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March 1997 Volume 7, No. 3
IN THIS ISSUE
MAKING THE CASE
The Microcredit Summit
LITERATURE REVIEWS
Nature Preserves and Development
South African Counterinsurgency
ORGANIZATIONS
National Council of Negro Women
Near East Foundation ~
VITA PROJECTS
The Microcredit Summit:
A View from the Ground
ANNOUNCEMENTS
Degrees in Sustainable Development
Groundwater in The Urban Environment
* * *
DevelopNet News is published monthly by Volunteers in Technical
Assistance (VITA) in Arlington, Virginia, USA. For additional
information, please see the end of this newsletter.
* * *
M a k i n g T h e C a s e
THE MICROCREDIT SUMMIT
The private-sector Grameen Bank in Bangladesh has provided credit to 2.1
million poor people in 36,000 villages. Years ago its successes inspired
an international movement to improve access to credit for the world's
poorest people. This past February the Microcredit Summit, meeting in
Washington, D.C., sought to launch a global campaign and adopt a plan of
action for reaching 100 million of the world's poorest families, especi-
ally the women of those families, with credit for self-employment and
other financial and business services by the year 2005.
The Summit attracted more than 2,000 individuals and groups involved in
microfinance. These ranged from entrepreneurs to representatives of
nongovernmental organizations (NGOs) engaged in microfinance, and donors
providing financial resources for existing microfinance efforts. The
Summit was the culmination of a twenty-month effort to summarize the
case for microcredit as a critical antipoverty tool and outline the
principles that contribute to success. It was also a forum for airing
plans of action that defined the organizational and financial infra-
structure to reach the 100 million families.
The Importance of Microfinance
In the last three decades microfinance -- the provision of financial
services such as credit and savings to low-income entrepreneurs -- has
helped raise employment, income, and living standards of the world's
poor. According to James D. Wolfensohn, President of the World Bank,
microfinance has "brought the vibrancy of the market economy to the
poorest villages and people in the world. This business approach to the
alleviation of poverty has allowed millions of individuals to work their
way out of poverty with dignity."
Nurjahan, a borrower of the Grameen Bank in Bangladesh, is only one
living example of the impact microfinance is having. Abandoned by her
parents at three months of age she was raised by a neighbor. She was
married by the age of twelve only to be abandoned by her husband a year
later when she was three months pregnant. Until she received help from
the Grameen Bank, Nurjahan had never earned more than $37.50 in a year
and owned no land. After five years with Grameen, her annual income is
$250 (just above the national average) and she owns 0.25 hectare of
land. Seasonally, she employs two farm-hands to assist her with her rice
crop. In a country where only 46% of the children reach grade five,
Nurjahan's son is now in 8th grade.
A Call for Action
The World Bank estimates that microfinance institutions now are exten-
ding over $2,500 million worth of credit. This represents only a small
portion of total market demand. The demand is represented by more than
700 million women and their children living in extreme poverty.
Is it possible to reach 100 million of the world's poor by the year 2005
and achieve the Summit's goal? The World Bank holds that loans as small
as $100 would allow this target population to dramatically improve their
livelihoods. The Summit estimates that to provide 100 million poor with
the necessary financial resources to have a positive impact on their
lives would require up to $21,600 million in grants, low interest loans,
and commercial loans. Although this amount is relatively small when
compared with total development aid, private sector donations, social
investment and private capital flows, it is still not negligible.
Already at the Summit and immediately following it pledges were made
toward the $21,600 million. For example, Japan's parliamentary delega-
tion announced that it would work with the Japanese Government to allo-
cate 1% of the country's Official Development Assistance -- approxi-
mately $100 million dollars -- to microenterprise support. By continuing
such assistance for 10 years this Japanese pledge alone will help to
cover 5% of the financial resources required to attain Summit goals.
Is money enough and a commitment to providing credit to the poor enough
to fight poverty? Many at the Summit, including Uganda's president,
Yoweri Museveni, argued that credit by itself couldn't combat poverty if
the necessary infrastructure such as roads and agricultural processing
capacity wasn't already in place. (Please see, also, "VITA Projects,"
below.) Mohini Malhotra, Manager of the World Bank's Consultative Group
to Assist the Poorest, said that beyond these financial resources,
reaching the poor requires building strong local and sustainable micro-
finance institutions designed to provide financial services to them.
The Importance of NGO Participation
The Microcredit Summit was the first global social summit in the 1990s
to be convened by an NGO, Results International (Washington, D.C.). The
Summit called on all sectors of global society -- public, private, as
well as nonprofit -- to participate in the effort to reach more of the
poor. Participants expected, however, that the involvement of NGOs will
be critical.
Heads of state and of governments of countries that participated in the
conference will need to provide leadership in promoting regulatory and
physical infrastructure required for financial services to reach the
poor. At least initially, multilateral and bilateral donors will have to
expand investment in microcredit as a key instrument to alleviate
poverty. Thus far NGOs, along with credit unions and specialized finan-
cial institutions have been responsible for most of the innovation in
microfinance. Now the financial resources of the U.S. Agency for Inter-
national Development, the World Bank and other multilateral and bilat-
eral donors that have traditionally financed microcredit are starting to
dwindle. NGOs that combine flexibility with a grassroots approach to
development can really take a leading role in helping to integrate
microfinance activities with the formal financial system.
Thus, NGOs will have to make an increasingly greater effort to move away
from donor dependence and onto commercial sources of funds. NGOs must
also continue to serve those populations that have so far been unreach-
able by commercial sources of banking and by other banks that focus only
on providing the capital and technical training needed for the exponen-
tial expansion of credit and other financial services. It will be up to
NGOs that work directly with the poor and poorest of the poor to ensure
that their clients -- those in remote, rural areas, and those in need of
extra social or economic services -- come to realize the benefits of
microfinance.
Information: Vicki Tsiliopoulos <mailto:vickit@vita.org>.
L i t e r a t u r e R e v i e w s
NATURE PRESERVES AND DEVELOPMENT
Yan Xun, 1996. "Status, Problems, and Objectives in the Development of
Chinese Nature Reserves." In Richard B. Harris (tr. and ed.) Wildlife
Conservation and Management in China. Chinese Environment and Develop-
ment, Volume 6, no. 4 (special issue, Winter 1995-1996), pages 45-53.
China's nature reserve program is 40 years old and in 1989 began to
expand, partly because of the recognition that the country has lagged
behind others in nature conservation. Moreover, as Yan Xun (Ministry of
Forestry, Beijing) says, "The degradation of the environment now
directly threatens China's social and economic development." Although
the number of reserves has increased, many are too small -- especially
for the protection of larger animals. Many reserves are threatened by
encroaching urban and industrial development and by tourism. Briefly,
China's reserve system aims to save species and improve the natural
environment, diversify the network of nature reserve types, and display
natural scenery, rare fauna, and the cultures and customs of local peo-
ple. Toward these goals, the country will expand international coopera-
tion to improve its reserves management capabilities.
International cooperation started in 1981 with a giant-panda project
conducted jointly with the World Wildlife Fund. Other international
arrangements have provided Chinese scientists opportunities to share
their experiences and engage in collaborative research, leading to the
application of new-found knowledge to "develop management methods
appropriate to China's own unique circumstances." The author expects
more cooperative ventures will lead to a better system of nature pre-
serves in China.
SOUTH AFRICAN COUNTERINSURGENCY
Al Venter, 1997. "Counter Insurgency; Hide and Seek. Remote Pilotless
Vehicles Play Their Parts in Surveillance in Southern Africa." Flight
International, volume 151 (5-11 February 1997): pages 31-33.
Persistent insurgent activity in Kwa-Zulu (South Africa) and the area
around the Natal capital of Pietermaritzburg, where gang warfare some-
times gets out of hand, is fueled by widespread hunger and partisan
encouragement. In response, the South African government has been
developing and deploying lightweight (250 kg) pilotless flight vehicles
for spying on ground trouble spots. When trouble is spotted, an armed
reaction force can be airlifted to cope with it.
The vehicle, called the Kentron "Seeker," resembles Israel's remote
pilotless aircraft, largely because Israeli specialists worked at the
Kentron firm during the Apartheid era when the two nations cooperated.
Israel deploys its own version over southern Lebanon on a 24-hour basis.
The Seeker's camera, which can "see" infrared, has a gyrostat for sta-
bility and can send clear pictures to a ground control station from
5,500 m altitude and the Seeker can range 200 km from ground control. It
will stay aloft for two hours. Once up, it can be detected by "the
enemy," but Israel claims it has yet to lose one over Lebanon, nor have
Hizbollah or Syria succeeded in jamming its communication systems.
South Africa has used Seekers on the Natal south coast since mid 1996,
and with its use many persons accused of capital crimes have been
arrested and many illegal weapons seized. But some South African army
and police officers believe the devices should not be used for spying
within the country, since the armed forces are supposed to be restricted
to coping with external aggression or giving humanitarian aid in a
national crisis. Yet, violence in Natal is forcing many South Africans
to emigrate.
O r g a n i z a t i o n s
NATIONAL COUNCIL OF NEGRO WOMEN
This nonprofit organization, founded in 1935, strives to improve the
socioeconomic conditions of women internationally, particularly those in
Africa. The organization works primarily by providing technical assist-
ance and resources to women's organizations for the implementation of
projects which improve agricultural practices, alleviate hunger and
malnutrition, improve health and nutrition, and provide new income-
generating opportunities. It also provides training in gender issues
relative to management and leadership. The council's current programs
include Botswana, Egypt, Senegal, and Zimbabwe.
Information: Lucile Thomas, International Division, National Council of
Negro Women, 1001 G Street NW, Suite 800, Washington, DC 20001; tel. +1
(202) 628-0015; fax +1 (202) 628-0233; e-mail <mailto:NCNW@scs.howard.edu>.
NEAR EAST FOUNDATION
NEF is a private, nonprofit development agency dedicated to helping the
rural and urban poor in the Middle East and Africa build better lives
for themselves, their families, and their communities. Working closely
with local organizations to address specific needs and create self-
sustaining projects, the foundation provides a diverse range of techni-
cal assistance and customized training related to agriculture, health,
literacy, and income-generation. Currently it is conducting enterprise
development programs in Jordan and Egypt where it is training staff of
local organizations to promote small-scale enterprise and administer
credit schemes. It is also involved in natural resource management pro-
grams in Mali as well as public health programs in Egypt, Morocco, and
Lesotho. The foundation also is working in Lebanon, Sudan, and
Swaziland.
Information: Richard Robarts, Near East Foundation, 342 Madison Avenue,
Suite 1030, New York, New York 10173-1030; tel. +1 (212) 867-0064; fax
+1 (212) 867-0169.
V I T A P r o j e c t s
The Microcredit Summit: A View from the Ground
The Microcredit Summit held 2 to 4 February in Washington, D.C., attrac-
ted many celebrities. These included Queen Sophia of Spain, President
Museveni of Uganda, the First Lady of the United States Hillary Clinton,
and Mohammad Yunus, the founder of the Grameen Bank in Bangladesh. Just
as important were the many grassroots participants from Africa, South
Asia, and Latin America who will ultimately be responsible for carrying
out many of the summit's resolutions. Among the delegation of ten from
Morocco was Paul Rippey, the leader of VITA's microfinance project
there. Four of the Moroccans represented the Finance and Trade minis-
tries and the remaining five were from four different microfinance
institutions.
Morocco is relatively new to microfinance. Its oldest programs are about
three years old. They show a fervent desire to reach people with assis-
tance; some programs are already producing remarkable results in mobil-
izing national resources. Banks and other institutions are contributing
money, and there is rapid growth in the numbers of people receiving
credit nationwide. Microfinance, unknown a couple of years ago, is now
frequently in the media.
"In coming to the Microcredit Summit, I had modest goals" says Rippey;
"I wasn't expecting that in three days the summit was going to educate
participants on the latest approaches in management, the use of data
bases to keep track of clients, or analytical accounting systems that
allow microfinance programs to track progress towards cost recovery. But
I was expecting that we would all come away with a shared vision of
microfinance and how it would work."
How successful was the summit in meeting expectations? Rippey says, "The
participants, at least those from Morocco, got to know each other bet-
ter. Since we all work in the same country and towards the same goal of
providing credit to the poor this was very important. It will ease our
future dealings and collaboration and can only enhance the services
offered to our clients. Just participating at the Microcredit Summit and
being able to see first-hand the number, importance, and obvious dedica-
tion of the speakers and other participants also went a long way towards
dispelling any doubts about the seriousness of the worldwide interest in
and commitment to microfinance."
Despite the positive aspects of participation, the summit had some weak-
nesses. "All the Moroccans that I talked to appreciated the short work-
shops on such topics of interest as savings mobilization, but found them
just that: short. The workshops were long enough to raise good questions
but none of them were answerable in the short time allotted to each
workshop."
Perhaps because 2,000 people met for only three days to address very
complex issues, the summit treated some subjects too superficially. For
example, microfinance is still seen by many as a social movement rather
than a science. Unfortunately, movements often are perceived as weak in
self-analysis or self-criticism, and measure success by the growth in
numbers of adherents or borrowers whatever the cost in quality of servi-
ces. This perception tended to put the world microfinance effort in an
unflattering light.
Rippey also commented, "The notion that microfinance programs must
recover their costs if they are to provide services to large numbers of
people on an indefinite basis was presented but not argued for. The
summit literature gave an intelligent treatment of this and many other
issues, but the literature was largely provided in English; some of the
key participants from Morocco needed to see it in French or Arabic.
Since returning to Morocco, we have noticed that some press reports
disparagingly describe cost recovery as 'an American idea.' The ques-
tion, who will ultimately pay for microfinance: the user or the donor?
will become more important as more programs get under way. It must be
resolved if the summit is to meet its ambitious quantitative goals."
The bottom line? Certainly, in Morocco the summit stimulated a useful
flow of ideas. More people are talking about microfinance, more people
take it seriously, and more ideas are on the table. These trends should
help VITA's efforts and those of the entire microfinance community.
Information: Vicki Tsiliopoulos <mailto:vickit@vita.org>
A n n o u n c e m e n t s
DEGREES IN SUSTAINABLE DEVELOPMENT
The American Institute of Urban and Regional Affairs offers Scholar-
Practitioner Doctoral Degrees (S-PD) or Professional Certification in
Sustainable Development. Both programs are accredited by the World
Council on Sustainable Development (London). Either the Doctor of
Science degree or the Doctor of Social Science degree may be earned
depending on a candidate's primary academic orientation.
The S-PD is intended to prepare professionals in mid- and advanced career
status for senior level assignments as scientists, planners, managers,
and similar positions in agencies of government, industry, nongovernmen-
tal organizations as well as for teaching, research, and consulting
positions in higher education. In addition to satisfying all require-
ments for the conventional doctoral degree, the Scholar-Practitioner
Doctoral Degrees have features comprised of executive leadership or
major project management skills.
Qualified candidates from any nation may apply for admission at any time.
Financial assistance and internships are available for promising, needy
candidates.
Information: Troyt B. York, President, American Institute of Urban and
Regional Affairs, 19251 Dunbridge Way. Gaithersburg, Maryland 20876;
tel. +1 (301) 948-4327, fax +1 (301) 948-4789, e-mail <mailto:susdev@intr.net>,
URL <http://www.intr.net/susdev>.
GROUNDWATER IN THE URBAN ENVIRONMENT
Groundwater plays a critical, but often unrecogized, role in urban
development and management. To explore the key issues and the conflicts
arising from the use of groundwater in urban areas for water supply and
waste disposal, from 21 to 27 September 1997 the International Associ-
ation of Hydrologists will be hosting the XXVII Congress on Groundwater
in the Urban Environment. The congress, to be held in Nottingham, UK,
will also analyze lessons for the more sustainable use of groundwater as
a finite resource.
The main topics to be covered include Groundwater Processes in Urban
Environments; Effect of Wastewater Disposal and Reuse; Impacts of Fall-
ing and Rising Water Levels; Industrially Contaminated Land; and Urban
Water and Environmental Management.
Information: Stephen Foster, c/o Conference Nottingham, Regent House,
Clinton Avenue, Nottingham, NG5 1AZ, UK; tel. +44 (115) 985-6545; fax
+44 (115) 985-6533; e-mail <mailto:S.Foster@bgs.ac.uk>.
* * *
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DevelopNet News is an electronic newsletter published monthly by Volun-
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