Pious words will not eradicate poverty, says G-77 Chairman at Microcredit Summit

WASHINGTON, Feb 2 (G-77/IPS)— Addressing the Micro-Credit Summit, the chairman of the Group of 77 Ambassador Daudi Mwakawago of Tanzania called for concrete actions to empower the one billion poverty-stricken people to help themselves out of their misery.

The world, he said, is endowed with resources and riches which, if properly directed, could wipe out the scourge.

“Pious words or lofty declarations will not alleviate the plight of the poor people. What is needed are concrete actions which will empower them to help themselves,” he added in a message addressed to the Microcredit Summit.

It is against this background, he said, that the Group of 77 views the Summit as an important milestone in addressing seriously the menace of poverty in the 20th century.

“In the Group of 77, we view the Summit as providing an enabling environment that will lead to many governments, U.N. agencies, NGOs, civil society and the private sector adapting the initiative to suit their policies and programmes,’’ the chairman pointed out.

He also warned that as long as there are millions of poor people in this world, there can never be reasonable peace. For peace, he said, can only thrive where there is justice.

“As we analyse the content of poverty in many countries, especially the least developed and Africa, the majority of the poor are women. And to make matters worse, all global efforts at restructuring of the economy has thrown more women out of the job market. Hence the term the feminisation of poverty,” he added.

The chairman also praised the Grameen Bank in Banngladesh which has been providing credit mostly to the poorer people of the country. “The international community should create the environment for helping the poor to liberate themselves,” he added.

Meanwhile Summit participants left Washington armed with a declaration heralding a ‘’decade-long strategy to accomplish a pivotal next step in the unleashing of human potential’’; and a plan of action calling for some 21.6 billion dollars in grants and loans for the world’s 100 million poorest families; and promises of help from politicians and aid agencies.

The heads of international agencies spoke of the need to redirect their programmes ‘’from charity to empowerment,’’ as Inter-American Development Bank (IDB) president Enrique Iglesias put it. The IDB, he says, is committing some 500 million dollars over the next five years to ‘’the little bancitos’’.

United Nations Development Programme (UNDP) administrator James Gustave Speth launched ‘MicroStart’, which will provide 41 million dollars in capital grants and technical support to microfinance organisations, initially in some 25 countries.

But can microcredit reasonably be expected to do what Muhammad Yunus, founder of Bangladesh’s Grameen Bank, says it will: ‘’send poverty to where it belongs, the museums’’?
Microcredit providers -- or ‘’practitioners’’ -- say the Summit’s main weakness is that it does not provide them with the ‘’institutional arrangements’’ to manage what happens from now on.
As a consequence, their small grassroots organisations will be left to negotiate individually with large donors whose financial clout likely will determine the future course of their movement.

‘’There is no doubt the balance of political power favours the donors,’’ says Thomas Joseph of India, director of the British charity Action Aid’s Ethiopia office.

Many donors will invest only in programmes that fit their political purposes and visions of microcredit, some practitioners fear -- regardless of local needs and realities.

This may be a particular problem as donors seek to rapidly expand microcredit as an attractive alternative to traditional aid programmes savaged by the budget axe. The notion that the poor should be self-reliant is gaining popularity as quickly as foreign aid and domestic welfare budgets are being cut in donor countries, summit participants noted.