3/19/02

MICROFINANCE CAN CLOSE THE ''HOPE GAP'' LEFT BY TRADITIONAL AID

An interview with Queen Rania Al-Abdullah of Jordan

Queen Rania Al-Abdullah is the Queen of Jordan. She spoke with
Global Viewpoint editor Nathan Gardels in Los Angeles en route to the United Nations meeting on trade, development and finance being held this week in Monterey, Mexico.

In Los Angeles, she launched ''The Global Endowment for the Poor,"
'a fund to connect individual donors with loan recipients worldwide. On Friday (March 22), in Mexico City, she will dispense 15 microfinance loans of less than $200 each to 15 women.


GLOBAL VIEWPOINT: You have championed the cause of microfinance loans as a way to lift the absolute poor, especially women, from hopelessness and dependence to self-reliance. As world leaders gather in Mexico under the aegis of the United Nations to discuss development, trade and aid, how high should this be on the agenda?

QUEEN RANIA: Microfinance now has such a credible history as a tool to empower people, especially women, and to close the gap between the haves and the have-nots that it is becoming high on the official agenda for development. Even the U.S. Congress has just earmarked a large new sum of money for microfinance through AID (the Agency for International Development).

GLOBAL VIEWPOINT: With such small sums, how can microfinance change anything?

QUEEN RANIA: Because it creates hope. Today we hear a lot about what divides us -- the digital divide, the technology gap and the disparities between developed and developing nations.

But I believe the greatest challenge is something that lies beneath all these dangers -- the hope gap. This gap separates the world's people into those who have futures and those who don't.

The hope gap widens when whole communities are left behind, held back not by their unwillingness to work, but because of lack of resources, technology and education. And when nations are bypassed by global economic growth, that gap becomes a chasm into which hope just disappears.

Governments and charities have spent vast sums and energies to find ways around this problem, but conventional assistance has largely proved to be just a detour. The aid mentality simply doesn't provide the independence and opportunity that people need.

In my years of working on this problem in Jordan and elsewhere, I have seen people leap that gap through microfinance -- the brilliantly simple idea that small loans, on a local level, to individuals who are accountable, add up to big changes globally for millions.

Microfinance is not about jobs for bureaucrats. It is about
people-to-people partnerships, a relationship of respect and
responsibility between lender and borrower.

Nowhere is money better spent. The self-renewing nature of microfinance means that money contributed by government and individuals alike becomes an endowment because it is renewable. Repaid loans are recycled back into communities to create more jobs and more businesses. Across the world, the experience of microfinance is that of a 97 percent repayment rate -- something that would make a conventional banker envious.

GLOBAL VIEWPOINT: Can you give me a specific example or two?

QUEEN RANIA: In Kosovo, I visited war-torn communities being rebuilt with help from small loans. One example that comes to mind from 1999 was a woman named Ganimette Mareku. Her husband, a factory worker, was seized by Serbian forces and marched off with a group of men who have not been seen since.

She now had to be the breadwinner for their three children. Traditional aid might have helped her survive. but when that aid ended, so would any hope it had brought. Fortunately, she was connected up with FINCA (The Foundation for International Community Assistance), a microfinance organization that aspires to be a kind of world bank for the poor. With a $250 loan, she became a bread seller, opening a tiny store with fresh bread, fruits and vegetables. Today, she has leveraged the reinvested
income from that business into a larger one that sells hand-made table cloths.

This same process is crucial today for other war-torn places like
Afghanistan, offering new hope for families and new hope for women seeking independence and self-worth.

GLOBAL VIEWPOINT: If we are to be serious about development, isn't it really a task for government aid in the end because the sums needed are so enormous?

QUEEN RANIA: I'd rather put it the other way -- the opportunities are enormous in civil society.

With all the reexamination since September 11, a lot of us have been surprised to discover the suffering and strife of so many across the world. This new knowledge of the plight of others has created a kind of global consciousness. People really want to reach out to educate themselves about the rest of the world, and to help.

We should not always wait for our leaders or for our governments to act. People -- civil society -- should take the lead and make change ourselves. We need to be proactive. If people who donate money know where it is going, and what for, they will give it in enormous amounts. One million dollars alone can change the living standards in a village for six or seven years. That matters.


(c) 2002, Global Viewpoint. Distributed by Los Angeles Times Syndicate International, a division of Tribune Media Services
For immediate release (Distributed 3/19/02)