Early 2008, we have heard and read about the waste of donations by UNICEF Germany (for example on the helpmedia website and in meinungs-blog). For instance, the meinungs-blog writes that “the UNICEF invested 18% of the 100 million German donations alone in administration, press, advertising and greeting cards”. UNICEF has a total budget of more than US$ 3.013 billion in 2007. Does the money really goes to the children in Africa and other parts of the world? The website givewell.net rated aid organizations and lists also charity organizations among the best that we do not know in our neighborhood.
I personally admire the members of aid organizations who really bother with the problems of poor people, especially those in war zones or in villages somewhere in Africa where after 12 to 18 hours of work for the sake of their children’s health the people do not have even pure water to drink or a roof on their houses. These men and women working on-site in the true meaning of support and relief for people are the one who really deserve our admiration but not those for whom poverty (especially of women and children) is only an expedient to help selling block of shares of the bank behind them, thereby increasing their profits (as the “Two-Wings” does).
I did not know that the clothes we donate to various relief organizations destroy the local clothing industry in Africa. It is a competition with cheap Chinese goods that also destroy jobs in poorer countries, as the local production can not keep up with their prices. In Germany, about 600,000 tons of old clothes have been collected last year; how many of these tons will be available to needy people in Africa for free? Nothing, as far as I am informed. In this context, www.radio.de also reported: “Indeed, the market for used clothes became rather a commercial matter than a charitable one.”
A few months ago, I have seen in a German television broadcast a documentary about used, donated clothing in Africa. A journalist has followed a girl’s dress from donation until the moment a girl bought this donated (i.e. free, actually) dress for about 4 euro, which means a lot of money for them in Africa. The journalist then showed this video to the donor in Germany and asked her if she will continue to donate; she replied “no” since she didn’t donate the dress for the middlemen but for the needy who should not be forced to pay for it.
In the “Net World Encyclopedia” you can read that in 2005 there were more than 200,000 relief organizations in Britain alone; I could not figure out how many of these charity organization were in Europe, America or elsewhere. In any case, poverty alleviation has become a major industry in addition to the tourism industry. You can earn a lot from it, you only must know how to reach the hearts of wealthy people, the rest goes automatically.
As described, one way of winning these hearts is awarding distinguished and honorable helpers, who have offered (and still offer) their services to the needy for free, with prizes in a public event. Subsequently requesting the present audience for assisting the own efforts in helping the poor will usually open their hearts and their wallets.
To my later regret, it was such a ceremony for Karlheinz Böhm (founder and activist of the well-known “Menschen für Menschen” aid organization in Ethiopia), arranged by this Two-Wings, that captivated also me. Precisely this foundation was now awarded a price for their (alleged) help for people, especially women in poor countries, with the invested earnings from these and other events. But the truth is that their real interest is only to profit from the Two Wings sharebaskets held by them on behalf of humanity(in my eyes rather a travesty).
For banks and large investors the poor have become an issue, following the Nobel award to Yunus (remember, he granted the so-called “micro credits” to the poor in Bangladesh, who were able to build a secure existence with just a small amount of money). In this connection, the German magazine “Der Spiegel” published a very interesting article on micro-lenders in its issue #31 dated 08/11/2008: “The limits of decency”. The author writes that these micro-loans have been invented by human rights activists, but now large banks and pension funds with higher interest rates come into the business and bring higher returns, of course. Now, is that assistance or exploitation?
The article compares Muhammad Yunus, a good speaker and owner of the Grameen Bank, with another micro-lender and poverty fighter namely Shafiqual Haque Choudhury, owner of the ASA bank, but formally a NGO. The difference between the two is: Choudhury sees no problem in dealing with the micro credits for the poor to enrich himself, Mohammad Yunus on the other hand says “No” to this. Another difference between a loan from Yunus and one from Choudhury is that Yunus builds groups of women granting little loans to them individually, but the repayment is guaranteed by the whole group lowering the burden for each woman, while gaining also a higher repayment rate. On the other hand, Choudhury considers it not correct if other women will take care of repayment when a woman can not pay; he says, why should he punish good debtors when bad ones are behind with their payments? Both give loans only to women and hire men to collect the installments. “Der Spiegel” continues: “… currently about 7.5 million women have a small loan from the Grameen Bank in Bangladesh which is an astonishing success, but not all women are up to their new power and new opportunities; (…) Others have been fobbed a sick or old cow off on them, others had to watch how their husbands spent the money on booze. Approximately every second borrower is currently said to have led their families out of poverty using this money. (…) Choudhury is in the same business as Yunus, but he conducts it not as a missionary, knowing the weakness of human beings, but like a sergeant. He boasts to lead the most effective micro-credit organization in the world and the business magazine ‘Forbes’ backs him up with a comparative study last year; this study lists ASA coming first among 600 micro-credit organizations while the Grameen Bank got stuck on rank 17. (…) Among Chodhury investors are the Credit Suisse, Morgan Stanley, Axa, the Blackstone and the Carlyle Group.”
Whom Yunus cannot stand is the Mexican micro-lender “Compartamos” (Eng. “Let us share”), for him the classic example of modern exploitation, hidden behind a humanitarian façade. “Der Spiegel” writes that Compartamos was established in 1990 as Micro Credit Bank and funded by donations. 2006, it was converted into a bank followed by quotation at the stock exchange on April 20, 2007 being 13-fold oversubscribed and today it is the most profitable bank in Mexico, investors’ favorite because of their returns of 55%. Approximately 850,000 women pay for their loans from Compartamos.
Finally, “Der Spiegel” quotes Yunus: “Muhammad Yunus is anything but happy about this development. He is afraid that the micro credit industry is now more concerned about the returns for the investors than the fight against poverty. ‘Our aim was to oust the usurers and now they are coming back, disguised as benefactors.’”
Yes, as I wrote above, the poverty and the poor (especially women and children) has become a new industry which you can profit a lot from like from an untapped spring, a source with more than one billion people in almost every country in the world. I’m curious if and when the micro-credit will gain a foothold in our neighborhood in Europe and America. However, whether clients in Europe will pay interests of 11% and 14% for micro credits, as with Mohammad Yunus and Shafiqual Haque Choudhury, is doubtful.
Not to be misunderstood, I don’t want to deprive all donors of their charity and good will, otherwise the assistance for the needy may begin to dry up, I would only demonstrate the need of control, in order the largest possible part of the donations will actually come there where it is requested most, namely in the hands of the poor and needy and not in those of financial magnates. Such a control, or even just the effort for it, may have the same rating for the concerned as a cash donation will have.