New Philippine innovation can possibly eradicate poverty

Poverty – one of the world’s biggest problems. People living in third world and even first world countries cannot afford to provide for their families. They have to resort to borrowing loans that they probably are not able to pay back, and they are so far in debt that whatever money they earn just goes right back to the government in a continuous cycle. This is the situation in the small town of Guiuan (gee-whan), Philippines.

In 2013, the massive typhoon Yolanda,  also known as typhoon Haiyan, hit the Philippines. Guiuan was largely affected as the town is located on the coastline. The destruction caused by this disaster left the town in ruins. Although the UN has rebuilt much of it, the people are still suffering.  

Infographic of Guiuan's economy. Created by Alyssa Renert
Infographic of Guiuan’s economy. Created by Alyssa Renert

Joey Renert, who was deployed to Guiuan by the United Nations after the typhoon, created a possible solution in November of last year to eradicate poverty in the area.

Joey Renert, creator of the Wagan, said, “I saw that there was a lot of money coming in and trying to help through aid programs, but the money didn’t have the impact it was supposed to and I didn’t understand. Why is it that by spending millions and millions of dollars it still doesn’t make an impact? There needed to be a way to keep the money in the economy in order for it to grow. So that’s where the idea came for creating a voucher that circulates locally that can be used by local folks.”

Wagan, originating from the local word “kauswagan” meaning progress, is essentially a form of local alternate currency. Local vendors such as fish (which is the biggest export of Guiuan), vegetables, and the bicycle taxis accept the Wagan as a form of payment. This way, the people can save their pesos for outside products and only use the Wagan locally. The vendors will take Wagan and then use that Wagan to trade for other local products. This makes sure that the Wagan stays within Guiuan and none of it leaks out, thus stopping one of the many causes for their poverty.

“I brought groups of people into an office and we played games where we practiced as if we had real Wagan, and there was a fisherman, vegetable and rice vendor. They practiced playing  and we saw how they didn’t actually have to use pesos or dollars or any other currency to actually trade with each other and to make a small living and a small income. So when they don’t actually have any real money, they are still able to eat on a daily basis,” said Mr. Renert.

Wagan Vouchers. Created by Joey Renert
Wagan Vouchers. Created by Joey Renert

Another reason it helps eradicate poverty is that once every three months, 3% of the Wagan is collected from the people with a minimum of one Wagan collected. This process makes sure that the people spend their Wagan so that is circulates. When the people know that a certain portion of their money will be taken away they tend to spend it. The vouchers which are taken are then used to fund clean-up projects to help further the development of Guiuan.

“We are beginning a program where people can take their cash and buy Wagan, and that Wagan can be used within Guiuan and then redeemed back out for the cash. What we are doing is finding family members for people of Guiuan who are working overseas and sending money back,” Mr. Renert said.

Usually the pesos that they send back are spent for imported goods and are lost, but now they can exchange that pesos for Wagan and that way the pesos that were originally sent are held in trust for Guiuan.”

The Wagan has a QR code on it which allows the vouchers to be tracked and recorded online. Eventually there will be an SMS form of Wagan where people can receive Wagan on their phones. This strategy, if used for UN projects in the future, could be helpful in tracking the progress and circulation of money which is essential to see if an aid program is successful.

Local vendor shows he accept Wagan. Photo by Joey Renert
Local vendor shows he accept Wagan. Photo by Joey Renert

After four months of operation, people use the word Wagan as if it were a normal word. They are actually able to buy and sell different things using Wagan, which is what the purpose was in the first place. It shows that the program is going in the right direction, and one day could be used to help the economies of poor areas worldwide.

During the first few weeks after the initial launch of the program, children began to latch onto the idea of spending the Wagan. They would ask people for Wagan and then attempt to use that Wagan to buy ice cream. The ice cream vendor at the time did not accept Wagan as a form of payment, but after having to withstand an army of children chanting “I want Wagan to buy ice cream,” the ice cream man had no choice but to accept the Wagan. This is an example of how even the youngest of people can understand this concept of alternative currency, and that they can apply it in real life, which is the first step to eradicating poverty. This idea can quite possibly change the world.

Author: Alyssa Renert

This is Alyssa’s first year reporting for The Eye. She moved to SAS in 8th grade from Beijing and is now in 10th grade. She has lived all over the world. Alyssa loves to write as well as travel. She wants to make her last year at SAS interesting and exciting. Alyssa can be contacted at renert45824@sas.edu.sg.

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