Posted on 11/15/2002 5:49:19 PM PST by dgallo51
The saber-rattling and chest-beating has all but drowned out decent consideration of the security obligations to make peace by helping the poor and hopeless help themselves. The Bush administration's commitment to increasing development assistance came back into focus this week when Treasury Secretary Paul O'Neill addressed the Microcredit Summit +5 in New York on Wednesday night.
His topic was the plan to require more accountability by poor nations that will receive funds in the expanded U.S. commitment to development aid. The new requirements will link assistance to "the rule of law, enforceable contracts and an everyday attack on corruption,'' O'Neill said. These will be the rules for disbursing aid through President Bush's Millennium Challenge Account, which seeks to increase U.S. aid to $40 billion over three years. This would be an increase of $10 billion over what would be expected under current practices.
While still stingy, relative to what many other developed countries contribute as a percentage of their national wealth, the Millennium Challenge plan represents a big acknowledgement that alleviating poverty, increasing education and improving access to basic needs for health care and food are a vital component of security policy.
It's significant that O'Neill chose the microcredit conference as a forum to say, essentially, that help is on the way. The microcredit summit was a meeting of about 3,000 people from a wide variety of groups interested in reducing acute poverty by lending very small amounts of capital, mostly to women, for them to apply to an enterprise that can help a family make a living.
The goal of the experts and activists at the summit was to examine performance and best practices for working to ensure that 100 million of the world's poorest families, especially the women of those families, are receiving credit for self-employment and other financial and business services by the year 2005. A similar summit set this goal five years ago and reports in the follow-up this week figured that 35 million families have been reached since then with microcredit loans and that by next year the number will be 50 million.
We are talking very small loans, in American terms. Muhammed Yunus, managing director of the Grameen Bank in Bangladesh and a pioneer in microcredit enterprise, said the average start-up loan from Grameen is the equivalent of $30 to $35. The payback rate is more than 98 percent. The bank overhead is a modest 9 percent.
But measured for its social impact, the Grameen and other microcredit lenders are making a large difference in creating work in poor families and their communities. In about 20 years, the microcredit movement has tested itself in the market, found its own efficiencies and reached toward measurable goals that have gained the wide endorsement in such disparate political venues as the U.S. Congress.
Congress has pending legislation, supported across ideology and party, to expand U.S. funding for microcredit. The House-passed bill also directs half the appropriation to the world's poorest people. The accepted definition of "poorest people'' is those who live on less than the equivalent of a dollar a day. The Senate has not passed its version, so prospects for this year are virtually overcome by time and the need for the lame duck session to conclude expeditiously. But the new Congress can and should pick up the microcredit bill and pass it quickly.
There will be great (and reasonable) pressure in the next Congress to reduce "wasteful spending." In the current fiscal and political environment, a cynic might define "wasteful spending'' as programs that don't go directly into some member's state or home district. Actually, microcredit migrated into domestic settings, too, so there are hometown benefits than came from international efforts to extend credit to the poor.
It also would be a mistake for Washington to revert to the old definitions of national security that calculated foreign assistance as a frill. The Bush administration has been wise in understanding that outreach from the richest nation on Earth to the poorest people benefits not only the recipients, but American interests.
Microcredit is an excellent tool to serve such interests. Applause is in order for the civil society movement that has grown up around microcredit as a tactic to address extreme poverty, create markets and jobs. ------------------------------------------------------------------------ Write Holste at gholste@pioneerpress.com or at the Pioneer Press, 345 Cedar St., St. Paul, MN 55101.
Perhaps. But is hard to claim the need to feed at the public trough when you are a mutlitimillionaire. If the funds we put into Socialist Insecurity actually earned 9%, we would all be multimillionaires by the time we turned 65. And this would be a good thing.
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