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Few documentaries in the past years can claim to have had as much impact on transnational development as The Micro Debt. Tom Heinemann‘s documentary film, produced for Norwegian public broadcasting, has contributed to a wave of critical reasoning about microfinance, but also to the axing of Grameen Bank’s founder, Muhammad Yunus. While Heinemann wasn’t out to harm Yunus, the documentary’s fallout (as well as the Indian microfinance crisis) was an opportunity for politicians in Bangladesh to remove a weakened Yunus from office.

All in all, The Micro Debt doesn’t shed a good light onto microfinance, and in return has come under fire from the microfinance community, an epistemic community which doesn’t take criticism well. Grameen Foundation in particular has mounted an organised attack on Heinemann and his film, engaging PR firm Burson-Marsteller to disseminate counter-claims and draw into question the film’s integrity. But The Micro Debt is becoming increasingly difficult to ignore or deny. It won in the “Television” category at the Avanca Film Festival in Portugal earlier this year, and may win more awards at the various other festivals internationally where it has been nominated. And it’s going on tour in the USA and Canada this month (see below).

Tom Heinemann: “The Micro Debt- a critical investigation into the dark side of Microcredit” (2010)

The real message of the film is that, after three decades, there is still no concrete evidence that microcredit actually does anything for the poor. Heinemann’s main point is that Western donors have been naive in their enthusiasm about microfinance, and his poverty-stricken interviewees testify that this might even worsen their precarious situation.

A misrepresented film

The film’s director Heinemann visited Bangladesh, the Mecca of microfinance, to check up on the successes claimed by Grameen Bank and other microfinance organisations regarding poverty alleviation. He investigated Grameen’s funding from the Norwegian government (where he uncovered financial irregularities amounting to $100 million) and spoke to numerous academic and practitioner experts. The film also shows him being denied interviews with Muhammad Yunus on several occasions.

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This post is provided by guest blogger Domen Bajde, Assistant Professor of Marketing at Faculty of Economics (FELU) at the University of Ljubljana/Slovenia. He is also running a personal blog at bajde.net.

In one of his depressingly amusing anecdotes Ronald Reagan suggests that in the US ‘War on poverty’ (declared by Lyndon B. Johnson two decades earlier) ‘poverty won.’ In the decades that followed, Reagan’s smug conclusion has resonated with many who have either lost faith in organized political/governmental action against poverty or have altogether refused to conceive of poverty as an issue of governance. Similar qualms have been raised in regard to nonprofits’ and charitable organizations’ ability to effectively besiege poverty. Not surprisingly, the ‘foot soldiers’ of the anti-poverty regiment (i.e., regular citizens/donors) are often overwhelmed by the endless charity appeals and a profound sense of hopelessness.

In our collective efforts to discover (create?) ‘fresh’ champions in the ongoing war on poverty, many heads have turned to business. Philanthropy-business hybrids, such as venture philanthropyphilanthrocapitalism or social entrepreneurship, have become central to contemporary pursuits of poverty alleviation. These hybrid alternatives are often depicted as an unproblematic marriage of economy (self-interest, resource management) and philanthropy (social values, charitable giving). Due to their supposedly apolitical and non-ideological nature they appeal to individuals of varied political convictions and domiciles (globally, so to speak). Read the rest of this entry »

I’ve recently been reading through the thought-provoking  (albeit somewhat attention-grabbingly titled) book Participation: The New Tyranny?. The authors from a broad range of disciplinary backgrounds take on the paradigm of participatory development from various angles, from failing to account for local power asymmetries and élite capture, to the technicalist perfunctory nature of many participation processes.

Part of Bill Cooke’s chapter entitled “The Social Psychological Limits of Participation?” caught my eye because of his consise elucidation of groupthink and its relation to development policy-making and practice, both at the transnational and the local level.

In a debate I had last month on this blog with David Roodman of CGD about Milford Bateman’s book, I levied what I thought was a rather strong charge against the (so-called, self-proclaimed) microfinance community: that its world-view is skewed and closed-off by mechanisms of groupthink. That was because I was trying to defend Milford Bateman’s argument against a misconception of  his critics, that he held a conspiracy theory of microfinance and neoliberalism. I begged to differ by explaining Bateman’s analysis of the microfinance community as a transnational epistemic community plagued by group-typical groupthink.

So I thought I’d put my allegation to a brief test here against Irving Janis‘ eight symptoms of groupthink as summed up by Bill Cooke:

Sypmptom 1: The illusion of invulnerability “An over-optimism about the power of the group and the lack of any real threat to the status quo.”

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The last several weeks have been extremely frustrating for many activists, international organizations and general public. Several international summits have shown that the global governance system was significantly damaged by the global financial crisis. The crisis created uncertainty about the future and made governments of the world’s leading economies careful about their commitments. After the meeting of parties of the UN Framework Convention on Climate Change on 2-4 November 2009 in Barcelona it became clear that the conference of parties to be held in Copenhagen in December was not likely to result in any legally binding arrangement to succeed the Kyoto Protocol. The World Summit on Food Security held on 16-18 November also did not result in any significant binding commitments. Meanwhile, the Food and Agriculture Organization of the UN reports that due to the global economic recession, the number of hungry people in the world will exceed one billion in 2009. In 2008, it was 850 million people. Only the G-20 Summit in Pittsburgh in September 2009 can be seen as a success of international regulatory efforts, at least to some extent. G-8 was transformed into G-20. The general principles of the new global economic architecture were approved. One of such principles is tough regulation of financial markets. Read the rest of this entry »

Even Karl Marx, who saw Capitalism as a production system governed essentially by inescapable laws, acknowledged the key role of special actors who made it their job to advertise the benefits of the market. The market, a political project, needs these people to create the “right” environment. Marx often called them “sycophants”, an ancient Greek word denoting servile persons who would flatter potentates, and even denounce their own peers, in order to garner favour.

Christoph Deutschmann’s fascinating new book, which analyses Capitalism as equivalent to a modern secular religion, also sees these actors performing an important function. He views many economists and business “experts” as performing for the market a role equivalent to that of priests in the Christian church – to interpret the signs given by the deity and to make predictions based on them.

Be they high priests or sycophants, the PR workers of global Capitalism (those who haven’t, at least temporarily, defected to the pro-government side, so long as it subsidises business) are getting in gear again – they literally have a world to lose. However, in this present crisis, neither the numbers, nor the facts, nor people’s everyday experience, really speak strongly for the priests’ side. So some turn to a rather “liberal” treatment of the facts.

Take for instance the statement that luxury goods are cheaper than ever thanks to mass-production. True. But most people in the world haven’t had much from this, while they are getting a taste of the flipside; the massive rise in grain prices over the past years is literally causing riots and civil wars in the South (Haiti, Sudan, Congo…).

Grain Prices

Yesterday’s special business section in the German broadsheet “Frankfurter Allgemeine Zeitung” (FAZ) opened with a bleeding-heart appeal for more faith in the market, based on the view that everything isn’t so bad after all. If Capitalism has served us so well for so long, why rebuke it just because of this crisis? Maybe we can bring out the sun simply by wearing sunglasses? Read the rest of this entry »

The Book

Governance across borders: transnational fields and transversal themes. Leonhard Dobusch, Philip Mader and Sigrid Quack (eds.), 2013, epubli publishers.
December 2022
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