Microfinance not the Magic Bullet

No Magic Solution to Poverty, says  Bob Rae

   “I am one of those people who believes that microfinance in fact represents not a fad but an understanding that development starts with each person.” Former Ontario Premier Bob Rae made this pronouncement during his keynote address to the recent International Microfinance Summit. He informed the participants that over many years there has been development as a sort of abstraction that takes place at a macro level -- way above and beyond what most people understand. That type of development often leaves a lot of people behind, Rae stressed.

                                Carol Golench, left and Jim Louttit, right president and vice

                                     president of the summit and keynote speaker Bob Rae

 Citing Northern Ontario, as an example, Rae said it’s conceivable that a model of development and investment could be created that would offer almost nothing to the people who actually live in those communities. Fearing that such a model could be devise without much difficulty, Rae advised “unless we make a change (that’s the model that is at risk of taking hold) it’s so important for governments and companies and all Canadians to understand that when First Nations raise issues, real deep issues about how development is happening, the basic question they are asking is, ‘where is the development for us?’

Carol Golench, co-chair of the summit said from the beginning her committee has been dedicated to shining a light on microfinance – a fast growing poverty reduction tool with a number of goals in mind. Educating the community about microfinance is a main objective, because individuals can make a difference when they learn about solutions to poverty. The Microfinance Committee has been establishing a forum for dialogue and action and has been  raising the profile of organizations that make an impact through domestic and international microfinance initiatives.

 Rae who served as Interim Leader of the Liberal Party of Canada, informed his listeners that First Nations people are not asking the question in a greedy or a self-interested way. “They are simply looking around them and saying: ‘how does what you are doing connect to who we are and where we are and the conditions we are facing?’” he continued.

  The keynote speaker advised that micro-financing allows governments and developers to make the connection between the people on the ground and the world of development and to see that in fact make progress can be made in real terms in terms of the conditions of life. “Our objective is not to create masses of wealth that doesn’t trickle down really on very many people. Our objective is to improve the real condition of people,” Rae emphasized.

  The former Ontario Premier reflected on the search for what he termed ‘a magic bullet’ to solve the problem of poverty. The World Bank’s theory of creating mega projects that resulted in mammoth debt; agricultural projects and the host of fads after fads that have not worked, were among failed examples Rae spoke about. He made the emphatic point that “we face under-development in Canada” just like India, Pakistan, Africa and elsewhere where Canadian non- governmental agencies operate.”

 In his keynote address Rae noted that Canadians often think of development as something happening somewhere else. But he reminded the assembly which included students, development workers and advocates that they can see poverty right here in Canada. Then he told a story of his most recent experience of a visit to Martin Falls where the cost of living is going through the roof and children or the community as a whole has no access to the Internet.

   Throughout the day panelists, presenters and participants acknowledged the need for serious action to rid the country and indeed the world of the pangs of poverty. Betty Ann Lavallee, national chief, Congress of Aboriginal Peoples said her community is currently looking at all sectors that can help alleviate poverty. Consequently they are looking at every possible aspect. Some First Nations affiliates are involved in the fishing industry, a multi-million dollar enterprises on the east coast. Some are involved in mining. Others are working in windmills and alternative energies.

  Ian Smillie, international development specialist and author said a lot of the problems of development are not in the country that is poor. They are here, he stressed. Action is require by our governments that have to do with trade and tariffs and subsidies and all kinds of things that cannot be addressed in the village in India or Africa or even in the capital city of those poor countries, Smillie argued. Lots of Non-Governmental Organizations in the south need allies in the north and they want to work on these issues, he counseled. “I think the future for northern NGOs to a large extent is going to be around advocacy and policy issues,” the development specialist concluded.