Winds of Peace Foundation

Steve Sheppard | May 24, 2010

While in Nicaragua several weeks ago, I had many opportunities to hear from rural Nicaraguans about their current economic circumstances in light of the global crisis.  Naturally, most of the news was bad, compounded by an unusually harsh drought which hit the country last year.  In light of the early rains which had begun to fall, hopes were high that this year’s rainy season would choose to be rainy.  I heard many stories about scarcity of food, non-existent crops, real hunger and growing uneasiness about the future.  This is a telling message, given the already-impossible conditions in which many of these people live.  Once again, and as I have observed here many times before, I was moved by the resolve and resourcefulness of these rural Nicaraguans to survive in the face of relentlessly traumatic conditions.

One afternoon I was engaged in conversation with my Nicaraguan colleague, talking about U.S. reactions to the economic crisis and the circumstances in which U.S. citizens found themselves.  I related the difficult unemployment conditions and the struggles faced by many in the wake of losing a job.  I mentioned what I saw as a continuing crisis in confidence being experienced by people in the face of  increasingly contentious party politics.  I talked about linkages to other countries and how their experiences definitely impacted our own.  And then she affirmed an eerie feeling that I have had for some months now.

She told me that her son was living and working in the U.S. and experiencing the global economic meltdown in a very different way than that being felt in Nicaragua.  In frequent communications between the two, her son observed on more than one occasion that many U.S. citizens seemed to be almost dormant in their reactions, as if waiting for the economic cloud to lift or for the government to enact some quick fix for relief.  In his view, it was as if some person or some entity bore responsibility for the conditions and once the culprit was identified, relief would soon follow.  After a brief pause in our exchange, my colleague said that according to her son’s perceptions, many in the U.S. don’t seem to know what to do.  Most people don’t know how to grow food or save it.  She mused that, strange as it may seem,  when a calamity occurs, Nicaraguans might be better prepared than those in the north. After all, too often it’s been a way of life in Nicaragua .

This observation made for the second time the notion has surfaced.  I made much the same observation at this site back on February 17, 2009 in a piece I called “The Further We Fall.” Only this time, the recognition came from a more experienced, reliable source, from someone who has truly lived in both realities.

I still find myself asking the question, especially in the face of tumultuous times, “Who’s learning from whom in all of this?”

Category: Rural development | No Comments »
Tags: economic crisis, recession

Steve Sheppard | May 15, 2010

I recently had the opportunity to review a soon-to-be-published research project undertaken by Grantmakers Without Borders (GWOB), a terrific association of funding organizations whose focus is beyond the borders of the United States.  The purpose of the research was to examine the impact of microlending within poor countries, and whether this highly-touted initiative has really brought about the kind of positive change which its proponents suggest.  The paper is a good and balanced piece, and should be required reading for any funding organization contemplating or already conducting microlending practices abroad.  Watch for it.

The research finds, perhaps not surprisingly, that microlending is not the perfect tool for eliminating global poverty, despite its many virtues and successes.  While it has developed a momentum and a transformational impact where implemented successfully, it has also on occasion created unprecedented indebtedness and divisions within communities and families.  Initially, I found myself perplexed at this second type of outcome, not having experienced that phenomenon in our own work.

It turns out that the celebrity status of microlending has captured the attention of not only those who seek to assist impoverished people, but also those who see it purely as a means of access to an untapped credit market.  In other words, for some lending groups, microloans are just another way for the coyotes, the sharks, to circle their prey.

Sam Daley-Harris, Director of the Microcredit Summit Campaign, captures the essence of these profiteers perfectly in a recent presentation.

“This should have been warning of what was to come when microfinance institutions began to run more like commercial banks and what that might do to the soul of microfinance….

“I am fortunate to have been one of the leading advocates for microfinance over the last 25 years. We have been so successful in our advocacy that the field is out of control and now the profit-maximizers, those who want to make big money from the poor are rushing in. This leads me from the poverty and purpose part of my talk to the pitfalls and redemption portion.

“What are the problems that have become pitfalls? There are profit maximizers who charge the poor 85% interest, 100% interest, or more. As Prof. Yunus says, we started microcredit to free people from the money-lenders, not to become the new money lenders.

“I now see that the spiritual dimension of microfinance, the redemptive dimension of microfinance is central to my vision for the field. The technical issues are important, but only if they serve the transformational dimension.”

The findings in the GWOB study shouldn’t be a surprise or perplexing at all.  The essence of the microlending idea is that it is a tool for helping poor people raise themselves from poverty.  It’s not designed as a tool for financial institutions to use in tapping a new market and making a lot of money.  That practice will inevitably create real problems for both the borrower and the lender.

It seems to me as though a good share of the research and conclusions (or at least doubts) about the effectiveness of microlending revolves around MFIs that are in the business of lending. These organizations are quite different from the microlending institutions that exist for the purpose of true development. In essence, it is difficult to effectively address the efficacy of microlending conceptually when both types of funders are considered together; a more effective assessment has to look at the two forms separately since they are so fundamentally different. I am not surprised to read about predatory practices on the part of “Financial-System” lenders, but would be surprised and disappointed to learn of such behaviors coming from a “Poverty-Lending” organization.

At the Microcredit Summit several years ago, I could feel the difference in both intention and tone when the people from Barclays Bank talked about entering the microlending arena “to serve a vast, untapped market.” Those words signaled the contamination that would occur within the microfinance community moving forward. It seems as though any good idea can and will eventually become abused in the name of profits….

Category: Microfinance | No Comments »
Tags: Grantmakers Without Borders, GWOB, Microcredit Summit Campaign, Sam Daley-Harris

Steve Sheppard | May 13, 2010

                        

Among my visits in Nicaragua a couple of weeks ago was a return trip to the community of Santa Maria.  The cooperative which has formed in the region is one with whom we have worked for several years now, and it has been an impressive experience.  The community is located in the arid, mountainous region near the north central edge of Nicaragua, within sight of the Honduran border.  The travel to this  remote area is rugged and slow, but the scenery along the way is nothing short of spectacular.  Thick stands of pine cover the rocky mountainsides, reminiscent of woodlands in northern Minnesota.  Below the mountain roads and forested hillsides lies a deep expanse of valleys, seemingly miles away below, occasionally exposing the flow of a quiet river.  The vistas are as breathtaking as any I have ever seen. 

Trips to Santa Maria are impressive for another reason, as well.  It’s the people.  There is a special perseverance, resilience, persistence in these partners which is noticeable even by Nicaraguan standards.  The climate is hot and dry most of the time, and never moreso than during the past growing season.  But this cooperative chooses to meet their circumstances head-on, with brainstorming and innovative thinking creative enough to make any entrepreneur jealous.  In the wake of a tree-cutting ban, they have created wood-efficient stoves from barrels and clay.  In the aftermath of wilting bean crops they have planted peanuts, an uncommon produce in the region, and other counter-cyclical crops.  Bee keeping has been introduced to the members and Fair Trade certification is being sought.   Following the withering drought of 2009, as they contemplate a planting which might be no more successful than last year, they have identified land to rent in other parts of the country where the rains have been a more frequent visitor.  The idea of rotating members a week at a time to tend fields in a distant location is not a perfect one, but it’s creative.  There is nothing easy or certain about any of these initiatives, but a vibrant sense of self-sufficiency permeates this cooperative, even as we work with them to provide organizational strengthening.  Clearly, they’d rather be tackling livelihoods on their own.

They held a meeting on the day of our visit, perhaps for the very reason of our presence.  Maybe twenty of the thirty-five members were present, to talk about possibilities when there are few, to weigh alternatives which are difficult to contemplate, and to give answer to the question posed by one woman who asked,” How will I feed my children?” when there is no food harvested.  The answer to her question is as elusive as the rains which did not fall in 2009; options to consider in light of the circumstances are few, but the members of this cooperative have not given up energy, effort or hope.  And when Nature seems to be oblivious to the needs of people who are hurting, there is a special sting that is suffered when obstacles created by fellow citizens are thrown into the mix.  While the members of the cooperative made their request for assistance from the U.N.’s World Food Program, the only entity in the region to be granted relief was the municipal office, who chose only overt government supporters as the recipients for assistance.  The coop at Santa Maria is apolitical by design and thus was not deemed “worthy” of sharing in the aid.  Nonetheless, the members at Santa Maria continue to come together, to think and talk out loud about what can be done, what they can do. 

Who knows if the rains will return this season?  How will the logistics of tending to distant rented lands be managed and how will members manage needs at home?  If members remain in the community, where will they find land available to rent, as more and more of it is sold off to large cattle ranchers?  Will survival rest upon willingness to adopt a political party line?  For every strategic initiative weighed, there seems to be a counter-weight placed on the scale.  These are hard-working, courageous people in the face of enormously difficult circumstances, both natural and man-made.  And while they’re not the only ones in the world between a rock and a hard place, their plight becomes more pronounced, personal, as they become your friends….

Category: Reflections | No Comments »
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Steve Sheppard | May 3, 2010

I’ve always been attracted to optical illusions.  I’m fascinated by the way something can virtually change shape and meaning before my very eyes, almost as if magic was taking place.  This one is a favorite, simply because its two images are so starkly opposite each other both iconically and in reality.  The picture of Albert Einstein is a well-recognized portrait, but if you simply step away from the photo, say 10 feet or so, Albert magically transforms himself into the smiling face of none other than Marilyn Monroe.  How this can be I’m not certain, but it clearly demonstrates the truth of the title above, that where you stand does change what you see.

I heard activist Kathy Kelly make this observation as part of a presentation during this year’s Peace Prize Forum at Augsburg College.  The simple truth of it obscures the importance of its lesson, that we cannot hope to understand the circumstances of other people without being in those same circumstances.  We can imagine, we can project, we can theorize and even hope to know what it might be like, but unless we stand in the same spot we can never truly understand. 

That truth was brought home to me a couple of weeks ago as I visited some of our partners in Nicaragua. Our work is primarily in the north, so we were some distance away from the capitol city of Managua when we began to hear reports of protests, confrontation and even some violence before the National Assembly.  Supporters of President Daniel Ortega clashed with liberal party members, leading some participants to be injured in the clashes which took place.  The fracas continued for several days, with reports on the largely state-controlled news not providing very detailed or high-importance reporting.

The incident marks another chapter in the evolution of Nicaraguan governance, regardless of which side of the argument an observer may stand.  But the event elicited at least one immediate editorial piece from a U.S. writer which quickly made its way across a network which follows events in Nicaragua.  The commentary portrayed the incident as an anti-government protest, likely fueled by U.S. interests against the Ortega government, just like in the years following the Sandinista revolution.  It basically blamed the incident on a small number of agitators encouraged by outside forces.  The article resurrected motives and objectives from the past as if nothing had changed on the Nicaraguan political landscape over the past 20 years.  It called to mind a time when supporting the fledgling Central American government was a relatively easy thing to do. 

On this occasion, though, the diatribe pointing the blame at U.S. interests was not so easy to accept.  As I traveled with and among Nicaraguans during these days, the sentiment being expressed by some long-time Sandinista faithful was not supportive of the government at all.  The passionate, unshakable support for the Sandinista front has eroded within Nicaragua as  President Ortega’s administration has slowly taken on many of the dictatorial characteristics of the very regime against which it fought in the war.  And while the U.S. is still complicit in undermining the Ortega government (some things never do change), the view from the streets in Nicaragua is much less clear than the U.S. author would have us believe. Many of those protesters were committed Nicaraguans seeking more democratic processes than they have seen of late.  I found that to be interesting, since it’s Nicaraguans- not U.S. writers-  who are living in and experiencing that reality day after day.

It’s an easy thing to watch events from afar and draw conclusions based on the view.  We do that in this country all the time as our political parties do everything they can to shape our views, often by illusion.  But truth is a more difficult concept to discern, and it almost always will be influenced by where we stand, both physically and philosophically….

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