Letters to the Editor
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I'm not really sure what Goldman is doing here
Is training 10,000 women in rudimentary business techniques going to open up new markets for Goldman? I doubt it, except maybe in the very long term. Other than trying to boost their reputation, this doesn't seem to have any direct implications on their business.
Sure, I can imagine how more women in business in developing countries who are trained in management can shore up stability in those countries, reducing country risk, and opening up new markets. Or, more women in business in the developing world can promote long-term economic development that will open up markets.
If Goldman were on a cutthroat hunt for talent, they would work not to tailor a program to women to run small businesses but start giving out scholarships to business schools to extremely promising female talent that they scout. They could really get a leg up on their competition that way.
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The first step starts with one person.
If only one woman "gets" what Goldman Sachs is attempting then this training will have paid off. These women need a local role model and a mentor; this program is trying to cultivate such. I believe it will reap what it is sowing.
Word of mouth is very powerful in these countries. Having someone prove that the training will pay off paves the way for future successes. The psychological barriers can be enormous and this is one attempt to overcome fears.
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Microfinance the projects of the developing world
The mircofinance critique is a valid one. They do foster promoting traditional roles as a way to progress. The other part of that problem is that they tend to stagnate and don't really lead to development. I liken it to projects. For a few they provide a leg up to achieving more prosperity, but they mostly perpetuate a cycle. The benefit, they can enhance the chance to sustain at a low level, but as for development- well since the 1970's, not so much. The other flaw is that these loans go almost entirely to women. One partial myth is that women are better at paying back the loans. In some cases, the women collect the funds, and hand it over to their male counterparts. Also, those scenarios when the funds are extended to men have shown that they create enterprises more in line with true development. A factor that UNDP is loathe to acknowledge and they fall back on the higher rate of risk in making loans to men. My own thoughts is that microfinance fails because it excludes men. It also makes me uncomfortable because it is usually tied to imposing western values under the guise of human rights and beliefs. Lastly, Goldman Sachs would be better served by a gender neutral programs, particularly here in the United States, just ask black men and latino men. So once again the UN and UNDP are fanning the passions of the time which in an objective examination are not dedicated to the needs of all humanity.
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Cruel and Cynical Laughter Here
Having no little experience in development, here and in the third world, I have a hard time suppressing my cruel cynical laughter. Right, what a woman hoping to start up a goat-sitting service in some African hell-hole needs is training on how to write a business plan and create a marketing strategy. And mentorship from a business school professor who hasn't actually done any business in decades if ever.
Every real entrepreneur I ever met laughs hard and bitterly at business plans. They are a bureaucratic check-off item to secure a bank and especially government loan, a piece of meaningless drudgery, and any businessperson that ever refers to them thereafter in the running of their affairs won't be a business person for long. Similarly with marketing training-- a limited amount of money can be made selling sizzle, but if you ain't got the beef, at the end of the day, the business will fizzle.
But is sure is nice to see Goldman Sachs willing to share their entrepreneurial brilliance; as we all know, they make all their money with innovation, risk-taking, and flexibility. And have a deep understanding of goat-sitting derivatives, no doubt. What it really is, is patronizing: what these women really need is training, see, they need to understand all those fundamental business basics that are second nature to investment bankers. Because they are stupid and ignorant, unlike American investment bankers (sub-prime derivatives anyone?)
It really isn't all that hard to understand. What makes poor people poor? They don't have any money. What do they need to stop being poor? Money. What entrepreneurs need is capital, purely that, in any society. And they need capital appropriate to their circumstances-- microcredit can go a very long way in virtually cash (and capital)-less societies, because in those economies, what appears to be micro to us is only because we are looking at it through the wrong end of the telescope. For a family living mostly on subsistence activities who might see $200 in cash over a year, a $20 or $40 cash loan is not microcredit at all.
And like all business loans, guess what? There is risk; some will fail, some will be marginal, and some will work out very well. The only real mitigation against the risk is to make the wide enough without diluting the size of the loans.
Little has pissed me off in recent years as the the attempt of the microcredit culties to import the model to rich societies. See, it works because it's women doing it, in a circle no less, so if we make them attend hours of meetings at which a bunch of people who have never run a business (other than a microcredit cult-type business anyway) lecture them on a lot of moonshine, and ultimately loan them after they go through plenty of patronizing hoops what amounts to at best less than a quarter of a welfare cheque, somehow this will springboard them out of poverty. Riiiight.
Anyway, it is once again the same old tired cliche "Give a woman a fish, you've fed her for a day; teach her to fish, you've fed her for life." Uh, howabout you give her a fishing rod? And a boat, and an icebox, and perhaps trade-rules that don't viciously discriminate against her, and perhaps limits on drag-line fishing fleets that are vacuuming up all the fish and destroying the spawning beds in the first place? Naw, that would be, like, actually expensive, let's give her a marketing plan and our shareholders some warm fuzzies instead.
The patronizing attitude is nauseating. Gah.