WEBVTT - Widespread Poverty is Solvable 0:00:15.076 --> 0:00:21.556 Pushkin. I am Mayve Higgins, and this is solvable interviews 0:00:21.596 --> 0:00:24.916 with the world's most innovative thinkers working to solve the 0:00:24.956 --> 0:00:30.396 world's biggest problems. My solvable is putting the beneficiary as 0:00:30.436 --> 0:00:33.716 the focus of the aid and philanthropic sector and not 0:00:33.836 --> 0:00:37.276 the donor. We're letting the beneficiary choose where they want 0:00:37.276 --> 0:00:39.676 to spend the capital and taking that decision out of 0:00:39.676 --> 0:00:42.916 our own hands. That's Michael Faye, the co founder and 0:00:43.076 --> 0:00:48.116 president of Give Directly. Now imagine this. You're watching TV, 0:00:48.356 --> 0:00:52.076 or you're on your phone and you see some terrible disaster, 0:00:52.436 --> 0:00:55.436 or you read a story about extreme poverty in a 0:00:55.516 --> 0:00:59.196 country far from yours. If you want to help, and 0:00:59.396 --> 0:01:02.196 if you're moved to do something, the action you take 0:01:02.276 --> 0:01:06.636 will most likely be to send money. There are NGOs 0:01:06.676 --> 0:01:10.556 and aid organizations all over the world. Perhaps you'll find 0:01:10.636 --> 0:01:14.156 one working in that country or specializing in the type 0:01:14.156 --> 0:01:17.036 of aid you'd think is needed there, and you send 0:01:17.076 --> 0:01:20.236 them a donation. Then you feel a little bit better. 0:01:20.876 --> 0:01:24.476 But it's important to check, isn't it How effective is 0:01:24.476 --> 0:01:27.876 that aid system? Is it measured? Is it working for 0:01:27.956 --> 0:01:31.116 the people that it's supposed to be helping? And how 0:01:31.156 --> 0:01:33.916 can you even check that in the first place. Today, 0:01:34.156 --> 0:01:36.876 governments and donors are trying to find out how their 0:01:36.916 --> 0:01:41.436 money can make the biggest difference, and increasingly they're turning 0:01:41.476 --> 0:01:45.596 to a promising new tool, cash transfers, in other words, 0:01:45.956 --> 0:01:49.476 giving people cold hard cat. I guess it's not that 0:01:49.636 --> 0:01:53.076 new anymore because since the year two thousand, a growing 0:01:53.156 --> 0:01:57.996 number of developing countries have introduced these cash transfers instead 0:01:57.996 --> 0:02:01.156 of giving aid in the form of goods or services, 0:02:01.156 --> 0:02:05.716 and more recently, donors and development banks have begun championing 0:02:05.756 --> 0:02:09.636 these programs. Cash transfer programs have spread from a few 0:02:09.716 --> 0:02:13.396 middle income countries to basically all regions of the world. 0:02:13.956 --> 0:02:17.236 So you can understand why a growing number of voices 0:02:17.516 --> 0:02:20.956 are calling for an end to paying the middleman in 0:02:20.996 --> 0:02:24.396 the shape of aid organizations, and those voices are asking 0:02:24.876 --> 0:02:29.316 why not just give directly to the people who need it. Well, 0:02:29.356 --> 0:02:34.116 our guest, Michael Faye, founded his organization Give Directly to 0:02:34.196 --> 0:02:39.276 do just that. His organization are currently testing a universal 0:02:39.436 --> 0:02:43.596 basic income in order to try and permanently end extreme 0:02:43.676 --> 0:02:47.716 poverty for thousands of people and Kenya by guaranteeing those 0:02:47.756 --> 0:02:52.196 people an income high enough to meet their basic needs. Now, 0:02:52.236 --> 0:02:54.876 if that works. They're planning to do the same in 0:02:54.996 --> 0:02:59.196 other regions. We'll see the initiative launched in November twenty 0:02:59.436 --> 0:03:02.276 seventeen and it's going along now. It's set to run 0:03:02.356 --> 0:03:05.236 for twelve years. Let's hear all about it now in 0:03:05.236 --> 0:03:10.476 this conversation with Jacob Weisberg. So, Michael's the nature of 0:03:10.476 --> 0:03:15.716 this problem is the problem? Extreme poverty? Is at all poverty? 0:03:16.556 --> 0:03:18.796 What should we be thinking about trying to solve here? 0:03:19.996 --> 0:03:22.276 I think there are all sorts of these problems. There's 0:03:22.316 --> 0:03:24.516 extreme poverty. There are people that are poor because they 0:03:24.516 --> 0:03:29.076 were born in extremely poor location. There are people Interack 0:03:29.196 --> 0:03:32.596 that are suffering post genocide and trying to rebuild lives. 0:03:32.956 --> 0:03:35.476 And then I was recently in Uganda in a refugee 0:03:35.476 --> 0:03:38.116 camp where people have been for thirty years and don't 0:03:38.156 --> 0:03:40.996 have the capital to really build and move on in 0:03:41.036 --> 0:03:44.836 their lives. And why is this the problem you're focusing on. 0:03:44.876 --> 0:03:47.556 I know your background is economics. How do you find 0:03:47.596 --> 0:03:51.956 yourself running an international aid organization. We slowly tripped into it. 0:03:51.996 --> 0:03:54.996 So I did my PhD in development and at that 0:03:55.036 --> 0:03:57.556 time we were studying what worked and didn't work in 0:03:57.636 --> 0:04:01.196 poverty alleviation, and the reality was that before the early 0:04:01.236 --> 0:04:04.116 two thousands, this isn't something we spent much time on. 0:04:04.596 --> 0:04:07.396 If you are a pharmaceutical company, you might test your drug, 0:04:07.876 --> 0:04:11.116 but if you're a GEO or an aid organization, you 0:04:11.116 --> 0:04:15.436 weren't necessarily testing whether what you did was effective. What 0:04:15.436 --> 0:04:17.036 we learned in that period is that a lot of 0:04:17.036 --> 0:04:19.196 what we were doing was not as effective as we 0:04:19.196 --> 0:04:21.996 had hoped, and this simple idea of just giving people 0:04:22.076 --> 0:04:25.556 cash actually worked pretty well. Where does that idea come from? 0:04:25.596 --> 0:04:28.476 I mean, the idea that you replace something complicated with 0:04:28.516 --> 0:04:31.876 something simple. When it comes to internationally, it's the simplest idea, 0:04:31.876 --> 0:04:33.676 and we should take no credit for it. I think 0:04:33.676 --> 0:04:35.196 it's been an idea that's been out there for a 0:04:35.276 --> 0:04:39.236 very long time, but it's unsettling. We think people will 0:04:39.276 --> 0:04:42.396 waste the money, we think they'll stop working, and that's 0:04:42.396 --> 0:04:44.396 just not what the evidence tells us. So there was 0:04:44.436 --> 0:04:47.516 a moral judgment at the heart of the old aid 0:04:47.596 --> 0:04:51.036 system that you have to give people. You have to 0:04:51.036 --> 0:04:53.876 give money to deserving people, or you have to give 0:04:53.916 --> 0:04:57.796 them specific kinds of help, food, clothing that won't be 0:04:57.836 --> 0:05:02.556 wasted or lead to moral squal or whatever it is. 0:05:02.956 --> 0:05:04.516 I think that's right, and I think there's a certain 0:05:04.556 --> 0:05:07.476 implicit paternalism and a lot of what we were doing 0:05:07.756 --> 0:05:10.196 we thought, oh, we'll give this person the goat, we said, 0:05:10.236 --> 0:05:12.116 goat is great for their life, or we'll give them 0:05:12.116 --> 0:05:16.756 this specific nutrition intervention. And as you reflect upon that, 0:05:17.156 --> 0:05:19.596 I think it's important to ask why why do we 0:05:19.636 --> 0:05:22.116 think this person is going to waste money? I certainly 0:05:22.156 --> 0:05:25.076 don't want to receive my salary in bags of rice 0:05:25.196 --> 0:05:27.716 or corn. I'd like salary in dollars, so I get 0:05:27.716 --> 0:05:30.316 to choose. But why do we treat other people differently? 0:05:30.756 --> 0:05:35.956 So is your premise that giving cash instead is more 0:05:37.036 --> 0:05:40.436 just and fair, or that it's more effective or both. 0:05:41.196 --> 0:05:43.676 I think it's a bit of all. I think we 0:05:43.716 --> 0:05:46.636 should measure the impact of cash and compare it to 0:05:46.716 --> 0:05:51.876 other things. Us the aid sector philanthropists should have to 0:05:51.916 --> 0:05:54.956 make the argument to a recipient that we're doing more 0:05:55.036 --> 0:05:58.596 good with the money than they could themselves. And I 0:05:58.636 --> 0:06:00.996 think that's the minimum bar we should meet, and we 0:06:01.076 --> 0:06:03.836 often talk about that being the index fund or the 0:06:03.876 --> 0:06:07.116 benchmark for other interventions. But I also think there's an 0:06:07.116 --> 0:06:11.796 element about dignity choice. And when you talk to the recipients, 0:06:11.796 --> 0:06:13.916 they'll tell you that. They'll say this is not a 0:06:13.996 --> 0:06:16.596 large village. There's actually one village in Library with only 0:06:16.636 --> 0:06:20.596 seven people. But we all have different needs. I may 0:06:20.636 --> 0:06:23.116 need to send my child to secondary school and pay 0:06:23.156 --> 0:06:25.756 school fees. Someone else may want to feed their newborn, 0:06:25.956 --> 0:06:27.836 and somebody else may want to buy a motorbike to 0:06:27.876 --> 0:06:31.836 start a business. It's impossible to know that from here. 0:06:32.436 --> 0:06:34.076 But the people who do know their needs are the 0:06:34.076 --> 0:06:38.276 people themselves now, being a group of academic economists who 0:06:38.356 --> 0:06:41.636 started this organization, I think you did something unusual as 0:06:41.676 --> 0:06:44.836 you set it up as a kind of study. Yeah, 0:06:44.836 --> 0:06:47.756 so we started with an evaluation, so before we got going, 0:06:48.236 --> 0:06:50.796 we knew that there are other cash evaluations that cash 0:06:50.836 --> 0:06:54.116 transfers were an effective means of helping people, but we 0:06:54.156 --> 0:06:56.716 wanted to make sure that we give directly we're also 0:06:56.796 --> 0:07:00.156 as effective. So we did that before even launching publicly. 0:07:00.676 --> 0:07:03.116 And what have you learned from the studies you've done? 0:07:03.156 --> 0:07:04.956 I guess I mean talk a little bit about that. 0:07:04.996 --> 0:07:08.236 I know you started first in Kenya and have expanded 0:07:08.236 --> 0:07:11.396 in East Africa now elsewhere. But what are the oldest 0:07:11.436 --> 0:07:14.516 experiments in cash transfers now? Tell you Yeah, and we're 0:07:14.516 --> 0:07:17.076 not even the oldest. Before us, there are cash programs 0:07:17.076 --> 0:07:20.396 in Brazil, Mexico, many places. So let's start with what 0:07:20.436 --> 0:07:23.516 it's not and what everybody's worried about. People do not 0:07:23.676 --> 0:07:26.556 spend it on alcohol and drugs, and they do not 0:07:27.156 --> 0:07:30.756 stop working. And I think that's been shown across contexts. 0:07:30.956 --> 0:07:33.036 What people do do is they spend the money well, 0:07:33.596 --> 0:07:36.676 and how they spend it is really context specific. So 0:07:36.756 --> 0:07:41.356 you'll see projects that gave money to grandparents in South 0:07:41.396 --> 0:07:44.076 Africa and that seems to have gone largely towards nutrition. 0:07:44.556 --> 0:07:48.396 You'll see other programs where business income increased. You'll see 0:07:48.436 --> 0:07:52.396 programs that during the cash transfer program itself you actually 0:07:52.476 --> 0:07:56.436 saw a fall in HIV and STD prevalence. The range 0:07:56.516 --> 0:07:59.556 is wide, but that's sort of the point of cash 0:07:59.756 --> 0:08:02.556 is that people have different needs and we should expect 0:08:02.636 --> 0:08:05.596 the outcomes to be based on the specific needs. Now, 0:08:05.596 --> 0:08:07.796 that's the idea of cash transfers, which is that if 0:08:07.836 --> 0:08:10.476 you want to aid, you should give money and not 0:08:10.756 --> 0:08:12.956 bags of rice or a goad. And then there's the 0:08:13.036 --> 0:08:16.956 idea of universal basic income, which is the version of 0:08:16.956 --> 0:08:19.156 that that people are talking about in the developed world 0:08:19.196 --> 0:08:23.436 as well. But your large scale experiments in Africa are 0:08:23.476 --> 0:08:27.476 with UBI universal basic income, right, yeah. So universal basic 0:08:27.516 --> 0:08:29.396 income has come to me in a lot of things 0:08:29.876 --> 0:08:32.756 in the media, and in my view, it's something very specific. 0:08:33.036 --> 0:08:35.276 So it's universal. So you don't go and try to 0:08:35.276 --> 0:08:37.516 find the poorest person in the village. You give it 0:08:37.556 --> 0:08:40.116 to everybody. Everybody in the village, everybody in the village. 0:08:40.116 --> 0:08:42.316 It could be everybody in the country, depending on how 0:08:42.356 --> 0:08:45.076 broad your scope. It's basic so it's not a large 0:08:45.076 --> 0:08:47.556 amount of money. It's a small enough amount of money 0:08:47.556 --> 0:08:49.716 that you can get by. So in the case of Kenya, 0:08:49.716 --> 0:08:52.316 we're giving seventy five cents a day, which is the 0:08:52.316 --> 0:08:55.196 food poverty line, and then it's an income, so it's 0:08:55.236 --> 0:08:57.076 over a long period of time. This isn't a one 0:08:57.076 --> 0:09:01.636 time transfer or not. We're actually doing the first long 0:09:01.756 --> 0:09:06.156 term universal basic income that's ever been done anywhere. That's 0:09:06.156 --> 0:09:08.396 in Kenya, and people will be getting money for twelve years. 0:09:08.916 --> 0:09:13.196 Tell me what's happened in one of these Kenyon villages 0:09:13.356 --> 0:09:17.676 where you're conducting this experiment with universal basic income, I mean, 0:09:17.796 --> 0:09:20.196 how things change? What is it like? Yeah, so I 0:09:20.196 --> 0:09:22.156 can give you the anecdotes, I can't give you the 0:09:22.156 --> 0:09:25.276 evidence quite yet. We're doing the evaluation and that hasn't 0:09:25.276 --> 0:09:29.076 come out yet, but adotally it's incredibly interesting. So I 0:09:29.116 --> 0:09:32.156 think you see many of the kind of standard spending decisions, 0:09:32.196 --> 0:09:35.196 whether it's on school fees or food or a pair 0:09:35.236 --> 0:09:37.556 of houses that you might see elsewhere. But I think 0:09:37.596 --> 0:09:40.716 there's a social element of the universality that makes it 0:09:40.756 --> 0:09:43.276 a bit different than some of the other programs. And 0:09:43.316 --> 0:09:46.636 I think a recent recipients said it best when he said, look, 0:09:46.676 --> 0:09:51.276 before Universal Basic Income, there was rich and poor in 0:09:51.356 --> 0:09:55.676 the village. Now we're all Universal Basic Income recipients. We 0:09:55.716 --> 0:09:58.436 can talk about the twenty two dollars a month that 0:09:58.476 --> 0:10:01.356 we're receiving as a community, and we can have that 0:10:01.436 --> 0:10:04.316 conversation openly in a way that we wouldn't talk about 0:10:04.316 --> 0:10:07.596 our investments or funding otherwise. The second thing you see 0:10:07.636 --> 0:10:09.636 is you actually see a pooling of resource. Is because 0:10:09.636 --> 0:10:12.436 of this, you see groups of ten people that will 0:10:12.476 --> 0:10:14.996 actually start lending to each other. So each month, one 0:10:15.036 --> 0:10:17.356 person out of that group will take all the money 0:10:17.356 --> 0:10:19.276 so that they can make an investment, and the next 0:10:19.316 --> 0:10:22.596 month you'll see someone else. And then you see other 0:10:22.676 --> 0:10:25.396 pro social behaviors. So I was in the house of 0:10:25.436 --> 0:10:27.836 a village elder and she said, you know what's really 0:10:27.876 --> 0:10:31.236 amazing one of my jobs is to break up marital disputes, 0:10:31.956 --> 0:10:35.156 and I usually have two to three marital disputes a 0:10:35.196 --> 0:10:38.276 month that I need to intervene. I haven't had one 0:10:38.676 --> 0:10:41.716 in four and a half months. And you give to 0:10:42.036 --> 0:10:46.956 every adult in the village, So in a family, husband wife, 0:10:47.476 --> 0:10:49.996 not the children obviously that they get a larger grant 0:10:49.996 --> 0:10:52.476 depending on how many children they have. No so the 0:10:52.556 --> 0:10:55.356 children will get if they're eighteen and above. So once 0:10:55.396 --> 0:10:57.756 they're a team, they'll start receiving basic income as well. 0:10:58.156 --> 0:11:00.316 But it's at the individual level. And as you say, 0:11:00.356 --> 0:11:02.636 the results aren't in and I know you have kind 0:11:02.636 --> 0:11:06.356 of control villages where you're not doing this, But what 0:11:06.396 --> 0:11:09.796 do you hope to see from this experiment? What do 0:11:09.796 --> 0:11:13.156 you hope it will show. The beauty of cash is 0:11:13.196 --> 0:11:16.036 that where agnostic, which is I don't have a preference 0:11:16.396 --> 0:11:19.476 for what a recipient spends money on. And that's different 0:11:19.716 --> 0:11:22.356 than a lot of how we've historically thought about aid 0:11:22.476 --> 0:11:26.236 and structured the sector. So some organizations might have a 0:11:26.276 --> 0:11:31.156 mandate for shelter for food security for children, in which 0:11:31.196 --> 0:11:34.316 case the organization would hope that they'd see a food 0:11:34.316 --> 0:11:38.716 security outcome or an education outcome. I don't have specific hopes. 0:11:39.516 --> 0:11:42.316 I hope this improves people's lives and that you don't 0:11:42.356 --> 0:11:44.156 see any of the things that you might worry about. 0:11:44.756 --> 0:11:47.836 But given just the kind of magnitude of evidence on 0:11:47.916 --> 0:11:51.076 cash at this point, I'm not particularly concerned about that. 0:11:51.836 --> 0:11:54.556 But if you're giving someone a thousand dollars a year, 0:11:54.636 --> 0:11:56.596 or you'd like to see that they are in some 0:11:56.636 --> 0:11:59.476 sense a thousand dollars a year better off, well they 0:11:59.476 --> 0:12:02.276 should be at least a thousand dollars better off, and 0:12:02.316 --> 0:12:03.956 that's sort of it. They will be at least a 0:12:03.996 --> 0:12:07.076 thousand dollars better off. Maybe they invest it in a 0:12:07.156 --> 0:12:10.236 motorbike and they start working, so that compounds over time. 0:12:10.916 --> 0:12:14.436 And one element of cash that people often forget is 0:12:14.476 --> 0:12:17.596 that cash is very pro market. So if I get 0:12:17.636 --> 0:12:20.516 a thousand dollars, I need to spend that thousand dollars. 0:12:20.996 --> 0:12:23.596 So if I spend it on improving my home, I 0:12:23.716 --> 0:12:25.756 might actually be paying someone in the next village to 0:12:25.796 --> 0:12:28.636 do that, and that person may spend the money. And 0:12:28.676 --> 0:12:32.076 there is a paper that is forthcoming that suggests that 0:12:32.116 --> 0:12:35.636 there's a strong positive impact on even those that haven't 0:12:35.636 --> 0:12:38.156 received the cash. It sounds obvious. It's the point that 0:12:38.316 --> 0:12:40.596 you give a thousand dollars and someone gets a thousand 0:12:40.596 --> 0:12:43.996 dollars of benefit. But the benchmark isn't that. The benchmark 0:12:44.116 --> 0:12:47.236 is a thousand dollars spent on aid in the conventional 0:12:47.276 --> 0:12:51.076 aid world doesn't necessarily produce anything like a thousand dollars 0:12:51.116 --> 0:12:53.356 in benefit. In fact, a lot of it is lost 0:12:53.476 --> 0:12:56.876 in the friction and transaction costs of delivering it. It's 0:12:56.876 --> 0:12:59.516 exactly right. It's back to basics. Even that basic question 0:12:59.556 --> 0:13:03.116 of if you start with a thousand dollars on another program, 0:13:03.436 --> 0:13:05.716 how much value winds up in the hands of recipient 0:13:06.356 --> 0:13:08.316 is a question that we really just don't know the 0:13:08.356 --> 0:13:12.036 answer to as a sector. And the other aspect of this, 0:13:12.276 --> 0:13:14.516 I always think of this story. There's a program that 0:13:14.596 --> 0:13:18.036 gave coupons to buy goats, and this was in Pakistan, 0:13:18.436 --> 0:13:20.756 and you take your coupon to the business owner and 0:13:20.836 --> 0:13:22.916 you'd give him the coupon and he'd give you a goat. 0:13:23.596 --> 0:13:25.916 And they sent monitors to evaluate the program, and the 0:13:25.956 --> 0:13:29.676 monitors sitting outside and every person comes coupon goat, coupon goat, 0:13:29.676 --> 0:13:32.556 and it looks great. At some point he says, Tom, 0:13:32.716 --> 0:13:35.436 you know, all the goats just look so so similar 0:13:35.996 --> 0:13:39.516 in this market, and walk around the back and realize 0:13:39.516 --> 0:13:41.996 that after people would get their goat, they just sell 0:13:42.036 --> 0:13:44.516 it back to the shopkeeper. There is one goat in 0:13:44.556 --> 0:13:47.196 the village. And what you forget is that when you 0:13:47.236 --> 0:13:50.436 give people things that they don't want or don't need, 0:13:51.076 --> 0:13:53.276 they can just sell them to buy what they do 0:13:53.356 --> 0:13:55.916 want and do need. And now we spend all this 0:13:56.036 --> 0:13:59.756 time designing the sophisticated program to get people goats. Everyone 0:13:59.796 --> 0:14:02.916 loves a goat, and everyone's just sold their goat for cash. 0:14:03.196 --> 0:14:05.436 How does it actually work in these villages? Is someone 0:14:05.556 --> 0:14:08.316 handing out piles of cash every month? No, they're doing 0:14:08.356 --> 0:14:12.436 this on their phones mostly, so it surprisingly complicated. The operations. 0:14:12.436 --> 0:14:15.476 It seems simple, but there's a lot of work. So 0:14:15.516 --> 0:14:18.596 we have to go find the people that we want 0:14:18.596 --> 0:14:21.756 to target, look for the extreme poor, validate that they 0:14:21.796 --> 0:14:23.956 are who they say they are, and that we're not 0:14:24.036 --> 0:14:27.036 having people try to game the system. People squatting in houses, 0:14:27.316 --> 0:14:29.396 people cheating, we do all sorts of things. We actually 0:14:29.436 --> 0:14:32.556 pay people to try to cheat our own system. To 0:14:32.716 --> 0:14:35.676 understand how robust it is, you have a view of 0:14:35.716 --> 0:14:38.276 white hat hackers, it's exactly what we have. Yeah, wow, 0:14:38.556 --> 0:14:40.516 And that's a bit of putting the recipient at the center. 0:14:40.516 --> 0:14:43.276 It's how prone to fraud is your system. We also 0:14:43.356 --> 0:14:47.156 do customer satisfaction surveys where you treat it with respect, 0:14:47.676 --> 0:14:50.636 and then we pay people and incentivize them based on it, 0:14:50.756 --> 0:14:53.236 because we want to be treating the recipient as the 0:14:53.316 --> 0:14:56.356 customer and not the donor, even though the donor is paying. 0:14:56.596 --> 0:14:58.916 But how does the Kenyon villager actually get her money? 0:14:58.956 --> 0:15:01.196 Does it show up on her soul phone? Does she 0:15:01.276 --> 0:15:03.476 have them all get a text that says you've received 0:15:03.476 --> 0:15:06.956 a thousand shillings from give directly. They then can take 0:15:06.996 --> 0:15:10.116 that to a local shopkeeper or whomever and exchange that 0:15:10.196 --> 0:15:13.516 for physical cash and then spend the physical cash. So 0:15:13.556 --> 0:15:15.676 this is digital end to end. We can sit here 0:15:15.676 --> 0:15:19.676 in this room and send digital money to someone's phone 0:15:19.796 --> 0:15:23.076 in a Kenyan refugee settlement. I mean they're engaging in 0:15:23.116 --> 0:15:26.436 some cases and transactions that people in the developed world 0:15:26.476 --> 0:15:29.916 don't have access to. Right Is this because they had 0:15:29.956 --> 0:15:33.156 Venmo Before we had Venmo, Well, skip some of the 0:15:33.196 --> 0:15:37.036 technology we had and went straight to what were wells. Yeah, 0:15:37.316 --> 0:15:39.876 which is there was no banking. There was no financial 0:15:39.876 --> 0:15:43.196 inclusion or digital finance for a large swath of the 0:15:43.236 --> 0:15:47.676 world's population, and now everybody has an ATM and bank 0:15:47.956 --> 0:15:51.756 in their pocket, and that's completely changed what's feasible. So 0:15:51.796 --> 0:15:53.716 if you go back when we started this a decade 0:15:53.796 --> 0:15:56.756 or so ago, you had the evidence that this thing 0:15:56.796 --> 0:15:59.956 we thought was really silly worked and you had the 0:15:59.996 --> 0:16:02.996 technology to actually make it feasible. But it wasn't that simple. 0:16:03.076 --> 0:16:04.676 I am and I know you had to set up 0:16:04.796 --> 0:16:10.356 essentially a separate company to help facilitate these transfers across 0:16:10.436 --> 0:16:14.236 international borders. Right. Yeah, the opportunity of mobile payments is there, 0:16:15.316 --> 0:16:18.396 as is always the case, the execution and operations is 0:16:18.436 --> 0:16:20.956 more challenging than you would like. So we wound up 0:16:20.956 --> 0:16:25.156 setting up Segovia, which is an enterprise payments company that 0:16:25.196 --> 0:16:28.316 was actually recently acquired by Crown Agents Bank. Now cash 0:16:28.396 --> 0:16:32.836 is a bit of a buzzword now in the development world. 0:16:32.996 --> 0:16:37.876 I think institutions and organizations that haven't traditionally been involved 0:16:37.916 --> 0:16:40.716 in cash transfers are now talking about them. Is what 0:16:40.756 --> 0:16:42.476 they want to be doing or part of what they 0:16:42.516 --> 0:16:45.236 want to be doing. What's really happening there? Is it 0:16:45.356 --> 0:16:49.356 your idea catching on or are you antagonistic to a 0:16:49.396 --> 0:16:52.556 lot of the existing aid at infrastructure. We should take 0:16:52.596 --> 0:16:54.796 no credit for the idea. The idea of giving people 0:16:54.916 --> 0:16:58.076 money goes back millennia. So there's been a real shift, 0:16:58.596 --> 0:17:01.596 certainly in the rhetoric and the commitments people are making. 0:17:02.116 --> 0:17:05.036 I think it is going to be hard to move 0:17:05.076 --> 0:17:09.836 this sector. In many ways. Cash fits everywhere. Cash impacts 0:17:09.876 --> 0:17:14.196 all of the objectives people have, nutrition, education, and so on, 0:17:14.276 --> 0:17:16.516 but it also fits nowhere. It may not be the 0:17:16.596 --> 0:17:20.796 single best intervention for a single outcome, and that's something 0:17:21.276 --> 0:17:23.796 that we're going to have to wrestle as a sector. 0:17:24.596 --> 0:17:26.836 The way I think of it is there is a 0:17:26.916 --> 0:17:30.236 lot of capital going to aid one hundred and fifty 0:17:30.236 --> 0:17:35.516 billion dollars of development assistance now. Historically almost all of 0:17:35.556 --> 0:17:39.116 that has been decided by the donor what we spend 0:17:39.156 --> 0:17:41.756 that money on. Now, you may not think one hundred 0:17:41.756 --> 0:17:45.516 percent of it should shift to recipient choice, but I 0:17:45.556 --> 0:17:47.596 think all of us would agree that it should be 0:17:47.596 --> 0:17:50.596 more than zero percent. They should get to vote and 0:17:50.756 --> 0:17:55.916 choose over some fraction of that capital spend. But it 0:17:55.956 --> 0:18:00.796 points to, among other things, a much smaller development infrastructure. 0:18:00.836 --> 0:18:03.836 There are fewer people I imagine, working for gift directly 0:18:04.316 --> 0:18:07.716 than some of the more traditional organizations we're talking about 0:18:07.756 --> 0:18:11.236 that have large numbers of people on the ground involved 0:18:11.276 --> 0:18:15.276 in the delivery of physical aid. Yeah, that may be true. 0:18:15.636 --> 0:18:18.916 Give directly. We have two hundred and fifty or so employees, 0:18:18.916 --> 0:18:22.196 so it's not a small number of employees, and it 0:18:22.276 --> 0:18:25.916 certainly still takes work. But yeah, you'd be spending less 0:18:25.916 --> 0:18:29.516 time making the decisions. I recently heard a story from 0:18:29.516 --> 0:18:32.676 an AID worker that was a recent cash convert, and 0:18:32.676 --> 0:18:34.956 I said, well, what did it. Well, you know, we 0:18:34.956 --> 0:18:38.796 were just spending months and months internally debating what brand 0:18:38.836 --> 0:18:42.556 of food we should be buying for this settlement. We 0:18:42.596 --> 0:18:45.996 don't need to spend months debating. We can give the 0:18:46.076 --> 0:18:48.996 money and let the household decide what brand of food, 0:18:49.036 --> 0:18:51.316 or maybe they don't even want food. Michael, I wanted 0:18:51.316 --> 0:18:54.596 to ask you about disaster relief. I think there were calls, 0:18:54.716 --> 0:18:58.236 especially after the hurricane and flooding in Houston, for some 0:18:58.356 --> 0:19:02.476 kind of direct cash type model to get help to 0:19:03.476 --> 0:19:06.836 victims of the storm faster, and I know you're trying 0:19:06.876 --> 0:19:09.636 to set something like that up. Yeah, we should give 0:19:09.796 --> 0:19:12.316 Felix credit. Felix Salmon wrote an op ed saying we 0:19:12.316 --> 0:19:14.996 need give directly in Houston, and then Felix Salmon, the 0:19:15.636 --> 0:19:18.116 journalist journalists now at Axios, and then we set up 0:19:18.156 --> 0:19:22.196 and did cash transfers in Houston. I think disasters spend 0:19:22.316 --> 0:19:25.436 is off in some of the least efficient spend in 0:19:25.476 --> 0:19:28.156 the sector that you see. I was in Houston and 0:19:28.236 --> 0:19:32.036 you saw piles of used clothes, piles of water bottles, 0:19:32.076 --> 0:19:35.196 a food truck serving rice and beans. Now that sounds 0:19:35.236 --> 0:19:38.596 great until you realize that the tap is working and 0:19:38.596 --> 0:19:42.516 people can get water from their faucet, that the Walmart 0:19:42.556 --> 0:19:46.316 and other restaurants are open down the street, and that 0:19:46.436 --> 0:19:49.436 what people need is different. Some people need to repair 0:19:49.476 --> 0:19:51.316 their car because it was flooded and they can't get 0:19:51.356 --> 0:19:54.516 to work. Some people need to rebuild their house. So 0:19:54.556 --> 0:19:56.596 we did cash transfers in Houston. What we're going to 0:19:56.636 --> 0:20:00.756 do next and just announced the partnership with Google is 0:20:00.756 --> 0:20:04.556 actually something called prepositioning. It's when we raise the money 0:20:04.596 --> 0:20:08.396 on already in advance of the disaster, and that'll allow 0:20:08.476 --> 0:20:10.876 us to be on the around immediately following the disaster. 0:20:11.116 --> 0:20:13.716 And how will that work? I mean if Houston happened, 0:20:13.716 --> 0:20:16.276 and now, how would you determine who gets aid and 0:20:16.356 --> 0:20:18.716 how would you be delivering it? Yeah, So it's a 0:20:18.716 --> 0:20:22.996 combination of damage from the storm and poverty levels, so 0:20:23.036 --> 0:20:26.716 you want to find high damage obviously and those most 0:20:26.756 --> 0:20:30.156 in need. The way we've delivered it in the US 0:20:30.396 --> 0:20:33.676 was through debit cards, so we didn't use mobile money 0:20:33.716 --> 0:20:36.636 in the US, and going forward will likely use something 0:20:36.676 --> 0:20:40.076 called hyperwallet, which is just a very flexible card product. 0:20:40.676 --> 0:20:43.276 So people get essentially a gift card that they can 0:20:43.436 --> 0:20:46.276 use to anywhere. Feel what's getting the roof fixed or 0:20:46.476 --> 0:20:49.676 whatever whatever. They It's essentially cash, but it's stored on 0:20:49.676 --> 0:20:52.676 a card. But how do you determine who gets how much? 0:20:52.796 --> 0:20:55.196 Is it a function of how much you have divided 0:20:55.276 --> 0:20:59.636 by how many qualified victims or recipients. So I think 0:20:59.636 --> 0:21:02.196 it's one of the hardest questions, how much versus how 0:21:02.196 --> 0:21:05.396 many people. I think historically the sector has always opted 0:21:05.396 --> 0:21:07.916 for a high number of people, and I think we've 0:21:07.956 --> 0:21:10.476 likely gone too far where we want the headline we've 0:21:10.516 --> 0:21:13.076 served a million people. Well, if we've given a million 0:21:13.076 --> 0:21:15.956 people a dollar, we probably haven't done much good. So 0:21:15.996 --> 0:21:18.916 we try to be thoughtful. We try to price how 0:21:18.996 --> 0:21:21.756 much we give to what the investments are that people 0:21:21.796 --> 0:21:24.036 need to make. So what would a car repair look like? 0:21:24.356 --> 0:21:26.276 What would it look like to pay rent for a year. 0:21:26.636 --> 0:21:30.076 Those sorts of things. People react emotionally, which is on 0:21:30.116 --> 0:21:34.436 the one hand, wonderful and understandable, but can produce very 0:21:34.876 --> 0:21:39.276 irrational results. I think people came forward and gave over 0:21:39.356 --> 0:21:43.476 a billion dollars to restore Notre Dame after the fire, 0:21:43.796 --> 0:21:46.516 and probably none of that money is needed because the 0:21:46.516 --> 0:21:49.756 French government would ultimately pay for it. But whether it's 0:21:49.796 --> 0:21:52.436 needed or not, it's probably more than it's needed, and 0:21:52.516 --> 0:21:55.556 certainly money that would be better spent elsewhere. Whether it's 0:21:55.596 --> 0:21:58.076 more or less, I don't know in the specific examples. 0:21:58.076 --> 0:22:00.876 I think the timing is what's really flawed, which is 0:22:00.916 --> 0:22:03.476