ADDS Reduction of Poverty Project

Research & Analysis by Briana Booker. April 2010.

ADDS Reduction of Poverty Project

Introduction

The Middle East is a region of much history and enlightenment. It is also a region of much turmoil and violence. The present controversy in the region revolves around whether modernism or fundamentalism will help uplift nation-states of the Middle East out of their continuous cycle of massive poverty.  Debates of whether political or cultural reform is needed to fight against poverty have been raised. Are both needed? A development organization of the name Djiboutian Agency of Development and Solidarity (ADDS) is aiming for solutions. It is using its Poverty Reduction Strategy of 2004 (Hipie).
Context 
ADDS aims to conquer poverty by constructing projects that work on building up reliable institutional infrastructures and utilities through sustainable development (SD). This NGO tries to generate stable income by providing micro credit. Micro credit is the process of lending small amounts of currency at a low interest to help entrepreneurs and individuals in need of quick funds. Micro credit helps developing economies slowly become strong economies
The mission of ADDS is to mobilize people and liberalize the markets and actions of citizens. ADDS believes by mobilizing, providing funding for business launching, and being supportive of individual actions, a better social and economic society will develop (World Bank).

History of the Project

 In fact, ADDS considers itself a public enterprise in administrative tasks. The sectors of the agency are focused on social, financial and political sovereignty. It sought this after its civil wars and migration of refugees to its homeland.

Conductors of the project

 The conductors of the projects are in three subgroups. The subgroups are participatory, partnership and proximity. The administrative tasks are supervised by the Secretary of State for Solidarity which works with the Prime Minister of Djibouti. The Prime minister enforces the national policies. This is very important because if something is designated as a law, it is more likely to be followed by the majority. This allows SD to have a greater chance to be a successful project. The most important chains of the agency are the Directorate General, the Financial and Administrative management, and the Micro finance branch. Below are the tasks conducted:                                                                                                               

The Directorate General

In this sector, the following tasks occur: 1.Policies are implemented. 2. Plans are framed and guided for operational and financial projects and programs.  3. Monitoring and regulations of all legal fixtures related to employees happens. The General must be reliable, timely, productive and accountable in all legal and financial matters. Also, it is the General’s responsibility to manage public relations and communications effectively (Djama).                                                                                                                                   

The Financial and Administrative Management                                                              

The job of the Financial and Administrative management is to make enough funds for the agency to conduct and implement projects. This task includes managing assets, annual budgeting, inventory, monitoring potential debts and regulating payments and cash flow. In addition an emphasis on hospitality management is enacted. Its overall aim is to advertise and develop the microfinance of the state. The Financial and Administrative does this through the Epargne and Credit (CPEC).  CPEC allows individual credits, sight savings and term saving to be available to public and private enterprises (Djama). 

The Micro Finance Branch

Development of Micro Finance is part of the National Solidarity Fund account, combined with micro-credit projects, uses $3 Million USD to advance community initiatives and productive ability to help with the fight against poverty. In addition, the Islamic Development bank helps (IMF Country).                         

Goals of the project

There are 3 main goals for the project. One goal is to improve the living conditions of the less advantaged, specifically women and children.  A second goal is to formulate sustainable employment and income for those whom are historically discriminated and have difficulty integrating into a working society. The third goal is to implement organizations of both private and public to work along with the agency, training and equipping them with skills and experience that will bring about improvement. The overall goal is to help progress society to one supportive of SD (World Bank).

How the Agency plans to execute these goals

  To fight poverty the agency takes on a strategy intervention tactic. The strategy takes five steps to minimizing poverty in Djibouti. One strategy is to designate an area to improve development. The second strategy is to empower those in that vicinity and make them motivated to participate. The third strategy, evaluate the potential of the project to succeed by reviewing the socio-cultural and political aspects of the region. The Fourth strategy, look at the problems of gender and environment, and use partnerships and funds to empower the society to advance the well being of the less advantage (World Bank).                                                                                                                                         


Areas for the intervention strategy
The agency focuses projects in the poor areas of Balbala (urban) and the capital Veterans (suburbs), which are important targets because they look at both interior and remote areas ( Djama).

Resources involved in the project
The resources used are valued and valid credit lines and cash flows. An example would be the creation of Credit Union savings institutions and CPEC. It is essential that these institutions are genuine micro finance facilities so that finance in the community will be viable and sustainable. This is important because the infrastructure branch of the mirco-finance sector can not conduct work, provide supplies or conduct research throughout Djibouti without a stable mirco-finance system.  Establishment of a concrete micro- finance system allows the agency to fulfill developmental goals in infrastructure because it helps build up private enterprise and household incomes (Steiner).                  

Many resources are focused upon the areas of service studies projects, control services, and service methods and coordination. The Service studies project revolves around revealing the pros and cons of initiating SD such as whether the cost of building a solar power plant to creating a more modern water sanitation plant. The Control Services branch tries to make sure contractors and business employees are being productive. The Service methods and coordination tracks progress.
 For the Djibouti Social Development Agency, it is most important to have stable partners in development projects. Main partners of the agency are the World Bank, Djibouti National Solidarity Fund, and UNICEF. These partnerships help stakeholders to be confident in where and how their funds are distributed in the projects and programs of the agency.                                                                                                             


Most funds go into information, education and communication. The agency mobilizes the community by hiring staff that provide basic education services, such as increased literacy and mathematical skills. Also, it promotes other civil society organizations and cooperates with them. Housing projects and electricity facilities are main objectives of the agency. In the rural areas the focus is more upon making the agriculture, livestock and fisheries more developed and effective in business. Allowing a solid foundation and detailed inventory is what matters most to the agency.

Present project: Individual Sanitation Strategic Plan (PSAI)
A present development project ran by the ADDS is the Individual Sanitation Strategic Plan (PSAI).  Presently, it is at the pilot stage of being enforced. It hopes to be formally known as the Strategic Plan Individual sewage. Its goal is to identify ways to improve sanitation so that the well being of the population is sustained. This project focuses on rural outskirts of Djibouti such as Oued Ambouli.                                             
It has potential to be very successful by the support of its institutes of team efforts with the World Bank and UNICEF. The cost of the project is estimated to be $462,000 USD. The funding is by a grant, which will help tremendously advance Djibouti because it is helping minimize the potential of high-debt. The project started in 2009 and the agency hopes to finish the project by 2011. The goal is to establish a fully operational personal sanitation throughout Djibouti. Also, a goal is to spread awareness to citizens to help them learn methods to improve sanitation in their personal homes and business facilities. The agency hopes by 2015 that 23,000 households will have proper sanitation. However, there are barriers holding Djibouti from its mission (Djama).

Unintended consequence

The past two decades Djibouti has been victim to regional wars, famine and controlling the inflow of displaced refugees. This is how finances and the social well being of the state failed.  Since 2004, the state has been struggling to reduce the high poverty levels in society.  The barrier to resolving this matter is that the state has very little room to exploit natural resources. The unintended consequences of the project have been heavy debt burden, civil war and large financial crises. Yet, The 2007 National Initiative for Social Development (INDS) is thinking the best way to end poverty is through democracy and modernization being created by Sustainable development (SD).

Suggestions and discussion

 I believe INDS has great potential based on the theories of SD support of privatization and less structural adjustment. INDS focus on sustainable ability can be very effective because it interconnects environmental, economic and social spheres that can be instruments to a modern and functional society. The benefits of maintaining SD in structuring is that it allows a range of interests and causes to be of importance to the success of the state. This allows people to fill more unified but still hold individualistic prosperity through privatization. If David Brundtland ‘s objectives to secure effective citizen participation in political and social systems, conserve profitable resources, harbor sustainable patterns of trade and finance, and, above all enforce a self-correcting, flexible administrative system.                                                                                                                        Djibouti is on the right track, enforcing these objectives to work in the ADDS’ PSAI and INDS plans. Allowing the society to be open to review and evolutionary policies are beneficial. This allows the ability for a full fledged democracy to become a reality. I think it’s a great idea to use sanitation and SD needs to bring forth democracy and stability because having a living document, followed in words and actions, is crucial to reducing poverty. It teaches participates to be flexible and adaptable in actions and policies.                                                                                                                   


Brundtland’s document Our Common Future explains how massive crises of states and regions are interlocking crises that arise from a common crisis whole. Poverty is a common crisis every society faces. Active participation by every sector of society appears to be a potentially powerful tool to fight the war on poverty. An active participatory society will liberalize the government and its citizens to the point modernization will be inevitable. Also, quality of life will improve because concerns have a better means to be addressed. The present improvements in Djibouti are evidence that the path of SD is effective (UN).                                                                                           


Djibouti desires to accomplish the Millennium Development Goals (MDGS) by 2015. Using privatization it can do this because it strays from the severe abuses and inefficiencies that are connected with public firms and civil servants, such as limited and bad quality services. Privatization promotes profitability, enhances market operations of the economy, and can benefit individual efficiency and life quality (Rapley).                      


MDGS goal for Djibouti is to strengthen competitiveness, human resources and government capacity. This is evident in its primary education access to its citizens.          

Since 2006, 66.5% of the population has the ability to obtain a foundational education and the gender gap disparity is virtually non-existent with its gender parity index 0.98. Knowledge is a crucial tool to empowering a state and its society.  However, economic growth is taking a slower route to development which is seen with the extreme poverty line under $1.8 USD and the relative poverty line under $3USD. I believe the economic growth has been slow because the currency has been at a fixed exchange since 1977. It takes 177.72 DF to make one USD (IMF country report).

The fixed rate promotes foreign direct investment to the state and stabilizes a currency over time but it can be a preventive towards the Djibouti government gaining any profitable cash flow from the international market.  If it can not make large profits through exports, it will remain an underdeveloped state. This is why structural adjustment (SAPS) should not be fully used because when conditionals are enforced in Africa it has not been beneficial. It often increases poverty, injustices, economic and political setbacks because trade liberalization makes the economy too competitive. The state can not keep up with a full global market; it’s not advanced in development (Rapley).

Djibouti can not sacrifice devaluing their currency, removing price controls or limiting restrictions. These are conditions expected of SAPS with a pre- set qualification criterion (IMF).                                                                                                                       


But the FDI seems promising expecting to reach up to 40% in investment interest by 2011. It hopes to make stronger goods transportation through the trade union of Common Market for Eastern and Southern Africa (COMESA). By strengthening its economic market region commerce, it can form a stable macroeconomic. This will allow private investment, commercial and financial growth. This is seen in a few success stories of economic growth in household incomes and expenditures, but not enough to pull Djibouti out of poverty (IMF country).

There is still hope for Djibouti to greatly reduce its poverty. It will be costly. Lives will be lost and crucial financial assets before true growth will be visible but common bench marks of voluntary initiatives and legal binding rules will help the state prevail (Steiner).  Djibouti has great potential to be a powerful state just on mere geographic benefit. A few supportive examples are as followed:  it is a gateway for trade in and out of Africa, has manageable sea routes and easily convertible currency. But the best asset the state has is its people. Focusing on women’s rights will advance home stability and community stability, especially in communities where women are the providers of a one parent household. When people are uplifted and promoted to do their best, justice and human rights will prevail in the society. When justice and human rights are of concern and practice, fewer in depth inequalities in society are expected (Steiner).

Conclusion

Djibouti has recently come out of a civil war. Unity and democracy is what it desires.  The Reduction of poverty project by Djibouti has ability to accomplish this goal through the path of sustainable development because it aims towards human rights improvements and not simply economics. Yes, unemployment, external debt and population growth are very high, but as a skilled and educated society evolves, these issues will dissipate. In time, Djibouti can become a powerful, modern and democratically stable society. It will take time, patience and consensus, not a neo-liberal economic elitist society. But it must stick to the principles of sustainable development to not fall back on growth (WHO). 

Work Cited

Djama Elabeh, Rue. Presentation of Djibouti. ADDS. ADDS, 2010. Web. 11 Apr. 2010. <http://www.adds-djibouti.com/>.

IMF. Factsheet -- IMF Conditionality.IMF -- International Monetary Fund Home Page. IMF, 09 Apr. 2010. Web. 11 Apr. 2010. <http://www.imf.org/external/np/exr/facts/conditio.htm>.

International Monetary Fund. Djibouti: Poverty Reduction Strategy Paper. IMF Country report. IMF,  July 2009.

Rapley, John. Understanding Development: Theory and Practice in the Third World. 3rd ed. Boulder, Colo: Lynne Rienner, 2007. Print.

Steiner, Henry J., Philip Alston, and Ryan Goodman. International Human Rights in Context: Law, Politics, Morals : Text and Materials. 3rd ed. Oxford [UK]: Oxford UP, 2008. Print.

United Nations. Our Common Future, Chapter 8: Industry: Producing More With Less - A/42/427 Annex, Chapter 8 - UN Documents: Gathering a Body of Global Agreements. A/RES/3/217 A - Universal Declaration of Human Rights - UN Documents Cooperation Circles. United Nations, 1986. Web. 11 Apr. 2010. <http://www.un-documents.net/ocf-08.htm#II>.

WHO.Welcome to MENGOs. World Health Organizations, Jan. 2010. Web. 11 Apr. 2010. <http://www.mengos.net/>.

Weber, Carolyn. "Regional Case Study: Middle East." Haberman International Policy Institute in Education - HIPIE. June 2010. Web. 11 Apr. 2010. <http://www.hipie.org/articles/52/1/Regional-Case-Study-Middle-East/Page1.html>.

World Bank. Projects - Djibouti : DJ-URBAN POVERTY REDUCTION PROJECT.The World Bank. World Bank, July 2009. Web. 11 Apr. 2010. <http://web.worldbank.org/external/projects/main?pagePK=64283627&piPK=73230&theSitePK=40941&menuPK=228424&Projectid=P088876>.