Sunday, March 25, 2018
Week 10 - Credit / Debt and Microfinance
In this week's readings, Ananya Roy notes how "economies of need are transformed into economies of profit and how collective resources are recalibrated as channels of privatization" (p. 107). Use examples from the readings (both Roy and Elyachar) to describe how these processes are taking place. Discuss in particular how microfinance is one growing area of global capital that exemplifies this predicament.
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According to Roy from the hundreds of volunteers who continue to descend on post-Katrina New Orleans to the intimate transactions of charity through micro nance portals like Kiva.org, these affect-laden actions are part of the ethicalization of market rule and the renewal of development. They are also formations of millennial modernity, where the global citizen as modern self is made and remade through such encounters with poverty. Nowhere perhaps is this more evident than in Red eld’s account of the tremendous philanthropic and humanitarian agency that shapes the production of life technologies as humanitarian goods. However, she charts how the exchange and circulation of affect deepens forms of market rule and creates an “affect economy,” which relies on unpaid labor and nonprofit infrastructure to do the work of the state. Here, too, the capture of collective resources that Elyachar warns about is evident. Beyond the generation of profit, it can be argued that the mediations of millennial modernity consolidate rather than disrupt market rule (p107-108).
ReplyDeleteElyachar article cite example of how fianacial organizations, firms should rethink and hence tap the "poor people at the pyramind" as profit- making ventures. The need to tap that "market " are explicitly cited in these paragrahs by the author " Communicative channels created on the streets of Cairo extended into the Gulf together with migrants and were maintained through flows of affect, money, information, and faith. Those channels were used by migrants and their families to transfer money, emotion, and news and materialized in forms as simple as a neighbor carrying an envelope and news, a friend carrying a cassette, or a fellow worshipper carrying cash. Some of those channels were formalized in institutions like the Islamic investment companies that channeled a large portion of Egyptian migrants’ sav- ings during this period and which grew to play a key role in the political economy of the Middle East in the 1980s. On other parts of the African continent twenty years later, corporations such as Vodafone Visa, MasterCard, and Intel were work ing together with the Gates Foundation and other philanthropic organizations to build on this infrastructure to create a new kind of “payments space” in countries devoid of basic infrastructures of telephone and banking systems. When corporations institute business models for telecommunications projects in the global South, they find a ready-made infrastructure for their investments (p.121).In both examples by authors it is obvious how the "underdeveloped or needy communities" have received servces and product through benevolent acts and developmental agenda in this diguise of econmoies of profit.
Roy, when discussing how "economies of need are transformed into economies of profit. . .” (107), is attempting to demonstrate the idea that impoverished people is being capitalized upon through neoliberal economic and State policies. Using the example of privatization of previously public entities after hurricane Katrina, Roy discusses how profit is created, to the detriment of the poor, in the name of aid or development. The “bottom billion” or “bottom of the pyramid (BOP), signifies the huge section of the world population that is considered impoverished, or is making two dollars a day or less. Roy refers to this shift towards privatized aid as the “ethicalization of market rule”. This ‘ethicalization’ is where microfinancing comes into play. Once the State is not such a large actor in the development of impoverished places, private entities microfinance, or give out loans, to sections of certain popualtions, creating a cycle of dependency in which the company is constantly benefitting. This, in the name of humanitarianism, is “a form of global governing” according to Roy (107).
ReplyDeleteFurthermore, Elyachar takes this idea a step further in “Next Practices” by discussing how “there is no contradiction between earning profits and helping the poor.” Elyachar is not promoting microfinancing nor state-governed aid and development strategies, but rather proposing a new way of looking at the BOP as an actor in the global economy. Rather than focusing on development of the BOP, our world market and commodities should be redesigned in order to be applicable to conditions of life in poor areas. This idea of the “design challenge of poverty”(114) seems quite radical, but also could allow us to see member sof the BOP as their own agents in the world economy, and create a win-win situation for both multinational corporations and impoverished people. Elyachar also discusses the idea of communicative channels between poor areas, such as the flow of remittances, should be seen as a form of profitable infrastructure that should not just be seen as a personal mechanism of the poor, but also as playing a part in the world economy.
Elyachar notes that the market itself is transformed into an ethical subject. Humanitarianism must be understood as a global form of governing one that exceeds the state and market. In such a way that, entrepreneurs must treat the poor as a source of market rather than beggars. The poor are more willing to adapt to new technologies as they have nothing to lose. Technologies should be developed in a way that adapts to poor peoples environment. Due to hardships that poor people face, they solve the technological advancements. Since these technologies are designed to adapt to poor peoples environments.
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