Technology vs. Aid – which one combats poverty more effectively?

Prof Iqbal Quadir, founder of the Legatum Center for Development and Entrepreneurship at the Massachusetts Institute of Technology (MIT) and of Bangladeshi mobile phone operator Grameenphone, claims that technology should play a central role in development. According to him, helping people to use technology can combat poverty more effectively than centralised aid programs.

He states that Western technologies can empower individuals whereas aid programs often don’t. Empowering people economically creates a system of checks and balances. People become more aware and at the same time governments become more sensitive to their people’s needs.

Prof Quadir launched Grameenphone in 1994 and already had 300,000 retail entrepreneurs on board after just a short period (all women). With the help of these 300,000, Grameenphone was able to give mobile access to an estimated 100 million people and has 35 million subscribers today.

Based on his experience, Prof Quadir believes that investment in communications can create a win-win situation as the usage of phones allows information to spread from one individual to another, even if the recipient of the information is located in another country. This allows farmers for to share knowledge about gluts or shortages with buyers in a way not possible before.

Another supporter of Prof Quadir’s view is Professor Leonard Waverman of London Business School who is one of the early analysts of the potential of mobile phones in Africa. He believes that “The impact that mobile phones have on the developing world is as revolutionary as roads, railways and ports, increasing social cohesion and releasing the entrepreneurial spirit that stimulates trade and creates jobs.”

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