Hi.

I'm Rick Steves in Africa.

In the next hour, we'll travel through two developing countries -- Ethiopia and Guatemala -- using each country not as a tourist destination, but as a classroom.

We'll learn about what's working as people around the world are climbing out of poverty and how ending hunger in our lifetime is within our grasp.

♪♪ ♪♪ ♪♪ This is my home.

It's an unusual place for me to start a show, but this is an unusual show.

For decades, I've been preaching the benefits of travel to Europe.

I love my home, and I love Europe.

But I especially love how travel connects me with the rest of our world.

I'm privileged in so many ways.

I live in a rich and highly developed country.

If I'm hungry, I simply go to the supermarket.

If I need water, I turn on the faucet.

When I'm sick, I can just go to the doctor.

And my children enjoyed a fine education.

But I've long been aware that almost a billion people are so poor they get none of that.

It's like we live on two different planets, and it's so easy for privileged people -- people like me -- to ignore this reality.

Today, of the over 7 billion people on our planet, about half are struggling to live on under $5 a day, and roughly 700 million live in what experts call extreme poverty -- trying to make it on under $2 a day.

Imagine: this cup of coffee cost me a day's wages in the countries where the beans were grown.

But there are big changes going on in the developing world where, in my travels, I found hunger, and I found hope.

Join me now on a journey to Ethiopia and Guatemala.

We'll learn about new and inspiring ways today's smart development work, often made possible by foreign aid, is a practical investment.

Mixing new thinking, new technology, and the hard work of locals, it makes our world both less hungry and more stable.

[ Women speaking native language ] In the last generation, the world has made dramatic progress against hunger.

Since 1990, the number of people living in extreme poverty has dropped by more than half: from 2 billion to less than 1 billion.

We're on a trajectory to end extreme poverty in our lifetime.

♪♪ ♪♪ We'll visit Guatemala, an economic leader in Central America, with dramatic volcanos, evocative pre-Columbian temples, bustling towns, and colorful markets.

It's the most indigenous country in the region, with an enduring Mayan culture.

The capital, Guatemala City, is thriving and intense, with a grand cathedral and a vibrant commercial energy.

It's a fertile country with plenty of wealth but a poor distribution of that wealth.

In Africa, Ethiopia is proud to be a country that was never a European colony.

Along with busy cities, it also has a rich and ancient heritage.

It's a country of many ethnic groups and vivid contrasts... ...some of the oldest Christian churches anywhere, a world-renowned coffee tradition, and dramatic natural beauty.

While Ethiopia has long struggled with poverty and famine, it's making great strides.

And today, countries like Ethiopia are inspiring hope in the developing world with steady gains.

Ethiopia's capital, Addis Ababa, is a city of over 3 million people.

It has a lot of energy -- high rises... [ Train whistle blows ] ...efficient mass transit, and the headquarters of the African Union.

And Addis Ababa also has its chaotic market scenes and teeming slums.

Big cities like Addis are a seductive draw to young people from the countryside.

For a poor rural person, such a high-energy city -- with an enticing consumer society and office towers that seem to promise job opportunities -- has a strong appeal.

It's a global trend: The allure of the big city depopulates the countryside and fills the barrios.

Neighborhoods like this are crowded with people who came to the big city dreaming of solid employment, only to find themselves mired in urban poverty.

Ravines, considered uninhabitable by the local government, become shanty towns crowded with these new arrivals.

Extreme poverty is difficult to witness.

Living on less than $2 a day looks about the same around the world: People live on a dirt floor -- no electricity, no running water.

If they're fortunate enough to own animals, they live together.

With an open fire on the floor and no chimney, their homes are dark and filled with smoke.

♪♪ Work is done by hand.

[ Rooster crows ] They eat one or two plates of a starchy staple a day, not enough for their children to grow healthy.

There's likely little education, job skills, or understanding of good hygiene.

The people in this family will probably never be seen by a doctor.

One unanticipated crisis -- a storm, an accident, a sick parent -- and these children go hungry.

Hundreds of millions of people like these struggle daily, out of sight and out of mind of those of us who are more privileged.

The gap between rich and poor in our world is huge.

It's huge between rich countries and poor countries.

It's huge within rich countries, including the United States, and it's huge within poor countries.

Like any big city, Guatemala City has its poor districts and its wealthy districts, and the gap between rich and poor in Guatemala is particularly wide.

The planned community of Ciudad Cayalá is a protective haven for people with wealth, with stylish boutiques, name brands, movie theaters, and the kind of relaxed ease that comes with a sense of physical and financial security.

The Realtor here knows how to sell a condo.

You have everything you need?

Yeah, you have everything you need.

You have the movie theater.

You have the supermarket.

You have a church.

You have restaurants.

You have cafés.

You have academies.

You have well, you name it.

So you never need to leave this place if you don't want to.

Actually, that's the concept.

That you have everything in walking distance.

While the wealthy in such a development have carefully scrubbed cans for garbage, at the other end of the economy, people earn their living digging through garbage.

In the same city, thousands eke out an existence scavenging from the city dump.

Like in many big cities in the developing world, an entire class of people are professional recyclers.

Trucks, with scavengers hitching a ride, rumble in and out of the dump all day.

Guatemalans actually compete for the opportunity to work here.

Fito Sandoval, a former gang member in the city who spent many years scavenging in this dump, describes the experience.

[ Speaking Spanish ] Everyone is working on recycling different kinds of materials.

People who are stronger and faster get a little bit of everything.

Some have to focus on just one thing.

Maybe they are not strong enough, or they get there after the others, so they just get what is left.

[ Man whooping ] Every day you're in a struggle, risking your life for basically nothing.

It's difficult because you arrive with hope to be able to earn something.

And you're in a constant struggle to survive.

There is no security.

You might earn $6 today, or you might cut your foot and you have to go to the hospital.

What is the stigma of a person who works in the dump?

Maybe it's a big stigma.

But it's actually scary to learn a new job, to learn something else, because they aren't used to other jobs because you think you can't do it.

The adjacent community, one of the poorest in the city, is built literally on the dump.

Buildings are made of salvaged tin.

Electricity is tapped illegally from passing wires.

In this community, while there's a frail, informal economy, many family incomes are based on bags of trash scavenged to be recycled.

Homes are built with a mish-mash of material as parents work hard to provide the most basic of necessities.

Discouraging as this may look, there is reason for hope.

[ Children crying ] This program is about how those in extreme poverty -- the poorest of the poor -- are improving their lives by addressing very basic needs.

Progress is incremental, and it happens with a combined and coordinated effort -- smart non-governmental organizations, or NGOs, the support of local governments, development aid and fair-trade policies from wealthy countries, and, most of all, hard-working local people.

In Ethiopia, Abadi and his family are a good example.

While still poor, they have a more modern home and are actually making progress.

Abadi explained how he's running a productive small farm, growing enough for his family needs with a surplus to sell.

He showed me how a tank he fills with manure produces fertilizer.

At the same time, it generates methane (or "biogas").

Abadi can now fire up his stove and boil water without using firewood.

He has light even after the sun goes down.

His home is spacious with windows for ventilation and a sturdy tin roof.

The old kerosene lamp grows dusty, as this light is now powered by a solar panel.

And the same panel provides enough juice to charge their cellphones.

The family has worked hard and has enough food stored to get them, hopefully, through the hunger season.

And a few sheep share the courtyard until they're sold at the market to boost the family income.

Here in the highlands of Guatemala, an indigenous Mayan couple, Diego and Catarina, while still poor, are also gaining modest and dignified lives.

They told me how, unlike their parents, they were able to buy their land and have diversified their sources of income, growing more crops than just corn and raising goats.

An NGO from the United States helped them become landowners, providing a loan and a lawyer to get firm title.

When asked how this house was better than their last, Diego showed us their concrete floor, electricity, a bedroom for the children, and running water.

And their kitchen has an elevated stove equipped with a chimney.

Around the world, great strides in fighting poverty are being made with simple technical upgrades, for example, smarter stoves.

Less-fortunate neighbors still have an open fire on the floor, wasting firewood and filling their family's lungs with smoke.

Elevated stoves with chimneys allow women to stand rather than squat, are more fuel-efficient, saving lots of trees, and make living quarters less smoky, avoiding lots of respiratory disease.

Families like those we visited have worked hard.

They've been provided not with charity but with a path to development, and they seem to be flourishing.

Charity is important for emergencies, but development aid is for the future.

Today's development aid is smart.

Rather than dependence, it creates independence.

It breaks the cycle of poverty, connects people to markets, and opens the door to the benefits of capitalism.

Rising out of extreme poverty through development requires certain basics.

Water is fundamental to health, hygiene, and nutrition.

But for much of the world, access to water is a daily struggle.

Hundreds of millions of people live in villages with no running water or well.

They have to walk for their water.

It's typically a job for women and children.

♪♪ Here in Guatemala, laundry day without running water means these women have to leave their family, interrupt their farm work, and trek three hours to this dirty pond.

Water is so heavy that the women wait for their clothes to partially dry before making the long slog home.

♪♪ Development is incremental.

These villagers have the relative convenience of public spigots in each neighborhood.

They gather on certain days at certain times when water is released.

For many, having a tap down the street running just a few hours a week is a blessing.

A vital step in development is building water infrastructure.

This Ethiopian village got a well last year thanks to an American NGO whose mission is to do exactly that.

Wells like these cost about $4,000.

Today, with a neighborhood well, these people no longer need to walk hours a day to get their water.

Modern aid projects are not simply given to a community.

Experience has taught development workers that locals who own these projects take better care of them.

They work with the NGOs to build the projects.

This pump is community-owned.

A locally elected committee manages it, and each family pays about a dollar a month to maintain it.

With ownership comes responsibility and good stewardship.

Water infrastructure divides the poor from the extremely poor.

Having to depend on river water means farmers and families are dependent on rain.

River water may carry water-borne diseases.

With safe water reliably available right in the village, there's better hygiene, families are sick less often, children have more time and energy for school and work, and moms have more time and energy to nurture their children.

♪♪ Ironically, most of the hungry people in the world are farmers.

Helping farmers grow more food more profitably is essential in overcoming extreme poverty.

More food means more money, which fuels development.

Exciting advances in agriculture have resulted in a green revolution throughout the developing world.

Ethiopia is becoming a model of development thanks to governmental leadership.

The country is divided into 18,000 districts, each with a farmers' training center.

The government employs 60,000 teachers and coaches to make sure smart agricultural policies are implemented throughout the country.

Here we train farmers on different disciplines -- on livestock production, feed management, irrigation, and water management.

Here at Abadi's training center, local farmers learn why it's important to plant seeds in a line rather than scattering.

They learn to rotate crops with plants like alfalfa, which reinvigorates the depleted soil.

And the government has studied the soil across Ethiopia and recommends just the right mix of fertilizer for each district.

Smart farming includes selective breeding so animals can survive local conditions as well as increase their production.

This cow is a Holstein crossed with an African breed, hardy in the heat and giving more than double the milk.

These hybrid chickens lay triple the eggs compared to the local ones.

The value of these new farming techniques is evident back on Abadi's farm.

While his parents subsisted on corn only, he's diversified his crops.

Better seeds allow three harvests a year rather than two.

In the far reaches of Guatemala, this family is also working hard with coaching from an NGO.

And their yield is also better than ever.

A simple change, like just the right spacing of seeds and smart use of fertilizer, can make a big difference.

Nearby, another nongovernmental organization, mindful that dairy is a great source of protein and Mayan children are better able to digest goat's milk than cow's milk, has helped a community build a goat-breeding center.

This gives local families a chance to produce a carefully selected breed of goat and raise them at home to produce more milk.

Villagers bring their female goat to the love shack.

After a few minutes in the adjacent pen, she goes home pregnant.

Soon the family will have plenty of extra milk, better-nourished children, and surplus dairy products to sell in the market.

An effective way to fight hunger is to focus on health and nutrition.

After all, if you're sick, you're more likely to be poor, and if you're healthy, you're better able to climb out of poverty.

In many developing countries, the government (often with the help of the United Nations' World Food Programme) maintains health posts like this one in Ethiopia.

Extremely poor people have no money for health care, but this health post provides the basics in the village for free.

Pauline Akabwai, a local U.N. worker, explained how they educate young mothers who gather here twice a month to help them raise healthier babies.

A health post is the smallest unit of health in Ethiopia, and this is one of the health posts.

The reason why we have a health post is because of the close proximity to the community.

And the mothers and the beneficiaries do not need to pay any money to receive services.

The main objective is to prevent malnutrition.

We have a program called targeted supplemental feeding programme, and the program targets children under five years with moderate acute malnutrition and also pregnant and lactating women with moderate acute malnutrition.

One of the activities that we do is to screen for malnutrition, moderate acute malnutrition -- they measure the arms of the children, and if the pointer shows yellow, it means the child is moderately acute malnourished.

We also weigh children.

When you're screening for malnutrition, you weigh children.

Along with being malnourished, children in the developing world are more likely to contract a host of dangerous diseases.

Inoculations are an example of a global success of a United Nations-led initiative.

Measles, typhoid, and pneumonia -- until recently commonplace in the poor world -- are easily avoided with cheap and simple vaccinations.

Thanks to a U.N. program, nearly all the world's children are now inoculated against these most deadly diseases, and child mortality has dropped dramatically.

Laura Melo, who runs the U.N.'s World Food Programme in Guatemala, dedicates her work to nutrition education in vulnerable communities.

Guatemala has a very serious problem when it comes to poverty and chronic malnutrition, what we normally call "stunting."

Stunting is a global problem.

It's a problem that affects many countries.

Unfortunately, Guatemala is one of the top four countries in terms of prevalence of stunting.

It's a very serious but invisible problem.

It basically consists of children who do not have the quality of food that they should during the first thousand days of their existence.

And that compromises their development throughout their entire life, both physically as well as cognitively.

So it's not as if children don't get enough to eat -- they do, but that's not good enough food -- it's not smart calories.

A lot of people think that people in Guatemala are short and that it's genetics.

That's not true.

They are short because they are stunted.

They are short because they didn't have the quality, the smart nutrients, that allow them to develop.

If we have a country like Guatemala where almost half of the children are stunted, that means that about half of the children of this country cannot fulfill their potential.

So I think it's a more than necessary investment to make sure that this problem disappears, that these children fulfill their potential.

In both countries, thanks in part to U.S. funding, I saw mothers learning important skills, such as to breast feed for at least six months, how to cook with nutritional supplements to be sure children receive not just calories but healthy calories, and to teach children to wash their hands with soap so they stay healthier.

If we don't wash our hands, if we don't have basic hygiene, then even if a child is eating good food, then they get very easily sick.

And by getting sick, then they have diarrhea, then they lose the good nutrients that they're getting.

A healthy child is more likely to become a productive adult.

Rather than a life sentence of poverty, well-nourished young people will be capable of learning, and therefore helping to lift their families and community out of poverty.

Throughout the world, it's the women and girls who have fewer opportunities and endure the brunt of poverty.

They eat last.

They have babies early.

And boys get priority for education.

Ultimately, it's the women who take care of the children and are most responsible with the family income.

When women have an education, legal rights, and employment, they are empowered.

Experience has shown the importance of relying on women to spearhead development projects.

One of the reasons we know that it's worth investing on women is that women always put the care of their families and their children ahead of themselves.

So, for us, it's very important to ensure that we educate women, that we give women a voice, and that that translates in empowerment of women, money, and therefore development of their family and their children.

If we want to be successful in terms of addressing poverty, hunger, malnutrition, we know we have to work with women because that will translate in development of the full community.

In Addis Ababa, a local NGO called Women in Self-Employment is helping Ethiopian women develop small businesses.

These women are taught basic work-force skills, and are given vocational training.

In a place where any solid job is a good job, these women learn to sew, they gain skills to join the hospitality industry, and they learn to be computer literate.

Organizations like this are in the business of producing success stories.

And, judging by the smiles here and the quickness with which these students embrace an impromptu opportunity to dance, this one's doing just that.

[ Singing in native language ] ♪♪ ♪♪ Education is critical.

Governments, private enterprise, and parents are realizing that an educated workforce is a prerequisite for development in today's global economy.

In terms of pure economy, workers are considered human capital, and they produce more when healthy and educated.

Like many developing nations, Ethiopia aspires for all children to have about eight years of schooling.

In both countries, we saw committed teachers and eager students.

Development workers have learned the value of education for girls.

Girls with an education gain more control of their lives.

Educated women have fewer children, and when they do start a family, their children are generally healthier.

Even with meager resources, it seems that as long as students are healthy and adequately nourished, they're eager to learn.

They know that a better future depends on being able to read and write.

For these students, a few months of vocational training prepares them to get a job: Computer labs, welding skills, plumbing, and a field with lots of future employment, being a solar panel technician.

Technology has become a boon to developing countries, bringing new approaches -- like solar panels -- to overcoming extreme poverty.

Low-cost, high-tech innovations are offering solutions to age-old challenges.

Remote, off-the-grid communities are employing wireless technology, leapfrogging past older energy and communication infrastructure.

For example, solar panels are powering villages that were literally in the dark without electricity.

This solar panel powers a water pump that fills this reservoir so the village can make it through dry periods.

And cheap cellphones are revolutionizing the world of small-business people.

Farmers can find the best price for their produce.

Herders learn when and where to bring their stock to market.

This entrepreneur can make a direct sale and avoid a needless middleman.

And entrepreneurs can make and receive mobile payments and do their banking without making a trip into town.

The very poor want the opportunity to work in order to break out of poverty.

But without access to banking, they're excluded from the economy.

Capitalism requires capital.

And without capital, there's no development.

New opportunities in banking are bringing capital to people, and it's making a difference.

Here in a crowded neighborhood of Addis Ababa, Lisa has organized her neighbors to create their own community bank -- a cash box with two keys.

Each woman banks a deposit each week and earns interest.

They take turns borrowing from their common fund for business purposes.

Thanks to this rudimentary banking service, this woman runs the neighborhood coffee shop.

NGOs are employing a clever system for microlending.

This phenomenon of making tiny loans and then recycling the capital is kick-starting small businesses and speeding up development throughout the poor world.

Back in Guatemala, I meet Señora Ana, who was able to start a beading business, and now employs dozens of workers.

Marta, who works with an organization that makes microloans to women, explains how microfinance is working here.

Microlending, it's a type of financing, but also with a social focus.

That's what we do.

We provide small loans to impoverished people 'cause people have no access to normal banks, and they need some funds to sustain their small businesses -- small like somebody who sells fruit in the street, or, say, shoes in the corner, so that's the financing we give them.

For us, it's important to have not only financing part, but also the education part -- so train them about business skills, budget, marketing, life skills.

We grow with them.

We start from the beginning point.

We want them to be successful.

We have 98 percent payback -- so it's working.

People are very responsible -- It's a hand up to these people, to make them empowered, and to be independent.

First, we start with the women, provide the small seed to the women.

This family work together.

The mother started first.

She learned this beaded technique, and she taught her girls to do the same, and they after hired other people, as you can see, around -- they work together.

And the kids are around; they can take care of the kids here, and, also, they employ several people -- like this family -- they employ 50 more people in the community, so they provide jobs and food on the table to other families here.

So you're empowering one person, but this person makes a huge impact in her community by providing jobs.

They can stay here -- they can have jobs here, have dignity, and raise a family.

With microlending, the same capital is used again and again.

This Ethiopian woman got a loan to start a little store.

When that cash was paid back, it was loaned again to help this man start his metal-working shop.

This Guatemalan family got a loan for cows, which, when paid back, was loaned again so this family could start their rabbit business.

Experience has shown that these microloans are nearly always paid back, and they've helped millions of poor people work their way out of poverty.

In case after case, I saw the potential of empowering people whose desire is to work and produce.

These are the success stories of smart and modern development aid.

While there's been tremendous progress globally in the fight against hunger, unfortunately, over the last few years, hunger has ticked up rather than declined.

To a great extent, it's because of a combination of three things -- conflict, bad governance and corruption, and climate change.

Conflict is a major hurdle.

Wars, drug trade, gangs, sectarian violence -- with so much weaponry ending up in the poor world, it all pushes people deeper into poverty.

Statistics show that when there's violent conflict, it's the poorest who suffer the most.

More civilians than combatants die, institutions that hold societies together fall apart, and economies grind to a halt.

A global surge in armed conflict, especially in Africa, is a major reason for the recent setback in progress against world hunger.

Experts believe that, in the future, most hunger will be in countries wracked by conflict.

♪♪ Conflict and exploitation have a long history.

In Guatemala, the ruins of magnificent temples are reminders of a grand civilization that thrived here centuries before Columbus.

But Spanish conquistadores subjugated Guatemala's indigenous people.

Today, the descendants of the people who built those temples are the poorest people in the country.

The city of Antigua was founded by those European conquerors in 1543 as their capital of Central America.

It was the hub of a colonial system designed by Europeans for exploitation.

The main square reflects the structure of that repression -- the palace and military headquarters, Catholic church, local government, and the trade center.

It was all designed to control the people who lived there and export their natural resources.

And, while pleasant today, this square was notorious as a place where indigenous people who caused trouble were executed.

Central America's eventual independence from Spain led to an unholy alliance of international corporations and corrupt local governments -- the era of the so-called "banana republics."

Entire nations became essentially company farms designed to export their basic crop, raw, to developed nations.

When landless peasants organized for land rights, there were inevitable civil wars.

The people buried in this remote Guatemalan cemetery all died in one such war, which raged for 36 years until 1996.

It was portrayed in the United States as a war against communism.

But people here saw it as about economic justice and land rights for the country's poor.

Though over-grown, the memories are still raw.

This man, at the tomb of his father, described how he was one of 200,000 who died in a war about rights to own land.

This economic dynamic played out in so many countries, and its legacy continues.

Colonial systems evolved into systems of economic dominance by local elites.

To this day here in Guatemala, a handful of wealthy families own most of the good land and dominate the economy.

Along with a heritage of economic injustice, Central America is now struggling with a huge problem of gang violence.

To learn more, we rejoin Fito.

Drawing on his experience as a former gang member, he now counsels boys to give them better lives.

Fito's own experience illustrates why boys are attracted to gangs.

[ Speaking Spanish ] Because I come from a broken family and my father was an alcoholic.

My mother worked hard in the garbage dump.

I could bring money home, even though it was a result of violence or the result of theft.

So I could help my mom.

And apart from that, I had my friends -- good friends.

That's probably the strongest motive that drew me to the gang -- a deep friendship.

Another family!

Yeah.

People looked at us with respect.

Sometimes with fear, but with respect.

I think that's really the only thing human beings have: Dignity.

I work with young people, and it hurts to watch when they apply for jobs.

[ Continues speaking Spanish ] When they are in an interview, they don't even treat them with dignity.

It's easier to obtain a weapon than a job.

If you could these people three things to help them not to be in a gang, what would you give them?

One is to offer job opportunities.

[ Continues speaking Spanish ] Second, to see people with dignity.

I am an example because I had opportunities... ...because someone walked together with me for years... ...giving me dignity.

Number three?

Amor.

Love.

Amor.

Because love is the only thing that allows you to imagine a future.

Africa has had its own difficult history, from slavery to brutal colonialism... ...to rampant corruption under modern-day tyrants.

Today Addis Ababa hosts the African Union, an organization of all 54 African nations.

It's dedicated to helping the continent heal and develop.

The stated mission here is to overcome the conflict, bad governance, and corruption that's long wracked this continent.

Another major hurdle to ending hunger is a changing climate.

In wealthy countries, we turn up the air-con -- generating more CO2 -- and debate the existence of climate change.

But climate change is here, and it's hitting the poorest people in the poorest countries hardest.

In the last few years, the impact of climate change has dealt a major setback to the fight against extreme poverty.

Weather is more severe and less predictable.

While arid regions may get the same amount of rain, it now comes in torrents, washing away the topsoil.

And as struggling people cut down trees for fuel, land becomes even more vulnerable to erosion.

In Africa, with each decade, more arable land becomes desert.

The result: more hunger, more conflict, more refugees.

When climate change destabilizes the poor world, it drives migration.

That threatens the security of the wealthy countries.

And what we're seeing today could be just the beginning.

[ Indistinct shouting ] ♪♪ Poverty has long been widespread in the highlands of Guatemala.

And when listening to a farmer whose family has worked the land here for generations, it's clear that climate change is making the fight against poverty even harder.

Is there any question that climate change is real for the farmer?

[ Speaking Spanish ] [ Speaking Spanish ] Don Simeón was telling us that there's always been a hunger season.

What is happening now, with climate change, is that it's longer, and the harvest starts later, so, meaning that they have a longer season during the year when they don't have enough food to feed their family.

For example, before, the hunger season could start in April.

Now it's in February.

In Ethiopia, so notorious for droughts, the government has organized local communities to reforest and terrace eroded hillsides.

People here understand that planting trees increases rainfall.

And terracing allows rainwater to soak into the earth.

Abadi is able to irrigate his crops thanks to a replenished water table.

And water-management infrastructure is also critical in dealing with the impact of climate change.

Reservoirs enable farmers to dole out their precious water as needed and more efficiently.

Thanks to this, reforestation projects and improvements in agriculture -- a new approach called climate-smart agriculture -- Ethiopian farmers are becoming more resilient.

For instance, they believe that while there will always be droughts, famines are now preventable.

In fact, in recent years, Ethiopia has had several serious droughts but no famines.

When it comes to ending extreme poverty, globalization is both an opportunity and a challenge.

Globalization is a powerful force, and it's here to stay.

Locals say it's like a big train -- get on it or get run over.

Everything I'm wearing right now -- and probably everything you're wearing as well -- is the result of a globalized economy.

Globalization is all about the free market, and the free market is about buying and selling.

For countries like Guatemala and Ethiopia to benefit from the global economy, they need to sell things.

And for less-developed countries, because of rich world-trade policies, that's usually their natural resources, raw and unprocessed.

Back home, I love my morning cup of coffee.

And I enjoy it thanks to an efficient chain of links that connects me with the farmer who grew the beans.

For economic development, each of these links is important -- good soil, educated workforce, firm title to the land, fair trade policies, roads, ports, container ships.

This is called the "value chain."

Guatemala's huge sugar industry is a good example of being connected to the global economy through this value chain.

Sugar is its leading export product, and the top producers have created an association for a stronger voice in the global market.

While cutting cane is low-paid and grueling, workers from across Guatemala still migrate to the sugar plantations to find jobs at harvest time.

The raw cane is trucked in, ground up, and then moves through a complicated process.

Along with its high-tech efficiencies, this plant is embracing the worker and environmental standards now expected to successfully compete in a global market.

Huge truckloads of unprocessed brown sugar are unloaded three at time.

Then, with a steady cascade, mountains of sugar fill vast warehouses.

To add value to their raw product, as much sugar as possible is refined.

Quality control is strict as the processed sugar is bagged.

Much care is put into building the brand of Guatemalan sugar.

Here in this warehouse, with a mix of mechanization and hard labor, sweet sacks are stacked like mountains, awaiting shipment to other countries.

The best road in Guatemala connects the cane plantations with the country's one big port.

And thanks to this complete and efficient value chain, Guatemala exports its sugar profitably all over the world.

♪♪ The coffee industry is another example of the value chain at work in Guatemala to stoke development.

Melanie Herrera of Bella Vista Coffee explains how the value chain works for coffee.

So let's picture this.

We have this consumer in the States that wants to drink coffee, but wants to know who the producer is.

And let's say we have this producer here on this volcano, up in the slopes in the middle of nowhere.

How do you connect these two?

So you need the producer, you need the facility to process the product, you need the knowledge and all the technical skills, you need to have an exporter, you need to have an importer, and all of this we know as "value chain," which is "cadena de valor" en español.

What we do is, we add value in every step.

The value chain for coffee is maybe best exemplified by the coffee tastings Bella Vista has on site.

Representatives from around the developed world come here to taste the beans from not only the company's own plantation but from dozens of small farmers who work with them.

And it's because of this value chain linking producers to consumers that globalization works for the Guatemalan coffee industry.

Globalization is here.

In reality, these are good opportunities for countries like ours.

It opens markets, and we're able to produce many tropical things that you guys can't there, like sugar, coffee, ornamental plants.

And we can be competitive in that.

This is a family business.

They have grown coffee for over a hundred years.

They offer jobs and farms for over a hundred people; At the mill, we have another 30 people.

They have a job here.

They have their things here.

They have a history, a family, everything they need here.

They stay here.

So if we can create opportunities here, if we can make people have jobs here, they will want to stay here.

While big agriculture, like sugar and coffee, is well connected with the global economy, a formidable challenge in the fight against poverty is for landless family farmers to also get into the game.

High in the hills of Guatemala, an NGO has helped Pedro and Ana buy land and councils them to maximize their yield and profit.

Pedro used to leave his family for work in the coffee plantations.

He still works hard, but now he's independent.

The loan's paid off, and he owns the land.

Through the NGO worker, Pedro shares his story.

The NGO helps them to find the land and to have the lawyers for all the local papers so they own the piece of land.

So no sugar plantation can come here -- he's got this land for his family?

He's...he has his land for his family, yes.

And his son will have the land when he is finished.

They will stay here instead of going to other places, so they will be with the family all year-round.

So the landless farmer is a migrant farmer.

He leaves his family to cut sugar cane, or work in the coffee plantations.

Yeah.

Ana and Pedro's main crop?

At least right now, it's not corn or beans like you might guess, but snow peas.

[ Speaking Spanish ] Pedro, ¿ustedes comen este, estás arvejas aquí, en el área?

¿En la casa?

; ¿No?

Entonces, ¿por qué la siembra?

Solo para venderlo.

Okay.

No, they don't eat it here, but they grow it for selling.

That's the main business.

It's not what the locals eat, but what international demand and prices make most profitable.

And right now, that's peas.

Throughout the valley, farmers like Pedro are bringing their bags of peas to the weigh station to sell to a middleman or exporter.

♪♪ These peas are export-quality, carefully picked, and put into crates with all the children helping.

And within a short time, they're off to the market.

Much of this shipment will end up sold in England.

It's a long way from Pedro's pea patch to the supermarket in London.

While Ethiopia may not export a lot of natural resources, with a 100 million people, it has lots of potential labor, and that in itself can be a valuable resource.

With lots of young people looking for jobs, Ethiopia has made training a skilled workforce a priority.

Learning industrial sewing is good prep for a solid job.

And these grads got that job just down the street at the Hawassa Industrial Park.

This is one of many sprawling complexes of industrial sheds designed to generate export income for Ethiopia.

Each shed is run by an international manufacturing company.

This is made possible, in part, because of supportive U.S. trade policy, the low cost of Ethiopian labor, and the government's aggressive initiative to attract business.

Thank you for having us here.

What is this park?

Ethiopian workers are about where China's workers were a generation ago.

As China has developed, it's no longer the world's primary source of cheap labor.

Ethiopia aspires to spur its development by helping to fill that role in the global economy.

The impact of big issues like these -- globalization, conflict, climate change -- it seems beyond any one individual's control.

But when we act collectively, we do make a difference.

Walking with people like Ana, Abadi, Lisa, Diego, Marta -- the hard-working people who make the developing world develop -- shows the human value of tackling hunger.

And the uptick in extreme poverty in recent years has made fighting it more urgent than ever.

Traveling through Ethiopia and Guatemala, witnessing both the lives of people in extreme poverty and the economic realities of our world, makes me consider my relationship to it all.

Why should I care?

What should I do?

How can I, as an individual, make a difference?

Like many people, I want to do something to reduce the obscene gap between rich and poor.

But we can also go beyond our own modest individual efforts and support a much broader solution.

That's exciting -- and it's an opportunity.

American spends $700 billion a year on our military to make us safer.

That's hard power, and hard power is necessary.

But it needs to be complemented by soft power.

Soft power is investing in development, diplomacy, stability.

And that also makes us safer.

Soft power is real power.

It's good for our national security.

For example, for the annual cost of one extra soldier deployed overseas, we could dig a hundred wells in thirsty villages.

It's a societal choice we make.

The accepted goal among wealthy nations is to invest around 1% of their GDP for development aid, and lots do.

While many Americans think we're giving far more than that, in reality, the United States gives less than a quarter that amount.

For every $100 of our GDP, we give less than 25 cents in development aid.

So what are the options?

As we've seen, generous giving to hard-working NGOs is important.

But when it comes to fighting poverty and fostering development, smart U.S. government aid programs and fair-trade policies have a far greater impact than all philanthropic efforts combined.

How our government responds to these challenges does make a difference.

And when we act together as a nation, there's certainly reason to hope.

Considering all the wealth in our world, 700 million people living in extreme poverty is just not right.

We can end hunger in our lifetime.

We can do it because we care, or we can do it because it'll make our world more stable and our country safer.

Or we can do it for both reasons.

Thanks for joining us.

I'm Rick Steves wishing you thoughtful travels.

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