Microloans


The conversation fluctuates between a legendary Tunki coffee and a brand new pisco, Larroca, served up cold, in accordance with the tastes of its creator: Bernardo Roca Rey, architect of the Novoandino cuisine, exquisite epicure, president of the Peruvian Society of Gastronomy (APEGA), and the current promoter of the rescue and rehabilitation of Peru’s millions of acres of agricultural terraces.

How was this project born?
In the Ministry of Culture, during my time as Viceminster for Cultural Heritage, I had the the opportunity to be close to the issue of the terraces. Conserving the walls of the terraces is what the ministry must do with its archaeologists, and it works, but it is expensive. The other way is that the farms work them, and in so doing, they will also provide maintenance. If there are a million hectares of terraces, 700,000 of those are abandoned.

Up until 1999, there were programs to map the Andean terraces, but they have been abandoned. Days ago, in Mistura, we managed to gather together seven ministers to talk about the Andean diet, and one of them was Trivelli (Minister of Development), who has done studies of the terraces. APEGA goes hand-in-hand with two ideas: nutrition and social inclusion. In both cases, the Andean terraces are important to recuperate. If there are a million hectares, that’s a little bit more than 10% of all the arable land used for cultivation in Peru, and it’s a shame that that land isn’t being used.

What is the Ministry of Culture doing about it?
They have abandoned all of the projects that existed. There isn’t even a complete map of the terraces in Peru, where they are and which they are. They’ve identified barely 50% of them.

Is mapping the first step for their recuperation?
The first step is a pilot project: take 500 hectares and adopt them. The objective is that these lands, which are the most productive in Peru, offer the Peruvian restaurants of the world the Andean grains that are so fashionable. For years, I have been promoting the Novoandina cuisine, and among those crops are quinoa, oca, mashua, products which will soon be fashionable. We started with quinoa twenty years ago, and it’s a success today.

What is the idea? To give value added through the denomination of origin; having products that are introduced with the gastronomic boom and also grown on Andean terraces, some of which are three thousand years old. That a restaurant in Paris, for example, adopts a terrace and once a year offers roasted, glazed mashua. What you will have then is a cultural phenomenon which will allow for value to be added to the product, and the farmer will be well-paid.

Additionally, if they are crops from the VRAE, where there are many terraces, it can be another type of assistance. For example, the U.S. government and restaurants in the U.S. could receive those crops, which are also organic. Everything goes hand-in-hand: biodiversity, ancestral crops, new cuisine, boutique agriculture, all of those go together and break the inertia. And that the state puts in $500 million to save a certain number of terraces.


Where will you realize the pilot project?

The closer to Lima, the easier. In APEGA, we have a project with the Interamerican Development Bank, which has given us $3 million as a nonrefundable amount for supply chains, and with part of that we could begin to work on this subject.

I firmly believe that the Andean diet is related to the terraces, so that all of the ministry portfolios are related to this: Tourism, Agriculture, Social Inclusion and Health. The issue is in the hands of the state. I have calculated that it takes an average of $5,800 to recover one hectare. In APEGA, we can recover 100, but with the state or help from abroad, we could recover thousands. Some villagers in Ayacucho are already willing, and the corn that they haven’t grown for a while could be cultivated there. There is a fungus, which in Mexico they eat and call huitlacoche, which contaminates the corn crops, and in Cusco, the infected corn are just tossed out. It would be interesting to grow the infected corn, in order to sell the fungus, which elsewhere is worth much more than the corn itself. The same monks cress plant that I am growing in my garden can be used to produce “Incapers,” in place of regular capers.

Going back in time, what was your first contact with the Peruvian terraces?
I was a boy, because my family led me to this and traveled a lot. I remember being very young and lying down on a terrace in Machu Picchu and looking at the stars, thinking that this was the best thing you could ever do. Who would have guessed that I would end up having to care for them myself…

If we develop them, Peru, instead of having 1.2 million kilometers, would have 2 million. That is, we would be as big as a flat country like Mexico.

 

By Maribel de Paz  (“Caretas” magazine from PERU). 

Translated and adapted by Nick Rosen, October 4, 2012

 

LAHORE, Pakistan: An old friend of mine here fights terrorists, but not the way you’re thinking. She could barely defeat a truculent child in hand-to-hand combat, and if she ever picked up an AK-47 — well, you’d pray it was unloaded.

Roshaneh Zafar is an American- educated banker who fights extremism with microfinance. She has dedicated her life to empowering some of Pakistan’s most impoverished women and giving them the tools to run businesses of their own. The United States should learn from warriors like her.
Bullets and drones may kill terrorists, but Roshaneh creates jobs and educational opportunities for hundreds of thousands of people — draining the swamps that breed terrorists.


“Charity is limited, but capitalism isn’t,” Roshaneh said. “If you want to change the world, you need market-based solutions.” That’s the point of microfinance — typically, lending very poor people small amounts of money so that they can buy a rickshaw or raw materials and start a tiny business.
Roshaneh grew up in elite circles here in Lahore and studied business at the Wharton School and economics at Yale. After a stint at the World Bank, she returned to Pakistan in 1996 to start her microfinance organization. She called it the Kashf Foundation.
Everybody thought Roshaneh was nuts. And at first nothing went right. The poor refused to borrow. Or if they borrowed, they didn’t repay their loans.


But Roshaneh persisted, and today Kashf has 152 branches around the country. It has dispersed more than $200 million to more than 300,000 families. Now Roshaneh is moving into microsavings, to help the poor build assets, as well as programs to train the poor to run businesses more efficiently. She is even thinking of expanding into schools for the poor.
Microfinance is sometimes oversold as a silver bullet — which it’s not. Careful follow-up studies suggest that gains from microloans are often quite modest.
Some borrowers squander money or start businesses that fail. Some micro-lenders tarnish the field because they’re incompetent, and others because they rake in profits with sky-high loan rates. Microfinance has also generally been less successful in Africa than in South Asia.


Yet done right, microfinance can make a significant difference. An outside evaluation found that after four years, Kashf borrowers are more likely than many others to enjoy improved economic conditions — and that’s what I’ve seen over the years as I’ve visited Kashf borrowers.
On this trip, I met a woman named Parveen Baji, who says she never attended a day of school and until recently was completely illiterate. She had 14 children, but five died.
Ms. Parveen’s husband, who also never attended school, regularly beat her and spent the family savings on narcotics, she says. The family’s only possessions were four cots on which they slept, crammed three or four to a cot, in a rented apartment.


“One night all my children were hungry,” she remembered. “I sent my daughter to ask for food from a neighbor. And the neighbor said, ‘you’ve become a beggar,’ and refused.”
Then Ms. Parveen got a $70 loan from Kashf and started a jewelry and cosmetics business, buying in bulk and selling to local shops. Ms. Parveen couldn’t read the labels, but she memorized which bottle was which. As her business thrived, she began to struggle to learn reading and arithmetic — and proved herself an ace student. I fired math problems at her, and she dazzled me with her quick responses.


Ms. Parveen began to start new businesses, even building a laundry that she put her husband in charge of to keep him busy. He no longer beats her, she says, and when I interviewed him separately he seemed a little awed by her.
Eventually, Ms. Parveen started a restaurant and catering business that now has eight employees, including some of her daughters. She bought a home and has put some of her children through high school — and a son, the brightest student, through college. She has just paid $5,800 for a permit for him to move to London to take a health sector job.
Ms. Parveen tried to look modest as she told me this, but she failed. She was beaming and shaking her head in wonder as she watched her son speak English with me, dazzled at the thought that she was dispatching her university-educated son to Europe. “Microfinance has changed my life,” she said simply.


That’s an unusual success story. But the larger message is universal: helping people start businesses, create jobs and support education is a potent way to undermine extremism.
We Americans overinvest in firepower to defeat extremism and underinvest in development, and so we could learn something useful from Roshaneh. The toolkit to fight terrorism includes not only missiles but also microfinance and economic opportunity.
The antonym of “militant” is often “job.”

By NICHOLAS D. KRISTOF (NYT), November 13, 2010