Buying local while working global

Scott Gilmore offers a bet. With one phone call, the Ottawa native said he could get a trailer filled with bottled water shipped to the most remote corners of the world within a few days.

We took his word for it. Few people know more about moving the nuts and bolts of humanitarian missions than Gilmore. He's dedicated his life to improving these logistics.

"It's really easy," says the executive director of Peace Dividend Trust. "The global logistics industry is so simple."

Simple is one thing. But efficiency in places like Afghanistan, Haiti and Africa is another.

"When it comes to supply chains and managing people, the aid industry is decades behind the private sector," says Gilmore. "We can help [these organizations] spend locally."

Gilmore knows buying local isn't synonymous with easy - but it is efficient. While working as a diplomat in East Timor he saw just how wasteful aid could be. Supplies were held up at borders and on ships while in-country managers helplessly waited the red tape to be sorted out overseas.

"We were very frustrating at the fact that peacekeeping missions were limited by lack of attention to the nuts and bolts," says Gilmore.

But Gilmore did see positive change through his own day-to-day personal spending living in the country. Buying food and personal items generated more income for the local economy than the guarded shipping containers. He figured if he could recreate this growth on a larger scale, he could make missions cheaper, smarter and more effective.

"We want to make it as easy as possible for even the laziest procurement officer to spend money locally," he says.

Peace Dividend Trust set up their flagship project in Afghanistan in 2006. There, he found Westerners working as procurement officers - people purchase supplies in the field - who didn't speak the language and were concerned about personal safety.

"He's probably just heard someone got kidnapped," says Gilmore. "He's scared about the security, so he doesn't leave the compound."

The officer makes a phone call and gets aid shipped from Pakistan and or flown from Dubai. Instead, Gilmore's team looked to the local private sector.

When Afghanistan was invaded, many had difficulty finding reliable local suppliers. But, as Kai Eide, the U.N. Special Representative to Afghanistan, told a conference in Kabul, "This is not 2002 anymore...There are Afghan companies today which can supply the international community."

Peace Dividend Trust found them.

The team headed into cities like Kabul, Kandahar and Jalalabad and sought our owners of medium-sized businesses. "Not just businesses out of a suitcase," says Gilmore.

They would vet them, record their services and compile the information. Then, they gave owners training on how to bid for contracts. To connect aid agencies, the team sometimes brought business owners directly to compounds to negotiate a price - sometimes half that of shipping internationally.

Today, Peace Dividend Trust has created an online directory of 4,400 Afghan companies. In the process, they have directed $476 million of aid money into the local economy.

"It's one of the single largest drivers of economic growth and job creation," says Gilmore. "That meant focused aid was not as successful as this accidental income generation."

The Afghanistan model was so successful the United Nations asked for it to be replicated in Haiti prior to the earthquake. In June 2009, Peace Dividend Trust started vetting local companies.

Since the earthquake, that directory has become integral to Haiti's recovery.

"We go out and find Haitian companies and verify they are up and running," says Gilmore. "Then we can make sure the money being spent on Haiti actually gets spent in Haiti."

For aid to be effective, it needs to be an investment in communities. By using in-country operations to create jobs and provide alternative forms of income, this creates stability and a positive relationship between donor and receiving countries.

Solutions exist by buying local. We need to see past easy and start thinking efficient.