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‘Micro-credit not panacea for Monga’ PDF Print E-mail
Monday, 17 March 2008

Staff Correspondent

The non-government organisations that run micro-credit business have failed to help the ultra-poor come out of poverty trap and get self-employed with dignity, resulting in scourge like monga — seasonal joblessness, economists have said.

They also criticised the government’s manpower training bureau and overseas recruiting agencies in the private sector for failing to create job opportunities for the northern poor.

‘The NGOs which run business with micro-credit have failed to give the ultra-poor the dignity which may prompt them to eradicate their poverty.

Micro-credit lenders have not taken into consideration the people’s ability or inability to work,’ said senior economist Muzaffer Ahmad.

Akbar Ali Khan, a former finance secretary who now chairs Regulatory Reforms Commission, expressed his conviction that micro-credit did not solve the problems of the poorest of the poor, who suffered from malnutrition for years together and lost entrepreneurial ability.

Compared to national average gross domestic manufacturing product at Tk 2,720, it is Tk 254 for Lalmohirhat, Tk 263 for Nilphamar, Tk 341 for Kurigram, Tk 400 for Gaibandha and Tk 820 for relatively well-off Rangur among the monga-prone northern districts, show research findings presented at the seminar on ‘Public and Private Initiatives in Monga Mitigation: Lessons Learnt and Way Forward.’

The function was jointly organised by Neeti Gobeshona Kendra and Social Development Foundation at the Bangladesh Institute of Administration and Management on Saturday.

Referring to limitations of micro-credit, Akbar cited example that a micro-credit recipient might be self-employed by selling flattened rice or fattening cattle only at the cost of another poor who is more vulnerable.

‘Yes! Micro-credit can pay dividends to moderate poor and be effective only if the economy grows in a healthy manner.’

Both Muzaffer and Akbar termed the monga ‘nothing but a poverty syndrome’, let alone a seasonal distress, because income opportunities have not been created.

They proposed savings scheme facilities and also employment guarantee schemes for the monga-affected people. MM Akash, economics professor of Dhaka University, equally blamed the NGOs and the government’s apex microfinance window for contributing to unending poverty through loans of meagre amounts. ‘The philosophy of the government and the NOGs is the same: Just to keep people alive for using them in micro-credit business,’ he said.

‘Let us not enter into a vicious cycle of loans and grants without income generating activities,’ said Rushidan Islam Rahman, a researcher at Bangladesh Institute of Development Studies, suggesting agricultural diversification, small and medium industries and revitalisation of cottage industries for the northern region.

As many as 230 NGOs have been working in Rangpur for 30 years, but the status of the poor there could not be elevated in absence of ownership of the people, revealed the research findings presented at the group discussion.

Demands for land and wetland reforms were also raised for distribution of resources among the poor. Steps should be taken to send abroad 2-3 lakh labourers from monga-affected region so that remittance earning could contribute to the poverty alleviation.

In the monga-affected areas, the government distributed Tk 266 crore as against Tk 72 crore by the NGOs in recent years, said researcher Lenin Azad, who criticised the instalment system of micro-credit repayment for prolonging poverty there. Pointing to a baseline survey which gave the number of households vulnerable to monga at 11 lakh, Palli Karma-Shahayak Foundation managing director Quazi Mesbahuddin Ahmed stressed the need for continuation of the safety-net programmes like ‘cash for work’ during the lean season.

Salimullah Khan, a law professor of Stamford University, criticised the approaches such as ‘monga mitigation’ or ‘poverty alleviation’ saying that the underlying problem was not being addressed to keep poverty alive.

‘There has been a mockery with monga,’ he said adding that non-solution of agrarian problem had manifested other problems in various syndromes of poverty. In this context, he noted that at the age of globalisation and individualism, the problem of nation-state was not being addressed properly.

‘Unless we can define the existence of the nation-state, our inability will lead us to ruination,’ cautioned economist Sajjad Zahir. He called for redefining the activities of NGOs in eradicating poverty. In the keynote, Sheikh Toufiq, a teacher of the North South University, underlined the importance of a comprehensive programme by connecting the northern region with mainstream national economic activities to end monga.

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