Monday, October 16, 2006

Redaction on Nobel Peace Prize Posts

I mentioned Muhammad Yunus, and the Grameen Bank, being awarded the Nobel Peace Prize here, and here, in a positive light, but, unfortunately, I must retract some of the enthusiasm I previously exhibited.

Though I still think the concept of providing microfinanced loans to the poor, without state (government) involvement has merit, further reading on the subject, specifically in regards to Muhammad Yunus and the Grameen Bank, leads me to conclude that the lending programs spearheaded by Yunus and Grameen Bank are not as benevolent, or free from state (government) interventions, as I had previously thought.

Contrary to legend, Yunus wasn’t an independent entrepreneur when he started his bank. He used his personal wealth and high-level connections to arrange special privileges and millions in subsidies. Before the Grameen Bank lent one Taka, he had government backing for fully 60% of its operations.

Additionally, those individuals who receive loans from Grameen Bank must adhere to what are termed the 16 Decisions. The 16 Decisions, though mostly offering sound advice for the poor, stray into collectivist territory.  For example, number 13,

We shall collectively undertake bigger investments for higher incomes.

and number 16,

We shall take part in all social activities collectively.

Other portions of the 16 Decisions, such as number 7,

We shall educate our children and ensure that they can earn to pay for their education.

and number 12,

We shall not inflict any injustice on anyone, neither shall we allow anyone to do so.

are sound, but, the way the Decisions are inculcated into those who borrow from Grameen Bank, leads one to think, as Jeffrey Tucker states in a piece he wrote in 1999 titled Microcredit Meltdown, that Yunus and Grameen Bank are “cult-like.”

Jeffrey Tucker has also penned a more recent piece on microfinancing, titled The Micro-Credit Cult, which has lead to this redaction.

My apologies for not being aware of the whole story, prior to my previous posts.  Though I think the microfinancing concept is good, the methodolgy, at least in regards to Yunus and Grameen Bank, is lacking.

Link to Tucker pieces via LewRockwell.com Blog.

Posted by John Venlet on 10/16 at 09:36 AM
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