The Poverty Industry: Does it Help or Hinder SDGs in Global Poverty Reduction?



“As usual, in every scheme that worsens the position of the poor, it is the poor who are invoked as beneficiaries.”  ~Vandana Shiva

An important event occurred in the Vancouver Downtown Eastside (DTES) in 2014.  This event highlighted all that can go wrong when government agencies offload responsibility for the poor to private enterprise. In a Globe and Mail article, the DTES was described as the “epicenter of the poverty industry.”[1]  It is a space marked by extreme poverty and homelessness.  More than a hundred social agencies can be found here – each one is dedicated to helping the poor.


DTES “Paint-In”. Source:

The Portland Hotel Society (PHS) is one of these organizations.  The PHS manages housing for the homeless.  Some of the programs PHS offers are very controversial – including vending machines which disperse cheap crack pipes and workshops for teaching alcoholics how to brew ‘safe’ beer.  PHS receives funding from the Federal government.   In 2014 Mark Townsend, the executive director of PHS, was audited.



Audits showed that Townsend and his wife used government funding for expenses which included trips to Paris and Vienna.  He and his family took trips to Disneyland, ate at expensive restaurants, and took a Danube cruise – all at the tax-payer’s expense. Although Townsend defended many of his expenses and admitted to making mistakes, his actions raise an important question:

“Do privatized, profit-driven corporations always act in the best interests of the poor they are funded to help?”  The answer is a resounding “No”!

There are so many examples today where the Poverty Industry has harmed the poor.  Last week, I discussed the example of New Orleans after Hurricane Katrina in 2005.  The government hired private industries to assist in recovery and rebuilding.  People who could afford supplies and services benefited, while residents of the lower Ninth Ward were marginalized and forgotten in the aftermath.  The poverty industry also harms the poor on a global scale.


In 1978, U.S. pig farmers became concerned by an outbreak of African swine flu in Haiti.  The U.S. gave $23 million to Haiti to exterminate and restock their pig population.  Haiti killed over 1.3 million pigs by 1984.  Once again, the U.S. stepped in to ‘help’, and replaced the previous population with Iowa-born pigs.  This plan demanded that new pigsties were built to U.S. standards.  Many poor farmers could not afford these standards.  Even worse, the Iowa pigs could not withstand the Haitian environment and either died or required expensive food.  In the end, thousands of Haitian farmers were left with no pigs – and Iowa hog farmers were better off for it…


“Pigs for Kids in Haiti”. Source:

In 1986, the International Monetary Fund (IMF) loaned $24.6 million to Haiti.[2]  The Haitian government had to agree to reduce trade tariffs on rice in order to get the loan.  U.S. rice farmers were allowed to export rice to Haiti. The livelihoods of local farmers were destroyed.  Haiti now imports most of its rice from the U.S.  Poor Haitians can no longer afford rice.  The U.S. provided food aid, but most of that money went to U.S. farmers and companies.  The poor became poorer. U.S. agribusiness became richer.

In 2010, Former President Bill Clinton made a public apology to Haitians for the role the U.S. had played in destroying the livelihoods of Haitian rice farmers.  Explaining that “we made a devil’s bargain”, Clinton stated,

“Since 1981, the United States has followed a policy, until the last year or so when we started rethinking it, that we rich countries that produce a lot of food should sell it to poor countries and relieve them of the burden of producing their own food, so, thank goodness, they can leap directly into the industrial era. It has not worked. It may have been good for some of my farmers in Arkansas, but it has not worked. It was a mistake.”[3]



Canadian industry is guilty of harm to the global poor as well.  In the 1970s, Canada began a $45 million wheat farming program in Tanzania. This program was designed to help poor farmers.  The result was anything but helpful!  First, over 60,000 acres of land was taken from the Barabaig people.  Members of this community were migratory cattle farmers who needed the land for grazing. Next, costly and mechanized farming methods were used.  These methods required purchasing expensive equipment from Canadian corporations.  Finally, these methods produced unimaginable soil erosion. Tropical downpours soon produced deep gullies in the landscape.  Even more money was spent trying to fill in these gullies.  In the end, Tanzanian farmers were producing less wheat than before.[4]  Once again – the poor became poorer… and Canadian agribusiness was lining its pockets.


Barabaig woman. Source:

Many other examples of the harm the poverty industry causes the world’s poor exist.  I discussed some of these examples in a previous blog post titled The Four C’s of Social Justice: Creating a Foundation for Change.  Check out to read this blog (and many more).  It is clear that the poverty industry has been counterproductive to the mission of today’s UN Sustainable Development Goals (SDGs).  Things need to change if we want to really help the poor!  Next week, I will discuss some of the things we need to do if we are committed to eliminating poverty by 2030.  Private enterprise can help the poor, but only if important changes take place!  Until next time, this is Spatial Integrity – Making the Invisible, Visible!

[1] Margaret Wente. 2014. The fall of the poverty entrepreneurs. Globe and Mail. Accessed 8/3/16.




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