“The system is the cause of all this poverty, not the person”

Just finished watching this amazing video of Muhammad Yunus speaking in Melbourne, courtesy of SlowTV.

The story of the Grameen Bank is well known, and I won’t attempt to retell. I highly suggest you follow the link and watch yourself.

It would be fictitious to think that this program could be recreated directly in a developed country like Australia with the same scale of success. Even though we have unacceptable poverty in parts of Australia the fact remains that we are a developed nation with a strong economy with a modern and stable Government.

However, I though it a useful exercise to break down some of the social benefits of the Grameen Bank, to see if there are lessons that can be applied to a post-industrial nation such as Australia, in spite of the distinct cultural and socio-economic differences with Bangladesh. This is what I have come up with.

1. Access to credit

2. Enabling women

3. Financial literacy

Australian and Bangladesh societies differ in innumerable ways, but I took one lesson from the talk that translates well. This is the importance of financial literacy. This does not discount issues of access to credit or the status of women, but I believe that whilst these problems have not been fully resolved in Australian society, much more attention has been paid to these issues than financial literacy.

Financial literacy should be shared, as through the example of the Grameen Bank, with dignity. The Grameen Bank’s teaching financial literacy through enabling programs, ie by lending for the purpose of starting a business, differs grossly to the current Australian example of dealing with a lack of financial literacy amongst impoverished households – blanket welfare quarantining across whole classes of society (starting with the racially offensive practice of trialing the program on Indigenous Australians in the Northern Territory).

Australia’s welfare state, high cost-of-living and wage structures mean that starting a small business is unlikely to be the best path out of poverty for the low-skilled; education stable employment is likely to be more beneficial. But we must find better ways to increase financial literacy amongst struggling households without resorting to programs that strip dignity, and treat only the outcome of the problem without developing long term benefits to the people we are trying to help.

On a side point, the NSW Government is currently sitting on funds promised for financial counseling up to nine months ago. with no mention of when the funds might role out. My understanding from interactions in the Redfern community and working on the affordability of utilities is that financial counseling and workshops are in demand in that area, and across the State. Current waiting times are unacceptable.

After questioning the office of the Minister responsible, I was informed that the funding was allocated from the budget and would be rolled out. But no indication of when nor the reasons for the delay. At a recent IPART forum I provided a NSW Government representative the opportunity to provide information on the roll out of the funds. None was provided.

‘spose I’ll keep asking.

Update: Eva Cox on welfare quarantining

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