[OPE-L] Muhammad Yunus and the secret of original accumulation

From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Sun Oct 15 2006 - 10:10:51 EDT


No doubt what you say is true. I think though the question in poor countries
is not so much *whether* capital is accumulated - the social surplus
annually produced is in many cases proportionally larger than in the West -
but exactly *how* (in what form) it is accumulated, i.e.

(1) whether a continuous reinvestment of realised capital formation occurs
in a way that cumulatively expands the local productive base, and increases
local employment and wages, and
(2) whether a social class or polity exists which is interested in carrying
out this project, integrating more and more of the local population in an
expanding market for goods and services.

The experience of "export-led development" as the driving force of
globalisation is, that it does often increase economic growth, but in a
"lopsided way" - a few urban industrial sectors grow, but the rest of the
economy stays much where it was. In many cases, the foreign debt as well as
the transfer of income abroad also grows at the same time. Countries like
India and China are good for about a billion people each, but in reality the
total number of people benefiting from industrialisation is the minority.

What surprised me was the reported extent of honesty among the rural poor in
Bangladesh, with regard to repaying credits, given that in the 2005
"Transparency International Corruption Perceptions Index", Bangladesh scores
as one of the *most corrupt* countries in the *whole world*.
http://www.infoplease.com/ipa/A0781359.html

Patrick Bond's lengthy mail does not really mention this.

Some of the mystery however disappears when you realise that the TICP index
measures corruption among Bangladeshi public officials and politicians (most
corrupt are said to be the police, judiciary, land administrators and health
officials), not everybody. So then you seem to have a fairly honest
peasantry (two-thirds of the population) and a corrupt urban polity and
business class. About one in three Bangladeshi adults are unemployed, some
estimates are as high as 40%.

Here's a clip:

"One of the most frequently used money laundering methods in Bangladesh is
the underground banking system (UBS) which is used to transmit both
operating funds and profits. Hundi is the name for the underground banking
system used in Bangladesh. The purpose of the hundi system is mainly to
manipulate secret cash flows to make them look as if the same came from
legal business activities. In such a case, the lack of a paper trail is a
common denominator. The Bangladeshi hundi system is spread from Singapore,
Thailand and Hong Kong in the east, through Oman and Dubai in the Middle
East to the United Kingdom, Europe and the USA in the West and involves the
movement of millions of dollars. (...) Hundreds of thousands of dollars can
be transferred in a matter of a few hours through the system. Banks, on the
other hand, are notoriously famous in Bangladesh for holding money transfers
or taking their time in clearing checks, which enables them to earn interest
on the money they are holding."
http://blogalization.nu/marketmachines/2006/04/17/the-ubs-acting-in-concert-in-bangladesh/

Almost $6bn slipped through the net in the year to June 2003, more than half
of it the proceeds of smuggling, according to the Bangladesh Economic
Association. More than 20% of the laundered funds were the proceeds of
undocumented remittances from overseas, with the proceeds of bribery
contributing about 7% of the total.
http://news.bbc.co.uk/2/hi/business/3160892.stm

Looks to me as though the next Nobel Prize award should go to a great
pioneer in the battle against corruption (though no doubt some would argue
Yunus is precisely such a pioneer).

Jurriaan


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