what does "living on a dollar a day" mean in rigorous economic terms?

What does your opinion have to do with a factual thing like the price of rice, and what size scoop do you mean?

It’s got nothing to do with the price of rice, but the price of a serving or rice. A pound of rice, (s)he’s saying, isn’t a lot.

Yes it’s mostly about PPP. The Economist uses their Big Mac Index (Big Mac Index - Wikipedia) as an informal measure of purchasing power parity, by analyzing the cost of a Big Mac in different countries and the time an average worker needs to work to earn one. USD 5.79 for a Big Mac in Norway and USD 1.95 in Sri Lanka.

More interesting, I think, is that the average Angeleno needs to work only 11 minutes to buy a Big Mac in LA but the average Colombian needs to work 97 minutes to earn a Big Mac in Bogota.

Those are February 2009 numbers from Wikipedia because I don’t have a current Economist subscription.

This is the key to the problem at hand.

In places like Africa, charities feed the population on a soy based gruel that is very nutritious and it goes quite a long way. You mix the powder, which is a total meal in itself, vitamin fortified, and usually based on soy, with water and you can easily get three meals a day for a few cents per person.

What kind of time would villagers have left over to manufacture their own goods, e.g. cut firewood, make furnishings, etc.?

Rob

if there are such cheap foods available, why are they not sold in the West for poor people? Maybe even not “poor” but more specifically homeless, who would be very happy to get several decent meal for a dollar or less?

What part of “gruel” don’t you understand? If it’s the same stuff I’m thinking of (and have had), it makes 15 cent-a-pack top ramen look like fine dining.

It depends.

As things develop, it often gets harder and harder for the average person. For example, as professionals (teachers, police, merchants) enter villages, firewood gets harder and harder to find as professional wood merchants strip the nearby wood to sell on the market. My friends said a decade ago they could walk an hour and find a place to cut wood. Now it’s an all-day thing…something they often can’t do without really getting behind on farming and housework. So often they are forced to spend their hard money buying these things on the market. An average household in my family could easily have ten kids (and those kids raise the standard of living by helping with farm work and doing odd jobs around town.) You can’t just take off all day when you are responsible for that kind of household.

Few people in my village manufactured their own soap these days, though some women’s groups did try to market specialty soaps to the middle class. And there is a great desire for laundry soap, which is a much better tool for washing clothes than bar soap. But soap was still so treasured that the standard gift to give to a new mother was two bars of soap. Things like turning your own peanut oil and grinding your own grains only happen when things get really bad. Grinding your sack of millet by hand is literally hours of back-breaking labor. If you can come up with the twenty cents a sack to take it to the electric mill, it takes a few minutes.

Producing furniture requires tools, which the average person doesn’t have access to. Things like hammers and screwdrivers were not household goods- they were treasured items that could change your life. You have to really picture what it means to pretty much own nothing. The poorest people could sometimes scrounge up money by producing stick beds and weaving grass mats. But you can really only afford to spend two days weaving a mat (which might sell for fifty cents) if you have no dependents.

While most people relied on locally produced materials to build their houses (i.e. mud, straw and gravel) these materials frankly sucked. Every year a couple people would die when their mud hut collapsed in the rain- something that could be avoided by adding a little bit of lime to the mud mixture. Straw roofs leak and harbor bugs. Gravel floors are difficult to clean. So while people would make do if they had to, if they could find the money for a few sheets of tin roofing or a bag of concrete, their lives would improve considerably.

People did buy locally produced clay cooking pots. But they got destroyed pretty quickly. People had a strong desire for the cheap metal pots that could last for years.

Basically, today’s poorest people are at a difficult time of transition. The economies that used to be at some kind of balance are now facing a new economy- one where schooling is necessary for real prosperity, and where life-saving medical care (which of course, people would spend their last dollar for) is available. And there are relatively cheap manufactured goods (tin roofing, metal pots, milled grains) that make a HUGE difference in quality of life. People want cash to pay for these things, and they can get that by selling goods to the middle class. Most people I knew had cottage businesses selling snack food or something. But honestly, you can’t do both. You can’t be a sustenance farmer and a small-scale manufacturer. Something has to give. So people are still in desperate situations, caught between two worlds.

One of the big things that aid groups do is try to help people organize so that they can have access to the tiny bits of capital that make running a small business possible. For example, my friend organized a woman’s group to pool their resources and buy an electric mill. They could use that to grind their grains, and rent it out to pay for the gasoline to power it. If they made a profit, they’d have money for school and medicine. Another pooled resources to build drying racks, so that they could dry seasonal fruit for their own use and for sale. Everyone wins. Other groups teach people how to market their handicrafts to the middle class in larger villages.

what part of “homeless” don’t you understand?

even_sven,

are you aware of / can you share any interesting low cost solutions to some of the problems that you have enumerated that may be coming from the “intermediate technology” discipline/movement that you personally would consider worthwhile (as opposed to the traditional waste of grant money)? E.g. has anybody figured out how to produce and sell cheaper soap or soap-like substances, or maybe how to grind grain cheaper than how they do it now?

Also, is there a distinct agricultural “off-season” in Cameroon? I know that in Eastern Europe there was a big winter period where there was nothing to do in the fields and a part of spring when there was little to do. So villagers would do handicrafts or go work in a factory if available nearby during that time. Are there similar periods for tropical subsistence farmers?

Well, touche, but the non-flippant answer is simply that the product described can only be described as an emergency foodstuff and that if all one wants to do is eat for incredibly cheap, there are other alternatives that are readily avaliable in this country that are more palitable.

Soup kitchens and similar charities in the US provide free food that’s far better than what the relief services distribute in third world countries. By third world standards, there’s no such thing as “poor” in the US.

If there were better solutions, the market would probably take care of it- Cameroonian people are ready to embrace new things when it leads to improved standards of living. On the village level markets were relatively free (though on a national level numerous harmful policies have helped perpetuate economic decline.) One of the biggest stumbling blocks to adapting new practices is that people lack even the smallest bits of capital to get new businesses started. There are some good intermediate technologies that various NGOs are trying to push- for example, improved cookstoves that use less wood, and treadle pumps that are cheaper and more reliable than gas pumps. But people don’t have money to invest in something they consider unproven, and it’s hard to set up local manufacturing facilities when so few people have the means to start a business.

There are lots of good people out there working hard to improve things. I think you’d be surprised at how dedicated and hard working many sustenance farmers are to improving the lot of their community. It’s not just foreigners working together to organize and create NGOs.

I lived in a sahel region. My area had two major millet growing seasons, plus whatever cotton, peanuts and fruit people could eek out of their fields. There was some down time, especially for men (women worked sun-up to sun-down.) but people simply did not have the capital to invest in the raw materials to make handicrafts, and factory jobs are extremely rare in unindustrialized areas- my entire state had something like three factories.

Additionally, people were sick pretty much continuously. Everyone suffered repeated bouts of chronic malaria, plus intestinal difficulties brought on by bad water. And that’s before we even start talking about the toll that AIDS takes on what should be the country’s most productive workers.

Anyway, no easy solutions.

Sven,

Are there cash crops there? How about blacksmiths? Also, what are the stupid policies of which you spoke?

Thanks,
Rob

There are some cash crops.

In my area it was cotton. The big problem with cash crops is that they require a lot of inputs (fertilizers, pesticides, etc.) to grow. In order to get these inputs, people either had to have capital, or borrow money from the cotton company. The cotton trade was controlled by a monopoly owned partially by the state and partially by private French companies. They would buy the cotton at the end of the season at a price that they set. For many farmers (especially those who gave in to the temptation to use imputs on their staple food crops) the set price isn’t enough to cover their debts, leading to sharecropper situations where they are forced to grow cotton year after year, degrading their land and never making a dent in their debts.

Ironically, quality cotton was virtually unavailable to the very people who grew it. It all got sent to Europe and China, processed. and sold back at hugely inflated prices. People who spent their lives neck-deep in cotton might be lucky to get a set of clothes once a year. We all slept on mattresses filled with waste from the gin (well, those of us who didn’t sleep on mats.)

One thing we did was teach natural fertilizers and pesticides, so that people wouldn’t rely on the cotton company for inputs. We also tried to create markets for new cash crops. There was an NGO trying to stir up a gum arabic trade (the trees that produce that are beneficial in various ways) and several groups trying to introduce more soy products to consumers, since soy is a high-yield easy to grow crop. While some groups worked to create export markets, most groups tried to create home-grown substitutes for the expensive foreign goods consumed by the middle class.

There were blacksmiths, which in much of West Africa is actually a pretty complicated caste-like trade. Really, anyone who could afford any kind of tool could have a trade. There were people trying to make their living off of a single bicycle tire hand pump. If you had enough capital to create any sort of shop- a tailor shop, a bike repair shop, etc. you’d probably be able to scrape by okay (but it’d be a big risk to give up your fields.) But few people had that kind of capital.

As for government problems- the problems you find in many African dictatorships is a subject of it’s own. Trade restrictions made import and export difficult. Business laws made it impossible to protect business assets enough to make re-investing and growing a business worth it. Tax collectors showed up to strip anyone who started to look prosperous. Infrastructure problems made it difficult to get goods to markets. Your average kleptocracy exists to mine the country for natural resources, sell those resources abroad, and use the profits to buy mansions and luxury goods. Should your business grow prosperous, it becomes just another resource to be mined until it’s tapped out. Anyway, that’s all a problem pretty much nobody can fix, and it’s probably beyond the scope of this discussion.

Maybe someone should tell Biya that he would be a lot richer if he didn’t kill the golden goose. What about Grameen-style banks? Do these exist in any systematic way?

Thanks,
Rob

even sven - Rushgeekgirl mentioned taxes in her post about being poor in Mexico. Are there land/property taxes in the villages of Cameroon? Or is it all pretty much an income tax setup? (as you noted in your last post)

Such as in addition the charming Army and Gendarmes who like to tax your transport etc., such that one has to give drivers special compensation.

They’re called caisses as I recall, and yes. But microfinance ain’t all that Grameen pimps it out as.

Maybe, but it’s better than nothing. Of course, if your wealth is stolen by corrupt officials the minute you get it, it probably won’t help.

There were lots of micro-finance groups in the country, but none operating on a usable scale in my area. The best people in my area could do was a bank loan with 20% interest that needed to be paid back in six months. Securing this required having a bank account of around $50.00 (a huge sum even for a group.)

There was some government assistance available to help people form village groups to have bank accounts an secure loans. But even that was often difficult- requiring dozens of forms that needed to be meticulously filled out in French and delivered to regional offices…something beyond the means of most farming communities. In theory there were government representatives to help with this. In practice, these representatives rarely made it to the villages they were supposed to be living in or demanded bribes to do their job.

Taxes were so complicated that they didn’t even try to teach our small business volunteers about it. From what I understand, for small businesses it basically adds up to some guy showing up a few times a year and shaking you down for what he thought you were worth, and presumably pocketing some unknown amount. I remember my shopkeeper friends saying they didn’t want to improve their storefronts too much for fear of attracting too much attention.

For larger organizations, I imagine taxes are a hugely complicated dance incomprehensible regulations and bribery. And of course there were the random taxes built in to the price of goods. Nigerian Coca-Cola cost twenty cents a bottle. Cameroonian cost a dollar. All of that was taxes. Finally, any transaction with the government (filing a police report, etc.) required “fees”, that presumably went to supplement the official’s salary- not exactly a tax, but it kind of functions like one.

Local traditional leaders also collected taxes- usually sacks of grain from everyone’s harvest and a percent of the profits from the local market. In theory these rations served as a back up against famine. In my experience most leaders at least tried to use their taxes somewhat wisely.