A Need To Harness Indigenous Resources
By Moin Qazi
20 November, 2015
Countercurrents.org
During the last 40 years, Third World governments, backed by international aid organisations, have poured billions of dollars into cheap-credit programmes for the poor, particularly in the wake of the World Bank’s 1990 initiative to put poverty reduction at the head of its development priorities. And yet those responsible for such transfers had, and in many cases continue to have, only the haziest of ideas of what they achieved, and how their intervention could be redesigned to improve matters. Studies done by microfinance institutions (MFIs) tended to look at their chosen institution alone, and often to idealise it, leaving readers unclear which of the new ideas might work in which environments.
In many places, those programmes have become essential buffers against drought and landlessness, but they also have been plagued by waste and corruption, a record cited by those who argue that a nationwide employment programme would funnel more money, not to the poor, but rather to corrupt politicians, bureaucrats and local power brokers. Now, a number of organisations have shown that such projects can work, that grass-roots capitalism is one of the best routes out of poverty.
It is now almost an item of faith with me that the poor act rationally, however straitened their circumstances. If their undertakings are too small, or their efforts too thinly spread, to be efficient, it is not because they have miscalculated, but because the markets for land, credit or insurance have failed them. Good management of even the smallest asset can be crucial to very poor people, who live in precarious conditions, threatened by lack of income, shelter and food. Importing expensive, unworkable ideas, equipment and consultants from the North simply destroys the capacity of communities to help themselves. Any goal that is driven from the top by international donors and governments not accountable to the communities served and without financial transparency is doomed to fail.
Although imported programmes have the benefit of supplying ‘pre-tested’ models, they are inherently risky because they may not take root in the local culture when transplanted. Home-grown models have greater chances of success. The hundreds of millions of households who constitute the rural poor are a potential source of great wealth and creativity who, under present institutional, cultural and policy conditions, must seek first and foremost their own survival. Their poverty deprives not only them but also the rest of us of the greater value they could produce under more conducive circumstances. The people who pioneered the world’s most successful development programmes recognized this potential and always sought to evoke it. The results have been miraculous.
We need to bring in the poor to the conversation. Interventions that take the end user into account almost always have better success rates than top-down decision-making. But many social enterprises are still not talking enough to their poor customers to find out what they really want, and too often policy makers have no idea what their end beneficiaries really need. I hope that the expanding use of technology across all segments of society will help to create platforms for exchange of ideas, so that people can better express their needs.
The poor are yet to find their voice, even as the media (for that matter, the entire establishment) have become the megaphone of the classes that are prospering. The preference for growth over social justice, indeed, the argument that economic growth is the road to social justice, is advocated over and above increased spending, is required for accelerated growth to translate into inclusive growth? The answer, I fervently believe, lies in inclusive governance. In the absence of Inclusive governance, the people at the grassroots, that is, the intended beneficiaries of poverty alleviation programmes, are left abjectly dependent on a bureaucratic delivery mechanism over which they have no effective control. The alternative system would be participatory development, where the people themselves are enabled to build their own future through elected representatives responsible to the local community and, therefore, responsive to their needs.
Not only is responsive bureaucratic administration almost a contradiction in terms, the Indian experience of the last six decades would appear to confirm that bureaucratic delivery mechanisms absorb a disproportionately high share of the earmarked expenditure: up to 85 paise in the rupee, said Rajiv Gandhi; perhaps 85 paise says the Planning Commission in a recent evaluation; not quite so high, says the Prime Minister. We can leave it to experts to argue how many angels can dance on the head of a pin; for our purposes, it is enough to note that 75% to 85% of expenditure on poverty alleviation schemes is absorbed by the delivery mechanism itself. No wonder outcomes are so derisory. In India, over a hundred schemes are delivered to the same set of beneficiaries through mutually insulated administrative silos, set up by Central government ministries intent on jealously guarding their respective fiefdoms. Thereby, convergence of schemes at the delivery point becomes virtually impossible, thus depriving beneficiaries of the multiplier effect that would operate if the beneficiaries themselves, through their locally elected leaders, were to have the authority to plan and implement the utilisation of these resources in keeping with their own respective priorities. So far, I am on well-trodden ground. But the argument for a systemic reordering of the delivery mechanism to shift from bureaucratic delivery to participatory development runs much deeper.
Moin Qazi is a well known banker, author and Islamic researcher .He holds doctorates in Economics and English. He was Visiting Fellow at the University of Manchester. He has authored several books on religion, rural finance, culture and handicrafts. He is author of the bestselling book Village Diary of a Development Banker. He is also a recipient of UNESCO World Politics Essay Gold Medal and Rotary International’s Vocational Excellence Award. He is based in Nagpur and can be reached at [email protected]