Article: A Nobel Peace Prize for Neoliberalism? The Myth of Microloans by Alexander Cockburn

I don't usually visit Counterpunch.Org very often, but like the articles they publish. This article by Alexander Cockburn really appealed to my logic as far as Dr. Yunus' recent Nobel Peace Prize victory goes. While the whole world celebrated and praised Dr. Yunus, as did I, it took a few days for me to realize that the whole idea of microcredit and microloans made a large group of people, further entrenched in debt. And debt is never a good thing. No matter how small or useful, debt can only make you worse off because it maes you dependant on some other person or entity for your needs and/or survival. This can never be good.

And it is now that I sit here thinking, "what was Dr. Yunus thinking?", that I present to you an article by Alexander Cockburn of Counterpunch.org. Happy reading...

Some excerpts:

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.

In the statistical tables of human development Bangladesh ranks 139th, worse than India, with 49.8 per cent of its population of 150 million below the official poverty line. In the homeland of the Grameen Bank, about 80 per cent of the people live on less than $2 a day. A UN Development Program study in the early 1990s showed that the total microcredits in Bangladesh constituted 0.6 per cent of total credit in the country. Hardly a transformation.

But today the World Bank and the IMF, along with state-owned and commercial banks are diving into microfinance. The microloan business is fast becoming a gigantic empire, bringing back into control the very banks and bureaucracies women have been trying to bypass. Microcredit is becoming a macro-racket.

Governments like microloans because they allow them to abdicate their most basic responsibilities to poor citizens. Microloans make the market a god.

The trouble with publicly-subsidized credit programs is that they're public and they're large and run contrary to the neoliberal creed. That's why Younus got his Nobel prize, whereas radical land reformers get a bullet in the back of the head.