Micro credit and usury By DR ZAFAR ALTAF

ARTICLE (April 03 2010): There must be no lending at interest or so said Plato and what he has said over the centuries has always turned out to be correct despite the passing of millenniums. The credit aspect gained momentum as a result of the illusions of better living standards for the poor and lust satisfaction of the employees of the micro credit organisations.

The developed nations had to provide credit for there over valued machinery and that was necessary for the sake of their marketing of machinery and goods and services. Like poodles, we follow whatever the West says. The mindset has been so developed and imagine the hype that was created by there hit men - all those that came to the Planning Commission and all the economic organisations like the Pakistan Institute of Development Economics [PIDE].

It was the World Bank that started the latest craze at the behest of the D-7 countries. The holiness of the state has been taken up by the sins of the agents that have been created by the WB. Go to the genesis of the policies initiated by this agency and its cohorts and the analyst will find a nigger in every woodpile.

The easiest way out for them is to determine the way to waste time and to break the rhythm of the state organisations and when the policies fail because of the inherently weak designing by these very agencies there is a lot of hue and cry that these have failed because of the corruption in the developing country [ies]. What does one do when the state is roughed up by the very agencies purporting to be the friends of the developing world and created and visioned by none other than McNamara?

The micro credit system came in for the same sort of action by the hit men and women [in this case], who decided that the indigenous co-operative system had to be dismantled and the micro credit system put in place and they looked for the richest and the wealthiest and the most powerful in society, and decided that their children were to be given seven digit salaries so that the powerful could look after the useless children that they had produced and who were now going to be pawns in the hands of the economic hit men [EHM]. The time was ripe because when this policy was to be implemented the lady who got this charge from the WB was a colleague of mine at one of the board of governors and I was explained how this was going to be done.

The disruption was not to be for the consumption of the developing country. Simultaneously, another option was launched for the WB realised that not every one could be safely taken on board and therefore, a number of studies were invoked [yes invoked] and one of which was to study why women were in jail and the qualified children given this consultancy was at a huge rate. The children, who were to become consultants to the government, all belonged to the power bloc of the time [Musharaff's time].

Micro credit was thus created and AKRSP, being a poor organisation and its offshoot, NRSP and PRSP, were brought in along with others so that they could charge anything between 36 to 60% interest rates.

Go back to the opening statement by Plato-that man must have been an idiot to make the statement that he did. But then there were others as well and it was Aristotle who said "The trade of the petty usurer is hated with most reason, it makes a profit from the currency itself, instead of making it from the process which currency was meant to serve. This common characteristic is obviously their sordid avarice".

How did this sordid avarice come to an end in former East Pakistan where the moneylender was the Pathan from centuries? They would be roaming the countryside with their khatas [registers] on cycle. Anyone could get a loan for any amount only that the family would pay back a certain amount and if they could not pay, they would allow him to take one of the daughters of that family as a concubine; that for the accrual of the interest and not as pay back of the principal. So the money kept on serving the sordid ends of the Pathan moneylender.

When the Ayub Khan government fell all of a sudden, the moneylender was eliminated-for the majority of them were found hanging cowboy style by the tree trunks and those that could escape ran away. That is the kind of hate that they had created. So, that is one way though not a decent way to policy to be changed.

If you were to go to any Board of Revenue, you would see all the Patwaris there giving information as to how the recovery was made and in one case for a debt of Rs 5000 each, they had locked up 144 small farmers. Why not do it for the industrialist and the rich and the powerful?

The point made indicates the way of the deceitful, the mean and the rapacious. It was left to the former Bank of England Chairman Sir Josiah stamp, to speak candidly about usury. He mentioned that the 'banking was conceived in iniquity and was born in sin. The bankers own the earth. Take it away from them, but leave them the power to create money, and with a flick of the pen, they will create enough deposits to buy it back again. However, take it away from them and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of the bankers and pay the cost of your own slavery, let them continue to create money.'

Since that time other kinds of synthetic banking products have been created and we know that the most sophisticated financial system nearly took the world's economic systems with it. The Musharraf regime excelled in this poodle behaviour because a banker was there as prime minister. He has since joined in sinful explanation with the steel industry magnate from India to whom he wanted to sell our silverware. Talk of great men and great abilities.

Micro credit is one such synthetic product in which a loan of Rs 10,000 is processed and the processing fee charged is Rs 4,000 per loan and, therefore, the so called beneficiary actually gets only Rs 6,000 and he has to pay the exorbitant interest rate for the original amount. Great is it not?

What does eyeliner cost for these loan servicers? The answer I got from the well to do and the skeletal lady worker of 200 pounds was that I was trying to snatch the bread from them. What about the bread snatched from the 70% poor? The liars of the Musharraf regime are still around and one of them had the cheek to say that he could not provide the administrative details and the employees' names in the Federal capital, as it was secret. Secret my foot. They will be torn to pieces just as the moneylenders of former East Pakistan.

Social cleverness will not help eliminate the problems created thoughtlessly. The infrastructure so assiduously built by ZAB was dismantled by the then governor of the state bank despite my protests. Well the matter is ready for a reappraisal and if not done, the people will take care of the doers of evil. Hang down your head Tom Dooley, poor boy your bound to die [by hanging].

The final nail comes from Aquinas '..is to sell what does not exist and this leads to inequality, which is contrary to justice. Money was created for exchange and that is where it should remain'. Islam has no covenant with usury and that is why the effort at Islamic banking. What became of it? Askaris should be asked to indicate the purpose that is fulfilled by the current actions and by the past years of Musharraf's regime.

Other bankers could also chip in but there is so little of self-reflection, self-introspection. Spiritual leaders have also condemned the use of this practice. But hold on who is pushed. You and I will only learn when the majorities that have been done in by the minority interests are made to pay and overwhelmed by the majority. Should we wait for such time? I leave you with the thought.

Source: http://www.brecorder.com/index.php?id=1039330&currPageNo=1&query=&search=&term=&supDate=