Women's ENews, March 14, 2007
Microcredit?
Spare Us the Praise for a Panacea
By Susan Feiner and
Drucilla Barker
The White
House, the Nobel Prize Committee and many development agencies
celebrate microcredit as a boon to women struggling to survive.
Economists Susan Feiner and Drucilla Barker dissent, saying it
distracts from wage and work reforms.
(WOMENSENEWS)--Earlier
this month President Bush, in a speech to the Hispanic Chamber
of Commerce, opined that microcredit has "been very successful."
Bush went
on to say, "If you're a rural farmer scratching out a subsistence
living, would you want to be able to sell your goods to new markets
overseas?" Don't you "want to be able to sell into a
larger universe?"
Apparently
Bush and others believe that rural farmers will successfully exit
subsistence agriculture and start competing for market share side
by side with multinational powerhouses like ConAgra, General Foods
and Nestle.
This equates
the activities of the world's largest corporations with the activities
of peasants--mostly women--bartering in rural fairs. Yeah, right.
One expects
Bush to endorse policies popular at the World Bank. But when the
Nobel Prize Committee, the United Nations and hundreds of international
development agencies join the celebration of microcredit as the
key to reducing female poverty via women's economic empowerment
we have an obligation to probe their underlying premises.
Powerful policy
makers--at the International Monetary Fund, the World Bank, the
Federal Reserve and the White House--share the view that markets
(specifically the individual exchanges that occur in markets)
will save the world's poor.
This view
is an article of faith for neo-liberals since they adhere to the
economic philosophy that holds that capitalism and unfettered
markets will cure the world's ills. It assumes that poverty is
a problem of individual behavior.
Hoover
v. the New Deal
Such was Hoover's
mindset during the Great Depression when he infamously proclaimed,
"Prosperity is just around the corner." The New Deal,
by contrast, rejected appeals to "rugged individualism"
and instituted economic policies--social security, minimum wages,
unemployment compensation--designed to help workers and their
families weather the poverty induced by market failures.
Women constitute
70 percent of the world's 1.3 billion people living on less than
$1 a day. Millions are agricultural workers, at-home workers and
domestic employees in the informal sector.
In the last
20 years, the percentage of self-employed women in the non-agricultural
sector increased globally to 34 percent from 28 percent as compared
to the percentage of self-employed men which barely changed, moving
to 27 percent from 26 percent. To make matters worse, women still
make up the majority of part-time, temporary and precariously
employed workers around the world and spend more than twice as
much time as men on unpaid work.
Yet neo-liberals
adhere to a tough-love market fundamentalism that ignores structural
explanations for women's low income and rejects political interventions
to help them.
Instead, the
Nobel Peace Prize was handed out in a quite different direction:
to Mohammed Yunis, founder of Grameen Bank and the wunderkind
of microfinance.
In the aftermath
of the Bangledesh famine of 1972 Yunis saw that the "poorest
of the poor" could not get loans because they lacked collateral.
In response he developed "loan circles" to secure individual
debts via the creation of group collective liability. This innovation
permitted Grameen to begin offering credit to poor women at interest
rates below those charged by local money-lenders and loan sharks.
Only members
of loan circles were eligible for Grameen's loans. When one woman
in a loan circle failed to meet her obligations the others in
the circle had to either repay her debt or they would all become
ineligible for future loans.
Empowerment
Touted
Grameen, like
other microfinance institutions, boasts of the empowering effects
of these loans when poor women generate income after starting
small enterprises with borrowed funds. Today it lends an average
of $60 million a month in amounts ranging from $20 to $500 or
more. Among its 6.95 million borrowers, 97 percent are women,
according to the bank's Web site.
But microcredit
is not an open door to broader and broadening opportunities. It
encourages women and children to work at home sewing and weaving,
assembling toys and electronic components, or raising chickens
and goats.
This low paying
work requires long hours in hazardous conditions. Often it either
confines women at home or exposes them to a hazardous and primitive
workplace where their agricultural activities and home-produced
wares must be traded in a fiercely competitive, unregulated, informal
sector beyond the reach of laws or institutions to protect workers
or even ensure that they are paid for the work they do.
Data on the
informal sector are hard to come by, but researchers agree that
workers here are close to 10 times more likely to be injured than
those in the formal sector and about 100 times more likely to
become ill as a result of work conditions. In one estimate for
several sub-Saharan African nations, 19 percent of injuries resulted
in some form of permanent disability. Another study in South Asia
found 40 percent of informal workers exposed to toxic solvents
or pesticides. Other surveys find high levels of musculoskeletal
and respiratory illness. The picture is not pretty.
"Lasting
peace cannot be achieved unless large population groups find ways
in which to break out of poverty," the Nobel Committee said
in bestowing its award on Yunus last year. "Economic growth
and political democracy cannot achieve their full potential unless
the female half of humanity participates on an equal footing with
the male."
Marginalizing
Female-Led Effort
One can hardly
imagine a more paternalistic act than acknowledging the need for
women's economic equality by making an award to a U.S.-trained,
conservative male economist. This marginalizes the achievements
of the world's first female-led microcredit organization, the
Self-Employed Women's Association of India, known as SEWA.
Unlike Grameen
and other microfinance enterprises, SEWA is run by poor women
for other poor women. It organizes women working in the informal
sectors so they can obtain income security, food security, health
care, child care and shelter. Its philosophy unites the labor
movement, the cooperative movement and the women's movement to
ensure that self-employed women, like salaried employees, have
a right to their wages, decent working conditions and protective
labor laws.
SEWA's first
president, Ela R. Bhatt, received the George Meany-Lane Kirkland
Human Rights Award in 2005 to honor the group's advocacy for the
rights of poor women, workers in the unorganized, informal sector,
and for helping hundreds of thousands of street vendors, rag pickers,
incense rollers and other self-employed workers overcome political,
social and economic oppression.
Grameen's
approach is touted as a panacea for global poverty. But Bhatt,
and millions of SEWA members, know this isn't true. They know
that it is necessary for women to define and mount their own campaign
against exploitation.
Does the award
of the Nobel Peace Prize to the Grameen Bank add credence to the
neo-liberal myth of individuals escaping poverty merely through
their own hard work? Yes. Do these programs help some women pull
themselves up by their bootstraps? Yes. Will micro-enterprises
do much to end widespread poverty among the world's poorest women?
Not a chance.
Susan F.
Feiner is director of women's studies and professor of economics
at the University of Southern Maine; Drucilla Barker is professor
of economics and women's studies at Hollins University in Roanoke,
Va. Choice magazine named their 2004 book, "Liberating Economics:
Feminist Perspectives on Families, Work and Globalization,"
an outstanding academic title. A longer version of this article
will appear in the June issue of the Women's Review of Books.
Women's
eNews welcomes your comments. E-mail us at editors@womensenews.org.
For more
information:
"Liberating
Economics":
http://www.press.umich.edu/titleDetailDesc.do?id=11867
"Women's
Union in India Battles State Charges":
http://www.womensenews.org/article.cfm/dyn/aid/2610/
Clean Clothes
Campaign:
http://www.cleanclothes.org/index.htm
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