A capital alternative to terror

By Chan Akya

Groucho Marx is famously said to have turned down the membership of a club with a characteristic putdown, "I don't care to belong to a club that accepts people like me as members." Last week, Muhammad Yunus and his creation the Grameen Bank must have felt the same way after being awarded the Nobel Peace Prize.

Snide remarks apart, the prize recognizes that to win any war on terror, the focus must be on nipping the sources of terrorism in the bud. The war is far from won for Bangladesh, with forthcoming



elections presenting a keen battle between modernist forces and regressive forces that wish to radicalize the population and produce more cannon-fodder for battling the West. It is my keen hope that countries around the world, and particularly around South Asia, learn from the Grameen experience and perhaps even make the experience self-sustainable.

A prize not worth having?
For the first time in a long while, I believe that the Nobel Peace Prize has been awarded to an entity that actually prevents the creation of new violence, rather than rewarding photogenic politicians for work that is quickly forgotten or even reversed. Unlike in the case of prizes in various subjects including the sciences, the Nobel Peace Prize does not examine either the sustainability or stability of achievements that lead to the awards. That is no vile characterization, as a select list of recent winners shows us:


2005: The International Atomic Energy Agency, whose claim to peace contributions has been shredded by the proliferation activities of North Korea and Iran, that it was supposedly monitoring.

2001: The United Nations, whose handling of the situation in the Sudan has produced nothing short of the second genocidal calamity in Africa in 10 years after Rwanda.

2000: Former South Korean president Kim Dae-jung, whose Sunshine Policy paved the way for North Korea's recent nuclear tests.

1996: Bishop Dom Belo and Jose Ramos-Horta, whose work on East Timor failed to result in a sustainable entity, as seen by recent tragic events; and my personal "favorite".

1994: Yasser Arafat, Shimon Peres and Yitzhak Rabin. What the former contributed to world peace since the award is too well known for me to bother elucidating on.

With a club containing such members, Grameen Bank has a long task ahead to prove itself as a sustainable operation, and one that contributes meaningfully to the alleviation of poverty as well as the perpetuation of women's rights. I have written in the past about the religious underpinnings of terrorism [1] but also about the impact of social factors on radicalization [2].

As we will see below, the key spoiler to Grameen Bank's operations arises from the fecund politics of Bangladesh, which appears to be heading in the same direction as the failed democratic experiments elsewhere in Southeast Asia [3].

Rural poverty and terrorism
All across South Asia, increased rural poverty has contributed to rising violence. Most famously, the destabilization of Nepalese democracy by Maoist forces since last year can be cited as a terrifying end-result of years of neglect in feudal societies.

On a similar vein, the radicalization of parts of Pakistan can be attributed to recurring rural poverty. Meanwhile, in India, the New York Times recently reported that some 17,000 farmers had committed suicide after crop failures, the figures for people desperate enough to join Maoist forces in central and southern Indian is likely to be many multiples of that figure, by simple extrapolation of what desperate people are likely to do.

Examining the cannon fodder in the global terrorist network shows us a combination of comfortable middle-class warriors, such as Mohammad Atta, who are radicalized by religious fundamentalism rather than the environment. Almost by definition, such terrorists cannot be cured, but must be prevented from acting.

In contrast, the rank and file of the Taliban, Maoist groups and Sri Lanka's Tigers all appear to have strong economic reasons for joining these movements, that is, wrenching poverty. Herein lies the potential for amelioration offered by Grameen Bank and other sustainable rural poverty alleviation programs.

The programs work by providing micro-finance, ie small loan amounts, for rural folks to start businesses. Mainly, it is used to purchase raw materials such as those used for handicrafts, although at times it is used for more value-added businesses such as decorating textiles. With a straight-forward mechanic, the overall impact is to diversify farmers' revenue sources.

This is particularly important in weather-reliant South Asian states, where a truant monsoon can make the difference between a bumper crop and utter starvation [4]. The bank is owned by the poor, therefore government involvement is kept to a bare minimum.
Impact analysis
The primary impact is cultural in South Asia, a region where the people are poor yet proud. In such a region, charity invariably creates a sense of obligation between donors and recipients, which has been vastly misused by various organizations for purposes ranging from proselytizing and radicalizing to the more mundane vote-gathering that occurs in India.

In contrast, micro-finance creates more tangible obligations - loans which people work to repay. Additionally, lenders are part of the community as well, therefore the idea of adjusting to external inputs is not germane.

A secondary impact of the process is to make women more central to the function of families, with lower reliance on men. This has proven to be useful in most Islamic societies, with Turkey and Bangladesh leading the way. Simply put, women in such societies tend to be less prone to radicalization and more focused on economic well-being.

Indeed, the experience in Bangladesh is unique in some ways in that radicalization appears to be almost exclusively an urban rather than a rural phenomenon, quite different from the more broad-based field which serves as a breeding ground for terrorists in other South Asian countries.

The third aspect of micro-finance, and one that appeals the most to me, is the fact that it turns the dissemination of aid on its head. The "top down" culture of aid organizations provides a set of central rules and principles to be adopted, which causes aid recipients in, say, rural Pakistan to parrot the concerns of far-away Palestinians.

Indian government programs are almost invariably daft, producing significant wastage as well as political linkages. In contrast, micro-finance provides assistance based on business proposals and past history of repayments, and is therefore a "bottom up" program that has limited use and place for centralized principles besides the obvious one of making good loans. As a means to short-circuit the vicious cycle of terror and corruption permeating many South Asian societies, one really couldn't ask for more.

Cautionary footnote
Keeping in mind the unfortunate trajectory of past recipients of the Nobel Peace Prize, Grameen needs to work on its own sustainability. Reading through reams of papers on the bank over the past few days, I find that its operations are largely sub-optimal on a self-sustaining basis.

The difference between a sustainable operation and bankruptcy has been made good with external aid, this mirrors observations by many others as well. Financial troubles arise because many loans are not repaid, and, as with many other Asian countries, Bangladesh is rife with corruption [5].

All of that takes some sheen off the Nobel committee's exuberant praise of this organization, but I am optimistic that recognition by itself probably provides the bank with its best hope for setting an example that the rest of South Asia would do well to follow. Additionally, Western governments would do well to examine this route as a sustainable means to stanch the germination of new terrorists from the region.

Notes
[1] Islam and the absence of Chinese terrorists Asia Times Online, August 6
[2] In-Sen! Asia Times Online, September 16
[3] Demo-crazy Asia Times Online, September 23
[4])Eco-friendly terrorism Asia Times Online, September 30
[5] Wages of corruption Asia Times Online, August 19

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