Prizes Upon Prizes, Difficulties Upon Difficulties
Wow -- the prizes this week are stacking up like harvest pumpkins for sale in the little roadside stands that I pass on my way to work (through rural Bucks County, to Bethlehem).
As most readers probably already know, the Nobel Peace prize today went to Mohammed Yunus and the Grameen Bank. Earlier in the week, Kiran Desai won the Booker Prize for The Inheritance of Loss. And yesterday, Orhan Pamuk won the Nobel Prize in Literature. It's worth noting that all three of these prizes are in some sense tied to serious problems in the world: Kiran Desai's novel deals with problems related to globalization; Orhan Pamuk's most recent novel, Snow, is preoccupied with the seeming collapse of Turkish secularism; and the Grameen Bank is an institution that has sprung up to assist desperately poor people in making small movements forward. Prizes upon prizes -- difficulties upon difficulties.
Teju Cole has worthwhile comments and links on both Pamuk and Desai. His Desai post links to Amitava Kumar's comment here. Amitava has suggested some similarities between The Inheritance of Loss and an earlier Booker-prize winner, The God of Small Things. I myself haven't gotten around to reading the Desai yet (though it's been sitting on my shelf for months), so I'll have to remain mum on that question.
I myself wrote a long post on Orhan Pamuk's Snow last year, which you can read here if interested. The first part of the post is the strongest; I'm no longer sure why I thought I needed to mention Hegel in that post.
On the Grameen Bank, the key lines for me in the New York Times profile were these ones:
That is a sentiment I tend to agree with. The Grameen Bank is a for-profit institution, and it has succeeded in actually being profitable for all but three of its fifteen years in business.
I know there have been some criticisms of the microlending model, which has now been copied in many countries outside of Bangladesh (within Bangladesh, BRAC is also very active with microlending). I'm curious if people can expand on these, since I haven't heard anything that makes me think there is a serious downside to this. Saurav at Pass the Roti has suggested that it's probably a mistake to see this as a cookie-cutter solution to poverty everywhere, which sounds right. But that doesn't necessarily mean microcredit specifically in the context of the Indian subcontinent can't make a positive difference for thousands of people.
(As an aside, every time I read about microlending, I think of Premchand's Godaan, and how different that novel would have been if there had been a Grameen Bank in the picture)
* * *
Incidentally, I myself was involved with the selection of a Prize (a much smaller one of course) this fall. I was a judge for the national fiction prize that is held every year by the Asian American Writers' Workshop in New York. Twenty novels were nominated, and I spent a significant chunk of my summer reading them.
The winner this fall is Sightseeing, by Rattawut Lapcharoensap. This is a novel about a working-class boy from a mixed race background growing up in Thailand, a country teeming with foreign tourists. It's a really smart, elegantly written novel, and I hope to have a more detailed take on it in a couple of weeks (whenever I get another spare hour to sit down and write!).
There were also a handful of South Asian novels nominated, and some were quite good. I might start doing profiles of some of those books too, now that the prize has been announced.
As most readers probably already know, the Nobel Peace prize today went to Mohammed Yunus and the Grameen Bank. Earlier in the week, Kiran Desai won the Booker Prize for The Inheritance of Loss. And yesterday, Orhan Pamuk won the Nobel Prize in Literature. It's worth noting that all three of these prizes are in some sense tied to serious problems in the world: Kiran Desai's novel deals with problems related to globalization; Orhan Pamuk's most recent novel, Snow, is preoccupied with the seeming collapse of Turkish secularism; and the Grameen Bank is an institution that has sprung up to assist desperately poor people in making small movements forward. Prizes upon prizes -- difficulties upon difficulties.
Teju Cole has worthwhile comments and links on both Pamuk and Desai. His Desai post links to Amitava Kumar's comment here. Amitava has suggested some similarities between The Inheritance of Loss and an earlier Booker-prize winner, The God of Small Things. I myself haven't gotten around to reading the Desai yet (though it's been sitting on my shelf for months), so I'll have to remain mum on that question.
I myself wrote a long post on Orhan Pamuk's Snow last year, which you can read here if interested. The first part of the post is the strongest; I'm no longer sure why I thought I needed to mention Hegel in that post.
On the Grameen Bank, the key lines for me in the New York Times profile were these ones:
The Peace Prize “looks like a fitting acknowledgment that the ways of the market are not necessarily evil, that markets can be harnessed as forces of good if done properly,” said Nachiket Mor, executive director of Icici Bank, India’s largest privately owned bank, which now has about $550 million in microcredit loans outstanding. (link)
That is a sentiment I tend to agree with. The Grameen Bank is a for-profit institution, and it has succeeded in actually being profitable for all but three of its fifteen years in business.
I know there have been some criticisms of the microlending model, which has now been copied in many countries outside of Bangladesh (within Bangladesh, BRAC is also very active with microlending). I'm curious if people can expand on these, since I haven't heard anything that makes me think there is a serious downside to this. Saurav at Pass the Roti has suggested that it's probably a mistake to see this as a cookie-cutter solution to poverty everywhere, which sounds right. But that doesn't necessarily mean microcredit specifically in the context of the Indian subcontinent can't make a positive difference for thousands of people.
(As an aside, every time I read about microlending, I think of Premchand's Godaan, and how different that novel would have been if there had been a Grameen Bank in the picture)
* * *
Incidentally, I myself was involved with the selection of a Prize (a much smaller one of course) this fall. I was a judge for the national fiction prize that is held every year by the Asian American Writers' Workshop in New York. Twenty novels were nominated, and I spent a significant chunk of my summer reading them.
The winner this fall is Sightseeing, by Rattawut Lapcharoensap. This is a novel about a working-class boy from a mixed race background growing up in Thailand, a country teeming with foreign tourists. It's a really smart, elegantly written novel, and I hope to have a more detailed take on it in a couple of weeks (whenever I get another spare hour to sit down and write!).
There were also a handful of South Asian novels nominated, and some were quite good. I might start doing profiles of some of those books too, now that the prize has been announced.
6 Comments:
I am glad that Mr Yunus got the Prize. He really deserves it for both his idea which was pretty innovative, and more importantly for getting it to work. He has written a book on this which is worth a read.
One of the major factors in India's farmer suicides has been the grip of local moneylenders. Access to non-usurious credit is crucial to lifting people out of poverty. Ever notice that check-cashing stores are one of the only business in poor neighborhoods in America?
That being said, I think the mistake is not with microfinance, per-se, but the idea that this is somehow a vindication of "the market." i.e. That helping the poor is profitable so there is no need for government intervention. For one thing, your own point that it is not a catch-all solution, points out that there are still many areas where government intervention is necessary (or better government). Some have even claimed that Grameen is not quite as profitable as it claims, benefiting from a significant input of development money. And others have questioned whether it has really done that much to lift women out of poverty.
I've started collecting a few relevant posts about this with an eye to eventually writing it up on my blog:
http://del.icio.us/kerim/microfinance
I agree with the later part of Kerim's comment.
Grameen banks and micro lending are not something new to the Indian sub-continent and have been around and running with public support for 20-30 years now, sometimes in the most remote villages where even power is a problem ! In fact, my parents spent their lifetime serving one such institution in small-town south India.
Somehow, the nearly eternal 'cash cycle' of a farmer who sees money only once or twice a year and spends it right away could not jibe well with the bank's monetary interests. In the end, the Indian government took a heavy beating with delinquencies and oustanding debt, until it chose to consolidate these micro-rural establishments into slightly bigger regional rural banks that do macro-lending in addition to the micro-financing to offset some of the bad debt.
I think this situation will not improve unless there is enough awareness and infrastructure available for farmers to take up viable summer jobs that can help them earn throughout the year without a substantial overheads in terms of travel expenses or the cost of acquiring new skills.
Traditional agriculture is very inelastic in terms of income, i.e income from agriculture does not easily rise beyond a point, and at a fundamental level, I would think that this is the problem that most farmers (and microlending schemes) would face. Land in India is highly fragmented, and the income that can be derived from crops is correspondingly limited. Add to this the fact that there is a lot of risk and uncertainty due to weather and water, and one has a very precarious situation for most farmers.
I agree with Kerim that usury has a big role to play in farmer suicides, but if anything usury is a manifestation of a market opportunity. There are a bunch of small farmers on the edge. Lending them money is an easy way to obtain their land on the cheap. If unregulated, this is a natural "market mechanism". I again agree that using microfinance as an example to argue against govt intervention is very dangerous, especially since the people here are extremely vulnerable, and microfinance is probably *not* an example of a market mechanism.
In any case, the Grameen bank still deserves recognition because it is an innovative way of dealing with these issues and probably even works in a limited number of cases, although it may have its failings.
And I thought Sightseeing was a collection of short stoties!
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