"They [micro-indebted women in India] are paying between 24 and 36 per cent on loans for productive expenditures while an upper class person can finance the purchase of a Mercedes at 6 to 8 per cent from the banking system."
"Governments like microloans because they allow them to abdicate their most basic responsibilities to poor citizens."
By Alexander Cockburn
The committee that gave Henry Kissinger the Nobel peace prize has given it this year to Mohammed Younus, the economist who put the word "microloan" on the map with the Grameen Bank in his native land of Bangladesh. That's progress of a sort. But in terms of hot air, any sentences linking "peace" with "Henry Kissinger" aren't immeasurably more vacuous than the notion that microloans can help--to use the language of the Nobel Committee's citation "large population groups find ways in which to break out of poverty."
Throughout the late Eighties and Nineties, in the verbal currency of first-world do-gooders, "microloans" became one of those magically fungible words, embedded in a thousand Foundation and NGO annual reports, like "sustainable". What could be more virtuous in terms of prudent philanthropy than giving very small loans to very poor women? Microloans breath healthful uplift, as divorced from the sordid world of mega-loans (though not, it turns out, mega interest rates), as are micro-brews from Budweiser.
The trouble is that microloans don't make any sort of a macro-difference. They have helped some poor women, no doubt about it. But in their own way they're a register of defeat. Back in the early 1970s there were huge plans afoot to change the entire relationship of the Third to the First World, to speed Third World economies towards decent living standards for the many, not just the few. At the United Nations radical economists were hard at work drafting plans for a New World Economic Order. All that went out the window and here are the caring classes thirty years later, hailing microloans.
Microloans are micro-bandaids in a scale of things today where - to take the example of India -- well over 100,000 farmers, including a large number of women, have killed themselves because their federal and state governments, plus large international institutions, have promoted the savage priorities of neoliberalism.
As the economist Robert Pollin put it pithily when I asked him what he thought of the award to Younus , "Bangladesh and Bolivia are two countries widely recognized for having the most successful micro credit programs in the world. They also remain two of the poorest countries in the world."
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