Tom Kruse is a valuable activist in Bolivia. I asked him his opinion of
de Soto.
Dear Pen-Lers:
Michael Perelman asked me to put in my two cents on the de Soto thread,
against the backdrop of incresing social conlict in the region (Ecuador
is
in the news up there, I understand).
First, whether de Soto is considered to be on the right or left. There
is
so much political cross-dressing and gender-bending that it is hard to
follow. Here, for example, heading BancoSol (flagship of the
micro-credit
inudstry, second only to the Grameen Bank) is a former trotskyist.
On the issue: is microlending and titlemaking progressive, in that is
opens
sphere of autonomy and potential bases for good mutualism? Or is it
retrograde, the basis for a new petty bourgeoisie? Dunno, but here are
some
notes.
Microlending is a business. Banks are banks, pretty much. They pretty
it
up with poverty fighting rhetoric, but the results are clear. Poor
people
are good at paying back the money, even better than the rich. Social
collateral (peer pressure to ensure payback) works initially at least.
And
while the borrowing makes for speedier thorughputs, it does not lead to
profitability, or accumulation, or any significant exit from poverty.
So,
banks can claim "success", and they do. They make lots and lots of
money
off the poor. BancoSol, until last year, was the most profitable bank
in
Bolivia -- with average lending rates from 18 to 30%, average loan size
around $1000 (average family income here is about $157/month).
At the same time I have studied and seen clearly how the
borrowing/lending
cycles produce negative social and cultural change. Example: after one
or
two rounds people prefer individual, not collective loans. Group
borrowing
tends to destory social fabrics. Loans are repaid, but frienships and
family networks are destroyed. Example: At BancoSol lending agents, who
work on comission, are separte from collecting agents, who work on
comission. One tells happy stories of prosperity, the latter thretens
debtors prison and legal action. And they neither know nor care what
the
other is saying or doing. A low grade form of economic terrorism.
Where I
worked, the stresses on the families were palpable: always hiding from
repo
men, teaching children to lie, and lots of worry. And now the banks are
centralizing databases. You default at one, your're on the shitlist of
all
of them -- a kind of neo-liberal social death: you become credit
unworthy at
the grassroots level, before family and friends.
Land is another issue. As an architect (former, really) with some
experience in housing the poor here, I know ownership is very sinificant
for
getting people to improve shelter. For this, clear rules and regulation
for
turning possesion into property are needed. So far so good.
(Digression
for Jim Devine: regarding the argument that elites would be aginast
making
peasants landowners on the grounds that it de-proletarianizes them, and
thus
raises labor costs -- I don't buy it. Here there is such a surplus of
people of dubious utility to global capital that it even the most
ambitious
titling program, I suggest, wouldn't make a dent in labor costs. Here
the
editorial pages periodically lament that not even maquilas will come and
exploit us.)
But both these things -- micro lending and making the poor property
owners -- are part of the fashionable notion that if we can just get
prices
right and turn peolpe into shareholders, somehow "the market" will solve
"poverty". I don't buy it. Study after study shows that this is not the
case. Microlending accelerates productive cycles of microenterprises,
but
skims off in interest what ought the basis for accumulation and the
micro
version of a Rostowian take-off out of poverty. Assets like homes and
land
allow you to put up collateral to gain access to resources, but in a
downturn it will also put you out into the street in the bat of an eye.
And
the same people pushing "social capitalization" are the last to accept
we
could or should do something to attenuate the "turbulence" of the global
economy. Here, the classfieds are full of auction announcements due to
foreclosures. And there is a good argument to be made that if you truly
are
against poverty, then at lower extremes at least perhaps houses and land
(and water, electricity, etc.) ought not to be simple commodities, but
basic
rights. But here I go, hazarding my morals again.
Bottom line in serious studies on poverty, families, vulnerability,
etc.:
access to a good job is absolutley the best bet for getting out and
staying
out of poverty. A recent review entitled "Microfinance, Macrohype"
concluded:
Microfinance may well have a role to play in alleviating poverty,
Morduch
concludes, but, even in the best of circumstances, that role will be
limited: helping to "fund self-employment activities that most often
supplement income for borrowers." Making "a real dent in poverty rates,"
he
suggests, will require increased economic growth and more new jobs.
Caloline Moser, Mercedes Gonzalez, Marina Ariza, Orlandina de Oliveira
--
the people who do serious homework on the issue -- all come up with the
same
thing: it's jobs&wages, stupid. In that regard, this just in:
"Weller [author of an importante recent ECLAC/ILO study] said ''growth
without employment'' was the consequence of insufficient growth of
economic
activity and of the tendency towards less-labour intensive technologies,
arising in turn from the transformation brought about in the productive
sector by the neo-liberal reforms. Employment has grown slightly in
sectors
producing tradeable goods, subject to competition from abroad, while 90
percent of the new jobs created in the region in recent decades emerged
in
the service sector, and mainly in sub-sectors with low productivity."
And THAT is what people like de Soto talk about least. Alejandro
Portes, in
explaining the "social capital" fad, notes that it "engages the
attention of
policy-makers seeking less costly, non-economic solutions to social
problems." (Annual Review of Sociology v. 24, 1998) Translated: you
can
sound good while doing nothing. And you can also keep legions of people
busy tinkering at the edges (and quoting de Soto) instead of attacking
at
the center.
"Atacking at the center" ... nice ring, but how to operationalize it?
Here
my transition to conflicts and social movements. The region --
Colombia,
Venezuela, Ecuador, Peru, Bolivia, Argentina -- are all experiencing
cycles
of ever more dramatic protest -- a kind of "harmonization" of tumult and
conflict, irrespective of borders. And while the protests take many
forms,
they DO point in the same direction: "the system" (IMF, WB,
privatization,
etc. etc.). (See attached note on Ecuador, below). It's all about
wresting
back spaces of political independence to make substantive livlihood
choices,
and builiding alternatives (however modest). Two moments here,
wresting,
and building. No wresting, no building.
Here in Cochabamba I am working with the coalition that led
de-privatization
of the water system. In April 2000 a Bechtel subsidiary was run out,
leaving one dead and dozens wounded (the military in the street killing
for
Bechtel; see my photos at www.americas.org under Bolivia). We call it
the
politics of basic needs, and it condenses a lot of stuff: the need to
change
the rules of the game at the highest level (set limits to
privatizations,
the enclosure movement of our age), to decommodify basic things, to
build
coalitions, and to build local capacity (to run the water system). And
I
confess, I'm hopeful. I feel like things are beginning to move, both
wresting and building.
Whew. I intended this to be short; sorry. Please cc comments to
[EMAIL PROTECTED] -- I'm not on the list.
Abrazos!
Tom
----------------------------------------
Tom Kruse
Casilla 5812 / Cochabamba, Bolivia
Tel/Fax: (591-4) 248242, 500849
Email: [EMAIL PROTECTED]
Fax from US or Canada: (413) 280-5234
----------------------------------------
On Ecuador:
From: Karen Hansen-Kuhn [mailto:[EMAIL PROTECTED]]
Thank you for your overwhelming response to the sign-on letter to
Ecuadoran
President Gustavo Noboa.
As you may have heard, a 23-point agreement was reached yesterday
afternoon
between the government and the indigenous movement. It was signed by
the
presidents of the three major indigenous organizations (CONAIE, FENOCIN
and
FEINE) and the country's Presidente and Vice-president. The agreement
was
celebrated with a march of about 5,000 indigenous people -- who had
spent 10
days inside the Polytechnic University in Quito surrounded by the
military
-- who were cheered on by many supporters on the streets of the capital.
With the agreement signed, the government moved to lift the state of
emergency, release all those who had been arrested during the protests
and
suspend all legal actions against them, return all goods and documents
confiscated during these actions, and compensate the families of those
killed and wounded in the protests. During the two-and-a-half weeks of
indigenous mobilization and protest, 5 indigenous people were killed, 50
were wounded (including some members of the military) and 930 were
arrested.
Among the agreements are provisions to:
- Reduce the price of cooking gas by 20%, freeze the price of gasoline
for
at least one year and enforce half-price bus fares for children,
students,
senior citizens and the disabled.
- Restructure the National Development Bank and make $10 million
available
for loans on preferential terms to community businesses and micro, small
and
medium-scale enterprises.
- Increase the budgets of state organizations that run development
programs
for indigenous peoples.
- Recover public funds invested during the country's banking crisis.
- Seek the participation of indigenous and other civil-society
organizations
to develop social investment projects, with a priority given to the
poorest
regions of the country, to be funded through debt swaps.
- Resolve existing conflicts over land, water rights and natural
resource
use.
- Seek consensus on the reform of the social security system.
- Refuse to allow the regionalization of Plan Colombia or to involve the
country in a foreign conflict.
- Broaden the debate and carry out a dialogue on tax reform prior to
approving new legislation.
- Open a dialogue based on the document "Proposals of indigenous,
campesino
and social movements of Ecuador for a national dialogue" to reach
agreements
regarding fiscal, financial, social, trade and monetary policies.
While indigenous peoples and many others are celebrating these
agreements as
a victory, it is also clear that much will depend on when and how these
agreements on paper are carried out in practice. Some Ecuadorans have
pointed out that certain agreements reflect actions that the government
is
obligated to carry out but has failed to implement. Other agreements
are
very similar to those made in the past as a result of previous protests,
reflecting the fact that they were never put into practice.
At the international level, we clearly see that the protests in Ecuador
were
a result of policies imposed by the IMF. At the same time, some of the
agreements signed yesterday run counter to the IMF program in Ecuador.
We
would like to continue to take further action to pressure the IMF to
refrain
from imposing structural adjustment policies in Ecuador and elsewhere,
and
in the case of Ecuador, to support the agreements between the government
and
indigenous movement. We plan to send you additional information in the
next
week with suggestions on how to pressure the IMF through Congress and
the
U.S. Treasury. In this way, we hope to contribute to helping the
indigenous
and social movement in Ecuador hold the government accountable to carry
through with its commitments.
As we mentioned in the initial appeal, there was a protest at the
Ecuadoran
Embassy in Washington, DC yesterday. A local journalist wrote an
article
about the protest that you might find interesting. It is available at
<http://www.dc.indymedia.org/display.php3?article_id=7125> .
Please circulate this note to the lists that received the urgent action
request. We are also sending along the final version of the letter,
which
was sent yesterday to President Noboa and delivered to the Ecuadoran
Ambassador.
Thanks again,
Karen Hansen-Kuhn
Stephanie Weinberg
The Development GAP
--
Michael Perelman
Economics Department
California State University
Chico, CA 95929
Tel. 530-898-5321
E-Mail [EMAIL PROTECTED]
