Magazine article Monthly Review

Bangladesh-A Model of Neoliberalism: The Case of Microfinance and NGOs

Magazine article Monthly Review

Bangladesh-A Model of Neoliberalism: The Case of Microfinance and NGOs

Article excerpt

The Myth and the Theatre

In 2006, a few months after the Nobel Peace Prize for Muhammad Yunus and Grameen Bank was announced, I was visiting Germany. Quite understandably, I found nonresident Bangladeshis overwhelmed with joy and pride about the prize. Many Germans, including left academics and activists, looked at it as a victory over neoliberalism. One German activist theatre group invited me to the show of their latest drama, Taslima and the Microcredit. The show was eye opening for me: I realized to what extent Grameen Bank had been misunderstood in the West, and how media campaigns and public relations activities, including embedded studies, created a myth around the Grameen Bank and Yunus.

The play was set in a remote village of Bangladesh, full of poor people and few landlords. Taslima, a poor girl, lived there with her parents. One day, a fully suited and booted World Bank consultant arrived with a "development" project to rescue the poor and make the village developed. After some time the World Bank project, as usual, created havoc-bringing more distress for the poor, more money for the rich, and intensifying natural disaster. The increasing floods and river erosion made Taslima's family lose everything. At this point a miracle happened: Grameen SOS arrived. The poor villagers received information about microcredit, the way to prosperity and empowerment! Taslima and others formed a group to get microcredit, but since they only had four members, they needed one more to form a group eligible for a loan. In the meantime, the World Bank consultant realized his disastrous role, and after desperately looking for Taslima to begin a new life, he joined her, leaving his suited and booted world behind. They became five, allowing them to form a group to enter the microcredit world, and they lived happily ever after!

The theatre organizers requested me to join a discussion following the show. Standing before a mesmerized audience, I had to tell them the hard truth with facts and figures. 1 said that, despite their best wishes, they were making a terrible mistake. Grameen had never been an alternative to the World Bank-pushed neoliberal economic model; rather, it was born and brought up as a necessary supplement to it.

It is therefore necessary to examine microfinance and the NGO model in a larger context, as well as the connections between the financialization of global capitalism and the neoliberal reforms that actually created the space for the microfinance boom. It is also important to investigate the nature and direction of microfinance in Bangladesh-its impact on the lives and livelihoods of the poor, and on the macroeconomic reality.

Globalization, Financialization, and Privatization

Globalization is not a sudden phenomenon of capitalism. Capitalism's dynamics have always been uneven with a global dimension. In the recent history of capitalism, Paul Sweezy identified its "three most important underlying trends" that began with the reces- sion of 1974-1975: (1) The slowing down of the overall rate of growth; (2) the worldwide proliferation of monopolistic (or oligopolistic) multinational corporations; and (3) what may be called "the financialization of the capital accumulation process."1

Neoliberalism has been an outcome of these dynamics. It swept the world in three phases: (1) It began in the 1970s, and was later pushed forward with the forceful support of Ronald Regan and Margaret Thatcher in the 1980s. (2) The fall of the USSR created unprecedented opportunities for neoliberal ideologues to dominate the development thinking. (3) Since 2001, the so-called War on Terror has strengthened corporate power and rationalized the use of force for geopolitical ends.

In the last few decades, world trade has expanded quickly. Most economies have become more integrated into a single global economic system, and information and communications systems have developed at a fast rate because of the rapid development of information technology. …

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