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Sunday, September 07, 2008

The Case for a more Effective Peace Corps

I have been closely following some of the debate over the future of Peace Corps and whether it is still an effective and necessary organization. The Washington Post recently reported on the cutbacks affecting Peace Corps and several months ago a former Peace Corps Country Director questioned the effectiveness of the organization in an op-ed piece in the New York Times. Both Presidential Candidates, John McCain and Barack Obama, have called for an expansion of the Peace Corps and the National Peace Corps Association has just launched a campaign to double the size of the Peace Corps by 2011.

While I’m far removed from the politics of Washington, I do think it makes sense to increase the role of Peace Corps, but there are some important lessons that can be found right here in Tonga.
Tonga is a beautiful place; it has the most fertile soil in the world, an educated population with a literacy rate higher than the United States and a rich culture. These are attributes that could make significant improvements to the Tongan economy if properly utilized.

One look around Tonga and especially Vava’u and you would think that such a wonderful place could attract a lot of tourists. There are islands where world class resorts could be built and certainly eco-tourism could flourish in a place like Tonga. There are not many places left in the World and certainly not in the South Pacific where the culture is as preserved as in Tonga.

Tonga would be a great spot for some multi-national company to locate a call center. The population speaks English, is naturally friendly and wages are very low. When it is 11pm on the West Coast of the United States, it is 7pm in the evening here (the next day).

Farming should be a no-brainer. The rich soil and abundant undeveloped land make the possibility of harvesting crops for export a real possibility. Tongans will tell you that “anything” will grow here and for the most part that is true.

So then, why with all these possibilities, is Tonga a developing country whose top source of income is from foreign aid? It’s not an easy answer.

Let’s start with the amount of foreign aid that Tonga receives. It comes not just from foreign governments like the US, Japan, Australia, New Zealand and China, but from individuals. In fact, there are more Tongans living abroad than there are in Tonga. Most of the overseas Tongans send money back to Tonga to support their families. Remittances from overseas are what make the Tonga economy go.

This is not a new phenomenon, Tongans have been living on hand-outs for years and they see nothing wrong with it. Unfortunately, the free money can have an adverse effect on a Tongans desire to work. Why work to develop a business when you know you will have every thing you need to survive given to you for free?

However, that is just part of the dilemma. By law, all land is controlled by the King and the Nobles and only Tongans can own land. In exchange for being allowed to own the land, they have to share part of what they grow. A foreigner can not own land nor can a foreign company.

There are ways around this law. If you marry a Tongan, the land can be passed down to your kids. Land can also be leased to outsiders. Generally a Tongan who owns land that he paid nothing for can make money by leasing it out if it is in the right location. It’s another source of free cash. However, the Government restricts the types of businesses that a non-Tongan can own. For example it is illegal for an outsider to run a bakery, a grocery store or to be an electrician or plumber. The government allows exceptions for businesses that it deems Tongans do not have the skills to run. This includes most tourism related businesses such as bars and restaurants. However, if you are an outsider and want to run one of these businesses, you will only be given a visa to operate it for two years. At the end of the two years, you have to re-apply and hope you are given another two years.

And depending on your business, your prices may be fixed by the government so you can’t go any higher (or lower) than the set price. In other cases, you may only be allowed to mark up the price of the goods 15% above what you paid for them.

Ok, so if you can get past all of these hurdles and actually want to start a resort, a farm or a call center, you’ll soon find yourself running into a brick wall.

Most of the “enabling” industries in Tonga are controlled by either the Government or run by Tongans who have little incentive to invest and grow their business. The call center seems like a great idea until you realize that there is no fiber optic cable that connects Tonga to the rest of the world. What about using Satellite? That exists, but the Royal Family sold most of the Orbital slots to the Chinese government a few years ago. So if you want to use Satellite you have to use slots from another country.

What about building a resort for tourists? The only practical way to get people to Tonga is via airplane. That might be fine if you want to bring people to Tongatapu which has regular International flights. However the best destinations are on the outer islands and the domestic airlines don’t measure up. Airlines Tonga one of two airlines serving Tonga just shut down for an “indefinite” period stranding many passengers. Another problem for tourism businesses is that the airports along with everything else in Tonga shuts down on Sunday. So if a tourist wants to come for a week, he or she has to either leave on Saturday, cutting their vacation short by a day or stay over until Monday, just to get a flight. (Tourism businesses that offer lodging are allowed to be open on Sunday.)

That leaves the farm. There is plenty of land and ample rainfall. However Tonga currently grows few crops that have any export value. The root crops which are the staple of the Tongan diet do not have a lot of demand outside of the South Pacific and are easily grown in other places. The exceptions are vanilla and perhaps pineapple. However, it takes a long time to grow vanilla and so far few Tongan farmers have embraced the crop. The price has also not been stable recently. Pineapple is widely grown but there are issues with exporting. Vava’u, where much of best pineapple is grown, has a ship just once a month to take crops outside of Tonga. And because Tonga has no fumigation equipment, many countries won’t accept Tongan crops (and other products) for fear of bringing small insects into their country. Even if these obstacles would be overcome the pineapple is seasonal.

The challenge is that many Tongans and Tongan businesses don’t have any experience in marketing their businesses and their country to the rest of the World. And not everyone thinks that making the changes necessary to attract foreign investors are worth it. If a foreign person were allowed to own land, would they gobble up all the prime oceanfront land? Would they be responsible citizens or would the impact they have on Tonga change the culture and life forever? Will advances in farming (and other industries) end up putting Tongans out of work as technology replaces manual labor?

There are no easy answers but I do think one way to start is by making some changes to the way Peace Corps works in Tonga and perhaps other parts of the World. Peace Corps is a grassroots organization, designed to work one on one with individuals in the host country to stimulate development and build capacity.

Why can’t this same approach be taken to businesses and to the upper levels of government? Right now, Peace Corps is actively recruiting people who are over age 50 to serve worldwide. (I’m not quite in that group yet) Imagine someone with real work experience who could sit down and work one on one with the leaders of business and government. Think of it as an “Executive” Peace Corps taking former business executives and former government leaders and putting them with a similar counterpart in Tonga.

Of course, that won’t be easy either. First, you have to convince the business and government leaders of Tonga to not only accept an “Executive Peace Corps Volunteer”, but also you have to recruit the experienced people to serve as volunteers. And Peace Corps will have to change too. Part of getting qualified volunteers into the key business and government jobs is having the Peace Corps In-Country staff be able to know well in advance the types of people who are coming to serve so they can effectively find the proper positions for that person. It makes no sense to convince the Prime Minister to take on a Peace Corps volunteer in his office if there is no volunteer qualified for that job in the pipeline. It also will take strong Peace Corps staff members with a background in business in each country. That person will have to convince the Tongan leaders the benefits of having an experienced volunteer.

Right now, at least in Tonga, Peace Corps doesn’t put volunteers in private businesses. To have an impact, that policy would have to change. Or perhaps you have a volunteer who is assigned to three or four non-competitive businesses and another volunteer assigned to the three or four competitors of these businesses.

I believe there will always be a place for the 20-something college graduates who make up the majority of Peace Corps volunteers. There are 24 new volunteers coming to Tonga next month. All but 3 are between the ages of 22 and 30. The other three, two men and a woman are in their 60's. One is an education volunteer, one is a business volunteer and the other is in NGO development. (There are also two married couples in the next group). It's good to see some older volunteers in the next group. However, if Peace Corps is successful in bringing in more volunteers aged 50+, hopefully there will also be new opportunities for their life and work experiences.

There are a lot of hurdles that would have to be overcome. Not just in Tonga, but Worldwide. Peace Corps has done a great job of teaching English and working with youth, but now I think it is time to take it to the next level. It won’t be easy but if done properly, it could change the way Americans are viewed in other countries and provide much needed assistance to those countries we serve.

2 comments:

  1. You make some great points Steve! Your post is a well-written analysis... I've found a lot of the recent debates (following the Times article and the Post article) interesting to follow as well.. One thing to note, Obama has included expansion of the PC in his economic plan, McCain has not! (http://www.politico.com/news/stories/0708/11705.html)
    -Karen M.

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  2. Well reasoned but you're making as much a case FOR as AGAINST bringing business volunteers into a country which, if I may state it as simply as this, practises communism in its original form: all for one and one for all. Nobody in Tonga who lives a truly Tongan lifestyle can prosper as everything has to be shared which everybody else which quite soon removes the incentive to make the extra effort. Which also defeats the purpose of the business volunteer as just as Tongans who receive free money from the outside stop to work for it themselves, they also stop to work if somebody else will do the work for them. I experienced this firsthand in Samoa when I did a job there for the Australian development aid: the business owner, rather than involving himself in the business while I was there and gaining from the experience, took the opportunity to take leave in Hawaii. After all, why not when there was an unpaid European fool doing all the hard work for him (which involved several YEARS of undone accounts and tax and VAT returns etc). I have visited Tonga and loved it - especially the far more unspoilt Ha'apai for which I set up a webpage at http://www.nelligennet.com/horst.html and I am not so arrogant as to suggest that we should turn them all into little Europeans. They are born into and living in a state which we hope to achieve in our retirement after decades of hard and soul-destroying work.

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