Goodbye to Kolkata's "underdeveloped" rickshaw pullers

On Dec. 4, BBC News reported that West Bengal's state assembly finalized a bill that bans hand-pulled rickshaws, a plan that's been in the worls for some years.

In the BBC report, West Bengal Chief Minister Buddhadeb Bhattacharya is quoted as saying "Westerners try to associate beggars and these rickshaws with the Calcutta landscape, but this is not what Calcutta stands for. Our city stands for prosperity and development."

According to the mayor of Kolkata, Bikash Ranjan Bhattacharya, "This inhuman mode of transport should have stopped years ago ... We can't imagine one man sweating and straining to pull another man."

I raise this issue not to argue whether such a ban is wrong or right. Certainly one would hope, perhaps naively, that officials are true to their word when they promise that a rehabilitation package for rickshaw pullers who will be out of work is forthcoming. Yet even if a rehabilitation package materializes, it will only be made available to licensed rickshaw pullers, according to the chief minister.

Instead, I raise this issue because I am interested in the rhetoric employed to justify the ban. Bhattacharya claims that Calcutta stands for "development." By extension, then, he must be implying that rickshaw pulling is a sign of underdevelopment. Does he, perhaps, also mean to suggest that rickshaw pulling is uncivilized? If so, is rickshaw pulling uncivilized because it is inhumane (the word the mayor used to describe rickshaw pulling)?

Or is it uncivilized because it is premised on simple machines--the wheel and lever--as opposed to the advanced machines (e.g., autos, streetcars, subways) of developed societies? In other words, isn't this ban really about changing the world's image of Calcutta? Perhaps this is no different than the motivations for New Delhi's subway?

I understand the argument to ban rickshaw pullers on humanitarian grounds. I have seen Calcutta's rickshaw pullers. I have ridden in a rickshaw behind a barefoot puller treading asphalt streets that must have been 55º C. I believe there must be a healthier and safer way for these men to make a living. But I object to officials using the rhetoric of concern for humanity when, or if, their motives truly lie elsewhere.



Since I quoted at length from Yunus' Nobel Prize acceptance speech in my post yesterday, let me conclude with another excerpt from his speech:

I support globalization and believe it can bring more benefits to the poor than its alternative. But it must be the right kind of globalization. To me, globalization is like a hundred-lane highway criss-crossing the world. If it is a free-for-all highway, its lanes will be taken over by the giant trucks from powerful economies. Bangladeshi rickshaw will be thrown off the highway. In order to have a win-win globalization we must have traffic rules, traffic police, and traffic authority for this global highway. Rule of "strongest takes it all" must be replaced by rules that ensure that the poorest have a place and piece of the action, without being elbowed out by the strong. Globalization must not become financial imperialism.

I wonder, are Calcutta's rickshaw pullers being thrown off the globalization highway? Or is something else going on here? And might this be an opportunity for one of the "social businesses" Yunus promoted in his speech; a business that could provide rickshaw pullers with a basic guaranteed income and better working conditions?

In case readers are interested in seeing what other bloggers are saying about this issue, check out Indra's Drishtikona, Pareltank, or Isaac Schrödinger.

Technorati tags: microfinance, Kolkata, globalization, rickshaw

Follow-up on Yunus/Grameen post

I finally had a chance to read the full text of Muhammad Yunus' Nobel Peace Prize acceptance speech. I was glad to see Yunus make explicit the link between pverty and peace. Back in October, when it was announced that Yunus/Grameen had won, I posted an entry summarizing what various people were saying about Yunus and about the Nobel committee's decision.

In that post, I quoted an editorial from The Economist that argued that Grameen and Yunus did not deserve an award reserved for peacemakers: "This year’s winner is an admirable anti-poverty campaigner, but it is a stretch to call him or the Grameen bank peacemakers." I then went on to argue that The Economist must not understand that peace is much more than the absence of war. Yunus' speech, from which I quote at length, made this point beautifully:

By giving us this prize, the Norwegian Nobel Committee has given important support to the proposition that peace is inextricably linked to poverty. Poverty is a threat to peace.

I believe terrorism cannot be won over by military action ... We must address the root causes of terrorism to end it for all time to come. I believe that putting resources into improving the lives of the poor people is a better strategy than spending it on guns.

Peace should be understood in a human way − in a broad social, political and economic way. Peace is threatened by unjust economic, social and political order, absence of democracy, environmental degradation and absence of human rights.

Finally, Yunus revealed his sociological intellect when he described the self-fulfilling prophecy of poverty:

We get what we want, or what we don't refuse. We accept the fact that we will always have poor people around us, and that poverty is part of human destiny. This is precisely why we continue to have poor people around us. If we firmly believe that poverty is unacceptable to us, and that it should not belong to a civilized society, we would have built appropriate institutions and policies to create a poverty-free world.

We wanted to go to the moon, so we went there. We achieve what we want to achieve. If we are not achieving something, it is because we have not put our minds to it. We create what we want.

In my previous post on microfinance, I sung its praises without also acknowledging its limits. For example, microfinance is not ideally suited to complete capital-intensive infrastructure projects (e.g., water provision, sanitation, road construction and maintenance, etc.). But Yunus, in his speech, elaborated on the concept of social businesses. Such businesses, when focused on needs other than microfinance, may develop the capacity to deliver larger-scale infrastructure projects. According to Yunus, social businesses

will be a new kind of business introduced in the market place with the objective of making a difference in the world. Investors in the social business could get back their investment, but will not take any dividend from the company. Profit would be ploughed back into the company to expand its outreach and improve the quality of its product or service. A social business will be a non-loss, non-dividend company ... The challenge is to innovate business models and apply them to produce desired social results cost-effectively and efficiently. Healthcare for the poor, financial services for the poor, information technology for the poor, education and training for the poor, marketing for the poor, renewable energy − these are all exciting areas for social businesses.

In Grameen, Yunus has already given us a social business that provides financial services to the poor. Let's hope that in another five or ten years we're celebrating a Noble Prize winner who, following in Yunus' footsteps, pioneered a social business that educated or provided health care for the world's poor. Such achievements are vital to a future world in which peace prevails.

Technorati tags: microfinance, Grameen, Muhammad Yunus, Nobel Peace Prize

As long as everyone is blogging about Grameen Bank...

As most of the globally conscious citizens of the world know by now, Dr. Muhammad Yunus, the founder of Grameen Bank, the original microfinance bank, has won the Nobel Peace Prize (technically he won half the prize while the Bank itself won the other half).

In short, microfinance is the ultimate antithesis to World Bank-style lending. Rather than massive loans given to governments of developing countries to undertake colossal mega development projects like dams, microfinancing finds single individuals, or sometimes a small group of individuals, and provides extremely small loans. Through a number of clever strategies, legitimate microfinance institutions like Grameen Bank are able to achieve extraordinary repayment rates. The individuals assuming the loans not only pay back the borrowed money, but develop skills to reinvest the surplus capital earned through the initial investment of the loan.

Here's what a few bloggers have been saying about Yunus and Grameen winning the award:

From Shobak, on the inspiration Grameen offers the world:

Current politics is a death-bound roller coaster, and the passengers can't disembark. People are always banging on about the resulting short supply of optimism. The stories are there, inside and outside the borders - vested with the Innovative NGOs, Tireless Activists, Young Turks and Culture Agitators."

The Globalization Institute Blog jumped on the optimism bandwagon, noting that the Institute "has been advocating a greater emphasis on microfinance in the international development community so we are delighted by this appointment. And we're doing research on how to take microfinance forward."

Kamla Bhatt has a nice summary of some of the major media coverage in her entry, including the following quote from an editorial by Gabriel Rozenberg, Economics Reporter for The Times:

Grameen shows us the poor and the destitute not as pitiable charity cases condemned to their lot, but as thwarted entrepreneurs who just lack the means to improve their families' lives. It is a profoundly optimistic view of human nature. With this inspired choice the Nobel Committee has lit a path that could lead to the eradication of poverty in our time.

And then, just in case there is too much optimism out there, we have The Economist offering its reaction in an editorial titled "Losing its lustre":

Friday October 13th, the Norwegian part of the Nobel Institute ... named the recipient of the 2006 peace award ... [T]he award was given to Muhammad Yunus and Grameen bank in Bangladesh, which promotes lending to the poorest, especially women ... [b]ut the Nobel committee could have made a braver, more difficult, choice by declaring that there would be no recipient at all ... This year’s winner is an admirable anti-poverty campaigner, but it is a stretch to call him or the Grameen bank peacemakers.

When The Economist also questions last year's winner, Kenyan environmentalist Wangari Maathai, claiming that "she has done a lot to plant trees in Kenya, but not much to promote peace," it becomes apparent that there are those who fail to understand how poverty, which emerges out of resource scarcity, is linked to conflict. "Peace," The Economist must not realize, is much more than the absence of war.

Now, what does microfinance have to offer the average citizen of a developed country who wants to help in the fight against global poverty? Most of us place some sort of vague trust in charitable and philanthropic organizations, believing that their modest work will somehow make a difference in the face of widespread poverty. Others believe that institutions like the U.N., or even the World Bank, are responsible for, and dealing with, the problems of poverty and inequality.

But these institutions are large and faceless, and if they are not working effectively to eradicate poverty, the average citizen feels powerless to change them. Many people might perceive microfinance as a tool of similarly large (though not as large as the World Bank) and faceless institutions, and therefore assume no ability to become involved. But the beauty of microfinance is that it is micro. This means that loan amounts are so small, on average, that even a lower-middle class American can contribute a small percentage of her or his annual earnings to a lender that can, in turn, make a loan to a farmer, shopkeeper, or other entrepreneur in need of a cash jumpstart.

But still, how would one find a bank engaged in microfinance, and do these banks give individuals an opportunity to make investments that can be turned around in the form of loans? They may, but there's a major obstacle in that few want to do the research to find out. There's an impressive organization, called Kiva, that has figured out a way to remove the obstacles. Kiva uses the Internet to allow people like me to lend money directly to a person in the developing world. This cuts out the massive overhead of a large bank. It gives me, the "lender," a sense that my money is actually making a difference in someone's life. If I'm happy with my investment, when my loan is repaid I can have Kiva roll right back into the lending pool so that I can help someone else.

At first I was skeptical about whether this was really a viable solution to global poverty. From the information on its website, including glowing endorsements from such media outlets as NPR, ABC News The Wall Street Journal, and Business Week, Kiva seems to have a solid foundation and a model that is already proving effective. I'm sure the most cynical among us can find reason to criticize Kiva's model of microfinance. The Economist, after all, found it rather easy to criticize Yunus and Grameen for not doing enough peacemaking to deserve a Nobel Peace Prize.

But I have to wonder, if such a model were in place six or seven years ago, when many cotton farmers in India began going deep into debt, with usurious interest rates, to buy Bt cotton from Monsanto and other biotech companies, would it have made a difference? In this case, probably not. The reason is that Bt cotton, and all of the other industrial inputs required to grow and harvest such volumes of cotton (or any other crop), are far more expensive than typical microfinance loans would cover.

What's at issue here is the use of technology at a human scale. For example, a hydroelectric dam is not a technology at a human scale. Huge institutional investors, and a stable government infrastructure for managing costs and overseeing construction, are central components to any large-scale dam project. Can a technology, whether a dam that produces electricty or a genetically engineered seed that produces increased yields, really benefit a person if he or she has little or no control over it, and in using it becomes severely dependent on others?

One of the ideas behind microfinance is that it gives people at the bottom of the pyramid a little bit of control over their lives. Not too many mega-dams have made profoundly positive impacts on people's lives. Nor have we heard many promising stories about genetically modified seeds leading to beneficial economic transformations in people's lives (the African farmers in my last post not withstanding). But the stories that come out of the microfinance community are truly amazing.

There are already plenty of organizations in India engaged in microfinance (see here for a thorough article on implementing the concept of microfinance in India, drawing on examples from elsewhere in South Asia). With time, hopefully, the legitimate and credible organizations that are doing good work will rise to the top and those that only aim to take further advantage of people will fall by the wayside. For now, I'm headed back over to Kiva to see if I can find a Ugandan barber, or a Kenyan street vendor, or an Indian tailor who need a small loan to invest in some improvements that will help grow their businesses.

Technorati tags: microfinance, Kiva, Grameen