Monday, January 28, 2008

Micro-Loans Alleviate the Pressure to Emigrate

Alleviating the Pressure to Emigrate: Microloans Help the Poor in their Home Countries

By Brenda Walker

Limits to Growth

While much of the liberal establishment regards immigration as an excellent example of its noble missionary work, the efficacy of immigration as rescue is limited. Like much about the issue, it boils down to basic numbers. Simply put, there are entirely too many poor people on earth to be rescued by immigration to the United States. Do-gooders should study better ways to help the poor where they live, since those billions cannot all come here.

One important answer already exists and has had the kinks worked out through years of trial and error in many small communities throughout the Third World. Microloans have been shown to be an effective way to improve the living standard of the poor where they live. This approach for aiding the world's poor is clearly superior to the rescue fantasy underlying liberal support for current immigration policy. Microlending is inexpensive and it works.

Microloans are very small loans made to women so that they can start their own businesses. It was started by an economics professor, Muhammed Yunus, who believed that the poor needed credit, not charity. Starting in 1976, Yunus created the Grameen Bank and secured donations to fund its lending programs. (Grameen is a Bangladeshi word that means rural.) Today the bank is self-supporting from the interest paid on its loans to the poor. Repayment rates are very high because Grameen has learned how to structure its program for maximum success.

Microloans are aimed at women, since across most cultures women consistently deal more responsibly with the loans than men. An individual woman might buy a sewing machine or a loom, or perhaps a simple handcart to start a delivery business. Although the money is loaned to individual women, every loan must be repaid in order for others in the local group to get any additional loans. In addition, there is a social contract to which every participant must agree. Among other things, members pledge to drink only safe water, limit the size of their families, educate their children, grow vegetables and refuse any participation in dowry customs (which are the source of much violence against women).

This is a prescription that should be welcomed by all political persuasions. Conservatives appreciate that microloans take little or no government involvement and become self-supporting in a very short time. Feminists like the “women's empowerment” in cultures where women have been subjugated by customs like purdah for centuries. In running their own small enterprises, the women gain more standing in the home and community.

For environmentalists, the emphasis on small, sustainable development is a welcome change from the large, often ecologically destructive engineering projects that the World Bank has promoted. In addition, the organizational structure promotes democratic involvement in the village. Women involved in microloans often vote in higher numbers and run for public office themselves. In countries like Bangladesh, this civic involvement is a far cry from the lives of their mothers, who may never have left their home compounds in their lifetimes.

It is also notable that the basic strategy carries over across cultural differences. A Grameen newsletter article announced the successful launch of a microloan program in Sonora Mexico in March 2000. Another branch has been started in Chiapas. The initial reports are very positive, showing that Mexicans do not need to relocate en masse to the U.S. in order to attain a better life. Now will someone tell Mexican President Fox that an open border is not necessary? Of course, Mr. Fox has a more complicated agenda than merely improving the lives of poor Mexicans, which is a minor sidebar to his globalist goals.

In his book, “Banker to the Poor,” microloan creator Yunus makes an astounding statement (pg. 221), “In Bangladesh, there is no reason why people should remain poor.” If the poster country for poverty is seen as a likely candidate for successful self-help, then any country can be.

The remarkable success of the Grameen Bank shows that appropriate self-help programs for the people of impoverished countries can effectively lessen Third World poverty. The poor do not need to be rescued by means of immigration to the United States in a paternalistic display of American elitism.

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