"Light In The Midst of Darkness:
Two Views of Global Poverty"

Speech by Lt. General Claudia Kennedy, Retired
Former Deputy Director of Intelligence, US Army
President's Forum of Opportunity International, March 5, 2004
Boca Raton, Florida

Thank you, Susy, and good morning, ladies and gentlemen.

The journey we’ve been invited to participate in this weekend is about bearing witness to a passage: a passage from poverty to empowerment and hope.

As Susy stated, it’s not a coincidence, not an accident that this organization is named Opportunity International. The name is what they do - providing opportunities internationally for women and men to make heroic journeys out of poverty.

When you look at the world map, the Philippines is tiny. A speck. But as we watched that wonderful story of Rosal, women like her are not specks. They are human beings, just like you and me. And there are millions of women just like Rosal in the Philippines and in dozens of other developing countries around the world.

Rosal lives in a land of 81 million people. The last available data we have tells us that in the year 2000, the number of poor families in the Philippines reached 5.1 million, up by 628 thousand families. The unemployment rate last July was 12.7% - and the underemployment rate was 20.8%. The combined rates of jobless or underpaid people are well over a third of the population. And while the faces behind these statistics are suffering, it is even worse for the children. Seventy percent of them are severely malnourished or underweight.

The statistics are daunting for Rosal’s land. In her traditionally passive culture it is not typical for a poor woman to band together with other women in the form of a lending group or a Trust Bank. But she has. In the Philippines—and other countries as well—the poor do not typically create business plans and forecast ahead to several loan cycles. But this is Rosal’s new reality, one that has been shaped by new opportunity.

My goal this morning is to present the harsh reality of poverty – to expand our worldview. Today, I want to be both the person who can deliver the startling facts, as well as one who knows there is a solution.

Let me first ask, how many of you traveled to Nicaragua on Opportunity’s Insight Trip, to see firsthand the work being done to empower poor women? (Look for raised hands).

Thank you. Let me ask another question: Of those who went on this trip, how many of you felt you learned something? (Look for raised hands). And lastly, how many of you felt more hopeful that there is a way to solve poverty at the grassroots level as you packed your bags to return home? (Look for raised hands).

That’s what I feel too. Hopeful. Grab hold of that as we look down on our globe and examine world poverty. As you listen, know that hope is coming at the end of our journey.

For the moment, I want to ask you to close your eyes and reflect upon the moment in your life – whether it was in childhood, adolescence, or later years that you realized for the first time the reality of poverty in the world. (momentary pause)

As for me, my own first recollection of poverty was in Germany in the late 1950's. I was ten years old, one of four children in a military family, which moved around every few years. My father was an army battalion commander. We lived in a U.S. housing area not far from a displaced persons' camp. I remember that each week we had to put our garbage cans out. We had two garbage cans: one for food and one for everything else. We were asked to create a can for food only, because people would come through from the DP camps and dig through the cans to find something to eat. My mother, along with other thoughtful military families, would wrap the food up in little pieces of tin. The people from the camps would come through several times each day looking for food, and gathering it up in bags. They'd then go back and feed their loved ones. Even as a ten year-old, I could sense the sadness. The unfairness. The hopelessness.

As an adult, my thinking about poverty in developing countries became more strategic, taking firmer shape in 1990 at the Army War College. It was absolutely clear by then that poverty is the source of enormous social turmoil, and social turmoil often results in civil unrest and disturbance, with the potential for negative ramifications worldwide.

Beyond this, though, as an American, and a Christian, and a citizen of the world, but even more, on a private/personal level, as a feeling and thinking human being, just like you, my heart has always gone out to the plight of very poor people. I have always intuitively felt, however, that so-called chronic poverty is not an insoluble condition without remedy.

And as a woman, I am deeply aware that poverty is for many a woman’s plight, and a mother’s plight, and that along with the necessity to end poverty as we know it on our planet, is the necessity to empower women in the developing world to step up to their full human potential and equality, and the recognition of their inalienable human right to live and to thrive with dignity and honor.

One of the things we believe in defense intelligence is that people must have an investment in an orderly society. Economic deprivation and hunger leads to lack of education and illiteracy, which leads to powerlessness and despair, which leads to victimization and social chaos. We know that when a country is poor one of the first things to go is the education system. This means that not only do you have hungry people; you have people who are unable to think for themselves. An open door appears for any radical leadership ready to take advantage of people who can then be told what to think rather than being taught how to think. Education is the huge protection that keeps individuals or groups from being bullied. But it is apparent to me that its prerequisite is earning enough income to put food on the table, a roof over one's head, and the money that can enable parents to send their children to school.

So, let’s look at the numbers. They are frightening. A part of me wants to just jump ahead to the solution, but we cannot fully realize the solution without muddying our feet in the reality of the problem. As you well know, the numbers of poor in our world today, at this moment, are enormous. According to the World Bank, half the world’s people – that’s three billion of us - live on less than $2 a day; and 1.3 billion people – 20% of the world’s population - live on less than $1 per day.

Dr. Philip M. Harter of the Stanford University School of Medicine gives us a way to look at it starkly yet simply. If the earth’s population were shrunk into a village of just 100 people, with all the human ratios existing in the world still remaining, 6 people would possess 59 percent of the wealth, 80 would live in substandard housing, 70 would be unable to read, and 50 would suffer from malnutrition!

There are eight hundred million people in the world who go to bed hungry every night. They don’t have an adequate income to put enough or decent food on the table, or to live in a home that provides true shelter. I am speaking of mothers and fathers who worry themselves sick every single day about their children – about not having enough to feed them, or clothe them, or to care for their health needs, or to send them to school.

Take a moment with me to imagine these people who are, today, earning less than $1 a day. These are people who breathe, laugh, play, cry, dream, yearn, need, and yes, who die. People who struggle (pause). People who pray (pause). Their joys, and their pains, are equal in intensity to ours. They yearn for peace and peace-of-mind, just as we do. They yearn for a better life for their children, just like us. They yearn for simple things – to put enough wholesome food on the table, enough to live in a house with a secure roof over their heads, enough to dress their little ones with warm enough clothing and shoes without holes.

And yet, there is an enormous gap between the fulfillment of this desire and the reality faced by millions upon millions of people in today’s world. In terms of those with the greatest uphill battle, poverty disproportionately affects women, children, the elderly, and people with disabilities. In many developing nations, women have low social status and are restricted in their access to both education and income-generating work. Without adequate income, they commonly depend on men for support, but often get little. In some developing countries, including in Southeast Asia and Eastern Europe, poor women seeking to work or immigrate to other countries are tricked and sold into prostitution or indentured servitude. This was reported in last September’s issue of National Geographic, in a special investigative feature article called “21st Century Slaves.”

Many women end up in sweatshops – illegal factories that have poor working conditions and long hours. According to UNIFEM, the United Nations Development Fund for Women, the feminization of poverty is a growing phenomenon.

Women are still the poorest of the world's poor, representing 70 percent of the 1.3 billion people who live in absolute poverty. When nearly 900 million women have incomes of less than $1 a day, the association between gender inequality and poverty remains a harrowing reality.

In addition, Womankind Worldwide states that women work two-thirds of the world's working hours, produce half of the world's food, and yet earn only 10% of the world's income and own less than 1% of the world's property.

And what of the non-working poor? People who don’t work – such as young children, the elderly, and many people with disabilities – depend on families and other support networks for basic necessities. However, neither poor families nor the governments of many developing countries can adequately support the non-working poor.

Poor children in particular suffer the consequences. Children have underdeveloped immune systems, and they easily acquire diseases in unsanitary living conditions. The poorest countries, therefore, have high rates of childhood diseases and mortality.

Poverty has many causes, some of them very basic. Some experts say the world has too many people, too few jobs, and not enough food. In most cases, the causes and effects of poverty interact, so that what makes people poor also creates conditions that keep them poor. Factors may include:

Overpopulation: having large numbers of people with too few resources and too little space.

Epidemic diseases, such as the devastation of HIV/AIDS on the African continent…

The unequal distribution of resources in the world economy…

Inadequate education and employment opportunities…

Corrupt, incompetent or despotic governments…

The social and cultural repression of women and minorities…

Natural disasters like floods or drought…

Civil wars and ethnic violence and brutality (who can forget the genocide that occurred in Rwanda?).

And radicalized religious forces with terrorist tactics opposed to Western democratic/capitalist civilization, launching violent acts in wealthy countries and creating civil disturbance and violent upheaval in developing countries while exploiting the poor to gain their objectives.

U.S. military intelligence projects a very unstable twenty-first century, where the world will still be divided into three distinct populations: the advanced nations comprising less than 2 billion people; the next and largest group of less advanced nations (such as China, India, Brazil and much of Southwest Asia) comprising about 5 billion people; and the third group, the unstable nations of Africa and South Asia struggling on the brink of disaster, whose population will number about 2 billion.

With the exception of North America, the expanded European Union, Japan, a few Latin American countries and some isolated zones of stability in the Middle East and South Asia, much of the world will be ripe for an ongoing conflict, and our military forces will be called upon to operate at an exhausting pace.

In light of these projections, it is very clear to me that if we defeat chronic poverty on a global scale, or even make a significant dent in the problem, that we eliminate a major cause of tensions in the world – so much so that military intelligence might just have to reevaluate the current crisis projections and scenarios it is making.

But we are not near that place yet. Nowhere near it. One of the reasons is that for the majority of the world’s hungry people, food is available – but the money to buy it is not.

Now it is true that in the last several decades, poverty research, in looking at the signs of poverty, has adopted a broader, multidimensional approach, taking into account a variety of social indicators in addition to income. The UN's Human Poverty Index, for example, factors in illiteracy, malnutrition among children, early death, poor health care, and poor access to safe water. Vulnerability to famine or flooding, lack of sanitation, exposure to disease, a diet poor in nutrients, and the absence of education are certainly as much the signs of poverty as material deprivation. When governments become the ally of their poorest citizens, providing the poor with basic social services and infrastructure, the alleviation of poverty moves more swiftly.

On a parallel course, it can also be said that when income levels rise through entrepreneurial opportunities created through microfinance and training in basic business practices, poverty takes a steep dive as well.

But without a concerted effort to amplify our work to empower the world’s poorest people, the future can indeed look bleak.

Certainly, the crisis of global poverty is compounded by profound issues such as the rampage of disease, or lack of educational opportunities.

Looking at just one global human tragedy – the HIV/AIDS epidemic – the statistics are numbing – and the relationship between the disease and poverty are profound:

According to CARE, by the end of 2002, an estimated 42 million people around the world were living with HIV/AIDS. During the past year, 5 million people became infected and an estimated 3.1 million people died.

More than 70 percent of those infected live in sub-Saharan Africa, now home to 29.4 million people living with HIV/AIDS. To date, the AIDS pandemic has left behind more than 14 million orphans, more than 92 percent of whom live in Africa.

In addition to the ravages of AIDS and other epidemiological catastrophes like malaria and infant mortality, illiteracy and lack of educational opportunities complicate the poverty equation just as severely.

According to Oxfam, there are still 125 million children who never attend school. Another 150 million children of primary age start school, but drop out before they can read or write. Today, sub-Saharan Africa accounts for one-third of the total out-of-school population. On current trends, it will account for three-quarters of the total in 2015.

One in four adults in the developing world – 872 million people – is illiterate,
and the numbers are growing.

Today, a lucky child in Mozambique can expect to go to school for two to three years, with luck. A five-year-old European or North American child can expect 17 years of formal education.

Oxfam says that school fees are denying millions of children in developing countries a basic education – and locking them into a cycle of poverty.

Poor parents are being forced to make agonizing choices: do they buy food and medicines for their children, or do they send them to school?

If they only have enough money to educate one child, which one do they choose? It’s usually the girls who miss out, because boys tend to be given priority. School fees are denying children the right to the most basic education -- and denying them a future.

One positive development in the global assault on chronic poverty comes with the emergence of the United Nations Millennium Declaration, formulated in September 2000 by more than 140 world leaders. They agreed to launch a campaign to attack poverty in eight different ways. I believe that declarations of this kind are extremely important. Just like Eleanor Roosevelt’s masterpiece, the Declaration of Human Rights, the Millennium Declaration establishes the universal value and template, which all humanity can aspire towards; and it seeds and steers consciousness in a positive way that is important to our collective evolvement.

The declaration states, “We will spare no effort to free our fellow men, women and children from the abject and dehumanizing conditions of extreme poverty to which more than a billion of them are currently subjected.”

In this regard, The Millennium Development Goals call for reducing the proportion of people living on less than $1 a day to half the 1990 level by 2015 -- from 28.3 percent of all people in low and middle income economies to 14.2 percent. The Goals also call for halving the proportion of people who suffer from hunger by 2015.

It’s useful and interesting to see the eight specific goals of the declaration:

First, to eradicate extreme poverty and hunger.

Second, to achieve universal primary education.

Third, to promote gender equality and to empower women.

Fourth, to reduce child mortality.

Fifth, to improve maternal health.

Sixth, to combat HIV/AIDS, malaria and other diseases.

Seventh, to ensure environmental sustainability.

And, eighth, to develop a global partnership for development.

You may ask, what will it take to achieve the Millennium Development Goals?

A great deal. Microfinance institutions believe that the most crucial factors are jobs and better incomes for poor people.

The powerful, transformational effects of microenterprise development was not sufficiently reflected in the Millennium Declaration, and I believe the extraordinary impact and success of microfinance should be more strongly reflected in that document.

Now I’m aware that I’ve painted a dark picture for you by walking you through these statistics. But I must tell you that when I heard about the transforming work of microenterprise development, this is when I became truly hopeful. This was when I began to see pinpoints of light in the dark reality of global poverty.

So let’s shift to the hopeful statistics, for they demonstrate that micro-enterprise development makes a difference wherever it is applied, presenting a model which, if expanded upon, can radically transform the plight of hundreds of millions of poor people in the developing world.

Thankfully the current focus in the development community is in community development. It is here that micro-enterprise development has become a major force for positive transformation, for it works within communities at the grassroots level, where the meaningful change is occurring daily.

In a speech delivered at Peking University in Beijing, China in May of 2002, World Bank President James Wolfensohn said that development “…is about treating the poor not as objects of charity, but as assets on which we can build a better and safer world.” He said, “It is about…replicating, for example, the successes of community-driven development and microcredit, where the poor are at the center of the solution, not at the end of a handout.”

I agree with Mr. Wolfensohn. And as he has said on many occasions, our self-interest is bound up in the economic growth and development of the developing nations of the world. Some would argue that the numbers are too great, and the situation is hopeless. While the overview of poverty in the world I have described may seem in numbers gargantuan, as I’ve already said, I DO NOT AGREE that the situation is hopeless. The method of helping others help themselves with micro-enterprise development, is very exciting, especially because of the simplicity and effectiveness of this tool.

The other reason is that “MED” as it is called in short-form, reaches the poor at virtually all the levels at which they’re found.

One of the exciting things about micro-enterprise development is that while it assists most immediately those in the upper levels of the poverty spectrum – the self-employed poor (those with a trade who already run a small business of their own but lack the credit to grow) and the entrepreneurial poor (those who are already employed and have managerial skills but who lack credit and access to a banking network)…it also infiltrates and reaches people in the lower rungs of the spectrum (the laboring poor, underemployed who barely eke out a living as farm laborers or domestics; the ultra-poor who struggle to survive day-to-day; and the unemployed poor who are mentally or physically handicapped).

The “ricochet effect” also comes into play. Essentially we’re talking about the number of people within a community who are positively affected by the funding of one entrepreneur. This number includes family members, people employed by these fledgling entrepreneurs, and their families. So if in a community, five hundred people are empowered with microloans – literally thousands more can be lifted up in total. That’s what I call community development. It is a reversal of the downward cyclical spiral of poverty into an upward cyclical spiral of hope, income, food, productivity, and learning.

And it all begins with a very small collateral-free loan of $50, $100 or $200, which can put a poor working person into an enterprise of his or her own. It might be a fruit or vegetable vendor stand in the local marketplace; or a canteen; or a seamstress, beauty or cobbler shop. No matter how humble the business, the effect on a formerly destitute person and the people within that person’s inner circle is financially and psychologically transformational.

The other two very encouraging features of microfinance for the poor are, first, that people are not given a handout, but a means to work their own way out of poverty through these entrepreneurial empowerment loans. As they are given the opportunity to become self-employed, they are simultaneously given the chance to discover their own self-worth. Their dignity becomes revealed to them.

The second is that loans are distributed at the grassroots level through local implementing partners. This avoids the corruption that so often occurs when monies are funneled from the top down. And the fact that women are brought together in community in groups of 15 to 40, to form what within the Opportunity International model are called Trust Banks, is especially exciting. You saw a Trust Bank at work in the Rosal video. By the way, eighty-seven percent of Opportunity’s clients are women.

The process itself is straightforward. These women and men take a brief training program, which includes instruction in simple accounting, business planning and banking. Then the first Trust Bank meetings are held and group officers are elected. After about two months’ time, small loans ranging from $50 to $200 U.S. dollars are distributed. This money is used to buy inventory or to purchase supplies, so the fledgling enterprise can get launched. Loans must be repaid and every Trust Bank client must guarantee the loans of the other group members.

The repayment rate on loans averages an amazing 98 percent. As clients progress through the program, their small businesses grow, a record of credit is established, and they often begin saving money in a commercial bank.

In a typical Trust Bank meeting, attendance is taken, loan payments are made and savings accounts deposits are recorded. Discussions take place where members can express themselves, learn from each other and where group problems are worked out. Importantly, each client finds that she has entered into a new “culture” within the Trust Bank setting – a culture that upholds the dignity and respect of every member.

Now, you may ask, on the macro-level, the numbers of poor in the world are so enormous, how can any one microfinance organization make the ultimate difference? The answer here is that there exists a great coalition of micro-enterprise development non-governmental organizations, called NGO’s, tied together through the Microcredit Summit, a Washington-based alliance of microfinance institutions which formulates goals for the microfinance industry and annually reviews and updates them. The Summit recently announced that its goal of reaching 100 million of the world’s poorest families by 2005 has made significant progress. Microloans reached 41.6 million families by the end of 2002 – and that is a very positive achievement!

And hear this: what it shows is that the success of microfinance in the alleviation of poverty is in inverse ratio to the escalation of global poverty in those many parts of the world where microfinance has not yet been applied.

Beyond this, the wealthy nations of the world need to do more. When General George C. Marshall in June of 1947 outlined his plan to help the defeated nations of Europe, he said there could be “no political stability and no assured peace” without economic security, and that American policy was “directed not against any country or doctrine but against hunger, poverty, desperation, and chaos.”

Today, the challenge is at least as great – probably greater. With billions of people in the world suffering economic deprivation, the relationship between economic instability to political instability to extremism and terrorism is real and ominous.

For this and humanitarian reasons, the Worldwatch Institute has called for a global version of the Marshall Plan to confront and eradicate chronic poverty, once and for all, worldwide.

The Millennium Development Goal of cutting absolute poverty in half by 2015 is ambitious too, and as mentioned, needs the support of microfinance organizations. Now a goodly portion of funding of microfinance institutions relies on private and corporate support. Then there is governmental assistance through such agencies as USAID. This falls in part under the category of “foreign aid.” What do Americans think about providing foreign aid to developing nations?

Most see giving foreign aid as serving American self-interest, or the national interest, not merely as humanitarian. In fact, there has been a marked decrease in the public’s desire to cut foreign aid, while an overwhelming majority continues to support the principle of giving foreign aid.

Findings from a study conducted by PIPA, The Program on International Policy Attitudes, in February, 2001, as well as from other polls, show a shift in public opinion away from the feeling that the U.S. should cut foreign aid. In the 1995 PIPA poll, 64% favored cutting foreign aid. In the 2001 poll this percentage has dropped to just 40%.

In polls, overwhelming majorities reject the idea that the US should only give aid when it serves the national interest. But beyond polls and trends concerning national feelings about alleviating poverty, we have the additional responsibility to hold our faith and belief systems up against the reality of poverty in our world.

With two billion Christians in the world today with an annual global income of ten trillion dollars, how can Christians help in the vital and noble crusade to end poverty on our planet, as we know it? If two tenths of the annual income of Christians - $20 billion - were funneled to provide loans to 100 million poor entrepreneurs, the lives of one billion children and adults would be transformed. This would constitute a Christian version of the Marshall Plan, far surpassing the goals of the Microcredit Summit and achieving many of the goals of the Millennium Declaration.

The most incredible part of investing in microfinance is the concept of “recycled money,” or leveraging and sustainability. What this means is that because charitable gifts are distributed as loans, these monies are used over and over and over again. One $100 gift can be realized in a loan to a poor woman in Africa. She then builds a business and repays the loan. Then, that $100 goes to another woman, who does the same, and so on and so forth. This is the beauty of micro-enterprise development.

For those of you who leave here this weekend with an understanding of the global dimensions of the issues, the truth is that ALL of it can be reduced down to the life of a single human being. Perhaps she’s a poor woman in the slums of Manila, struggling to gain financial independence so she can feed her family…or a poor woman who must earn extra income in a village outside Ghana, Africa, so she can support her sister’s children, whose mother died of AIDS . . . or a family in Guadalajara, Mexico desperate to start saving money for the first time with their own bank account.

Our commitment to this wonderful work translates to transforming these kinds of lives, one life at a time. And the greater the commitment, the more magnified the impact in the transformation of whole communities.

Because as grim in certain respects as the global overview of poverty is – and many of the statistics I’ve cited this morning, when they really sink in, can bring tears to the eyes – the truth is that this overview is dramatically in counterpoint with the success, the increasing success, of micro-enterprise development. And that’s the good news, the message of hopefulness I wanted to bring to you this morning.

Out of this good news and hopefulness comes the motivation to be part of something that works, something that calls us to service with the assurance that our support is not futile – that it will make a difference in the lives of our fellow human beings.

Sir Wilfred Grenfell, who worked tirelessly to eradicate poverty in Canada more than 100 years ago said, “the service we render for others is the rent we pay for our room on earth.” Along with this thought, I am equally moved by something I read in Proverbs: “He that hath mercy on the poor, happy is he.” Oh yes! And may I add, “She that hath mercy on the poor, happy is She!”

Ladies and gentlemen, mercy on the poor means empowerment of the poor. Empowerment represents new hope, and new life, for the poorest of our fellow courageous sisters and brothers. They don’t ask for charity – they ask for the opportunity to be liberated! The names of their trust banks speak to their spirit and their kinship with us through Christ. Here are just a few of those names:

Grace of the Lord Trust Bank, Kampala, Uganda
Loving Fellowship Trust Bank, Bacolod City, Philippines
Working Together Trust Bank, Kampala, Uganda

These names stand for opportunity realized. Hope personified. Small pinpoints of light shining in the darkest places of poverty. You are helping that light to grow and reproduce itself around the globe.

Thank you very much.