Babson Latin American Club hosts Chilean Congressman Felipe Kast
Post contributed by the Babson Latin American Club
On Friday, December 6 the Babson Latin American Club [BLAC] hosted Felipe Kast for a high powered session on Entrepreneurship as a Tool to Overcome Poverty. Mr. Kast is the former Chilean Minister of Planning, recently elected Congressman and leader of the reconstruction of the country after the 8.8 earthquake in 2010. As an economist and Harvard Ph.D he has dedicated his career to designing and implementing public policies to overcome poverty.
Mr. Kast challenged attendees to think out of the box when coming up with entrepreneurial solutions to poverty. Academic theory can only take you so far and entrepreneurship is about action and learning by doing since the real lessons are found out in the field. Social entrepreneurs should be skeptical about the solutions they propose, and never think they are smarter than those living in poverty. The most effective solutions come from the bottom up and by taking a humble position to hear what they have to say.
Most people, Mr. Kast explained, believe their governments should pay for social programs to create equality, but who should run these social programs? In Chile, the leftist party believes only the state should be responsible; while the right wing party believes that civil society should also participate in order to generate diversity. Politicians must be willing to give up the power associated with running these programs in order for this to work, and let social entrepreneurs play a bigger part.
The real goal behind economic growth is job creation through the creation of new value. Investment directly translates into job creation and therefore, to poverty reduction. These jobs must comply with fair treatment of workers and just wages, or else the damage to the system will be worse than the benefits. In 1987, 43% of the Chilean population lived in poverty; now, it is only 15%. Chile has reduced inequality through economic growth (explains 85% of poverty reduction) and investment, but, according to Mr. Kast, they are still not a just society.
“If there is inequality in your country, the only way to correct it is by investing in those who need it the most.” Investment in children up to the age of 6 is the best way to overcome inequality. Education tests in young children demonstrate that academic performance is uncorrelated with income, but these results don’t hold when performed in teenage years and beyond. This leads to debate because most politicians want to invest in higher education.
Mr. Kast’s ideas and Chile’s own success with poverty reduction were greatly thought provoking. Attendees of the event from all over Latin America and the World left challenged to think about how we can all take our entrepreneurial minds towards reducing poverty in our countries. Some of the key takeaways from the presentation were:
- To overcome poverty social entrepreneurs should be the ones leading most social policies with an open mind and a humble heart.
- Overcoming poverty is not about investing more money, it is about the effectiveness of the policies that are being implemented.
- Young and smart people that want to make an impact should gather together and create long-run programs that have a measurable impact on society.
View Mr. Kast’s speech and stay tuned for most guest speakers from the Babson Latin American Club next semester!