Thursday, November 20, 2008

What impact on development could the asymmetry between NGOs have?

Is the asymmetry between the developing and the developed countries made worse because of the asymmetry between the weak and often subordinated NGO’s from developing countries and the strong and often in command NGO’s from the developed countries?

I say this because I have often found it so hard for activists from developing countries to understand that the stability they look for in their natural desire to keep all that they have gained under their belt, has nothing to do with the risk-taking a developing country needs in order to place at least something under its belt.

I have also often found that some agendas of the NGOs of developed countries, though most often certainly representing worthy causes, not only differ but can also turn into outright distractions from the more practical development agendas that NGOs from developing countries would wish to pursue, if on their own.

There are a lot of discussions about much needed governance reforms at the International Finance Institutions, the IFIs. Please remember that those reforms might have to include their relations with the NGOs too.

Sunday, November 16, 2008

Is it real or bluff stuff?

The G-20 Statement of November 15, 2008 says “Regulators must ensure that their actions support market discipline, avoid potentially adverse impacts on other countries, including regulatory arbitrage…”

What more discipline could they want than having imposed on the markets as a Governess Fraulein Credit Rating Agencies and that later turned out to be so crazy as to send them of to the subprime swamplands? Do they really believe that finding a better qualified Mary Poppins, or a Maria will do it? Scary! Why don’t they leave the banks alone so that they learn to depend on themselves instead of following as a herd any agency that no matter how good it gets, is bound to take them, and us, sooner or later, over a cliff?

“Adverse impacts on other countries”? Like when the supposed global good of a credit rating agency turned into a global bad and caused a German bank that had never awarded a mortgage in Germany to be the first casualty of this subprime mortgage having followed the AAA signs looking for high risk-weighted returns in California?

“including regulatory arbitrage? Are we now finally get rid of the current “minimum capital requirements for banks” that has created such a damaging and useless regulatory arbitrage on risk…whatever that is?

The G-20, do they mean what they say, do they know what they say, or are they just bluffing?

Micro-financing… for what?

We need to define better what the purpose of the micro-finance institutions should be. If it is to help small entrepreneurs to get financing at as good rate possible, them I am all for it. If it is to accelerate the consumption of the poor, but by applying higher interest rates than the risk free rate, which effectively means them having to pay a present value premium for their consumption, which will just make them poorer, then I am all against it, since that is not what development is all about!

Many of the problems of this sector are derived from that instead of working on how to make microfinance help development, it has been taken over by those more interested in developing the microfinance institutions per se, which though quite legal and normal is something absolutely different.