates in 12 locations, including branches in Afghanistan, Bangladesh, Nepal and Sri Lanka.

Photo: (C)n Burgos (flickr)

Opium is widely recognized as a major obstacle to economic development and postwar reconstruction in Afghanistan. It's estimated that Afghanistan currently produces between 90 and 95 percent of the world's opium. It's an approximately US$4 billion industry that accounts for just over half of the country's total GDP. And, according to Newsweek, most of that money goes to traffickers and corrupt officials. The average opium grower makes only US$300 a year.

What is to be done? The numbers indicate that the U.S.-led counter-narcotics program, which focuses primarily on poppy eradication, has been unsuccessful. Opium production has skyrocketed since the Taliban's overthrow; the UN reported a 34 percent rise from 2006 to 2007. Other programs that look to curb opium production by providing farmers with other crops or alternative livelihoods have also had limited success.

An international security-and-development policy group thinks there's an unexplored option. The Senlis Council is advocating a "Poppy for Medicine" program in which individual Afghan villages would be licensed to turn poppy into morphine, rather than heroin. In theory, this program would allow existing opium crops to be diverted into legal markets for medical painkillers.

In theory, this sounds workable. Similar projects have been successful in India, Thailand, and Turkey. But standing in the way of implementing the same program in Afghanistan are two probably insurmountable obstacles — one political and one economic.

The Afghan government opposes opium's legalization; the crop is banned by the country's constitution. Then there's a report from Britain's Royal Society of Chemistry, which says there simply isn't sufficient demand for opium for medical purposes. Afghanistan poppy growers would have to corner the market on medical opium — and then double it — to sell out their crop.

Photo: Shirine Bakhat/Mercy Corps

You would think that female access to education within one country would be roughly the same. Not so for Afghani girls trying to get ahead.

Radio Free Europe explores the deep inadequacies in education offered to female Afghani students. Educational opportunities are vastly different for female students in northern provinces and their female counterparts in southern Afghanistan.

The problem emerges not only from a lack of funds, but increasing lack of security due to the Taliban's presence in the south. Schools have been burned down by members of the Taliban and female teachers terrorized or killed.

The connection between education, female economic empowerment and poverty alleviation is essential and the growing inability of female students in the south to access safe educational opportunities worrisome.

Read the article and also check out what Mercy Corps is doing in Afghanistan.