Farida majid and other pseudo-intellectuals have all the time to condemn Prof Yunus and other nationalists, ho are offering assistance to the community.
To: alochona@yahoogroups.com
From: farida_majid@hotmail.com
Date: Wed, 8 Dec 2010 13:50:12 -0500
Subject: RE: [ALOCHONA] The Yunus Saga
Not too long ago we had a discussion on microcredit and how it is really an extension of neoliberal capitalism in the guise of NGO that does more harm to the poor by sucking their money and globalising it.
Why is suddenly all this venom against PM Hasina for accusing Grameen for being a cruel and unforgiving moneylender, something that is the buzz in all corners of the world? Any sitting Govt. should express concern over tax evasion when such a large sum is transfered from a Bank and into a Trust/Kalyan in a questionable transaction.
Please have another look at the article from Himal Magazine as you sing the praise of "Noble" Younus:
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As you read this imp. article on Grameenism keep in mind the The [George] Soros Syndrome.
Excerpt from "The Soros Syndrome" by Alexander Cockburn:
In other words, foundations, nonprofits, NGOs—call them what you will—can on occasion perform nobly, but overall their increasing power moves in step with the temper of our times: privatization of political action, directly overseen and manipulated by the rich and their executives. The tradition of voluntarism is extinguished by the professional, very well-paid do-good bureaucracy.
I'm still not sure why Ralph Nader, in his vast 2008 novel Only the Super-Rich Can Save Us, embraced the proposition embodied in the title (unless the whole exercise was an extended foray into irony). As an international class, the superrich are emphatically not interested in saving us, beyond advocating reforms required to stave off serious social unrest.
For many decades the superrich in this country thought that the major threat to social stability lay in overpopulation and the unhealthy gene pool of the poor. Their endowments and NGOs addressed themselves diligently to these questions, by means of enforced sterilization, exclusion of Slavs and Jews from America's shores and other expedients, advanced by the leading liberals of the day.
More recently, "globalization" and "sustainability" have become necessary mantras, and foolish is the grant applicant who does not flourish both words. NGOs endowed by the rich are instinctively hostile to radical social change, at least in any terms that a left-winger of the 1950s or '60s would understand. The US environmental movement is now strategically supervised and thus neutered as a radical force by the Pew Charitable Trusts, the lead dispenser of patronage and money.
Refect upon "patroange" and its desirability when you stave off attempts to make any structural change to the govt.
Farida
Date: Tue, 26 Oct 2010 02:08:08 -0700
Subject: MUST READ: The dangers of Grameenism & microcredit
The danger of GrameenismOctober 2010By: Patrick BondHIMAL MAGAZINE Far from being a panacea for fighting rural poverty, microcredit can impose additional burdens on the rural poor, without markedly improving their socio-economic condition. (Also below, Khorshed Alam on why microcredit initiatives inspired by Mohammad Yunus's vision and implemented by Grameen Bank and other NGOs have not gone nearly as well in Bangladesh as has been publicised worldwide.) For years, the example of microcredit in Bangladesh has been touted as a model of how the rural poor can lift themselves out of poverty. This widely held perception was boosted in 2006, when Mohammad Yunus and Grameen Bank, the microfinance institution he set up, jointly received the Nobel Peace Prize. In Southasia in particular, and the world in general, microcredit has become a gospel of sorts, with Yunus as its prophet. Consider this outlandish claim, made by Yunus as he got started in the late 1970s: 'Poverty will be eradicated in a generation. Our children will have to go to a 'poverty museum' to see what all the fuss was about.' According to Milford Bateman, a senior research fellow at the Overseas Development Institute (ODI) in London who is one of the world's experts on Grameen and microcredit, the reason this rhetoric resonated with international donors during the era of neoliberal globalisation, was that 'they love the non-state, self-help, fiscally-responsible and individual entrepreneurship angles.' Grameen's origins are sourced to a discussion Yunus had with Sufiya Begum, a young mother who, he recalled, 'was making a stool made of bamboo. She gets five taka from a business person to buy the bamboo and sells to him for five and a half taka, earning half a taka as her income for the day. She will never own five taka herself and her life will always be steeped into poverty. How about giving her a credit for five taka that she uses to buy the bamboo, sell her product in free market, earn a better profit and slowly pay back the loan?' Describing Begum and the first 42 borrowers in Jobra village in Bangladesh, Yunus waxed eloquent: 'Even those who seemingly have no conceptual thought, no ability to think of yesterday or tomorrow, are in fact quite intelligent and expert at the art of survival. Credit is the key that unlocks their humanity.' But what is the current situation in Jobra? Says Bateman, 'It's still trapped in deep poverty, and now debt. And what is the response from Grameen Bank? All research in the village is now banned!' As for Begum, says Bateman, 'she actually died in abject poverty in 1998 after all her many tiny income-generating projects came to nothing.' The reason, Bateman argues, is simple: 'It turns out that as more and more 'poverty-push' micro-enterprises were crowded into the same local economic space, the returns on each micro-enterprise began to fall dramatically. Starting a new trading business or a basket-making operation or driving a rickshaw required few skills and only a tiny amount of capital, but such a project generated very little income indeed because everyone else was pretty much already doing exactly the same things in order to survive.' Contrary to the carefully cultivated media image, Yunus is not contributing to peace or social justice. In fact, he is an extreme neoliberal ideologue. To quote his philosophy, as expressed in his 1998 autobiography, Banker to the Poor, I believe that 'government', as we know it today, should pull out of most things except for law enforcement and justice, national defense and foreign policy, and let the private sector, a 'Grameenized private sector', a social-consciousness-driven private sector, take over their other functions.At the time as he wrote those words, governments across the world, especially in the United States, were pulling back from regulating financial markets. In 1999, for example, Larry Summers (then US Treasury secretary and now President Barack Obama's overall economics tsar) set the stage for the crash of financial-market instruments known as derivatives, by refusing to regulate them as he had been advised. The resulting financial crisis, peaking in 2008, should have changed Yunus's tune. After all, the catalysing event in 2007 was the rising default rate on a rash of 'subprime mortgage' loans given to low-income US borrowers. These are the equivalent of Grameen's loans to very poor Bangladeshis, except that Yunus did not go so far as the US lenders in allowing them to be securitised with overvalued real estate. Yunus has long argued that 'credit is a fundamental human right', not just a privilege for those with access to bank accounts and formal employment. But reflect on this matter and you quickly realise how inappropriate it is to compare bank debt – a liability that can be crushing to so many who do not survive the rigours of neoliberal markets - with crucial political and civil liberties, health care, water, nutrition, education, environment, housing and the other rights guaranteed in the constitutions of countries around the world. Microcredit mantras By early 2009, as the financial crisis tightened its grip on the world, Yunus had apparently backed away from his long-held posture. At that time, he told India's MicroFinance Focus magazine the very opposite of what he had been saying: 'If somebody wants to do microcredit – fine. I wouldn't say this is something everybody should have' (emphasis added). Indeed, the predatory way that credit was introduced to vulnerable US communities in recent years means that Yunus must now distinguish his Grameen Bank's strategy of 'real' microcredit from microcredit 'which has a different motivation'. As Yunus told MicroFinance Focus, 'Whenever something gets popular, there are people who take advantage of that and misuse it.' To be sure, Yunus also unveiled a more radical edge in that interview, interpreting the crisis in the following terms. 'The root causes are the wrong structure, the capitalism structure that we have,' he said. 'We have to redesign the structure we are operating in. Wrong, unsustainable lifestyle.' Fair enough. But in the next breath, Yunus was back to neoliberalism, arguing that state microfinance regulation 'should be promotional, a cheerleader.' For Yunus, regulators are apparently anathema, especially if they clamp down on what are, quite frankly, high-risk banking practices, such as hiding bad debts. As the Wall Street Journal conceded in late 2001, a fifth of the Grameen Bank's loans were more than a year past their due date: 'Grameen would be showing steep losses if the bank followed the accounting practices recommended by institutions that help finance microlenders through low-interest loans and private investments.' A typical financial sleight-of-hand resorted to by Grameen is to reschedule short-term loans that are unpaid after as long as two years; thus, instead of writing them off, it lets borrowers accumulate interest through new loans simply to keep alive the fiction of repayments on the old loans. Not even extreme pressure techniques – such as removing tin roofs from delinquent women's houses, according to the Journal report – improved repayment rates in the most crucial areas, where Grameen had earlier won its global reputation among neoliberals who consider credit and entrepreneurship as central prerequisites for development. By the early 2000s, even the huckster-rich microfinance industry had felt betrayed by Yunus' tricks. 'Grameen Bank had been at best lax, and more likely at worst, deceptive in reporting its financial performance,' wrote leading microfinance promoter J D Von Pischke of the World Bank in reaction to the Journal's revelations. 'Most of us in the trade probably had long suspected that something was fishy.' Agreed Ross Croulet of the African Development Bank, 'I myself have been suspicious for a long time about the true situation of Grameen so often disguised by Dr Yunus's global stellar status.' Several years earlier, Yunus was weaned off the bulk of his international donor support, reportedly USD 5 million a year, which until then had reduced the interest rate he needed to charge borrowers and still make a profit. Grameen had allegedly become 'sustainable' and self-financing, with costs to be fully borne by borrowers. To his credit, Yunus had also battled backward patriarchal and religious attitudes in Bangladesh, and his hard work extended credit to millions of people. Today there are around 20,000 Grameen staffers servicing 6.6 million borrowers in 45,000 Bangladeshi villages, lending an average of USD 160 per borrower (about USD 100 million/month in new credits), without collateral, an impressive accomplishment by any standards. The secret to such high turnover was that poor women were typically arranged in groups of five: two got the first tranche of credit, leaving the other three as 'chasers' to pressure repayment, so that they could in turn get the next loans. At a time of new competitors, adverse weather conditions (especially the 1998 floods) and a backlash by borrowers who used the collective power of non-payment, Grameen imposed dramatic increases in the price of repaying loans. That Grameen was gaining leverage over women – instead of giving them economic liberation – is a familiar accusation. In 1995, New Internationalist magazine probed Yunus about the 16 'resolutions' he required his borrowers to accept, including 'smaller families'. When New Internationalist suggested this 'smacked of population control', Yunus replied, 'No, it is very easy to convince people to have fewer children. Now that the women are earners, having more children means losing money.' The long history of forced sterilisation in the Third World is often justified in such narrow economic terms. In the same spirit of commodifying everything, Yunus set up a relationship with the biotechnology giant Monsanto to promote biotech and agrochemical products in 1998, which, New Internationalist reported, 'was cancelled due to public pressure.' As Sarah Blackstock reported in the same magazine the following year: 'Away from their homes, husbands and the NGOs that disburse credit to them, the women feel safe to say the unmentionable in Bangladesh – microcredit isn't all it's cracked up to be … What has really sold microcredit is Yunus's seductive oratorical skill.' But that skill, Blackstock explains, allows Yunus and leading imitators to ascribe poverty to a lack of inspiration and depoliticise it by refusing to look at its causes. Microcredit propagators are always the first to advocate that poor people need to be able to help themselves. The kind of microcredit they promote isn't really about gaining control, but ensuring the key beneficiaries of global capitalism aren't forced to take any responsibility for poverty.The big lie Microfinance gimmickry has done huge damage in countries across the globe. In South Africa in 1998, for instance, when the emerging-markets crisis raised interest rates across the developing world, an increase of seven percent, imposed over two weeks as the local currency crashed, drove many South African borrowers and their microlenders into bankruptcy. Ugandan political economist Dani Nabudere has also rebutted 'the argument which holds that the rural poor need credit which will enable them to improve their productivity and modernise production.' For Nabudere, this 'has to be repudiated for what it is – a big lie.' Inside even the most neoliberal financing agency (and Grameen sponsor), the World Bank, these lessons were by obvious by the early 1990s. Sababathy Thillairajah, an economist, had reviewed the Bank's African peasant credit programmes in 1993, and advised colleagues: 'Leave the people alone. When someone comes and asks you for money, the best favour you can give them is to say 'no'… We are all learning at the Bank. Earlier we thought that by bringing in money, financial infrastructure and institutions would be built up – which did not occur quickly.' But not long afterwards, Yunus stepped in to help the World Bank with ideological support. When I met Yunus in Johannesburg, not long before South Africa's April 1994 liberation, he vowed he wouldn't take Bank funds. Yet in August 1995, Yunus endorsed the Bank's USD 200 million global line of credit aimed at microfinance for poor women. However, according to ODI's Bateman, the World Bank 'insisted on a few changes: the mantra of 'full cost recovery', the hard-line belief that the poor must pay the full costs of any program ostensibly designed to help them, and the key methodology is to impose high interest rates and to reward employees as Wall Street-style motivation.' Bateman also remarks on the damage caused to Bangladesh itself by subscribing to the microcredit gospel: 'Bangladesh was left behind by neighbouring Asian countries, who all choose to deploy a radically different 'development-driven' local financial model: Taiwan, South Korea, Thailand, China, Vietnam.' And the countries that were more reliant on neoliberal microfinance soon hit, Bateman insists, 'saturation, with the result of over-indebtedness, 'microcredit bubbles', and small business collapse.' Just as dangerous, Yunus's model actually 'destroys social capital and solidarity,' says Bateman. It is used up 'when repayment is prioritised over development. No technical support is provided, threats are used, assets are seized. And governments use microfinance to cut public spending on the poor and women, who are left to access expensive services from the private sector.' The Yunus phenomenon is, in short, a more pernicious contribution to capitalism than ordinary loan-sharking, because it has been bestowed with such legitimacy. Bateman records extremely high microfinance interest rates 'everywhere'. In Bangladesh, for instance, these are around 30 to 40 percent; in Mexico, they go up as high as 80 percent. No wonder that in the most recent formal academic review of microfinance, by economist Dean Karlan of Yale University, 'There might be little pockets here and there of people who are made better off, but the average effect is weak, if not nonexistent.' As the Wall Street Journal put it in 2001, 'To many, Grameen proves that capitalism can work for the poor as well as the rich.' And yet the record should prove otherwise, just as the subprime financial meltdown has shown the mirage of finance during periods of capitalist crisis.
~ Patrick Bond is a senior professor at the University of KwaZulu-Natal School of Development Studies Centre for Civil Society in Durban, South Africa. Khorshed Alam is executive director of the Alternative Movement for Resources and Freedom Society, based in Dhaka. |
To: alochona@yahoogroups.com
From: Ezajur@yahoo.com
Date: Wed, 8 Dec 2010 05:16:54 +0000
Subject: [ALOCHONA] The Yunus Saga
Courtesy New Age 8/12/10
I AGREE with everything Md Mujibul Alam Khan has to say on the `Yunus saga' published in New Age on Monday. However, the Norwegians made it clear that they were not alleging corruption against Yunus. Corruption is alleged against him only by Sheikh Hasina and the Awami League. As it seems, Sheikh Hasina and her leaders can barely contain their glee at this setback for Yunus.
Both of Hasina's governments should be held accountable for the errors made by the Grameen Bank. Although the prime minister accuses the Grameen Bank and Yunus of being cruel and fraudulent moneylenders who are responsible for ruining many people's lives, she hasn't done anything about it all these years.
Hasina's concern for the image of Bangladesh abroad is laughable, seeing she did as much to hurt it as anyone else over the years. She never initiated an investigation into the corruption and incompetence within her own party and her government.
Yunus would bring more honour, good sense and vision to the office than either Sheikh Hasina or Khaleda Zia if he entered politics.
Ezajur Rahman
Kuwait
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