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Archive for the ‘Poverty’ Category

Work – the Hard Life

In Entrepreneurship, Poverty on August 10, 2011 at 6:09 pm

Having both moved around extensively in the low income neighborhoods of the city together with local NGO members on earlier occasions and made acquaintances with top managers representing the highest level of affluence in the country on later occasions, I’ve been able to observe many aspects of daily life in Colombia’s all 6 socioeconomic strata (social classes).

When it comes to the working conditions of the lower stratum, what most people face are long hours under the sun on thestreet corners and the traffic lights selling all kinds of things such as coffee, juice, breakfasts, avocados, chewing gum, cell phone accessories, children’s school utilities, books etc.

It’s questionable how entrepreneurial these people really are, considering the horribly low productivity level of what they do, but they are certainly persistent and hard working with the discipline to start working before sunrise (6 am) and continue working long after sunset (6 pm). Considering that their income is not close to being assured to reach the national minimum wage of formal jobs, their ‘forced willingness’ to work is admirable.

It’s not difficult to argue in favor of why more foreign companies should grasp the opportunity to invest in the enormous potential labour force in the lower strata, which to very affordable wages could be liberated from the inhumane working days on the streets. The monthly minimum wage in Colombia this year (2011) was set to 535 600 COP (286 USD), with an additional transportation subsidy of 63 600 COP (34 USD).This is a 4% increase from last year and is supposed to favor the creation of 2.4 million new jobs and the formalization of 500 000 work places. This is according to the objectives set by the new government. (Source: businesscol.com).

As for the upper classes, the salary, no matter how high, is not an indicator of how much free time managers have or how long vacation they can take. As in most places, top managers are the first to arrive to the office in the morning and the last to go at nightfall, obliged to make sure the overall operations are under control, and that their inboxes full of emails are taken care of.

Overtime work is the default rather than the exception and no extra pay for the extra hours worked is to be expected, although the salaries at the top level of multinational firms can be quite comfortable.

Besides an unemployment rate starting out at 13.5% this year, still struggling to come down from a high average of 14.6% the last 10 years, the incapacity of the formal sector to generate enough employments has given rise to a large informal sector. It includes around 34% of the workforce, of which 45% earn less than the minimum wage of the formal sector (Source: tradingeconomics.com, caracoltv.com, elespectador.com).

Despite the many challenges to employment, formalising your own company is easy in Colombia and entrepreneurship is also the great solution for many hard working individuals. More on this in an upcoming article on the reality of small businesses.

On Colombian development and opportunities,

Joni AlWindi

Everyday Violence – the Sad Life

In Politics, Poverty on August 10, 2011 at 5:52 pm

What contrasts the fantastically joyful spirit of the great majority of the approximately 45 million Colombians is the awful violence among the poorest spheres of the society. With violence, I will here only refer to unorganized everyday crime.

Living with and around the lower to upper middle classes, and following certain safety routines, it’s easy to forget that the city of Cali has among the highest homicide rates in the country, and thus, among the highest in the world. In my well over four years of moving around in the city, I’ve “only” been victim of four different non-violent incidents. The first incident occurred after having refused to give some coins to a random man, who opened the taxi-door for me, as I stopped by the grocery store in the middle of the day. This provoked him to tell me he was going to wait for me outside until I returned. A few coins seemed to keep that threat away. A little more serious was the second incident, when a smiling man started talking to me as he came towards me along a main street around nightfall (6:30pm) suddenly indicating he had a gun in his pocket and “politely asked” me to give him some money. Taking out the bills I luckily had in my pocket, in total 15.000 pesos (8.4 dollars) was fortunately enough to stay out of trouble that time.

At a later occasion, I was mildly robbed by a quite desperate guy who had spotted me after getting out of the same bus that he had been begging for money at. Following me at a distance while crossing the street, he suddenly appeared right behind me and had his hands in my pocket and grabbed my iPod that I stupidly enough had connected to my ears. Luckily, as he only concentrated on the device connected to my earphones, he left my wallet, my cell-phone and my laptop in peace. The last time, luck was with me again as a motorcyclist suddenly appeared from the wrong side of the street and, luckily enough, just ordered me to hand over my cell-phone, indicating that he had a gun in his bag. Having heard more than one story about motorcycle robbers ambitously stealing cars lately, besides their normal robbery activities, I didn’t hesitate at handing over my old, cheap cell-phone, which he incredibly enough accepted before hurrying away. He probably did not imagine that I, again, was also carrying my much more valuable MacBook in my Mickey Mouse folder.

Amazingly enough, when my iPod was robbed, Colombian police efficiency had the guy and his armed companion caught before I had finished a pleasant conversation with the nice lady who had seen and reported the incident. She had immediately called the police and helped me indicate to a police motorcyclist that appeared from nowhere in which direction the robbers were running. Despite this fantastic efficiency of the police work, the following 9(!!!) hours at the police station and the fiscal department (including a detour trying to catch another thief, who appeared on the way) did everything but give me a good impression of the administrative part of Colombian law enforcement. Adding that I, a foreigner, had to correct the police officer taking my report on his Spanish writing did not help much to reward my intentions of helping the police teach the robbers a lesson. My five-minute story took more than two working hours to get on paper, after three hours of pure waiting for the staff at the fiscal department to get available, after three preceding hours of waiting for something else at the police station.

Sadly, with administrative routines like these, it’s easy to understand the attitude of many to take the law in their own hands and try to revenge, no matter how dangerous, instead of letting the police and especially the fiscal departments do their job. In many’s opinion, too many resources are spent on the actual catching of the bad guys instead of preventing the guys from becoming bad. (In 2009, for the first time in Colombia’s history, investment in security and defense exceeded investment in education). No use is done “trying” to teach the criminals a lesson if the procedures to actually teach them a lesson don’t work. A focus is screamingly necessary on more effective fiscal work and even more on providing employment focused education and training, as well as on other constructive opportunities for the desperate and/or lazy youth.

The last time I was robbed, of my cell-phone, I just went straight ahead to recover my phone number at the operator’s main office, where I also bought a new phone. With a one-hour delay, I just continued my day as planned, without reporting anything to any authority, feeling both angry with and sorry for the people making a living robbing others. Sad.
Statistics indicate that 58% of Cali’s inhabitants think everyday crime is the city’s major problem. In 2010, 53% of the caleños considered the city to be equally as safe as the previous year and 17% felt that the city had become safer. The remaining 28% considered that the safety had worsened since the previous year, despite all, a huge improvement since 2006, when a tremendous 40% considered that the safety had worsened since the previous year. An increased presence of the police force is a result of this perception, as 37% of the citizens consider the police to be the main reason for the safety. In other words, the presence of the police force has a positive image in Cali, more positive than that in the country on average.

The perception of security and actual security are of course two different things, however, but in 2008, the indicators of homicides were the lowest in the last 15 years in Cali (66 homicides per 100,000 inhabitants). Of the people interviewed, 26% affirmed having been victims of some kind of crime in the city. Of these, 79% had been victims of robbery on the street (national average being 72%), 15% robbed in their homes, 9% victims of fraud or deception and 7% had been victims of physical aggression. (Source: http://www.occidente.com).

A chat at the police station with three former police officers, about everything from basketball to how to avoid getting an iPhone robbed, although somewhat entertaining, did not paint a very optimistic picture of the rough areas of the city. Besides their stories, the fact that all three officers were now wheel-chaired as a consequence of having been shot in duty only confirmed that the crime statistics of the city should be respected.

On Colombian development and opportunities,

Joni AlWindi

War, Corruption and Inequality

In Politics, Poverty on August 10, 2011 at 5:27 pm

To put the mystery behind Colombia’s terrible poverty rate in perspective – being as high as among the worst in Latin American together with Guatemala’s, Bolivia’s and that of the Dominican Republic – it’s important to know the following: i) Colombia has much more sophisticated public institutions than those of Guatemala, ii) Colombia is more urbanized than Bolivia and iii) Colombia has a more pushing business sector than that of the Dominican Republic. Although Colombia has duplicated its public social spending since 1990 (from 5.9 percent of GDP to 12.6 percent in 2008), this has not been reflected in less poor Colombians. (ECLAC Social Panorama of Latin America, 2010.)

One explanation is of course the eternal armed conflict of the country that according to a national survey has forced 760 000 farmer families to flee their homes to save their lives between 1998 and 2008, leaving behind 5.5 million hectares of land. Before this nightmare, half of these families were considered poor and a third had income levels at misery rates. The consequences have left 97 percent of these families in poverty and 80 percent in misery, a social catastrophe that continues until today. On a national level, poverty on the countryside is above 65 percent. (Source: Dane 2010).

The war has also affected in other ways. In the last decade, the presidency concentrated strongly on one priority, to reduce violence. The government of Alvaro Uribe invested an unprecedentedly high share of the public resources and institutional energy on this one priority. As I mentioned in a parenthesis in the section on Everyday Violence, Colombia’s investment in security and defense was budgeted to exceed the investment in education for the first time in the country’s history in 2009 (for the budget of 2010). Because of this, although having doubled the share of social spending, it is still lower than in countries such as Brazil and Costa Rica. (Source: http://www.elespectador.com, October 21, 2009.)

The other tremendous problem is corruption. Thousands of millions of pesos of public social spending money have been lost to scrupulous politicians or to armed actors, as was revealed in the para-politics scandal from 2006. According to Transparency International (which measures the perception of corruption of the public sector in 180 countries) Colombia has been worsening in the last years. In 2009, it went from position 70 to 75. This would be the exact opposite of what the country needs to successfully attack its tremendous problem with inequality.

Although the Uribe government between 2002 and 2008 was successful in increasing the number of places in education and health care – the latter experiencing a gigantic leap from 50 percent of the population covered in 2002, to 89 percent in 2011 – unfortunately, the coverage rate grew so fast that it put the system at risk. As to bring protection to the most marginalized, Colombia has followed the pattern of other Latin American governments; to give money to the people on certain conditions (that they assist medical controls, send their children to school, etc.).

However, the richest are still left with 30 percent of the public social spending, the main reason being that those with the highest salaries receive 86 percent of the pensions and those with the least, only 0.1 percent. The consequence of the economic boom is an even wider gap between rich and poor in Colombia. Starting the 21st century, Colombia was in the category of countries in the world with high indices of inequality, together with Peru and Brazil, the latter being the most unequal country in Latin America at that time. By 2008, Peru had advanced to the middle category and Brazil had left the category of extreme inequality altogether. Colombia, however, had dropped down to the even lower category of very unequaled countries. (Source: ECLAC 2010).

Poverty is a complicated issue in Colombia. Attempts of fighting it from different perspectives will be elaborated on in more depth in upcoming articles. Better investments in quality education for the poor as well as facilitation of entrepreneurial growth are examples on which I will continue to focus my personal attention. On a more general level, I will also try to give an updated account on the sitting government’s efforts and achievements in reducing the poverty rate and providing more Colombians with better opportunities. This will be presented in an upcoming article series following up on the presidency of Juan Manuel Santos.

Note: There are different definitions of poverty that affect the precise statistics to some extent. However, the numbers presented in the article are in line with the overall statistics found by the author.

On Colombian development and opportunities,

Joni AlWindi

Poverty – the Tragic Life

In Poverty on March 23, 2011 at 6:42 pm

In the statistics, Colombia is a poor country, and as such among the poorest in Latin America. Although one is constantly surrounded by street children and homeless people moving around in the background in most Colombian cities, poverty is not what strikes you. What struck me, once I had started to adapt to and integrate with the local environment, was the abundance of richness; the richness of the many flavors of culture, the richness of the strongly colorful nature, and the richness of the fantastic personalities of ordinary people.

My first year in Colombia (2003-2004) actually passed by so wonderfully that I never really experienced first-hand anything of what the word poverty pictures. I was surrounded by so much happiness and richness as well as warm welcomes from southwestern to the northern coasts. I was shown around and met by so much positivity in different forms that the material poverty in the background never really got through to me.

An important factor adding to my fully positive experience in Colombia is that I arrived when the economically prosperous years of 2003-2008 had just started. Optimism was spreading around the country as a strong priority on violence reduction that helped the economy grow at a high average of 5.5 percent of GDP per year. This had not been observed in a long time and even surpassed the achievements of Brazil, Chile and Mexico at the time. Unfortunately, while several Latin American countries managed to get a large share of their inhabitants out of poverty and misery through decent employments, Colombia’s flourishing investment confidence did not manage to benefit the poor much. Brazil got 40 million people out of poverty. Peru reduced its misery rate in half. Venezuela, despite its polarized politics, reduced its poverty and extreme poverty in half, and Ecuador decreased its poverty by 10 percent. At the same time, Colombia’s social improvements happened only one fraction at a time. The poverty rate was reduced by only 5 percentage points (from 51 to 46 percent) and among the poor, the number of extreme poor returned to almost the same rate as in 2002, on the border of a scandalously high 18 percent. This means that almost one in five Colombians still don’t have enough income to cover their basic hunger needs. (Source: http://www.semana.com, March 13, 2010 – For more background on the previous presidency, see the article Elections towards Legality or Security? from May 2010).

So despite a growing optimism about the country’s future, poverty rates did not see much improvement. At first, I could only notice how poverty shadowed the surroundings by observing the beggars and street children in the backgrounds of where I moved around. I didn’t realize the depth of the problems. It was violence that I was told to stay away from, by not moving around in the dangerous areas or walk outside after nightfall, less so alone. I was told not to travel by bus between cities to avoid the risk of being kidnapped by the guerilla. However, in the end, and thanks to the tough politics against guerilla violence, I could in fact travel by bus between cities without any disturbances.

On my third stay in Colombia, I started getting a deeper grasp of the country’s difficulties with poverty. This time, I actively sought the opportunity to learn more, by getting connected with individuals and organizations who lived and worked for the poorest of the country. This was in 2007, when I started moving around in the poorest and most dangerous areas of the city. I got to see first-hand what it really meant to live in poverty in Colombia. The main reasons behind the Colombian poverty will be the topic of next article.

On Colombian development and opportunities,

Joni AlWindi

Education – the Challenging Life

In Education, Entrepreneurship, Poverty on March 23, 2011 at 6:34 pm

In 2007, my Master’s thesis partner and I carried out a field study researching the role and scope of low-cost private schools serving the children of low-income areas in Cali. We managed to visit around 200 schools in the city’s largest and most dangerous marginalized area, Aguablanca. In our findings, we could confirm that the private sector’s share of schools and pupils constitutes a clear majority (85% of all schools and 64% of all pupils) and that the private schools perform better on two of our three indicators of quality (teacher activity and pupil-teacher ratio). On the third indicator (material inputs) the results were ambiguous; although the overall infrastructure was better in state schools, access to both computers and books was better in private schools.

It’s not a surprise to anyone that private schools in general are more effective than “free” state schools. For many, however,it’s almost shocking to find out that low-cost private schools directed to the poor, first of all exist; secondly, that they capture such a large share of the poor children; and, thirdly, that they perform better than the state schools. On the top of that, they do this on much lower budgets!

Teachers in low-cost private schools, although they are less qualified and much less paid, are more dedicated to the actual interaction with the children. Thanks to the much lower number of children per school, they have fewer children per classroom to attend and as a result both more time and more material per child at their disposal for the actual teaching.

Besides thousands of private institutions providing educational services in the country, the Colombian private sector has a history of high participation in education efforts. Various foundations, entrepreneurs and other groups have supported with financial resources and human resources specialized on different aspects of education for the poor. Similarly, numerous NGOs contribute to a great extent to the improvement of Colombian education. Despite of this, the resources are not enough to secure a quality education for the poor. Most monetary, technology and innovative investments, even from the greatest of the city’s foundations, are directed almost exclusively to the state schools, where they are managed ineffectively, and, although it’s great to read about some improvements in state schools concerning school environment, quality of education, absenteeism and coexistence etc., the impact of such improvements are far too small compared to the great amount of efforts pouring in.

Today, a terrible amount of youths in ages 17 to 23 are left with nothing to do, being excluded from university studies in lack of secondary school diplomas, good enough grades or money to get access to a university. To attack this problem, an interesting law – and even more interesting if actually enforced – was written in 2006, regulating Education for Employment and Human Development; six beautiful words that not very surprisingly title very well what Cali and Colombia needs. The purpose of this law is to facilitate the provision of the skills and talents needed for successful performance of existing work tasks. This alternative to university education, if made accessible to all and in collaboration with the actual employers, sees an interesting future. The most recognized institution providing this service is the National Service of Learning (the SENA), which will be written more about in an upcoming article on Colombia’s ICT advancements.

When it comes to higher education, well-off Colombians, but also top-performing or hard-working students from all socio-economic classes, can get access to top-class universities of international standards. Exchange programs to go abroad for advanced studies are also promoted through scholarships on the higher levels to help provide top-class Master’s and Doctoral level knowledge for the future leaders of the country. More than 70% of the institutions for superior education are private and costly (between about USD 1,000 and USD 3,800 per semester). Credits as a form of student loan are possible to get for high performing secondary students, but a great share of the university students has to work hard to afford higher education studies, with schedules running until 10pm.There is deep controversy globally about the government’s role and responsibility in education, especially when contrasted to the alternatives provided by the private sector. This is something that I feel passionate about sharing my thoughts on and learning much more about. The Education Business topic will therefore be discussed in more detail in an upcoming article.

On Colombian development and opportunities,

Joni AlWindi