Thursday, December 14, 2006

Microcredit: Solution to Poverty or False 'Compassionate Capitalism?'

While everyone praises Muhammad Yunus and his original intent of helping poor women in Bangladesh, some critics say microcredit is being misconstrued as a way of ending poverty. We host a debate with Susan Davis, founder and chair of the Grameen Foundation, and world-renowned environmental leader and thinker, Vandana Shiva. ... I think there’s a second context in which microcredit could actually create a problem. And it’s the kind of context in which we have been forced to work. As credit for unaffordable seeds moves nonrenewable seeds, genetically engineered seeds, hybrid seeds into rural areas in India, we are seeing a new kind of debt trap created. Farmer suicides, of which there have been 150,000 in the last decade of market opening made possible because of credit, micro and macro. 150,000 is a large number of peasants being wiped out. I have called this a genocide. And it’s being made possible by putting money available, credit available, so that they could get seeds of Monsanto. In fact, it’s a debate, old debate, I’ve had with Yunus, because there was a time he was going to use microcredit to move GM seeds and Monsanto seeds to the Bangladeshi women. And we had to have a debate, and thank goodness he backed out of that agreement. AMY GOODMAN: I remember this letter that you wrote many years ago. It was going to be called, what, Monsanto Grameen...? VANDANA SHIVA: Partnership. And it was announced at the big microcredit summit. So the point is, credit is a vector. Where does that vector lead you to? Does it lead you to participation in a debt cycle that you can never get out of? I think one of the key issues about credit has to be, is it a debt trap sucking people in to permanent dependence on more and more and more borrowing? And the case of nonrenewable seeds replacing farmers’ open-pollinated varieties, farm-saved seeds is an example where credit could actually create a new crisis. And I think we just have to see what is the credit for? What is it bringing? The second thing, I think, that’s very critical is, at least in India, we have witnessed how microcredit is being used to turn autonomous producers, sovereign producers into consumers. Levers has hijacked the entire microcredit system in Madhya Pradesh, this big giant agribusiness. And today, women who were producing their soaps and their potato chips are today sellers of Levers detergents. And they are called Shakti Ammas, when actually what microcredit has done is dis-empowered the women, in terms of robbing them of their productive capacity. ...

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