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Saturday, October 10, 2009

[chottala.com] In US First Lady’s Roots, a Complex Path From Slavery



 
 
 
 
 
This video is a must-see
Michelle Obama's Slavery Roots:
 
In First Lady's Roots, a Complex Path From Slavery
 
Barack Obama Campaign

Fraser Robinson III and his wife, Marian, with their children, Craig and Michelle, now the first lady.

 

Published: October 7, 2009

WASHINGTON — In 1850, the elderly master of a South Carolina estate took pen in hand and painstakingly divided up his possessions. Among the spinning wheels, scythes, tablecloths and cattle that he bequeathed to his far-flung heirs was a 6-year-old slave girl valued soon afterward at $475.

In his will, she is described simply as the "negro girl Melvinia." After his death, she was torn away from the people and places she knew and shipped to Georgia. While she was still a teenager, a white man would father her first-born son under circumstances lost in the passage of time.

In the annals of American slavery, this painful story would be utterly unremarkable, save for one reason: This union, consummated some two years before the Civil War, represents the origins of a family line that would extend from rural Georgia, to Birmingham, Ala., to Chicago and, finally, to the White House.

Melvinia Shields, the enslaved and illiterate young girl, and the unknown white man who impregnated her are the great-great-great-grandparents of Michelle Obama, the first lady.

Viewed by many as a powerful symbol of black advancement, Mrs. Obama grew up with only a vague sense of her ancestry, aides and relatives said. During the presidential campaign, the family learned about one paternal great-great-grandfather, a former slave from South Carolina, but the rest of Mrs. Obama's roots were a mystery.

Now the more complete map of Mrs. Obama's ancestors — including the slave mother, white father and their biracial son, Dolphus T. Shields — for the first time fully connects the first African-American first lady to the history of slavery, tracing their five-generation journey from bondage to a front-row seat to the presidency.

The findings — uncovered by Megan Smolenyak, a genealogist, and The New York Times — substantiate what Mrs. Obama has called longstanding family rumors about a white forebear.

While President Obama's biracial background has drawn considerable attention, his wife's pedigree, which includes American Indian strands, highlights the complicated history of racial intermingling, sometimes born of violence or coercion, that lingers in the bloodlines of many African-Americans. Mrs. Obama and her family declined to comment for this article, aides said, in part because of the personal nature of the subject.

"She is representative of how we have evolved and who we are," said Edward Ball, a historian who discovered that he had black relatives, the descendants of his white slave-owning ancestors, when he researched his memoir, "Slaves in the Family."

"We are not separate tribes of Latinos and whites and blacks in America," Mr. Ball said. "We've all mingled, and we have done so for generations."

The outlines of Mrs. Obama's family history unfolded from 19th century probate records, yellowing marriage licenses, fading photographs and the recollections of elderly women who remember the family. Ms. Smolenyak, who has traced the ancestry of many prominent figures, began studying the first lady's roots in earnest after conducting some preliminary research into Mrs. Obama's ancestry for an article published in The New York Times earlier this year.

Of the dozens of relatives she identified, Ms. Smolenyak said, it was the slave girl who seemed to call out most clearly.

"Out of all Michelle's roots, it's Melvinia who is screaming to be found," she said.

When her owner, David Patterson, died in 1852, Melvinia soon found herself on a 200-acre farm with new masters, Mr. Patterson's daughter and son-in law, Christianne and Henry Shields. It was a strange and unfamiliar world.

In South Carolina, she had lived on an estate with 21 slaves. In Georgia, she was one of only three slaves on property that is now part of a neat subdivision in Rex, near Atlanta.

Whether Melvinia labored in the house or in the fields, there was no shortage of work: wheat, corn, sweet potatoes and cotton to plant and harvest, and 3 horses, 5 cows, 17 pigs and 20 sheep to care for, according to an 1860 agricultural survey.

It is difficult to say who might have impregnated Melvinia, who gave birth to Dolphus around 1859, when she was perhaps as young as 15. At the time, Henry Shields was in his late 40s and had four sons ages 19 to 24, but other men may have spent time on the farm.

"No one should be surprised anymore to hear about the number of rapes and the amount of sexual exploitation that took place under slavery; it was an everyday experience, " said Jason A. Gillmer, a law professor at Texas Wesleyan University, who has researched liaisons between slave owners and slaves. "But we do find that some of these relationships can be very complex."

In 1870, three of Melvinia's four children, including Dolphus, were listed on the census as mulatto. One was born four years after emancipation, suggesting that the liaison that produced those children endured after slavery. She gave her children the Shields name, which may have hinted at their paternity or simply been the custom of former slaves taking their master's surnames.

Even after she was freed, Melvinia stayed put, working as a farm laborer on land adjacent to that of Charles Shields, one of Henry's sons.

But sometime in her 30s or 40s, census records show, Melvinia broke away and managed to reunite with former slaves from her childhood on the Patterson estate: Mariah and Bolus Easley, who settled with Melvinia in Bartow County, near the Alabama border. Dolphus married one of the Easleys' daughters, Alice, who is Mrs. Obama's great-great-grandmother.

A community "that had been ripped apart was somehow pulling itself back together," Ms. Smolenyak said of the group in Bartow County.

Still, Melvinia appears to have lived with the unresolved legacy of her childhood in slavery until the very end. Her 1938 death certificate, signed by a relative, says "don't know" in the space for the names of her parents, suggesting that Melvinia, then in her 90s, may never have known herself.

Sometime before 1888, Dolphus and Alice Shields continued the migration, heading to Birmingham, a boomtown with a rumbling railroad, an iron and steel industry and factories that attracted former slaves and their children from across the South.

Dolphus Shields was in his 30s and very light skinned — some say he looked like a white man — a church-going carpenter who could read, write and advance in an industrializing town. By 1900, he owned his own home, census records show. By 1911, he had opened his own carpentry and tool sharpening business.

A co-founder of First Ebenezer Baptist Church and Trinity Baptist Church, which later became active in the civil rights movement, he supervised Sunday schools at both churches, which still exist today, and at Regular Missionary Baptist Church.

"He was the dean of the deacons in Birmingham," said Helen Heath, 88, who attended church with him. "He was a serious man. He was about business."

He carried his family into the working-class, moving into a segregated neighborhood of striving black homeowners and renters. In his home, there was no smoking, no cursing, no gum chewing, no lipstick or trousers for ladies and absolutely no blues on the radio, which was reserved for hymns, remembered Bobbie Holt, 73, who was raised by Mr. Shields and his fourth wife, Lucy. She said the family went to church "every night of the week, it seemed like."

He carried peppermints for neighborhood children, Mrs. Holt said, and told funny stories about his escapades as a boy. But his family struggled.

His first wife, Alice Easley Shields, moved around after they split up, working as a seamstress and a maid, and two of their sons stumbled.

Robert Lee Shields, Mrs. Obama's great-grandfather, married Annie Lawson in 1906 and worked as a laborer and a railroad porter but disappeared from the public record sometime around his 32nd birthday.

Willie Arthur Shields, an inventor who obtained patents for improving dry cleaning operations, ended up working as a maintenance man, Mrs. Holt said.

As for his ancestry, Dolphus Shields didn't talk about it.

"We got to the place where we didn't want anybody to know we knew slaves; people didn't want to talk about that," said Mrs. Heath, who said she assumed he had white relatives because his skin color and hair texture "told you he had to be near white."

At a time when blacks despaired at the intransigence and violence of whites who barred them from voting, from most city jobs, from whites-only restaurants and from owning property in white neighborhoods, Dolphus Shields served as a rare link between the deeply divided communities.

His carpentry shop stood in the white section of town, and he mixed easily and often with whites. "They would come to his shop and sit and talk," Mrs. Holt said.

Dolphus Shields firmly believed race relations would improve. "It's going to come together one day," he often said, Mrs. Holt recalled.

By the time he died in 1950 at age 91, change was on the way. On June 9, 1950, the day that his obituary appeared on the front page of The Birmingham World, the black newspaper also ran a banner headline that read, "U.S. Court Bans Segregation in Diners and Higher Education." The Supreme Court had outlawed separate but equal accommodations on railway cars and in universities in Texas and Oklahoma.

Up North, his grandson, a painter named Purnell Shields, Mrs. Obama's grandfather, was positioning his family to seize the widening opportunities in Chicago.

But as his descendants moved forward, they lost touch with the past. Today, Dolphus Shields lies in a neglected black cemetery, where patches of grass grow knee-high and many tombstones have toppled.

Mrs. Holt, a retired nursing assistant, said he came to her in a dream last month. She dug up his photograph, never guessing that she would soon learn that Dolphus Shields was a great-great-grandfather of the first lady.

"Oh, my God," said Mrs. Holt, gasping at the news. "I always looked up to him, but I would never have imagined something like this. Praise God, we've come a long way."

http://www.nytimes.com/2009/10/08/us/politics/08genealogy.html?hpw

 

A Paper Trail to the White HouseInteractive

A Paper Trail to the White House

The Family Tree of Michelle Obama, the First LadyInteractive Graphic

The Family Tree of Michelle Obama, the First Lady

In First Lady's Roots, a Complex Path From Slavery

New York Times - Rachel L. Swarns, Jodi Kantor - ‎Oct 7, 2009‎
Ms. Smolenyak, who has traced the ancestry of many prominent figures, began studying the first lady's roots in earnest after conducting some preliminary ...
 
This video is a must-see
Michelle Obama's Slavery Roots:
 
 


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[chottala.com] How Context Shapes Islam in Power:All (Muslim) Politics Is Local



All (Muslim) Politics Is Local

How Context Shapes Islam in Power
September/October 2009
88, 5
Foreign Affairs
 

The maxim Islam din wa-dawla (Islam is religion and state) is often said to describe a distinguishing mark of Islam -- the suggestion being that Islam is a religion with a political mission at its core. Both those who repeat the mantra with approving fervor and those who worry about it assert its essential truth and suggest that all Muslims must make it a part of their worldview. Some go so far as to claim that this axiom calls for a particular form of state structure or political behavior.

And yet, of course, the statement is nothing more than a political slogan -- an artifact of its time, its meaning contingent on the setting in which it is used, like any other rallying cry. This quality does not make the slogan any less meaningful for the Muslims who subscribe to it; what it does is highlight the fact that this saying reflects a preoccupation with state power in the modern world. The Muslims who adhere to it, no less than those who do not and no less than non-Muslims, are both the products and the makers of that world. This point is worth stating since much of the present debate about the role of Islam in world politics tends to downplay the political or, at least, display a one-dimensional understanding of what drives political ambition. The political behavior of Islamists, and sometimes that of all Muslims, is often treated as an exotic peculiarity that defies normal analysis and can only be explained as an extension of their faith.

Whatever one's reference point, however, the sometimes sordid business of politics has a gravitational pull that brings lofty ideals and grand sentiments down to earth with a thump. To play the game of politics is to grapple with the practicalities of power. This requires making sense of why people act as they do and when they do: why they respond to certain calls to action -- nationalist, Islamist, whatever -- and why they think their political activities are appropriate, ethically as well as practically, to the ends they imagine worthy of achievement.

Investigating these questions may be an empirical or epistemological challenge, but it does not require singling out religious motivations, Islamic or otherwise. The same searching questions should be asked of the religiously motivated that are asked of liberals, conservatives, Marxists, fascists, nationalists, and any other group that tries to put into practice its imagined notion of the good life. One should not rely only on the players' descriptions of themselves. Yet this is precisely what has happened to the effort to understand the role of religion in shaping the political lives of Muslims. Many members of the Western media, and even many Western academics, have pointed to the most extreme of Muslim political tracts and suggested that these are what Islamism, or even Islam, is really about.

It is all the more refreshing, therefore, to encounter two serious books that avoid this pitfall: Gilles Kepel puts the "politics" back in "Islamist politics," and Ali Allawi explores the often troubled relationship between worldly power and the spirituality of Islamic beliefs. Both books indicate, in their own way, that all Muslims who seek to reshape the world according to Islamic ideals and traditions, whatever they may define those to be, are confronted by the mundane need to bend an often obdurate reality to their will.

RELIGION AND POWER

The exercise of power is bound by time and place, and it depends on the competence of political actors. These conditions determine the political impact of any Islamic ideals. It is worth contrasting, for example, the very different outcomes of Ayatollah Ruhollah Khomeini's calls for revolt in Iran in 1963 and in 1978: the first foundered; the second started a revolution. In some cases, the venality of political actors can trigger disillusionment and a reappraisal of Islamic obligations, leading some to turn their backs on an Islamic political program. (Iran might become such a case, after the unrest over the presidential election earlier this year.) A program that does not work -- spectacularly, corrosively, or insidiously -- loses credibility and purchase. It can no longer move people; it has no traction. This may be the result of various factors unrelated to religion or ideology, but these factors necessarily affect the ways in which people understand and act on calls to put their ideals into practice.

Allawi captures this point well in his account of the rise, domination, and decline of secular ideologies and their adherents in the Middle East. Having lived through Iraq's turbulent years of revolution, he witnessed thousands of Iraqis being drawn to the Iraqi Communist Party and thousands of others coming to believe that Arab nationalism and Arab socialism, Baathist or otherwise, would bring modernity to Iraq. Unsurprisingly, Allawi is wary of these fallen gods.

For him, the Islamist political movements that originally emerged in Iraq in the 1950s and gained power thanks to the U.S. occupation after 2003, came not simply from the disillusioned secularists. Crucially, he sees them as products of a distinctively Iraqi politics. They certainly identify themselves as Muslim -- Shiite or Sunni -- but they also represent what it means to be political actors in contemporary Iraq: having to deal with Kurdish secessionists, foreign intervention, and oil-based political economies. The resources of Islamist groups may be very different now than when these groups first emerged; demographics and power structures have changed. But the expression of their political imagination, no matter how self-consciously attached to distinctively Islamic markers, is similar to their predecessors'. Thus their attention to defining community and collective loyalties; the importance they attribute to territorial control and administration; their building of coalitions; their ideas of representation; their use of violence; their cultivation, with money, of patrimonial networks; their competing for political leadership -- all are familiar features of political behavior. Self-consciously Islamist movements and parties, no less than the secular nationalist ones, to which they bear a strong family resemblance, are preoccupied with what works and how.

LOCATION, LOCATION, LOCATION

Grounding Islamist organizations and their sympathizers in a local political reality shaped by the histories, predicaments, and preoccupations of the people they seek to mobilize is a central theme of Kepel's wide-ranging study of various Islamic political movements, chiefly in the Middle East. Part of his intention is to demonstrate how political movements that define themselves based on their readings of Islamic traditions are best understood through a close analysis of the contexts that produced them; they are not the generic symptoms of "resurgent" or "radical" Islam.

Looking at Islamist organizations from Afghanistan to Iraq, from Palestine to Lebanon, Kepel gives a convincing account of the failure of what he says are the two "grand narratives" that have dominated common understandings of political Islam over the past decade or so. The first is the narrative of the "war on terror." Put forward by the Bush administration and its circle of ideologues, it implied that the U.S. military would clear the way for the establishment of democratic politics across the Middle East. The second is both the target and the mirror image of the first: propagated by Osama bin Laden and his right-hand man, Ayman al-Zawahiri, it holds that jihad directed against the "far enemy," is the best way of establishing Islamic rule in Muslim-majority states and elsewhere. As Kepel points out, both theories are delusions, have equally improbable goals, and have inflicted horrific damage -- damage that has often provoked local resistance and left the United States and al Qaeda bogged down in the intransigent politics of place, facing criticism, fragmenting alliances, and isolation.

Quite apart from the ethical revulsion these two narratives have provoked among Muslims and non-Muslims alike, another problem, as Kepel points out, is their remoteness from Muslims' actual, and diverse, experiences. Both narratives so reify religion as to turn political behavior into the mere reflection of an individual's attachment to a timeless set of prescriptions called "Islam," as if these were removed from the contexts in which Muslim principles and identities drive political actors. They also suggest that Muslims' politics can -- or, in the case of bin Laden, must -- be understood in relation to their faith. Yet the truth is more complicated, contested, and contingent than these two narratives allow. Neither can explain why at a given time and place a given group of Muslims chooses the prescriptions it does from Islam's vast and rich tradition to guide its political behavior. And neither can account for why other groups of Muslims act on very different understandings of Islam or why still others see their engagement with power as having only the most tenuous connection, if any, to their religious beliefs.

What does explain these differences is political context. Kepel's account makes sense of the diversity of Muslims' politics, not simply in the Middle East, North Africa, and South Asia but also in western Europe, where a series of violent incidents and symbolic confrontations over the past decade has prompted talk of a fundamental incompatibility of values and a "clash of civilizations." A cursory glance at political reality makes clear that most of the conflicts involving Muslim immigrants in, for example, Denmark, France, the Netherlands, and the United Kingdom owed more to the policies pursued by these states' governments than to the Islamic identities or even Islamist proclivities of the protagonists. For Kepel, the policy eschewing integration in the Netherlands ("pillarization," which sees religious communities as separate pillars that help hold together the Dutch republic) and its counterpart in the United Kingdom ("multiculturalism," whereby the state lets people of different cultures regulate their own affairs) created fertile ground for the growth of radical Islamist political sentiments among Muslim immigrants in those two countries.

These approaches have roots in the Netherlands' and the United Kingdom's imperial pasts: overseas, Dutch and British colonists favored ruling indirectly and cultivating native leaders to ensure order locally. In the Netherlands and the United Kingdom today, policies shaped by these traditions have prompted the authorities to be hands-off when it comes to their Muslim communities -- at least until state security is threatened, at which point the state takes clumsy measures that many Muslims interpret as discrimination.

Kepel holds up the contrasting example of France, which has pursued clear and, according to some, highly intrusive policies designed to impose secularism in public life. He does concede that France's "assimilation" policy has been a good deal more successful at integrating Muslim immigrants civically than economically -- hence, the politics of contestation, including riots involving French citizens with Muslim backgrounds, that has erupted periodically. But as Kepel's account makes clear, this is better understood as the rebellion of bored, out-of-work, and marginalized French youths living in dreary suburbs than as anything remotely resembling Islamist politics.

Whether these differences in policy provide the key explanation for the variety of political views among the Muslim immigrant communities of Europe is still up for debate. Some argue, for instance, that the explanation has more to do with these communities' links to the politics of their countries of origin. Nevertheless, Kepel's analysis is valuable for taking the trouble to scrutinize the micropolitics of different groups. He shows that the closer one looks, the more either irrelevant or troubling grand narratives about Islam and civilization become.

THE PRIVATIZATION OF ISLAM

Allawi's otherwise erudite and thoughtful book is, for its part, haunted by the kind of generalization that Kepel eschews. Allawi is writing about Islam as a faith on the stage of world history, and as the book's title suggests, his central concern is "the crisis of Islamic civilization." By this, he means a number of things but principally the fragmentation of authority, the loss of unifying cultural referents, and the divergence between the spiritual and the material in Muslims' conduct. Together, these fractures have deprived Islam of the kind of autonomous, self-rejuvenating drive that Allawi sees in other civilizations (say, China or the West) and have made it more vulnerable to domination by the forces of globalization, be they powerful governments, capitalism, or cultural hegemons. From Allawi's perspective, Islam has become privatized, an article of interior faith nothing like the framework for public life that he believes it has been historically and should continue to be. If for Kepel the privatization of religion is a recipe for social harmony and a goal of the secular state, for Allawi it is the beginning of the end.

This position presents Allawi with something of a dilemma. On the one hand, he pleads for Muslims to reconnect with the powerful spiritual essence of Islam and to reestablish Islam as a major player in world history. On the other, he is intensely wary of, indeed repulsed by the sight of, political Islamists scrambling to use any means available -- graft, corruption, violence -- for political advantage, thereby cutting themselves off from the "wellsprings of Islamic ethics." The targets of his anger include organizations such as al Qaeda and the Islamist parties of Iraq, which he sees as symptoms of the crisis of Islamic civilization rather than as part of the solution. As he rightly says, these groups reflect the politics of those they are fighting in all its ruthlessness, not the spiritual values at the heart of Islam.

The question is, how can one have any impact on the existing order without in some way succumbing to the logic of political practicalities? The harsh truth is that however sublime or spiritual the ideals -- and Islam, no less than any other great religious tradition, can provide a dazzling array of such ideals -- their champions will need to engage with the politics of place in order to realize them. There may be many ways of doing this, and disputes about which ways are best are inevitable, but at the heart of this task lies the old political conundrum of how to engage effectively the existing power structure without compromising one's core ideals. Reflecting on this question, one realizes that political discourse is the very antithesis of civilizational discourse, even if the latter can sometimes be used polemically in political debates. The closer one looks at the multitude of hopes, prejudices, fears, and activities that constitute political life, the harder it is to meaningfully apply to a political order an overarching, homogenizing, and essentializing term such as "civilization."

MODERNITY AND ITS DISCONTENTS

It should be little surprise, then, that Allawi is at his best when he turns to the particular. Some of his book's most powerful passages concern the corruption of governments in the Middle East and, in his memorable phrase, the "sinister cities" of the Persian Gulf, which have embraced materialism and an "oppressive modernity." These grim facets of globalization form the reality of the modern world, as inhabited and created by Muslims and non-Muslims alike. Much of Allawi's concern, in other words, is not really about Islam as a religion, or even about Islam as a civilization, but rather about what has been happening to Muslims. They have had various responses to modernity and in the process have created new ways of being Muslim. Some of these responses -- peaceful or violent, accommodating or rejectionist -- could become an inspiration for millions. But even those will catch on not simply because of Muslims' professions of faith; if they do spread, it will also be because they help Muslims make sense of power, in all its forms.

This is the most important message of these books. Kepel and Allawi are at their strongest when they examine the intellectual and political trends that have shaped the experiences of Muslims across the globe. As Kepel and Allawi demonstrate, these trends have made Muslims full actors in the evolving story of world history, whether they act self-consciously with reference to their Muslim identities or not. To be a Muslim in the modern world is both to be shaped by that world and to take part in its shaping. Modernity, with all its ambiguities and sometimes contradictory impulses, is a composite affair, constantly refashioned by those who engage with it. Kepel's and Allawi's books are reminders that politics is rooted in time and place, and that at the same time it nonetheless follows a remarkably similar logic in all its various settings. Understanding this logic, while also grasping the full significance of context, helps one understand the behavior of political actors -- and not just Muslim ones.

http://www.foreignaffairs.com/articles/65229/charles-tripp/all-muslim-politics-is-local?page=show

 

Cover image 
Reading List
Chris Seiple

An annotated Foreign Affairs syllabus on religion and foreign policy.

 
Cover image


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RE: [chottala.com] Proud of Dr. Yunus - can we STOP biting please?



Thank you Mr. Sirajul for your honest reply to those "Yunus haters". I like to ask those gentlemen what their contribution to the poor, their community and the country. Please ignore those people comments, because "empty vassal sound much".

Respectfully,
Moe Faroqi


To: chottala@yahoogroups.com
From: sirajuz@hotmail.com
Date: Sat, 10 Oct 2009 01:09:53 +0000
Subject: RE: [chottala.com] Proud of Dr. Yunus - can we STOP biting please?

 
It may not have improved the life of middle-class or high-income level people but it tremendously improved the life of the poor and poorest people of the country throughout all areas and all localities. Yes, as I always say, nothing is perfect in the world. But we have to live with the statistics and to support whatever improvements are achieved in the maximum levels, ignoring the minor drawbacks. Is there anything without any drawbacks in the world? None. Humans being so improved as a specie amongst all living beings, still carry filthy urines in their bladders and stinky droppings in their stomachs. Did that make humans so bad? Why not? Because humans have so much more good stuffs compared to having just urine and droppings. Likewise, please look at the more good stuff and not just little bad stuff of something. Many selfish rich people and a lot of selfish middle class people bitterly oppose micro-credits for one main reason, which is, the micro-credit provided the jobs of own to the poor and poorest people and created the scarcity of house-hold servants and day laborers all over Bangladesh. People have to pay more now to find the servants and the day laborers. Those rich and middle-class people consider it as going against the improvement of the society, because of the price hiking in the market of day-laborers and house-servants; and those rich and middle-class people are concerned about their losses in the absolute hoarding and profiteering in the labor market. This is the worst mentality and a lot of people are siding with them, perhaps you did too, and perhaps for that reason you only see the bad affect of the microcerdits, but not the immense improvements of the condition of lives of the poor and poorest people of the country. This must be a corrupt thought.  Uplifting the conditions of the poor and poorest people should be valued as more desirable and more precious above the losses of profits of the well-to-do people's spending in the labor market.
 
By the away, why I have accept your ridiculous information that people of areas where there is no micro-credits are better off? Are you talking about the  poorest people there or about the well-to-do peoplethere? Before and even now, no one used to land money to the poorest people, except robbing their physical labors with very little or no money. Of course, some local local business people (mohajons) or village politicians (matobbars) would lend them money with 200% to 500% interest yearly, and at the end, when the loan could not be paid-off by those poor people, the influential lenders would grab all belongings of those poorest people. Micro-lending interest is about 30% maximum yearly, which is way cheaper than the local lenders. Are you in favor of those local cheaters? I believe you are not. So far all microcrediut small loans have been found to be within the means of the poorest people of all societies throughout the country. 
 


--- On Sun, 10/4/09, Dr. Jamir Chowdhury <americamyland@gmail.com> wrote:

From: Dr. Jamir Chowdhury <americamyland@gmail.com>
Subject: Re: [chottala.com] 'microlending' doesn't actually do much to fight poverty - Boston Globe Article
To: chottala@yahoogroups.com
Date: Sunday, October 4, 2009, 11:03 AM

 
Please compare the povert rates of the areas where Micro-credit was provided VS the areas that recieived support from NRBs.You will find that people from the areas supported by NRBs are in much better conditions. Yes, Micro-credit helps but not to transform the lowest income poor to the mid-income level. thanks.
 


 
On Sat, Oct 3, 2009 at 7:31 PM, Siraj Zaman <sirajuz@hotmail. com> wrote:
 
"Billions of dollars and a Nobel Prize later, it looks like 'microlending' doesn't actually do much to fight poverty" is the most uninformed, ignorant, and untrue statement that someone out of touch of the real ground where it is happening, can only make. I do cordially invite the commentator and the writer of the below too long too absurd essay full of lies and distortion to go in the interior villages of bangladesh like chitpur of Sherpur district or raokhali of rangamati district or mashkanda of Netrokona district or in any of the 64000 interior villages of Bangladesh and collect data about the social life style upliftment of the people of the lowest rung of the society. Compare it with what was 2o years ago and what was 100 years ago to their fore-fathers. It will be quite obvious and quite clear how much improvement the micro-credits did for their lives. Microcredit provided each family a living home, cell phone, cows, goats, plots of very high yielding crops, vegetables or fruits, clothes on them, created millions of independent small jobs where the poors can work and earn and live decent lives what they could not ever afford before other than working as day-laborers with very low or no wage for their entire life. Only because of the small credit, even the poorest of  the poors, can send their children to the schools, especially their daughters, and can buy a bike for each one of them to go to the distant schools form home.  Could anybody imagine before that 100% of the children will go to school in Bangladesh, even it is a poverty stricken country? It happened because of the micro-credit only.  Before when population was half of what is now, used to die significantly by the famines and mongas. Now-e-days no one dies for any famines. Mongas happen but very very less and micro-credit is working fantastically to tackle those crises. The poorest class people before could never thought of making their children educated, but now with the help of microcredits the poorest people  are finding very high yielding self employments such as growing, selling, trading, transporting, communicating, educating, food and other stuff processing, catering, sewing, crafting, painting, and many many activities like these, that provide ample earning as for their needs,  and so no need the children to help them to run the family; and so the children can go to schools and be educated; and change the status of their families when they become educated with higher degrees.
 
Please go to the interior villages of Bangladesh, and verify the truths; before publishing ridiculous essays for seriously affecting and dis-servicing the low-income people that would be quite agaist humanity.  
 

To: khabor@yahoogroups. com; notun_bangladesh@ yahoogroups. com; amra-bangladesi@ yahoogroups. com; reform-bd@yahoogrou ps.com; chottala@yahoogroup s.com; SonarBangladesh@ yahoogroups. com
From: Syed.Aslam3@ gmail.com
Date: Thu, 1 Oct 2009 18:16:18 -0400
Subject: [chottala.com] 'microlending' doesn't actually do much to fight poverty - Boston Globe Article

 

Small change

Billions of dollars and a Nobel Prize later, it looks like 'microlending' doesn't actually do much to fight poverty

By Drake Bennett
Globe Staff / September 20, 2009
In the world of international aid, microcredit is a rock star. The practice of giving very poor people very small loans to start very small businesses has been hailed as one of the very few unambiguous success stories in the long, frustrating fight against Third World poverty. The pioneer of the practice, Bangladesh's Grameen Bank, has disbursed more than $8 billion in unsecured loans, usually in amounts under $100, to people traditional banks ignore. Along with a 98 percent repayment rate, Grameen has accrued an inspiring collection of stories about its overwhelmingly female borrowers, whose microloans allowed them to start up an embroidery or pottery business, or a snack cart or a stand selling cell phone cards, and through such petty entrepreneurship lift themselves out of poverty. "Small Loans, Big Gains," a 2002 Globe editorial on microcredit was titled.
Discuss
COMMENTS (7)
Microlending institutions have sprung up all over the developing world, from India to Bolivia to Serbia; by one estimate, over 150 million people worldwide have taken out a microloan. Government aid groups and NGOs have rushed to fund them, and so have Wall Street banks and hedge funds, enticed by the promise of an anti-poverty program that can do so much while paying for itself - and even turning a nice profit. Grameen Bank and its founder, Mohammad Yunus, were awarded the Nobel Peace Prize in 2006, and Yunus is fond of saying that, thanks to microcredit, his grandchildren will have to go to museums to know what poverty looks like.
But two new research papers suggest that microcredit is not nearly the powerful tool it has been made out to be. The papers, by leading development economists affiliated with MIT's Jameel Poverty Action Lab, have not yet been published, but they are already being called the most thorough, careful studies yet done on the topic. What they find is that, by most measures, microcredit does not offer a way out of poverty. It helps a few of the more entrepreneurial poor to start up businesses, and at the margins it may boost the profits of existing microenterprises, but that doesn't translate into gains for the borrowers, as measured by indicators like income, spending, health, or education. In fact, most microcredit clients actually spend their borrowed money not on a business, but on household expenses, on paying off other debts or on a relatively big-ticket item like a TV or a daughter's wedding. And while microcredit champions point to microloans as a tool for empowering women, the studies see no impact on gender roles, and find evidence that if any one group benefits more, it's male entrepreneurs with existing businesses.
"Microcredit is not a transformational panacea that is going to lift people out of poverty," says Dean Karlan, an economics professor at Yale and a co-author of one of the studies. "There might be little pockets here and there of people who are made better off, but the average effect is weak, if not nonexistent."
In other words, Karlan and others argue, there's a place for microcredit in the campaign to help the world's poor, it's just not a very big one. And in the global anti-poverty fight - where aid budgets and public attention are both limited, and the potential stakes measured in the trajectories of millions of lives - it's vitally important to know what actually works, and what is simply hype. That's all the more true with microcredit, where the interest rates are usually far higher than what we're accustomed to in the developed world, and where there's always the risk that poor borrowers, just like wealthier ones, may end up piling up debts they can't repay.
Microcredit's defenders say the new findings, while suggestive, aren't enough to prove anything. Some argue that they actually show that microcredit works, in a qualified way, providing a cheaper alternative to the village moneylender and his ruinous interest rates. Microcredit's more dramatic effects, they suggest, may take longer to appear than the 1½-to-2-year windows the researchers looked at.
Underlying all of this is a debate over the role and the importance of the micro-entrepreneur. Part of the appeal of microcredit lies in its suggestion that the world's slums are populated not by helpless victims of global forces, but eager entrepreneurs lacking only a $30 loan to start a business and pull themselves out of poverty. The new research underlines the fact that, inspiring as that story may be, it misrepresents how both individuals and nations climb the economic ladder. Developing nations already have far more petty entrepreneurs than wealthy countries do, mostly because people there have little choice but to start their own business if they want to make any money. What these countries don't have enough of are the kinds of steady jobs that more reliably raise incomes, and the sort of enterprises, often quite large, that provide them. Truly addressing the poverty of the developing world may require that we think macro rather than micro.
In 1976, Muhammad Yunus was an American-trained economics professor at Bangladesh's University of Chittagong. A brutal famine two years earlier had made him vividly aware of the precarious lives of the very poor, and he had begun to spend much of his time in Jobra, a village that abutted the university. It was there, he recounts in his autobiography, that he met a woman named Sufiya Begum, a young mother of three who made bamboo stools by hand. Begum was too poor to afford the 5 takas (about 22 cents) per stool that her bamboo cost, so she had to borrow the money from merchants. As part of the deal, she then had to sell the merchants her stools, and they set their prices so that she only cleared two cents a stool.
All she needed to break out of that pernicious cycle, Yunus realized, was 22 cents. Then she could buy her own bamboo and sell her stools on the retail market, using what she earned to buy more bamboo and pocketing the profits. So Yunus decided to lend it to her himself. Working with a student, he drew up a list of 42 Jobra villagers in situations like Begum's and lent them, out of his own pocket, the money it took to pay off their debts. All in all it came to $27.
It was out of this first experiment that Grameen Bank was born; last month the bank disbursed just under $97 million worth of loans to borrowers all over Bangladesh. Yet, despite the explosive growth, there's been little rigorous research on the efficacy of microcredit.
This is not necessarily unusual for development and antipoverty interventions. Such research can be very difficult to do. When the target is something as complex as poverty, even at the level of a small village cause and effect can be maddeningly elusive.
And once an aid organization or philanthropically minded corporation, won over by powerful success stories, commits to an antipoverty tool, whether it's microcredit or bed nets or building rural schools, they tend to lose interest in funding research that could suggest that it doesn't work.
Ironically, the very speed with which microcredit has spread has made it hard to do the sort of comparisons that would most clearly measure its impact: in Bangladesh today it's impossible to find a community where people don't already have access to microcredit.
The new microcredit studies set out to address these challenges. At least one author of each of the papers is affiliated with MIT's Poverty Action Lab, a research center that brings together economists with a determinedly experimental bent. In particular, its researchers all share a belief in randomized controlled trials - the same sort of test that new drugs have to undergo - as a tool for evaluating poverty alleviation measures.
Karlan and his co-author, Jonathan Zinman, an associate economics professor at Dartmouth, looked at a bank in the Philippines that offered microloans. They created their controlled experiment by altering the algorithm the bank used to evaluate creditworthiness so that some borderline applicants were randomly denied loans while other otherwise identical applicants had loans approved. The researchers then followed up with the borrowers and nonborrowers to see what difference the loan had made.
The answer was not much. Neither household income nor spending rose for those who got microloans. And borrowers who did put the money into their businesses - instead of using it, as many did, for household expenses - actually shrank rather than grew their businesses. Karlan and Zinman suggest that this might be because the business owners were taking advantage of the loan to fire unproductive workers to whom they owed financial favors, and those firings seemed to explain the very small gains in profit Karlan and Zinman found. In addition, the gains accrued only to male entrepreneurs, not the women usually targeted by microcredit programs.
The second study, co-authored by Abhijit Banerjee and Esther Duflo, economics professors at MIT, along with Rachel Glennerster, executive director of the Poverty Action Lab, and an MIT economics doctoral student named Cynthia Kinnan, found a slightly larger impact, though a selective one. Working with a microcredit bank in India that was looking to expand in the city of Hyderabad, the researchers did find some small positive effects. Borrowers who already had a business did see some increase in profit. Households without businesses that the researchers judged more predisposed to start one were found to cut back on spending, suggesting they were saving to augment their loan for a capital business expense like a pushcart or a sewing machine. The researchers also found small but encouraging shifts in household spending across the board, with less money spent on "temptation goods" like alcohol, tobacco, and gambling.
Still, overall household spending - a key indicator of financial well-being - stayed about the same. And the researchers found no effect on children's health or education levels, and the women in the borrower homes were no more likely to play a role in household decisions than those in the control group.
To Duflo, this only seems disappointing because expectations for microcredit are so high.
"I don't see this as a negative finding," she says. When asked why she thinks microcredit didn't boost health and education outcomes, she says, "I would really ask the question, 'Why did we expect all these things to happen?' If you give people access to a financial instrument, it's like any other instrument. It's useful, but it's not like the miracle drug to end poverty."
For microcredit's defenders, evidence like this is, at best, an incomplete portrait. In part that's because of the relatively short time horizon of the studies.
"Certainly if people expected to see increasing incomes right away, in 12 months, that might be too much to expect," says Nachiket Mor, an economist and president of India's ICICI Foundation for Inclusive Growth.
Other microcredit proponents argue that the fact that microcredit has proliferated as fast as it has, with new clients signing on in droves and old ones coming back repeatedly, means it must be providing a reliable benefit to borrowers, if only by allowing them to pay off higher-interest moneylender loans.
"The fact that [microcredit] has survived commercially, I take that more seriously than any other piece of evidence," says Tyler Cowen, an economics professor at George Mason University who has studied the topic.
Even among some of microcredit's more passionate proponents, however, there has been a ratcheting down of the rhetoric in recent years. What microcredit may do, they argue, is not transform lives, but simply ameliorate them, giving poor people a more affordable source for credit, and one that, unlike some moneylenders, will not resort to physical violence if someone can't repay.
"The picture that emerges is not of people climbing out of poverty through microenterprise, but people doing what they need to to get by," says David Roodman, a microcredit expert at the Center for Global Development.
Nonetheless, the microcredit narrative of entrepreneurship and self-advancement is a stirring one, and still tends to dominate the image microcredit institutions present to the world.
Karlan sees the romance of this ideology standing in the way of measures that might more directly aid poor households. In many situations, he argues, the most helpful thing for poor households may not be a loan - especially since microloan interest rates can run from 30 up to 100 percent - but making it easier for them to save, or allowing them to buy some form of formal insurance policy against financial shocks. Research has shown that even people making $2 a day can put some money aside, and in many poor neighborhoods people don't save as much as they might simply because there's no trustworthy place to put their savings.
And if there are interventions that can lift whole neighborhoods - and, ultimately, whole nations - out of poverty, they will probably have to be much broader in scope. Part of the appeal of microcredit is that it avoids the frustrations of anti-poverty campaigns that seek to catalyze economic growth at a large scale. But it's a basic tenet of economics that scale has its advantages. Forty workers at a textile plant are going to be much more productive than 40 microentrepreneur weavers each working by themselves.
Partly in response to these concerns, Grameen itself has begun to offer a line of loans of up to $10,000 for what might be called mini- rather than microenterprises. And in a more marked shift, a few NGOs have begun to focus on the previously neglected sector of medium-sized businesses in the developing world, looking not just at loans, but buying equity stakes in the companies to provide them with interest-free money. They're bigger investments, and in the end they may have far bigger returns.
Drake Bennett is the staff writer for Ideas. E-mail drbennett@globe. com .
© Copyright 2009 Globe Newspaper Company.
Also Read ENA report on this article (Bangla):
http://www.khabor. com/news/ prabash/10/ prabasher_ news_10012009_ 0000010.htm
 
 
 
 
 



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[chottala.com] Proud of Dr. Yunus - what have he done?



There is nothing wrong to give a critical look about Grameen Bank and contribution of Dr Yunus. Though he is the only Bangladeshi to secure a Nobel Peace Prize, he has acclaimed star-power for himself and Bangladesh.

Dr Yunus's Grameen bank is in action for almost 30 years now. We need to give it a closer look those who took micro-credit from Grameen bank in 1974, 30 years later where they stand today? No where!

Have there really any substantial change for those who took loan from Grameen Bank?

Grameen micro-credit ain't that cheap, it changes 24% interest rate, hgher than any credit card interest charged.

The person who really made millions from Grameen hoop-hoola, is defintely Dr Yunus. That first woman, Sufia from Jobra, who borrowed 5 taka from Dr Yunus lived in poverty and died in poverty. That's the true case study.



--- On Fri, 10/9/09, Siraj Zaman <sirajuz@hotmail.com> wrote:

From: Siraj Zaman <sirajuz@hotmail.com>
Subject: RE: [chottala.com] Proud of Dr. Yunus - can we STOP biting please?
To: chottala@yahoogroups.com
Date: Friday, October 9, 2009, 6:09 PM

 

It may not have improved the life of middle-class or high-income level people but it tremendously improved the life of the poor and poorest people of the country throughout all areas and all localities. Yes, as I always say, nothing is perfect in the world. But we have to live with the statistics and to support whatever improvements are achieved in the maximum levels, ignoring the minor drawbacks. Is there anything without any drawbacks in the world? None. Humans being so improved as a specie amongst all living beings, still carry filthy urines in their bladders and stinky droppings in their stomachs. Did that make humans so bad? Why not? Because humans have so much more good stuffs compared to having just urine and droppings. Likewise, please look at the more good stuff and not just little bad stuff of something. Many selfish rich people and a lot of selfish middle class people bitterly oppose micro-credits for one main reason, which is, the micro-credit provided the jobs of own to the poor and poorest people and created the scarcity of house-hold servants and day laborers all over Bangladesh. People have to pay more now to find the servants and the day laborers. Those rich and middle-class people consider it as going against the improvement of the society, because of the price hiking in the market of day-laborers and house-servants; and those rich and middle-class people are concerned about their losses in the absolute hoarding and profiteering in the labor market. This is the worst mentality and a lot of people are siding with them, perhaps you did too, and perhaps for that reason you only see the bad affect of the microcerdits, but not the immense improvements of the condition of lives of the poor and poorest people of the country. This must be a corrupt thought.  Uplifting the conditions of the poor and poorest people should be valued as more desirable and more precious above the losses of profits of the well-to-do people's spending in the labor market.
 
By the away, why I have accept your ridiculous information that people of areas where there is no micro-credits are better off? Are you talking about the  poorest people there or about the well-to-do peoplethere? Before and even now, no one used to land money to the poorest people, except robbing their physical labors with very little or no money. Of course, some local local business people (mohajons) or village politicians (matobbars) would lend them money with 200% to 500% interest yearly, and at the end, when the loan could not be paid-off by those poor people, the influential lenders would grab all belongings of those poorest people. Micro-lending interest is about 30% maximum yearly, which is way cheaper than the local lenders. Are you in favor of those local cheaters? I believe you are not. So far all microcrediut small loans have been found to be within the means of the poorest people of all societies throughout the country. 
 


--- On Sun, 10/4/09, Dr. Jamir Chowdhury <americamyland@ gmail.com> wrote:

From: Dr. Jamir Chowdhury <americamyland@ gmail.com>
Subject: Re: [chottala.com] ‘microlending’ doesn’t actually do much to fight poverty - Boston Globe Article
To: chottala@yahoogroup s.com
Date: Sunday, October 4, 2009, 11:03 AM

 
Please compare the povert rates of the areas where Micro-credit was provided VS the areas that recieived support from NRBs.You will find that people from the areas supported by NRBs are in much better conditions. Yes, Micro-credit helps but not to transform the lowest income poor to the mid-income level. thanks.
 


 
On Sat, Oct 3, 2009 at 7:31 PM, Siraj Zaman <sirajuz@hotmail. com> wrote:
 
"Billions of dollars and a Nobel Prize later, it looks like ‘microlending’ doesn’t actually do much to fight poverty" is the most uninformed, ignorant, and untrue statement that someone out of touch of the real ground where it is happening, can only make. I do cordially invite the commentator and the writer of the below too long too absurd essay full of lies and distortion to go in the interior villages of bangladesh like chitpur of Sherpur district or raokhali of rangamati district or mashkanda of Netrokona district or in any of the 64000 interior villages of Bangladesh and collect data about the social life style upliftment of the people of the lowest rung of the society. Compare it with what was 2o years ago and what was 100 years ago to their fore-fathers. It will be quite obvious and quite clear how much improvement the micro-credits did for their lives. Microcredit provided each family a living home, cell phone, cows, goats, plots of very high yielding crops, vegetables or fruits, clothes on them, created millions of independent small jobs where the poors can work and earn and live decent lives what they could not ever afford before other than working as day-laborers with very low or no wage for their entire life. Only because of the small credit, even the poorest of  the poors, can send their children to the schools, especially their daughters, and can buy a bike for each one of them to go to the distant schools form home.  Could anybody imagine before that 100% of the children will go to school in Bangladesh, even it is a poverty stricken country? It happened because of the micro-credit only.  Before when population was half of what is now, used to die significantly by the famines and mongas. Now-e-days no one dies for any famines. Mongas happen but very very less and micro-credit is working fantastically to tackle those crises. The poorest class people before could never thought of making their children educated, but now with the help of microcredits the poorest people  are finding very high yielding self employments such as growing, selling, trading, transporting, communicating, educating, food and other stuff processing, catering, sewing, crafting, painting, and many many activities like these, that provide ample earning as for their needs,  and so no need the children to help them to run the family; and so the children can go to schools and be educated; and change the status of their families when they become educated with higher degrees.
 
Please go to the interior villages of Bangladesh, and verify the truths; before publishing ridiculous essays for seriously affecting and dis-servicing the low-income people that would be quite agaist humanity.  
 

To: khabor@yahoogroups. com; notun_bangladesh@ yahoogroups. com; amra-bangladesi@ yahoogroups. com; reform-bd@yahoogrou ps.com; chottala@yahoogroup s.com; SonarBangladesh@ yahoogroups. com
From: Syed.Aslam3@ gmail.com
Date: Thu, 1 Oct 2009 18:16:18 -0400
Subject: [chottala.com] ‘microlending’ doesn’t actually do much to fight poverty - Boston Globe Article

 

Small change

Billions of dollars and a Nobel Prize later, it looks like ‘microlending’ doesn’t actually do much to fight poverty

By Drake Bennett
Globe Staff / September 20, 2009
In the world of international aid, microcredit is a rock star. The practice of giving very poor people very small loans to start very small businesses has been hailed as one of the very few unambiguous success stories in the long, frustrating fight against Third World poverty. The pioneer of the practice, Bangladesh’s Grameen Bank, has disbursed more than $8 billion in unsecured loans, usually in amounts under $100, to people traditional banks ignore. Along with a 98 percent repayment rate, Grameen has accrued an inspiring collection of stories about its overwhelmingly female borrowers, whose microloans allowed them to start up an embroidery or pottery business, or a snack cart or a stand selling cell phone cards, and through such petty entrepreneurship lift themselves out of poverty. “Small Loans, Big Gains,� a 2002 Globe editorial on microcredit was titled.
Discuss
COMMENTS (7)
Microlending institutions have sprung up all over the developing world, from India to Bolivia to Serbia; by one estimate, over 150 million people worldwide have taken out a microloan. Government aid groups and NGOs have rushed to fund them, and so have Wall Street banks and hedge funds, enticed by the promise of an anti-poverty program that can do so much while paying for itself - and even turning a nice profit. Grameen Bank and its founder, Mohammad Yunus, were awarded the Nobel Peace Prize in 2006, and Yunus is fond of saying that, thanks to microcredit, his grandchildren will have to go to museums to know what poverty looks like.
But two new research papers suggest that microcredit is not nearly the powerful tool it has been made out to be. The papers, by leading development economists affiliated with MIT’s Jameel Poverty Action Lab, have not yet been published, but they are already being called the most thorough, careful studies yet done on the topic. What they find is that, by most measures, microcredit does not offer a way out of poverty. It helps a few of the more entrepreneurial poor to start up businesses, and at the margins it may boost the profits of existing microenterprises, but that doesn’t translate into gains for the borrowers, as measured by indicators like income, spending, health, or education. In fact, most microcredit clients actually spend their borrowed money not on a business, but on household expenses, on paying off other debts or on a relatively big-ticket item like a TV or a daughter’s wedding. And while microcredit champions point to microloans as a tool for empowering women, the studies see no impact on gender roles, and find evidence that if any one group benefits more, it’s male entrepreneurs with existing businesses.
“Microcredit is not a transformational panacea that is going to lift people out of poverty,� says Dean Karlan, an economics professor at Yale and a co-author of one of the studies. “There might be little pockets here and there of people who are made better off, but the average effect is weak, if not nonexistent.�
In other words, Karlan and others argue, there’s a place for microcredit in the campaign to help the world’s poor, it’s just not a very big one. And in the global anti-poverty fight - where aid budgets and public attention are both limited, and the potential stakes measured in the trajectories of millions of lives - it’s vitally important to know what actually works, and what is simply hype. That’s all the more true with microcredit, where the interest rates are usually far higher than what we’re accustomed to in the developed world, and where there’s always the risk that poor borrowers, just like wealthier ones, may end up piling up debts they can’t repay.
Microcredit’s defenders say the new findings, while suggestive, aren’t enough to prove anything. Some argue that they actually show that microcredit works, in a qualified way, providing a cheaper alternative to the village moneylender and his ruinous interest rates. Microcredit’s more dramatic effects, they suggest, may take longer to appear than the 1½-to-2-year windows the researchers looked at.
Underlying all of this is a debate over the role and the importance of the micro-entrepreneur. Part of the appeal of microcredit lies in its suggestion that the world’s slums are populated not by helpless victims of global forces, but eager entrepreneurs lacking only a $30 loan to start a business and pull themselves out of poverty. The new research underlines the fact that, inspiring as that story may be, it misrepresents how both individuals and nations climb the economic ladder. Developing nations already have far more petty entrepreneurs than wealthy countries do, mostly because people there have little choice but to start their own business if they want to make any money. What these countries don’t have enough of are the kinds of steady jobs that more reliably raise incomes, and the sort of enterprises, often quite large, that provide them. Truly addressing the poverty of the developing world may require that we think macro rather than micro.
In 1976, Muhammad Yunus was an American-trained economics professor at Bangladesh’s University of Chittagong. A brutal famine two years earlier had made him vividly aware of the precarious lives of the very poor, and he had begun to spend much of his time in Jobra, a village that abutted the university. It was there, he recounts in his autobiography, that he met a woman named Sufiya Begum, a young mother of three who made bamboo stools by hand. Begum was too poor to afford the 5 takas (about 22 cents) per stool that her bamboo cost, so she had to borrow the money from merchants. As part of the deal, she then had to sell the merchants her stools, and they set their prices so that she only cleared two cents a stool.
All she needed to break out of that pernicious cycle, Yunus realized, was 22 cents. Then she could buy her own bamboo and sell her stools on the retail market, using what she earned to buy more bamboo and pocketing the profits. So Yunus decided to lend it to her himself. Working with a student, he drew up a list of 42 Jobra villagers in situations like Begum’s and lent them, out of his own pocket, the money it took to pay off their debts. All in all it came to $27.
It was out of this first experiment that Grameen Bank was born; last month the bank disbursed just under $97 million worth of loans to borrowers all over Bangladesh. Yet, despite the explosive growth, there’s been little rigorous research on the efficacy of microcredit.
This is not necessarily unusual for development and antipoverty interventions. Such research can be very difficult to do. When the target is something as complex as poverty, even at the level of a small village cause and effect can be maddeningly elusive.
And once an aid organization or philanthropically minded corporation, won over by powerful success stories, commits to an antipoverty tool, whether it’s microcredit or bed nets or building rural schools, they tend to lose interest in funding research that could suggest that it doesn’t work.
Ironically, the very speed with which microcredit has spread has made it hard to do the sort of comparisons that would most clearly measure its impact: in Bangladesh today it’s impossible to find a community where people don’t already have access to microcredit.
The new microcredit studies set out to address these challenges. At least one author of each of the papers is affiliated with MIT’s Poverty Action Lab, a research center that brings together economists with a determinedly experimental bent. In particular, its researchers all share a belief in randomized controlled trials - the same sort of test that new drugs have to undergo - as a tool for evaluating poverty alleviation measures.
Karlan and his co-author, Jonathan Zinman, an associate economics professor at Dartmouth, looked at a bank in the Philippines that offered microloans. They created their controlled experiment by altering the algorithm the bank used to evaluate creditworthiness so that some borderline applicants were randomly denied loans while other otherwise identical applicants had loans approved. The researchers then followed up with the borrowers and nonborrowers to see what difference the loan had made.
The answer was not much. Neither household income nor spending rose for those who got microloans. And borrowers who did put the money into their businesses - instead of using it, as many did, for household expenses - actually shrank rather than grew their businesses. Karlan and Zinman suggest that this might be because the business owners were taking advantage of the loan to fire unproductive workers to whom they owed financial favors, and those firings seemed to explain the very small gains in profit Karlan and Zinman found. In addition, the gains accrued only to male entrepreneurs, not the women usually targeted by microcredit programs.
The second study, co-authored by Abhijit Banerjee and Esther Duflo, economics professors at MIT, along with Rachel Glennerster, executive director of the Poverty Action Lab, and an MIT economics doctoral student named Cynthia Kinnan, found a slightly larger impact, though a selective one. Working with a microcredit bank in India that was looking to expand in the city of Hyderabad, the researchers did find some small positive effects. Borrowers who already had a business did see some increase in profit. Households without businesses that the researchers judged more predisposed to start one were found to cut back on spending, suggesting they were saving to augment their loan for a capital business expense like a pushcart or a sewing machine. The researchers also found small but encouraging shifts in household spending across the board, with less money spent on “temptation goods� like alcohol, tobacco, and gambling.
Still, overall household spending - a key indicator of financial well-being - stayed about the same. And the researchers found no effect on children’s health or education levels, and the women in the borrower homes were no more likely to play a role in household decisions than those in the control group.
To Duflo, this only seems disappointing because expectations for microcredit are so high.
“I don’t see this as a negative finding,� she says. When asked why she thinks microcredit didn’t boost health and education outcomes, she says, “I would really ask the question, ‘Why did we expect all these things to happen?’ If you give people access to a financial instrument, it’s like any other instrument. It’s useful, but it’s not like the miracle drug to end poverty.�
For microcredit’s defenders, evidence like this is, at best, an incomplete portrait. In part that’s because of the relatively short time horizon of the studies.
“Certainly if people expected to see increasing incomes right away, in 12 months, that might be too much to expect,� says Nachiket Mor, an economist and president of India’s ICICI Foundation for Inclusive Growth.
Other microcredit proponents argue that the fact that microcredit has proliferated as fast as it has, with new clients signing on in droves and old ones coming back repeatedly, means it must be providing a reliable benefit to borrowers, if only by allowing them to pay off higher-interest moneylender loans.
“The fact that [microcredit] has survived commercially, I take that more seriously than any other piece of evidence,� says Tyler Cowen, an economics professor at George Mason University who has studied the topic.
Even among some of microcredit’s more passionate proponents, however, there has been a ratcheting down of the rhetoric in recent years. What microcredit may do, they argue, is not transform lives, but simply ameliorate them, giving poor people a more affordable source for credit, and one that, unlike some moneylenders, will not resort to physical violence if someone can’t repay.
“The picture that emerges is not of people climbing out of poverty through microenterprise, but people doing what they need to to get by,� says David Roodman, a microcredit expert at the Center for Global Development.
Nonetheless, the microcredit narrative of entrepreneurship and self-advancement is a stirring one, and still tends to dominate the image microcredit institutions present to the world.
Karlan sees the romance of this ideology standing in the way of measures that might more directly aid poor households. In many situations, he argues, the most helpful thing for poor households may not be a loan - especially since microloan interest rates can run from 30 up to 100 percent - but making it easier for them to save, or allowing them to buy some form of formal insurance policy against financial shocks. Research has shown that even people making $2 a day can put some money aside, and in many poor neighborhoods people don’t save as much as they might simply because there’s no trustworthy place to put their savings.
And if there are interventions that can lift whole neighborhoods - and, ultimately, whole nations - out of poverty, they will probably have to be much broader in scope. Part of the appeal of microcredit is that it avoids the frustrations of anti-poverty campaigns that seek to catalyze economic growth at a large scale. But it’s a basic tenet of economics that scale has its advantages. Forty workers at a textile plant are going to be much more productive than 40 microentrepreneur weavers each working by themselves.
Partly in response to these concerns, Grameen itself has begun to offer a line of loans of up to $10,000 for what might be called mini- rather than microenterprises. And in a more marked shift, a few NGOs have begun to focus on the previously neglected sector of medium-sized businesses in the developing world, looking not just at loans, but buying equity stakes in the companies to provide them with interest-free money. They’re bigger investments, and in the end they may have far bigger returns.
Drake Bennett is the staff writer for Ideas. E-mail drbennett@globe. com .
© Copyright 2009 Globe Newspaper Company.
Also Read ENA report on this article (Bangla):
http://www.khabor. com/news/ prabash/10/ prabasher_ news_10012009_ 0000010.htm
 
 
 
 
 



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