World hunger and private enterprise
| New York
The long-playing drama of America's struggle to aid the world's hungry seems aflutter with uncertainties.
Since Ronald Reagan moved into the director's chair in Washington, he has not only introduced a new cast of players, but also shifted the action to a totally new stage: private enterprise.
For some, that shift is a bold stroke to Mr. Reagan's credit. For others it appears to be the beginning of the end for America's foreign assistance. There's not enough profit incentive, they say, for private enterprise to put on a very good show in the poorest countries. Even if there were, does the private sector have enough people committed to carrying out such a humanitarian role?
Enter Jim Lanigan.
Actually, he's been waiting in the wings for over a decade, eager for the curtain to go up.
Raised on a Nebraska farm, James S. Lanigan is by trade a lawyer, politician, foreign service officer, and real-estate financier. He has long postulated that private enterprise could energize the war on world hunger.
If his entrepreneurial instincts are correct, this decade could witness some of the most ambitious experiments in international cooperation ever attempted, with American enterprise bringing unprecedented developmental resources into a hungry world.
It's all still in the conceptual phase, but Lanigan is no stranger to the nuts and bolts of turning ideas into realities.
He has been on the inside of some ambitious American economic experiments, working in the shadow of some of the leading social architects of postwar America.
Working for Averell Harriman in the Truman White House, Lanigan was in on the brainstorming that kicked off America's first foreign aid programs for the developing nations - Harry Truman's so-called ''Point Four'' plan. He also helped draft the Marshall Plan for getting war-devastated Europe back on its feet.
In 1963, as America waded deeper into third-world development programs, Lanigan was sent to the Indian subcontinent. There he served as a trouble-shooter for Ambassador Chester Bolls and coordinated the tenuous and turbulent commercial ties between the United States and India.
Today, Jim Lanigan pours all his energies into the one goal that seized him from the day he saw the faces of hunger in Asia: getting private enterprise to help.
''The climate for this in the developing world has taken a drastic turn for the better,'' he says, as we talk in his modest but comfortable Manhattan apartment. He is affable, friendly - Humphrey-like in his high-strung, ebullient idealism, yet as informal, homespun, and down-to-earth as a Nebraska farmer.
''So many of the developing countries are anxiously realizing that they're not producing enough. There's not going to be more aid money in these tight economic times. With their skyrocketing oil bills and debts, they don't have the foreign exchange to buy wheat from us. They're seeing that the only alternative is to grow more of their own food - and that they can get much more mileage out of the private sector, both from within and without.''
For a new-age capitalist like Lanigan, the critical part of this stage is bringing third-world agriculturalists and entrepreneurs face-to-face with the whole spectrum of American agriculturalists: retired farmers from the Midwest breadbasket, agribusinesses large and small (but especially medium-sized), and food specialists with overseas experience. In the process he believes the Americans will discern possibilities for joint ventures with third-world enterprise, overcome prevailing fears and ignorance about such investment, and give developing countries a chance to size up what Americans they could do business with.
To stimulate the process, Lanigan has just launched his own nongovernmental, privately funded International Development Investment Center in New York.
He's so committed to the idea that he's sold his Nebraska farms to help keep it financially afloat.
Ultimately he sees a new wave of privately sponsored -development projects taking hold in the third world, projects that will bring know-how and resources into the hands of rural peasant farmers, while generating profits for both the host countries and the Americans investing in their projects.
Already he has pilot projects going in Pakistan under the aegis of his private, nonprofit World Food Corporation based in New York.
By going the private enterprise route, Mr. Lanigan realizes he is steering a course fraught with doubts and sometimes biting criticism.
Several years ago, for instance, Frances Moore Lappe and Joseph Collins of the Institute for Food and Development Policy in San Francisco published a scathing indictment of the third-world ventures of US agribusiness firms.
In their book ''Food First,'' they argued that US agribusiness firms had historically seen world hunger as more of a ''growth industry'' to exploit, rather than as an evil to end. Too often, they wrote, agribusiness firms had not supported food self-sufficiency in poor countries, but had made third-world farmers dangerously dependent on Westerners and their technologies. They scored the use of low-cost labor and local resources to produce cash crops for export or to produce crops that benefit urban elites rather than the impoverished hungry.
In a recent seminar on private enterprise and third-world development at the Overseas Development Council in Washington, some analysts lamented how some American investment in Colombia has backed the growing of carnations for export to the US at a time when the Colombian government has had enormous difficulties feeding its people.
Whether the Lanigan ventures can steer clear of such pitfalls remains to be seen. But he seems confident that the new private development wave can be less exploitative.
''In these programs we're talking about, there's got to be a sense of public service. You go through all the effort of training and sending people out to live and work with villagers - it's too serious an investment. . . .''We are involving not so much the huge producers as retired farmers and their wives, the medium-sized operations who have the technical know-how but can still relate to the aspirations of the small farmer. There's a great deal of social responsibility in the rural areas of this country. You can screen out those who don't have it.''
Meanwhile other groups, working on a very small scale, have also been trying to help small entrepreneurs get started in small countries. Among them: Save the Children Federation, Partnership for Productivity, and Technoserv.
World Bank president David Clausen has said he wants to set up new loan-insurance programs for private investors trying to get things going in developing nations.
The White House, for its part, is gearing much of US aid to the private-sector approach. The Agency for International Development (AID) has created a bureau for private enterprise. The bureau has already teamed up with industrialists like David Rockefeller and private groups like the Florida-based Latin American Development Corporation to pour investment into the Caribbean and other parts of Latin America. The Peace Corps is also enlisting help from the private sector.
But many hunger analysts now think such public-sector ventures, for all their usefulness, have serious limits. The initial ventures of AID's Bureau for Private Enterprise, for instance, are generally geared toward middle-income countries of political interest to the United States, not toward the neediest countries. Developing countries that may balk at government-linked aid may well find the Lanigan model appealing.
Lanigan's strictly nonprofit, private approach was wrought from hard lessons learned in India.
''When we went to India in 1963,'' Lanigan says, ''Chet Bolls was full of idealism. He wanted to make India the garden spot of Asia. Well, we found India and other Asian countries themselves utterly suspicious, even outright hostile, toward both the West and capitalism.
''The Asians were then heady with power. They had broken away from the colonial powers that had exploited them. Socialism was a magic word. They all believed it would bring Utopia. Far from Bolls's hope for advancing rural India, Nehru wanted to turn the country into the Birmingham of Asia, and concentrated on industrializing the cities. Meanwhile the farmers in the countryside were starving; there were no roads, no food, no schools, no clean water.''
Still, in 1964 Bolls and Lanigan managed to persuade Nehru to meet with representatives of 29 major US corporations. Companies like John Deere (tractors), Ralston Purina (animal feeds), and IBM offered an impressive $2 billion package of food-oriented investments. The delicate, if not impossible, job of negotiating approval through the Indian government fell in Lanigan's lap.
Two years of haggling later, virtually every project had been killed by the Indian bureaucracy.
''The Indians at that time wanted no part of Americans or the private sector, '' he explains. ''To bring in fertilizer factories would be fine, they said; but they wanted to own 51 percent of it. I said that's simply not going to work. No American company is going to accept that.''
Some months later, India did accept an IBM offer of computers and training for young Indians in how to use them to develop better national population statistics.
To mark India's acceptance, Nehru invited the Indian cabinet and the diplomatic community in New Delhi to a small ceremony. Lanigan recalls that the Prime Minister was torn: He feared an invasion of the West's technlogy and its often-corrupted morals; but he also knew the promise of technology.
''My advisors tell me that these American gadgets are important for India,'' he explained to the dinner gathering. ''I've just seen our young men perform and they seem to be very proud and to believe that this is important for India.
''But I was also just looking out the window,'' he went on, ''and on the road I saw a bullock cart going by with a load of straw. It occurred to me that that bullock cart has been going by that gate for 5,000 years. I believe that same cart will be going by 5,000 years from now after the United States is a footnote in history. Nevertheless, I'm told that these computers will still be important to us.
''Lanigan, standing to speak in behalf of Ambassador Bolls, lost his cool.''
My Irish temper got away from me,'' he says, laughing. ''I put away my nice polite speech and got up and said, 'Mr. Prime Minister, that bullock cart represents hundreds of millions of people in this country who are starving, sick , drinking out of polluted wells, and desperately in need of help. And those computers and training that IBM has donated are going to help. I'm proud of my country and IBM.' Then I took my seat again next to Nehru.
''Nehru reached over and took Lanigan by the arm. ''Young man, maybe you're right. But you know, I wish we could have your gadgets without having you.''
Over time, the incident ripened into the rationale that defines the World Food Corporations's domain: While developing countries may be interested in certain kinds of aid from public institutions, they may get far more out of joint ventures with US agriculturalists in the private sector. American firms, which would likely resist involvements under restrictive third-world government controls, might well join ventures with private companies in those regions.
It all seems logical. Lanigan still wonders why it has taken so long to get such a plan started. He was pushing the idea of a private, nonprofit World Food Corporation back in the late '60s. It never got a full hearing in the Johnson White House, bogged down as it was with the war in Southeast Asia. In 1974 Sen. Hubert Humphrey ran the idea before the World Food Conference in Rome. Again, no takers.
But now the climate for investing in developing countries may be getting too inviting for agri-philanthropists to pass up.
''Nigeria, until two years ago, required 60 percent ownership of any foreign enterprise by Nigerians, 40 percent by the foreigners,'' Lanigan says. ''In agriculture they've now reversed it to 40-60, in order to get private investment in there. This is desperation - under the pressure of hunger and population.''
Mexico, Peru, Sri Lanka, Kenya, Cameroon, Egypt - they're all moving in this direction. They're giving new priority to agriculture. They're trying to make the most of private initiatives. While some of the French-speaking West African nations have not wanted English-speaking influence, many others do want American agriculture, technology, techniques.
''If Lanigan is right, American companies may also be changing their tune.''
When I staged that conference in India in 1964, virtually no American agency would consider going 50-50 in joint ventures in the developing countries. But now, many are willing to go 50-50 with third-world companies in joint ventures. This might mean, for example, contracting for the right to manage and operate an agricultural project, while helping to train the local people. Profits would be shared equally.
Two innovative development plans that have taken precisely that approach now have a prominent place as models on Lanigan's drawing board. Booker Agriculture, a British firm, has used the approach in Kenya to set up sugar refineries. Corn Products Corporation in New Jersey has had joint projects going for many years with a private affiliate in Pakistan, producing corn, sugars, and cooking oils.
Both use a rather ingenious ''satellite farm'' technique. The company sets up processing plants and refineries. These are eventually run by local people and are designed to serve farmers by offering them training in farming skills - and by providing better seeds and fertilizer, paying them for their crops at world-market prices (much higher than prices given by usually corrupt local middlemen) and marketing their produce. Profits are shared by the local businessmen running the plant and the parent company.
The controversy over who ultimately benefits from such a development model is likely to go on well into the decade. But at least for one Nebraskan cornhusker who has straddled the worlds of private industry and high-powered public planning, it is a model through which developing peoples could go places.
''I think we're going to see these ventures leading the way to economic growth,'' says Lanigan, ''because you're raising incomes of farmers in the rural sector with jobs, giving input for their farms. That provides a base for new factories in the villages to make machine tools and farm implements. Soon you'll see more rural elecrification, rural markets for both the farmers and the small entrpreneurs, who will then buy things from both the cities and the rural factories.
''In short, it provides a base for a chain of growth to help alleviate unemployment and slow migration to city slums, while opening up new productivity and purchasing power for the farmer.''
This is the way to growth and the end of hunger. It's the only real way. It has to start on the farm.''