By Susan Feiner and Drucilla Barker
Wednesday, March 14, 2007
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.
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.
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."
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.
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