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Vancouver Participatory Economics Collective

This is the blog for the Vancouver ParEcon Collective. Posts are made by collective members, regarding participatory economics, vision, strategy and related issues.

Monday, October 23, 2006

Nobel, microcredit and Canada in Afghanistan

Will microcredit save the world?
CTV news reports today that Canada's minister responsible for international development aid, Josee Verner, is in the midst of a "surprise visit" to Afghanistan. There, she announced (amongst other things) the granting of $5 million of development aid for Afghanistan which will go "towards micro-credit initiatives to help women establish their own businesses selling and growing fruits and vegetables."
Microcredit has been all the rage in development circles for several years, and the man chiefly responsible, Muhammad Yunus, was just awarded the Nobel Prize for his work.
Typically, microcredit schemes operate in the developing world where they loan out very small sums to small-scale women entrepeneurs who would otherwise not have access to credit. This is supposed to help these women pull themselves up by their bootstraps, meanwhile helping kickstart the economies of the impoverished regions where such projects are found. Thus, there is hope that the free market can help eliminate poverty in the Third World without the troublesome spectre of government involvement. You can hear the capitalist ideologues clapping their hands in glee.
The most celebrated microcredit project is the Grameen Bank, founded by Yunus in his home country of Bangladesh. Besides the supposed innovation of very small loans, the women who borrow do so in small groups which sink or swim as a unit. That is, if one woman in a peer group defaults, none of the other women in her group will receive any more loans.
Reality not so rosy
There is just one slight problem with the microcredit panacea: It's bollocks (apologies to the Black Adder):
**After 8 years under the Grameen tutelage, 55% of borrowing households could not meet basic nutritional needs. That is, the investment capital they are borrowing is in fact used for basic survival consumption, NOT investment.
**Far from loaning to the "poorest of the poor", Grameen borrowers must own their own house!
**Most women borrowers do not maintain control over the money borrowed; male family members end up controlling their businesses. Further, this dynamic tends to INCREASE as loans are renewed. That is, far from empowering women, the Grameen project tends to remove their decision-making power and reinforces traditional female roles.
**Grameen Bank isn't even successful from a capitalist's point of view: it has relied upon outside donations to stay afloat.
(See the great article by Gina Neff in Left Business Observer from 10 years ago.)
What it means
Mainstream commentators see the award of the Nobel to Yunus as confirmation for all of their prejudices: governments cannot eliminate poverty; the poor can pull themselves out of their circumstances; the free market cures all, and so on ad nauseum.
However, the reality which we just reviewed, shows that just the opposite is true. Walden Bello says it best: poverty elimination in the developing world will require "not only massive capital-intensive, state-directed investments to build industries but also an assault on the structures of inequality such as concentrated land ownership".

Sunday, October 22, 2006

Henwood on immigrants

Doug Henwood's Left Business Observer is always an exceptionally good read. Though it's mostly a print publication (so consider subscribing), there are some articles available online (here) which give a taste of the quality of LBO.
For the moment I'd like to call your attention to a new article on the LBO site, A nation of (yesterday's) immigrants. If you are at all curious about the economic effects of immigration (at least as it pertains to the US), it is a must read. He briefly trots out the evidence:
-Several "natural experiments" involving sudden mass immigration (Algerians to France; Cubans to Miami; Russians to Israel) show that immigration has no significant effects on wages or employment levels.
-Far from sucking the system dry, immigrants on average pay more in taxes than they will ever use in services.
-Immmigrants' children, no slouches themselves, tend to get more education and earn more than their native-born counterparts.
The article finishes is with a very interesting graph which charts Americans' attitudes toward immigration since the 60's. Very much worth examining.

Friday, October 13, 2006

Canada, human rights and the media

by Dave Markland

Last week we looked at the findings of a UN report about Canada's human rights record (see previous blog entry, below). The UN committee had over two dozen critical comments and recommendations, many of which pointed up fundamental injustices in our country. Sadly, the major media soft-pedalled the report. We didn't see newspaper front pages screaming: “Renegotiate NAFTA, advises UN panel”, or “Canadian natives denied basic human rights, says UN”, or even “UN body finds Live-in Care Program exploitive”. Instead, what we got was mostly a bit of cut-and-paste journalism in a “Can we afford it?” frame.

UN urges bigger budget for social programs, says corporate media.
A full-text search of nineteen of Canada's English dailies returns 26 separate articles which reference the UNCESCR report, all published within two months of the report's release. Half of those articles ran on May 23, and nearly all of those were drawn from just two news wire reports. (I have copied and pasted these 26 results in the “comments” section for this blog entry.)
Steven Edwards and Carly Weeks' May 23 article, syndicated by CanWest, was run in no less than nine major dailies. (You can see it here.) This, combined with a short Canadian Press article made up virtually all of the coverage of the report, which was on the whole extremely scant.(The honourable exception was the Toronto Star – more on that in a bit.)
The half dozen points which Edwards and Weeks highlight from the report are revealing: minimum wage and welfare are insufficient; employment insurance covers very few workers; our poverty rate is still high; poverty rates among several vulnerable groups are high; Canada is urged to supply adequate child care services; and Aborginal leaders complain that Canada hasn't paid out what it has promised in the past.
The problem with this formulation of the Committee's findings is that it lets Canada off the hook for some of the most damning things in the report. Instead of noting the serious and systemic short-comings which the Committee alleged, the article seeks mainly to point up instances of alleged under-funding. Clearly, the UN Committee sought to underscore fundamental problems in Canadian society, and not simply to raise concern that we are not spending enough on social programs.
Tellingly, both the Globe and Mail and the National Post ran nothing about the Committee report on May 23. While the Post persisted in its silence, the Globe ran an article on Alberta's denial of wrong-doing in Lubicon lands (May 24). The Committee was also cited in two Globe opinion pieces over the following month (June 1 and June 22).

Opportunity knocks
There is little excuse for the near-silence and lack of follow-through on the part of the major media. Here, you can see a joint press release from the various advocacy groups which gave evidence before the UN panel. They held a press conference in Toronto on May 23, the day when (some) media gave limited coverage to the panel's findings. The press conference was surely a perfect opportunity for journalists to pursue further some of the issues raised in the report. Alas, it seems that only the Toronto Star took advantage of this opportunity.

The Toronto Star and Hamilton Spectator
The Toronto Star accounted for over half of all original articles penned on the topic – a total of eight separate articles. Further, the Star's coverage exemplified the sort of trajectory which one might expect from a decent (not to say perfect) newspaper. That is, the paper reported on the release of the report on May 23 on its front page (the only paper to do so); it ran some follow-up articles and op-eds through the rest of the week; and it cited the report again in an editorial entitled “Don't turn away from homeless” on May 30. Finally, an article in the Star's National Report (a Saturday feature section) notes matter-of-factly: “Last month, the United Nations Committee on Economic, Social and Cultural Rights once again criticized Ottawa for failing to recognize social and economic rights as fundamental human rights.”
Meanwhile the Hamilton Spectator had decent coverage, too. (The full-text electronic search I used didn't include the Spec, but several bloggers archived some of their coverage.) This may be partly explained by the fact that at least two of the Canadian presenters in Geneva were from the Hamilton area – indeed one of them blogged for the Spec during his trip to Geneva where he spoke about poverty in the Hamilton area.
Here, it is distressing to note that, while at least one human rights expert who traveled to Geneva to testify before the panel was from British Columbia, no major daily in the province pointed out that the UN report specifically singled out BC for failings over human rights. (It took smaller papers like the Burnaby Now to let us in on that embarrassment.)

The one that got away
The most incriminating and shocking result of the proceedings of the UNCESCR was ignored in all but one media outlet. The Hamilton Spectator notes: “a carefully worded but stinging rebuke of Canada's repeated failure to meet its treaty obligations and is asking the Canadian government to report on progress annually -- instead of every four years.” (See it here.)
No other English print media passed this information along.

Since the release of the Committee's findings, the province of Alberta has continued to ride roughshod over the rights of the Lubicon. (See details of this important struggle here and here and here.)
Also, in recent budget cuts, Harper's Conservative government cut entirely the Court Challenges Program, which UNCESCR had specifically lauded while urging the program's extension.

Next week: The Fraser Institute's take on minimum wage: wrong again!