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Mission Statement Grassroots is a journal founded by Borderless World Volunteers that immerses its readers in the complexities of development studies, as seen through the lens of undergraduates in the field. As an open access journal, it provides an interdisciplinary forum for research and reflection on global development issues, as well as on recent innovations in development policy and practice. Grassroots publishes student academic articles, informative pieces on innovations in the field of development, and analytical pieces on development issues, controversies, and policy debates.

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Table of Contents

The Art of Calculating Corruption

By Vivien Underdown

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Dollarization Case Study

By Victor Cheng

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Tracking Niger’s Way on the Road to Development

By Maria Belen Giaquinta

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Reworking the Role of Buddhism in Thailand’s Consumer Culture

By Katrya Bolger

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Comparative Analysis fo Nigeria’s Microfinance Industry

By Christopher Villegas-Cho Is Hungary Criminalisizng the Homeless?

By Stephanie Fehrtoi The Quest for Rights for the Ecuadorian Amazon

By Camila Moyo Rosario

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From the Editors: We are truly proud to present you with the second edition of The Grassroots Journal. The writing team has put enormous amounts of time into not only creating this issue, but branding the journal as a project that Borderless World Volunteers is proud to be associated with.

In this issue, you will find a carefully selected collection of academic papers chosen from McGill University’s finest undergraduate scholars. We have also included some of the best articles, from our team of writers, which are also frequently posted on our website.

With this addition, we hope to add a more accessible dimension to the journal that is appealing to all levels of readers.

We would also like to give a special thank you to Nicole Zhu, our graphic designer who designed the new cover and put a lot of hard work into formatting the journal to make it a piece of work that reflected how special each article is.

We hope that you enjoy this edition of The Grassroots Journal!

Sincerely, Margot and Brenda

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For the past three decades, China has defied orthodoxy by maintaining astonishing growth rates despite experiencing worsening corruption.

Studies such as Paulo Mauro’s “Corruption and Growth” have demonstrated a negative statistical correlation between the two variables, yet China’s booming economy has marked it as an outlier to this trend. In the 1990s, this paradox puzzled Andrew Wedeman, and embedded within him the seeds for his controversial new book, “Double Paradox, Rapid Growth and Rising Corruption in China.” Wedeman, a professor of Political Science at Georgia State University, visited McGill University on October 25 to discuss his book at the International Development Studies Speaker Series. The presentation attracted a diverse crowd of professors and students, and challenged them to rethink corruption and its configuration in China.

Wedeman’s presentation drew attention to media reports and corruption indices that suggest corruption in China has risen to cataclysmic proportions in the past few decades.

Sexy stories of the Beijing Vice Major Wang Baosen’s suicide related to corruption charges in 1995, to the more current sentencing of politician Bo Xilai to life in prison on charges of bribery and abuse of power, suggest corruption is fervently integrated into the Chinese bureaucracy. Reported cases of corruption have shot up from 9000 in 1980 to 28,000 in 1985, to over 77,000 during the 1989 anticorruption campaign. Indictment of senior officials alone rose from 190 in 1988 to over 2500 per year by

The Art of Calculating Corruption

By Vivien Underdown 2000. Moreover, corruption intensified with bribes exploding from 4,000 RMB in 1984 to 273,000 RMB in 2005. With such statistics and stories, conventional corruption theory would suggest China should be experiencing economic turmoil.

Yet, China’s economic performance has been far from catastrophic. The country’s economy grew at an average rate of 8.75 percent between 1979 and 2010, lending to the thirteenfold increase in GDP per capita. However surprising this economic success is in the face of intense corruption, it is not unheard of.

Wedeman has also studied Japan and South Korea, which both have successful economies despite extreme economic corruption. In these countries, corruption takes shape as what Wedeman calls “developmental corruption.”

Essentially, this means that corruption is integrated into politics, with payoffs from businesses to the government as a way of stabilizing the ruling party and in turn stabilizing the economy.

In contrast, Wedeman points out that the strength of the Chinese Communist Party is independent of corruption, and that the leadership strives for economic invigoration due to recent uprisings (eg. Tiananmen) rather than as an avenue for institutional bribery. According

to Wedeman, corruption in China is predatory and anarchical instead of organized and systemic. As such, corruption in China is more aligned with the Zairian Mobuto regime and the systemic rent scraping in the Philippines, which proved destructive to their economies Thus, the key paradoxes are not only that rapid growth continued with an intensification of corruption, but also that China’s economy continued to prosper despite the predatory form of corruption more associated with economic decline.

Wedeman argues that this situation emerged as a reaction between economic reform, corrupt officials with a bout of sensibility, and governmental anticorruption efforts.

Corruption is far from new to China, but Wedeman argues it was limited to petty corruption in the Maoist era. With the transition from a command to market economy beginning in the 1980s, economic corruption intensified.

Officials would scrape a piece of the windfall profits created when closing the gap between lower command economy prices and high market prices. While this behaviour could have spiraled out of control, Wedeman suggests that corrupt officials limited their short term plunder in the outlook of more stable long-term corruption schemes. Rather than digging into the economy, they would merely skim off a layer of new growth.

After anti-governmental demonstrations in 1989, China set out on a “war on corruption” that has also prevented corruption from reaching economically destructive levels.

However, the continued growth of the Chinese economy also brings into question whether the extent of corruption in China is really as bad as it is purported to be. Wedeman’s presentation underscored a more subtle aim of his studies; while his book is about explicating China as an outlier to corruption orthodoxy, it is equally about criticizing corruption indicators used by institutions and the public. It is evident that the media heavily influences the public, but

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Wedeman also emphasizes that media influences the opinions of professionals, which are often used to shape corruption indices. While these types of indices may suggest a worsening of corruption in China, Wedeman’s studies suggest this is inflated. His analysis of the “revealed rate of corruption,” which is the number of arrests and prosecutions for corruption, indicates a surge of corruption in the 1980s and 1990s after which it leveled off. Even this indicator is limited because technically, each arrest represents a relative improvement of corruption. To address this shortcoming, Wedeman has developed an “accumulative” indicator of corruption that assesses increasing corruption from the moment corrupt activity begins to when it ends. Due to mathematical flaws, Wedeman suggested this indicator is still being developed.

As Wedeman admitted to his mathematical handicap, an empathetic chuckle spread across the audience composed overwhelmingly of Arts students, emphasizing the impossible task of measuring and interpreting corruption. The stream of questions in the Q&A period, regarding methods of indictment, reinvestment trends, and public perception underlines the complexity and span of the issue at hand. Having a long history of studying corruption and China, Wedeman addressed all questions in such a way that no argumentative commentators persisted.

However, the surprising lack of depth regarding the dynamic of corruption in predicting China’s economic future was striking. The lack of discussing regarding the future of the Chinese economy brings into questions: does Wedeman’s theory have predictive power?

As anyone who has studied theories will know, a theory that is generalizable is valuable but often disregards the idiosyncratic influences in a situation. Wedeman is set on a path to find the factors idiosyncratic to China that set it apart

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from Mauro’s trend. His analysis is particularly valuable because it emphasizes the downfalls of corruption indices, which make predictions concerning corruption inherently difficult. While the revealed rate of corruption suggests corruption in China is not as bad as it seems, this method is constricted primarily because the level of veiled corruption is unknown, and limited state resources will translate into a ceiling on said revealed rate.

While Wedeman’s new accumulative corruption indicator may be useful, its value is limited in that it rests upon revealed cases; thus, the indicator holds the aforementioned limitation and can also only measure accumulation retrospectively. While interesting, the indicator’s capacity is underwhelming.

Since corruption indices are limited in their predictive power, Wedeman’s theory may be more useful in terms of corruption checks and balances. His in-depth analysis is insightful, although contradictory at times. Though far from central to his argument, Wedeman purports that China evaded economic downturn in part because corrupt officials limited their corruption to avoid placing stress on the overall economy, thus ensuring long term corruption schemes.

This theory assumes that despite anarchical and predatory corruption, thousands of independently acting officials managed to make calculated assessments of the impact of their corrupt actions, independently and in relation to all other corrupt activities. The point seems random, and disconnected from the more

striking check on corruption: China’s anticorruption campaigns.

As Wedeman emphasized, corruption in China is very risky, and punishable by death. Perhaps officials’ calculations are less about long term corruption schemes and more about analyzing how much risk that looting the economy to detrimental levels would have on their lives.

Zeroing in on the importance of these factors is central to predicting not only China’s future, but also that of other developing states. If the Chinese economy experienced a downturn, would officials recalibrate the levels of their corruption to fit a new corruption equation? The implausibility of such a scenario impinges on the usefulness of assessing a subjective widespread economic understanding that would somehow translate into an abstract invisible hand of corruption. Rather, it would be more useful to assess the relationship between the level and consistency of punishment, and levels of corruption. A theory grounded in these factors may help further understand corruption in China’s past and future, and could be feasibly used in the assessment of other countries’ economic, political, and judicial development.

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Dollarization Case Study: Haiti

By Victor Cheng

This paper will examine the relationship between dollarization in Haiti and its economic performance using data from the past two decades. Attention will be given to discovering the rationale behind the government’s decision to dollarize as well as the impact that this decision had upon economic growth in the Haitian economy. We begin with some background information on the concept of dollarization. Dollarization is a type of fixed exchange rate with a wide range of possible variations. Unofficial dollarization is the widespread illegal use of foreign currency alongside domestic currency in unstable economies. Economic instability such as high inflation may cause citizens to lose confidence in the value of their local currency. Future purchasing power with respect to long term loans or investments becomes risky in local currency. The result is that more and more transactions will be made in US dollars with detrimental effects upon sovereign economic control. Unofficial dollarization undermines the ability of the central bank to be able to control national economic stability due to currency

mismatches1. For example, if businesses make large, long-term loans in US dollars, they risk not being able to pay that debt back if a catastrophic local devaluation occurs. Since world political events and shocks are unpredictable, local banks would then be insolvent, leading to a state debt crisis.

Many countries dollarize in order to alleviate stress on the local economy.

Dollarization ensures low inflation, lowers transaction costs and devaluation-risk premiums in interest rates, and promotes local firm integration into international trade by tying the value of the local currency to another foreign currency. Critics note that a loss of signorage and sovereignty are major factors to consider when dollarizing. Tying a state’s currency to the US dollar means that it will be unable to follow an independent monetary policy such as exchange rate adjustments during stressful economic periods. It also loses the ability to profit from issuing its own 1

S.A. Meyer. Basics of Dollarization. Jan. 2000.

Joint Economic Committee Staff Report, U.S. Congress.

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currency and the ability to lend itself money by printing more. Semi-official dollarization is another alternative where both currencies are legal. Every case of dollarization is countryspecific and policy makers must use a costbenefit approach to determine if dollarization is a sustainable economic solution.

American assets are attractive because the United States is considered to be very politically and economically stable, therefore most countries dollarize with the US Dollar. Haiti currently uses an official semidollarization system with the American dollar utilized alongside the local Haitian currency.

The International Monetary Fund deems a country “dollarized” if more than thirty percent of bank loans to the private sector are foreign currency-denominated. The American Dollar had a presence in Haiti long before the country was officially semi-dollarized. The American occupation from 1915 until 1934 saw the infiltration of the US dollar used alongside the Haitian “gourde” at a pegged rate 2 . The government, however, did not acknowledge this phenomenon until the 1990’s when it was recognized that the majority of private and public sectors had assets, investments, and

debts in US dollars. In 1995 the IMF gave Haiti dollarization status as banks began offering dollar-denominated loans to the private sector.

In 1991, there was a coup in Haiti, when the president was exiled by military generals after attempting to fight the drug trade.

The international community implemented severe sanctions and embargoes upon the country where only emergency aid Dorsainvil, Kathleen. Dollarization in Haiti: Causes and Consequences May 22, 2009. SSRN: http://ssrn.com/abstract=1681099.

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was permitted in or out of the state.

Constitutional government was effectively restored in 1994. This episode in Haitian politics had a severe consequence upon the already fragile national economy. Inflation peaked in 1993 and official dollarization could be seen as an attempt at re-establishing price stability in the regime. Official dollarization was also a way for people to turn the value of their asset holdings into an internationally stable currency during times of uncertainty within the state.

After the act of dollarization, the Haitian economy has shown a slight recovery but still falls below original expectations.

Countries that have dollarized are expected to experience a variety of improvements to their economies including lower rates of inflation, lower interest rates, and greater economic openness as compared to the phase before dollarization. They also tend to attract more foreign direct investment leading to higher export earning and greater long-term GDP growth.

The monetary policy of the Haitian government is to retain inflation levels below ten percent annually. If we take a look at inflation levels in Haiti before and after dollarization, we can see that it has actually soared from single digits to double digits after dollarization. The average inflation rate from 1990 to 2006 was 20 percent. In 1994 at the height of the coup embargo, inflation increased by an astounding 56.7 percent although the return of democracy and dollarization seemed to help bring it back to 10 percent by 1996. 3 The second peak of inflation in 2003 was a result of of Hurricane Jeanne, which was a category three hurricane.

Figure 1 illustrates the percentage rise in inflation during this period.

Haiti is geographically situated in an area prone to adverse natural shocks including high category hurricanes and extreme earthquakes due to tectonic fault lines. While some major peaks of inflation can be explained due to exogenous factors such as natural disaster or political instability, dollarization seems to have completely failed in controlling inflation.

Alan Heston, Robert Summers, and Bettina Aten.

Penn World Table Version 7.0, Center for International Comparisons of Production. Income and Prices at the University of Pennsylvania, May 2011.

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Interest rate levels from the central bank also have not been lowered or even stabilized. Rates of 15.6 percent per annum in 2002 almost doubled the next year to 27.8 percent per annum and jumped back down in 2003 to 7.6 percent per annum. Such a performance in three consecutive years shows how insecure the investment climate is in Haiti. The unpredictable security in the country leads to lenders, even official ones, charging exorbitant amounts that fluctuate irrationally.

Dollarization clearly has not brought about the stability needed for long-term development in the financial sector.

Although dollarization has propelled Haiti into one of the most open regions in Latin America, there is an increasing consensus that trade liberalization and openness has actually hurt Haiti instead of raising its standard of living. World Bank structural adjustment policies have promoted deregulation, privatization, and economic liberalization.

Average tariffs were only 2.9 percent compared to 28 percent in the 1970’s. 4 Government revenue was reduced, decreasing the capacity of the state to deliver social programs. Increases in taxes to maintain government funding further hurt the poorest citizens. Haiti’s openness allows many outside market factors to impact its economy and has resulted in the inability of the Haitian government to protect local businesses against more advanced external competition.

In Figure 2, we can see that regulatory changes in the business sector have increased the ease of entry to new entrepreneurs without any substantial amelioration in the quality of life in Haiti.

4 Gauthier, Amélie. Vulnerability and causes of fragility in Haiti. March 2012. http://www.google.ca/url?sa=t&rct=j&q=&esrc=s& source=web&cd=4&ved=0CEMQFjAD&url=http%3A %2F%2Fwww.fride.org%2Fdownload%2FIP_Haiti_fi nal_ENG_Mar10.pdf&ei=Bip_T6K7K4GQ9QSjiszMB w&usg=AFQjCNGlKIrr4O9a3NSq4B3a0WyTR-vR8Q. 4

Figure 2. Haiti – Change in regulatory environment DB score. From: CFI Invest in Haiti (2012) Retrieved 8 April, 2012 from http://www.cfihaiti.net/j10/index.php/en/getti ng-started/doing-business Foreign Direct Investment (FDI) is highly important with respect to the economic health of any country but especially for developing countries when external investment creates new infrastructure and jobs. Dollarization should have made the investment climate in Haiti more attractive. FDI growth was negative during the early 90’s as the embargo froze imports and exports and many companies shut down their branches within the country.5 As constitutional rule was restored, FDI jumped from -$2,800,000 to $7,400,000 in 1995. It has remained positive since dollarization but has been volatile, reaching a peak of $160,600,000 during the 2006 economic boom and dropping to as low as $4,000,000 during the 1997 financial crisis.

The trend in growth of exports roughly follows the direction of previously stated FDI levels. In 1991 the total value of exports in Haiti was $187,637,536 decreasing to an all time low in 1994 to $14,297,215. After dollarization policy implementation, export quantities increased at a slow but steady pace in the next few years, but they are still far from recovering to the post-coup and embargo era.

We can see in Figure 3 that Haitian GDP growth has rebounded significantly from a -12 Dunkel, Greg. U.S. embargoes against Haiti -- from 1806 to 2003. October 2003. http://www.iacenter.org/haiti/embargoes.htm 5

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percent decrease in 1994 to a 9.9 percent increase in 1995 after dollarization. However, Haiti faces major deficit issues due to its liberalized economy. 6 It exports mainly fabric and textiles to the US, its number one trading partner. The input demands to produce these goods are relatively inelastic and therefore the Haitian economy is at the mercy of global shocks in food and oil prices.

Haiti: Gross domestic product (GDP) per capita, USD

The implementation of dollarization as an economic policy has not translated into better developmental performance in Haiti.

After looking at data from the past two decades, we can see the ineffectiveness of dollarization through general indicators such as rates of inflation, interest rates, and economic openness compared to the time period prior to dollarization. The same can be observed in areas of foreign direct investment, export earnings, and long term GDP growth.

Not only has inflation always been above the state-mandated target level of 10 percent, but the country actually suffered a surge in inflation after the introduction of dollarization.

The co-existence of the US dollar and Haitian gourde promotes interest rate arbitrage and further intensifies social inequality.

Liberalization of the local economy proved to be devastating for local entrepreneurship. We may never know if dollarization was actually a critical choice in preventing further economic damage from political unrest, the embargo, natural disasters, and poor government management.

Figure 3. Haiti – Gross Domestic Product Per Capita, USD. Inflation rate at consumer prices (%) From: International Economic Statistics (2007-2012) Retrieved 8 April, 2012 It is clear that dollarization is not the panacea for all issues of economic reform.

Since dollarization in Haiti, the state has experienced additional inflation and slower growth. Much blame can be placed upon the lack of transparency and accountability within the financial bureaucracy of the central government. Another phenomenon leading to the failure of dollarization is delayed reform, where too much time elapses between the drafting of fiscal policy and the implementation of the same policy. Financial protocol was not strengthened after dollarization, creating incentives for corruption in the banking system. Simply creating a target for inflation or GDP growth after dollarization did not solve other dire issues, such as stability, security, and good governance.7

6 Louis, Carl Jean. CFI Invest in Haiti. Jan. 2012. http://www.cfihaiti.net/j10/index.php/en/gettingstarted/legal-framework/trade-agreements.

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UNITED NATIONS ECONOMIC COMMISSION FOR LATIN AMERICA AND THE CARIBBEAN – ECLAC. 7

HAITI: SHORT AND LONG-TERM DEVELOPMENT ISSUES. 7October 2005. http://www.eclac.cl/publicaciones/xml/3/23303/L 683-ing.pdf 7

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Tracking Niger’s Way on the Road to Development: MDG 4, Reducing Infant Mortality

By Ma ria Be lé n Giaquinta Since the 1970’s, after African countries received independence from their colonial powers, political and economic matters in the continent have steadily deteriorated, and thus led to increasing levels of poverty and underdevelopment in the region as a whole (Collier and Gunning, 1999).

Therefore, it is of no surprise to find that African countries exemplify some of the lowest rates of development, and along with them, poor rates of Millennium Development Goal (MDG) completion. In this frame, the Republic of Niger is no exception. According to the Human Development Report of 2012, the country’s GNI per capita in PPP terms was $701, life expectancy at birth was 55.1 years, and the mean years of schooling for an adult equalled 1.4 years of education (UNDP 2013).

These statistics place Niger 186 out of 187 countries in the Human Development Index.

More specifically, the country has an equally long way to go with regards to its MDG performance in Goal 4 - reducing child mortality rates- if it wants to cut down underfive mortality to 108 deaths per 1,000 live

births by 2015 (United Nations 2007).

However, in order to understand the challenges faced by the country in its struggle to achieve development, it is important to consider the theoretical perspective to this case study. Therefore, this paper will seek to analyze Niger’s progress on MDG 4 in light of contrasting conceptual frameworks of development based mainly on the work of Collier and Gunning (1999) and Sachs et al (2004), in order to answer the following question: How can Niger’s performance in fulfilling MDG 4 goals be explained through the theoretical framework about Africa’s underdevelopment?

In the article Why Has Africa Grown Slowly? (1999), Collier and Gunning explain the possible reasons that Sub-Saharan Africa is the lowest income region in the world and presents such high levels of underdevelopment. They illustrate this through a two-by-two matrix that examines the relationships between policy vs. destiny and domestic vs. external factors.

After presenting their case and evaluating the various factors, the authors conclude that the main reason for Africa’s slow growth is attributed to its domestic policy. They argue that highly persistent poor policies have hindered further development in African nations. They also suggest that while geographic and demographic factors clearly have an impact in delaying development, these can be easily overcome with increased investment and technological advancement (Collier and Gunning, 1999).

However, despite the fact that Collier and Gunning’s framework may explain slow growth in other African nations, this is not the case in Niger. According to the National Report on Human Development, the main reasons behind Niger’s high under-five mortality rates are from “a registered disastrous food and nutrition situation combined with a high prevalence of infectious and parasitic diseases,” such as malaria, diarrheal diseases, and measles, which are still highly prevalent today (UNDP 2004). Moreover, while domestic policy can play an important role in perpetuating high under-five mortality rates, in the last decade Niger has made remarkable progress in reducing infant mortality, bringing deaths per 1,000 live births down by almost 50 percent since 1990 (Amouzou et al. 2012).

The increase in child survival rate is attributed to a series of policies and initiatives carried out

by Niger’s government between 1996 and 2008, ranging from nutrition programs to providing child care services. During this period, “the government of Niger gave high priority to achieving universal access to primary health care for women and children… with special attention to reducing deaths from malaria, pneumonia, diarrhoea, and measles” (Amouzou et al. 2012). Thus, it is clear that in Niger’s case, policy and government action played a central role in reducing the national rate of under-five mortality. Therefore, Collier and Gunning’s theoretical framework disagrees with Niger’s demographic characteristics and the progress achieved in ameliorating the high rates of infant mortality in the country.

Conversely, Niger and its performance in MDG number 4 fit better in the theoretical framework proposed by Jeffrey Sachs et al in Ending Africa’s Poverty Trap (2004). Sachs outlines the “five structural reasons that have made sub-Saharan Africa the most vulnerable region in the world to a persistent poverty trap” (Sachs et al. 2004:130). Sachs’ first structural

reasons is Niger’s low productivity in agriculture, caused by a lack of affordable irrigation techniques, erratic rainfall, and high rates of evapotranspiration. Consequently, agriculture takes place in soils that are being depleted at increasing rates, while production falls behind population needs (Sachs et al.

2004). Coupled with high transportation costs, a situation of widespread malnutrition has been created. As it has already been discussed, a poor nutrition situation is one of the main causes for high infant mortality in the country. Consequently, this structural reason explains why under-five mortality rates are still prevalent in Niger, despite restless efforts from the government to bring death rates down.

Furthermore, Niger’s performance in MDG 4 can also be explained through Sachs’ et al second structural reason, high disease burden in Africa. According to Sachs et al (2004), African nations are home to many endemic tropical diseases, with malaria being the most far-reaching of all. The reason for such high prevalence lies in the disease’s ecology, rather than on factors associated with policy. As a result, widespread malaria “reduces productivity, frustrates foreign investment, and (by contributing to very high child mortality rates) delays or stops the demographic transition” (Sachs et al.

2004:134). It is clear that Niger’s struggles to achieve development and MDG 4 completion are partly explained by this factor, since infectious diseases have already been established as one of the key causes to high infant mortality rates. Lastly, a third structural reason addressed by Sachs et al is the slow diffusion of technology from abroad, which explains why many African countries, such as Niger, have lagged behind in technical advances regarding heath and agriculture.

The authors explain how this deficiency has clear implications for food productivity and crop yields (Sachs et al. 2004). Consequently, the lack of technological innovation can further worsen the already fragile food security and disease burden situation in Niger, resulting in even higher rates of infant mortality rates in the country. These structural reasons create the ripe conditions for increased rates of under-five mortality across the nation.

Therefore, given that Niger’s government has been very proactive in reducing infant mortality in the last decade, and that Niger's under-five mortality rate is mainly caused by reasons associated with the country’s geography and demographic characteristics, the country's lack

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of progress in MDG 4 can be better understood and explained though Sachs’ structurally based theoretical framework rather than on Collier and Gunning’s domestic policy argument.

Nonetheless, while it is vital to look at broader theoretical frameworks to understand development case studies in terms of various conceptual perspectives, it is also important to analyze what goes on at the local level in the various villages.

“Despite discouraging figures and poor rates of performance in many African countries, scholars continue to suggest that underdevelopment in Africa can be overcome” Despite discouraging figures and poor rates of performance in many African countries, scholars continue to suggest that underdevelopment in Africa can be overcome.

One of the ways to achieve this is through community-based projects, such as the “Key Family Practices” approach initiated by UNICEF and the French Red Cross in 2011 (Ardei et al.

2012). This initiative promotes the adoption of eight main practices, such as exclusive breastfeeding, the use of insecticide-treated mosquito nets, the home treatment of diarrhoea, and other interactive ways, like awareness-raising sessions and cooking demonstrations. These are behaviours that focus on the daily lives of the poor and can be promoted at the individual and the group level, without the need to involve health care infrastructure (Ardei et al. 2012), which is deficient in most of rural Niger. This kind of approach, despite being implemented by large civil societies, is similar to a bottom up or basic needs approach, since it tries to identify social needs and support local services and livelihoods by “helping people to help themselves” (Mackinnon 2011:187). Results from such programs suggest that the Key Family Practices program plays an essential role in reducing the prevalence of malnutrition among under-five children. These findings reinforce the importance of local-level

frameworks in promoting development, especially through the implementation of community-based activities.

To conclude, even though both Collier and Gunning and Jeffrey Sachs et al tackle the issue of underdevelopment and slow growth in Africa from a neoclassical economic perspective, their theoretical frameworks differ in that the former emphasizes policy and good governance as determinants for underdevelopment in African countries while Sachs emphasizes geography and demographics in perpetuating the poverty trap. In the case of Niger and the country’s performance in MDG 4, Sachs’ conceptual paradigm proved to better explain the rates of under-five mortality rates observed throughout the country. While Niger still has a long way to go to meet MDG 4 by 2015, thanks to community based development projects and basic needs approach style initiatives, remarkable progress is being made in the country towards the attainment of the Millennium Development Goals.

Bibliography Amouzou, Agbessi, Oumarou Habi, Khaled Bensaïd, and E Niger Countdown Case Study Working Group. "Reduction in Child Mortality in Niger: A Countdown to 2015 Country Case Study." The Lancet 380.9848 (2012): 1169178.

Ardei, Ferdows, et al. "Promotion of Key Family Practices in the Tanout and Magaria departments, Zinder region, Niger." Field Actions Science Reports. The journal of field actions Special Issue 5 (2012).

Collier, Paul, and Jan Willem Gunning. "Why has Africa grown slowly?." The Journal of Economic Perspectives 13.3 (1999): 3-22.

Mackinnon, Danny and Andrew Cumbers.

“Geographies of Development”. Introduction to Economic Geography: Globalization, Uneven Development and Place (2011): 181-188.

Sachs, Jeffrey, et al. "Ending Africa's poverty trap." Brookings papers on economic activity 2004.1 (2004): 117-240.

United Nations Development Program. “NigerCountry Profile: Human Development Indicator” (2013) from < http://hdr.undp.org/en/statistics/ >.

United Nations.“Niger MDG Profile”. MDG Monitor: Tacking the Millennium Development Goals.

(2007) from < http://www.mdgmonitor.org/factsheets_00.cfm ?c=NER&cd=562>.

Reworking the Role of Buddhism in Thailand’s Consumer Culture

By Ka trya B olger

For over 2,000 years, Theravada Buddhism has informed the Thai national identity. Thai values are fed by numerous principles that are fundamental to Buddhism, from its concern with mindfulness to its encouragement of modest, materially minimal living. Even for non-practicing Thais, Buddhist values of compassion and humility have figured in the formation of the Thai consciousness, affirming themselves in the country’s reputation among tourists as well. However, Buddhism is now being forced to re-assess its relevance in a 21st century Thai society saturated by a consumer culture that appears to run counter to the non-materialistic principles of Buddhism.

Thailand has seen accelerated economic growth in the past two decades, coinciding with a drastic decline in spiritual activity. With its newfound wealth, Thailand’s cities have been host to an upsurge of shopping malls, nudging themselves into the Thai landscape alongside its trademark, ancient temples or wats. In the process, Buddhist temples, once embodying the social core of Thai villages, have been reduced to colourful, decorative show pieces. Similarly, monks’ moral and community authority has been reduced and conferred to political leaders and social activists. Statistics indicate that there are now five monks for every 1,000 Thais today, in comparison to the 11:1,000 ratio in 1980.

Monks and temples have become static, sedentary symbols of tradition, debilitated by the

lack of monks and insufficient donations to sustain relevance in their communities.

A case study of a northern Thai village shows how monks are re-fashioning their traditional roles in a more materialistic culture. In this case, the monks of the local monastery admitted that ancient Buddhist traditions were quickly being replaced by more modern behaviours and approaches. For example, the monks in this village have relinquished the tradition of collecting and distributing food in the village in favour of calling a local restaurant to have takeout delivered. Most villages in the area have one or two full-time monks, who are often elderly and sick, suggesting that the appeal of the monk tradition holds less for younger people than it did before.

The Thai Sangha, or monastic community, is increasingly linking their traditions to consumer culture. One example is the involvement of the Sangha in retail businesses that supply products for monks to the tune of 10 billion baht, or 32 million dollars. “Monk Supply,” a store situated on the outskirts of Bangkok, resembles a North American big box store, bearing a variety of religious candles, clothes, prayer devices and statues for Buddhist monks.

Their revenue is fuelled by monks and young Buddhist men, expected to assume monk status for at least one period in their life. In this way, monks are finding niches in the consumer market to buoy their relevance and sustain their

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communities. Another marketing technique has been to emphasize the importance of meditation – in particular, in urban life – as an antidote to the stressful, over-crowded cities. In this way, modern Buddhism strives to demonstrate its dynamism and relevance outside the temple.

The use of social media among 21st century Buddhist monks has further aggravated their reputation by documenting and circulating scandals in the Sangha among the public. In recent years, Thai social media has captured footage of monks hosting parties and consuming alcohol in monasteries, as well as watching pornographic videos. The latest scandal involves a jet-setting fugitive monk who has been accused of engaging in excessive consumption, promiscuity and crimes ranging from statutory rape to manslaughter. In June 2013, a YouTube video surfaced that showed a monk taking a private jet ride with a Louis Vuitton carry-on.

Since then, a long list of darker secrets has emerged, including stories about this particular monk’s accumulated assets, which equal an estimated 1 billion baht. Increased visibility through scandals of this nature has seriously undermined the monks’ relevance and perceived legitimacy.

Divergent opinions have emerged on how effectively the Sangha can integrate itself within Thailand’s fast moving, materialistic culture. The Thai Sangha has been criticized in some quarters for neglecting to mend the gap between monks and mainstream society. In order to extend their role into modern life more readily, critics state that the doctrinal dichotomy between spiritual and material life needs to be re-assessed. The social and spiritual must be reconciled and the Buddhist believer must assume a more exterior, socially

conscious role, as the inner mind interacts with its environment. Monks must further expand their networks on both local and more extended levels to include villagers, NGOs, and progressive business people, among others.

For example, a group of monks called the ‘development monks’ emerged in the 1970s to help identify local needs in the community and relied on Buddhist principles to respond to them.

Similarly, some argue that the Thai Sangha must do a better job of asserting their notions of a moral economy and promote social Buddhist ethics.

In 21st century Thai society, Buddhism is re-fashioning its role as it struggles to maintain its relevance. With shopping malls fast replacing temples, and secular surpassing spiritual education, there is a real need to re-assess the place of temples and monks in this new, fast paced, technologically driven society. Buddhism can evolve with more emphasis on social media, for example, to convey transparency and to strike up a more dynamic relationship with sympathetic followers. The increasing materialistic culture of Thailand does not have to lead inexorably to the diminishing of Thailand’s distinct, Buddhist-

influenced national identity. Thai values and traditions that draw from Buddhism do not have to be toppled, simply re-purposed, to stay relevant.

A Comparative Analysis of Nigeria’s Microfinance Industry

By Christopher Villeg as-Cho Microfinance has continued to revolutionize the aid industry long after its inception in the 1960’s, it’s most successful and noteworthy example being the Grameen Bank, founded in Bangladesh. Although there have been many variances in how microfinance is applied, the Grameen Bank’s model stands out due to its success in reaching its clients and target groups, keeping close to its principles of doing social good and poverty reduction, all while remaining financially soluble. For these reasons, many projects and financial institutions have attempted to export this model abroad with varying degrees of success. This paper will seek to analyze the effectiveness of Nigerian Microfinance institutions (MFIs) in implementing a microfinance platform, their business primarily concentrated in Lagos’ slums and shantytowns. Although Bangladesh and Nigeria are geographically and ethnically distinct from each other, many of the demographic issues and trends facing the two Nigeria Population 174 M (7th)

countries overlap. A comparison between the two becomes not only logical, but potentially enlightening in addressing the short comings of MFIs in both contexts. The two countries are similar in almost all relevant metrics with comparable figures in key metrics such as population, HDI, and income inequality.

Although Nigeria’s rate of urbanization is significantly higher than Bangladesh’s, both countries have large segments of the population who are stuck in poverty and unable to access banking services, effectively restricting their access to capital. Microfinance is seen as a potential solution, if implemented correctly.

Bangladesh 163 M (8th)

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GDP per Capita (PPP) HDI Gini Coefficient Urbanization

$2800 (180th) 0.471 43.7 49.60%

Microfinance: Principles Behind the Idea Identifying a need that is sorely lacking, microfinance is “exclusively for the poor people who [have] little or no assets of any kind,” (Wahid 1). Conventional financial institutions are generally unwilling to service loans to the poor largely because they lack assets to use as collateral and are not literate enough to navigate through the necessary paperwork. More importantly, banking institutions are “more interested in large loans, rather than small loans which the poor…need,” (Wahid 7). As the poor provide little financial incentives for banks to take on such risks, few institutions are willing to provide loans and rudimentary banking services, making a portion of the population “un-bankable”. This barrier forces them to turn to informal sources of capital such as local moneylenders for supplementary capital, often at exorbitant interest rates. Microfinance opens credibility restrictions, allowing for small credit loans to be written for segments of the population previously deemed too poor to lend to. Microfinance manages to harness the entrepreneurial capabilities exhibited by the world’s poor on a regular basis, empowering individuals to turn day-to-day survival skills into business acumen. Microenterprises would effectively make debtors self-employed and provide them with a steady stream of income at a very low cost. In theory, microfinance deals with the two primary impediments to capital accumulation among the poor: low incomes and unmanageable interest rates. By providing them with sufficient income (in this case levels higher than sustenance) and market priced interest rates, microfinance gives them the option of saving excess income for future ventures rather than solely paying off the interest on loans taken in out in the past. Some studies have credited MFIs efforts with having “a sustainable impact in alleviating rural poverty…[by] providing a cost-

$2100 (192nd) 0.515 33.2 28.40% -CIA World, UNDP effective, sustainable development model that is applicable [everywhere],” (Islam 3), which has resulted in a proliferation of funding for MFIs from both public and private investors.

MFIs now globally serve approximately 100 million clients, each given an average loan of $170 making “the total market size…estimated at $17 billion,” (Sundaresen 26).

Demographics and Local Context Bangladesh remains one of the world’s poorest nations. As most of its populations are found in a rural setting, urban sprawl and slums have yet to become an issue, but like many developing countries, rural/urban dichotomies are becoming more pronounced.

High population density has proven to be somewhat problematic in the past, especially when the country’s location is taken into context. Periodic monsoons and flooding are a constant yearly risk, forcing the poor to reconstruct their lives on a consistent basis.

Such weather disruptions prove to be especially problematic for the country’s poorest, as they typically lack the ability to deal with such shocks, both socially and financially. This proves to be catastrophic for the small land holders in rural areas living off the land for sustenance, many lacking alternative sources of income in the event of mass flooding.

Demographically, Bangladesh is ethnically and religiously homogenous, with the Bengali Muslims making up the overwhelming majority of citizens. As a relatively young country, Bangladesh is currently on the cusp of its demographic bulge, 95.2% of the country being under the age of 64 with a median age of 23.6 years (CIA Factbook). While its population figures would place it on the fringes of economic expansion, education continues to lag well behind. Literacy rates remain low, with only

43.1% of total population being functionally literate; this lack of education is especially pronounced among women, as their rate is estimated to be as low as 31.8%. This would suggest that women continue to have restricted opportunities to participate in economic activities, as the majority of credit servicing institutions requires some degree of literacy.

Nigeria faces slightly different circumstances than Bangladesh, but is arguably equally impoverished on certain levels. Comparatively, Nigerian poverty levels outstrip Bangladesh with an estimated 70% of its population living under the UN defined poverty line (Bangladesh’s rate is roughly 31.5%). Although its economic outlook is better than Bangladesh, these market improvements are largely attributed to its oil exports; most of such profits rarely trickle down to the poorest segments of Nigerian society. Prudent public policy decisions by the government’s have allowed an IT industry to slowly flourish, most of the foundations having been laid out through investments in tech infrastructure and concerted efforts to expand its cell phone coverage beyond urban areas.

Urbanization is increasingly becoming both an economic driver and escalating problem. The Nigerian economy has derived economies of scale and concentration from densely populated city centers, allowing them to become centers for economic growth and development; conversely, they are also becoming concentrated areas of urban poverty as rural migration is set to intensify in the coming years. The country’s capital, Lagos, currently is dealing with an influx of rural workers, forcing the government to take measures to limit the rural migration while implementing mass construction investments in an attempt to prop up the capital’s failing infrastructure.

This can all ultimately be attributed to Nigeria’s population bulge, as a result of the fact that the vast majority of its population is under the age of 30. Its current median age is roughly 19.2, making it one of the youngest nations in the world (CIA Factbook). While there have been steps made by the

government to improve accessibility to education, like their heavy subsidy of primary and secondary education, literacy rates remain surprisingly low at 61.3%. Should current trends remain constant, Nigeria will continue to urbanize at an alarming rate, coinciding with the declining importance of rural agriculture to the nation’s economy.

Overall, its market conditions have made investing in Nigeria an attractive location, especially for banking institutions, as the majority of the young population remain without banking services.

Bangladesh: Grameen Bank Grameen Bank began as an experiment headed by Mohammad Yunus to provide poor individuals in rural areas with start-up capital to open their own microenterprises. While credit is hardly a necessity, Yunus firmly believes that “poor people [are] much more capable of taking care of themselves than [they are] portrayed,” (W=ahid p. 6), arguing that despite all their challenges, the day to day trials of Bangladesh’s poor made them credible, regardless of their lack of collateral. This belief goes in line with the traditional definition of microfinance, but what sets a part Grameen from other MFIs has been its dedication to its founding principles. Despite its success in the Bangladeshi market, Grameen has not rested on its laurels; a new system labelled “Grameen II” is currently being implemented to deal with deficiencies found in the first program. For these very reasons, numerous attempts have been made to export it abroad.

One aspect that has made Grameen distinct has been its development of its “16 Decisions”, a program meant to help “imbue members with discipline, unity, and hard work,” (Wahid 15). The program is a pledge taken by the debtors to stay true to certain principles, reinforcing the importance of maintaining small vegetable gardens year round, family planning, investments in education, sanitation and nutrition, and physical exercise. Overall, the program is a concrete demonstration of Grameen’s dedication to educating its debtors, striving to define their role in the community as something much more than simply a creditor

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of microloans. This can also be seen in the way that Grameen defines success through its “10 Indicators” of socio-economic progress.

Defining poverty in terms well beyond household income, Grameen’s indicators consider a client out of poverty when they have: proper housing, access to clean water, ability to put children through school, proper clothing, and money for potential healthcare costs (Grameen). All such indicators are correlated with an increase in standard of living and quality of life. Additionally, its firm dedication to empowering women has resulted in 96% of their clients being female, making Grameen’s dedication to gender empowerment more than simply rhetoric.

Perhaps most importantly, Grameen helps debtors generate their own savings with Year 1985 1986 1987

Sonali 37 62 69

Agrani 56 55 45

Even among its peer group of fellow Bangladeshi banking institutions, Grameen stands above and beyond all its competition at loan recovery. Its loan recovery rates are almost 30% more effective than Sonali, Bangladesh’s largest banking institution; Agrani tends to service loans to richer clients, many of whom are the owners of moderately sized tracts of land; BKB performed by far the worst as a government owned bank specializing in financing agricultural loans. This rate of success can be credited to three significant structural and regulatory decisions made on the part of Grameen’s governing board: 1) staying true to its targeted demographics; 2) keeping consistent market priced interest rates; and 3) structuring of loans in fair and affordable manner. Firstly, many MFIs attempt to target richer clients as a means of gaining more profits; some rural credit institutions only provide less than 6% of their funding to the functionally landless, defined as individuals who own less than .5 acres of land. Conversely, 21% of rich farmers were given 38% of the credit

which they can eventually buy their share in the bank, making the bank owned by the poor for the poor; as borrowers own roughly 95% of the total equity of the bank, the remaining 5% belongs to the government (Grameen).

Beyond its social good, Grameen’s structure can be attributed to its high degree of success as a lending institution. One of the most remarkable figures has been its 97% loan recovery rate, with the bank claiming that “on the average, the loan recovery rate is 97.4% within one year, and 98.6% within two years after the day of issue,” (Wahid 57).

Considering the return rates on most loans in the developed world, the poor are by far more responsible debtors than their richer counterparts, but this can hardly be considered something applicable to all Bangladeshi institutions BKB 52 47 32

Grameen Bank 97 97 98

-Wahid 58 available (Wahid 53). Considering Bangladesh is primarily rural, land ownership is a major definition of poverty. Grameen Bank has restricted its stakeholders to individuals owning assets not exceeding the value of 1.0 acre, which had allowed it to direct approximately 59.9% of its loans towards its targeted market.

Secondly, Grameen Bank is structured to provide loans at a nominal rate of 16%, similar to other programs, but compulsory deposits raise the effective cost to 30% (Wahid 57). This increased rate is largely meant to provide an adequate disincentive for richer individuals to stay away from taking out credit, as they would most likely have access to more traditional and conventional sources of capital. Lastly, loans are structured for a group rather than individuals; should an individual default on a payment, the group is held liable. Rather than use collateral to induce repayment, group pressure is largely sufficient in preventing default as a “failure to repay disqualifies [the whole group] from future loans,” (Wahid 175).

Peer pressure as a form of collateral can be

seen as a superior and more effective form of monitoring deviance as it can directly be correlated with Grameen’s loan recovery rate.

Although the bank has received some criticisms concerning its ability to truly penetrate poverty, as most of its clients tend to be “clustered around the poverty line…predominantly moderately poor or vulnerable non-poor”, it cannot be denied that Grameen’s activities have resulted in an overall improvement in standards of living for its clients (Sundaresan 3). The Grameen Bank has been successful in reaching its main target group in the poor (though perhaps not the very poor), empowered women by providing them with capital, and can be considered a reliable source of capital for rural Bangladeshis.

Nigeria: MFIs Recently at a microfinance conference in 2011, Muhammad Yunus accused Nigerian MFIs of not truly being MFIs by stating that “micro-financing is non-conventional banking; it is not an extension of conventional banking.

Conventional banking is for the rich, whereas micro financing is banking for the poor,” (Momoh).

Recent trends in Nigeria’s microfinance industry has resulted in many MFIs becoming increasingly profit oriented, to the extent that they lose sight of the social intangibles of microfinance as a social enterprise. This shift in mentality comes into conflict with many of the founding principles of microfinance. Yunus went as far as to argue that “any interest rate that is 15% above the cost of funds for a microfinance bank is no longer serving the poor,” (Momoh); some Nigeria MFIs are known to charge up to 100% per annum. First Bank, one of Nigeria’s larger microfinance players, is known to charge between 36-48% (Komolafe); comparatively, Grameen charges 20%. Despite having the third highest concentration of poverty in the world, MFIs in Nigeria are only serving a small portion of their population: less than 1 million out of a potential 40 million clients (Mejeha 3). Funding consistently goes towards richer segments of

the population rather than the poor, with the majority of microfinance funding directed towards the commercial sector. This imbalance becomes especially problematic with agriculture and manufacturing playing a major role in

building sustainable growth and employment opportunities for Nigeria. The trend could be interpreted as a manifestation of Nigeria’s growing urban bias, as most commercial debtors are found in city centers. Although urban migration has forced the government to progressively concentrate more funding on urban projects, rural areas still account for 50% of Nigeria’s population. Without a more balanced approach in distributing capital, MFIs will only continue to worsen pressures that accompany urbanization.

There are three primary challenges facing Nigerian MFIs. Firstly, interest rates, as identified by Yunus, continue to be problematic and impede the growth of the industry. At exorbitantly high rates ranging between 3248%, Nigerian MFIs are effectively limiting the amount of clients they can serve. While this may make investments in microfinance extremely profitable, giving the poor’s above average loan repayment rates, the interest offered by many MFIs can be comparable to those given by money lenders (Mejeha 6); as a result, there are few incentives for individuals to move from the informal capital markets to MFIs. Perhaps more importantly, such usurious terms contrast with the principles of microfinance by making clients work to pay off interest rather than allow them to accumulate personal capital.

Secondly, wealthy investment interests appear to be consistently trumping those of the poor.

Rather than invest in agriculture, which is “the source of income and sustenance for the majority of poor Nigerians,” (Mejeha 7), commercial loans overwhelmingly make the majority of credit distributed; this is largely because investments in Nigeria’s commercial sector can provide significantly quicker returns than other industries. Lastly, there has been an overwhelming lack of effort by MFIs to truly address the needs of the poor. The poor remain on the periphery of target groups for the majority of MFIs, making Nigeria’s industry centered on helping richer clients become richer, rather than alleviate the poverty for the poor. Few mandates have been established promoting independence and self-sufficiency.

Therefore, Nigerian MFIs lack the supportive and consultative framework established by the Grameen Bank.

Policy Changes Although Nigeria does have an untapped microfinance market, a concerted effort must

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be made to prevent conflicting interests from taking over the industry. A separation of commercial banks from their MFI branches may alleviate some of the incentives to strive solely for maximizing profits. By increasing licensing regulations and forcing MFIs to operate on a stand-alone basis, there may be more autonomy for MFIs to actually carry out their mandate of poverty alleviation (Mejeha 13). MFI independence from private and public pressures would undoubtedly force MFIs to look for alternative sources of capital, but with proper management, Nigerian MFIs may potentially become financially independent. As Grameen’s model is very worker intensive, it might not be economically feasible for some Nigerian MFIs to implement such changes.

Regardless, Nigerian MFIs must place a greater importance on reaching rural clients similar to Grameen, as rural growth has the greatest potential to alleviate mass poverty in Nigeria.

Investments in rural settings will not only “increase [the] income of the rural poor… [and] raise agricultural wages,” (Wahid 53), there is a high potential for spill over effects that will result in increases in livestock production and agricultural produce, both improvements that would help alleviate Nigeria’s food insecurity.

One potential, country specific change that Nigerian MFIs should implement in attempting to penetrate the rural market is to utilize the country’s expanding cell phone network as a means of delivering micro loans. A shift to such technology has already been successfully implemented in India and has seen a decrease in fraudulent and criminal activities, reduced cash handling and transaction costs, and made microloans more accessible to broader segments of India’s population (Sundaresan 7579). Given the country’s vibrant technology industry, such a shift has the potential to revolutionize the way microcredit is serviced.

Fundamentally, Nigerian MFIs must develop a broader understanding of their role in poverty alleviation to reach their full potential for producing social good.

CIA. CIA World Fact Book: Bangladesh. 10 09 2012. 12 11 2012 <https://www.cia.gov/library/publications/theworld-factbook/geos/bg.html>.

CIA. CIA World Fact Book: Bangladesh. 10 09 2012. 12 11 2012 <https://www.cia.gov/library/publications/theworld-factbook/geos/bg.html>.

—. CIA World Fact Book: Nigeria. 10 09 2012. 12 11 2012 <https://www.cia.gov/library/publications/the-worldfactbook/geos/ni.html>.

—. GINI Coefficient. 09 10 2012. 03 10 2013 <https://www.cia.gov/library/publications/the-worldfactbook/rankorder/2172rank.html>.

—. World Urbanization Rates. 09 10 2012. 03 11 2013 <https://www.cia.gov/library/publications/the-worldfactbook/fields/2212.html>.

Grameen Bank. Grameen Bank: About Us. 20 11 2011. 12 11 2012 <http://www.grameeninfo.org/index.php?option=com_content&task=view&i d=16&Itemid=112>.

Islam, Tazul. Microcredit and Poverty Alleviation. Burlington: Ashgate, 2007.

Komolafe, Babajide. Seven Fundemental Flaws with Microfinance Banking in Nigeria. 12 09 2011. 12 11 2012 <http://www.vanguardngr.com/2011/09/ seven-fundamental-flaws-with-microfinance-banking-innigeria/>.

Mejeha, Remy O. and Ifeanyi N. Nwachukwu. "Microfinance Institutions in Nigeria." 14 08 2008. MPRA. 12 11 2012 <http://mpra.ub.unimuenchen.de/13711/1/MPRA_paper_13711.pdf>.

Momoh, Siaka, Anthony Osae-Brown and Blessing Anaro. Yunus, Nobel Laureate, faults Nigeria's Microfinance Banking.

06 09 2011. 12 11 2012 <http://www.businessdayonline.com/NG/index.php/n ews/76-hot-topic/26923-yunusnobel-laureate-faultsnigerias-microfinance-banking>.

Sundaresan, Suresh M. Microfinance: Emerging Trends and Challenges. Northhampton: Edward Elgar, 2008.

UNDP. Country Profiles and International Human Development Indicators. 2013. 3 11 2013 <http://hdr.undp.org/en/countries/>.

Wahid, Abu N. M. The Grameen Bank: Poverty Relief in Bangladesh. Westview Press, 1993.

Yunus, Muhammad. Banker to the Poor: Micro-lending and the Battle Against World Poverty. New York: PublicAffairs, 1999.

Is Hungary Criminalizing the Homeless?

By Stephanie Fehertoi

Like many eastern European postcommunist countries, Hungary is now a developed nation with a democratic government, a member of the European Union (EU) and the Organization for Economic Co-operation and Development, and a popular tourist destination. However, Hungary has recently fallen under international scrutiny after new government measures suggest the criminalization of the homeless. The enforcement of human rights is a complex issue that all countries battle with, despite agencies that exist to prevent abuses. Nonetheless, most countries try to ameliorate such behaviour and progress, rather than amend government legislation in order to circumvent social issues, as Hungary has recently done.

Over the past couple years, the Hungarian government has cut wages and pensions in order to meet its requirements under the bailout from the International Monetary Fund and decrease its state debt. These austerity measures have greatly affected the country, forcing growing numbers of people into unemployment, poverty, and homelessness. Many took out credit in foreign currencies that they can no longer pay back due to

the devaluation of the Hungarian forint, and due to the cuts in social welfare, now have little options regarding their social conditions.

Despite these hardships, Hungary adopted the Act on Petty Offenses in November 2011, and began enforcing it in April 2012. The act made it a criminal offense to habitually reside in public spaces or to store belongings in them, with repeat offenders facing imprisonment for up to 75 days or fined up to 150,000 Hungarian forint (US$655).

While similar laws exist in many urban cities, such as those in the United States, it is unusual to find such measures enforced by national governments.

In February 2012, the United Nations (UN) special rapporteurs on extreme poverty and human rights, including the right to adequate housing, called upon Hungary to revise this law. Likewise, the Hungarian Constitutional Court ruled it unconstitutional in November 2012, claiming that the ability of the state to punish those who do not have any other option but to live in a public area is incompatible with the constitutional requirement of â&#x20AC;&#x2DC;defense of human dignity.â&#x20AC;&#x2122; However, the following month, Prime Minister Viktor OrbĂĄn objected to the ruling and amended the Hungarian constitution in

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March 2013. It now permits parliament to, “…outlaw the use of certain public space for habitation in order to preserve the public order, public safety, public health and cultural values.”

The law also allows local governments and municipal officials to impose their own bans in designated areas. The same article states that the state and local governments should strive to guarantee housing for homeless people, but does not make it a requirement.

During the eight months that the Act on Petty Offenses was in effect, the police began clearing shelters and temporary dwellings from many abandoned public areas, including the distant outskirts of Budapest, the nation’s capital During the eight months that the Act on Petty Offenses was in effect, the police began clearing shelters and temporary dwellings from many abandoned public areas, including the distant outskirts of Budapest, the nation’s capital.

The Hungarian Civil Liberties Union obtained government documents showing that about €100,000 of fines were incurred during this time, and according to a report filed by Human Rights Watch, these fines affected over 2,000 homeless people in 2012. In an interview with Human Rights Watch, human rights lawyer Lydia Gall said, “It defies logic to punish the poorest people in society just because they live on the streets…Hungary’s approach to homelessness is completely at odds with Europe’s anti-poverty strategy. Fines and jail will serve only to further marginalize some of the most vulnerable in society.”

Nonetheless, in the fall of 2013, Budapest became the first municipality to exercise its new constitutional right. The city passed a law that prohibits dumpster diving or taking unwanted items left on the streets for official disposal, and “residential habitation,” or rather, living and sleeping rough in public places. This law applies to all of the 22 districts of the city, and especially the

streets of any World Heritage sites, which are popular tourist destinations. Police recognize offenders as committing ‘misdemeanors’ rather than ‘crimes,’ but they can still be sentenced to community service, fined after three warnings, and imprisoned after repeated breaches. Public areas include playgrounds, train stations, cemeteries, and the capital's largest park.

Under the European Social Charter, a Council of Europe treaty, and the International Covenant on Economic, Social and Cultural Rights, Hungary is obliged to guarantee the right to adequate housing. However, last year, the UN stated that there are 5,500 available spaces in Budapest's shelters while there are about 8,000 to 10,000 homeless people in the city, and an estimated 30,000 to 35,000 in the country. In October, the Human Resources Ministry said that a total 11,466 beds at shelters are ready to receive homeless people, and that the number of rough sleepers refusing services is between 3,000 to 4,000 nationwide. According to Ferenc Kumin, the Hungarian Foreign Media Relations State Secretary, the occupancy rate of these shelters is 77.1 in Budapest and 79.4 elsewhere in Hungary.

This is most likely due to unfavourable conditions in the shelters such as overcrowding, bedbugs, and high exposure to illness, as well as the emotional and physical difficulty of changing living spaces so frequently.

Facing scrutiny for ‘criminalizing the homeless,’ the Hungarian government insists that the aim of the new law is to protect major monuments and keep public spaces clean and safe, as well as getting homeless people off the streets and into shelters. It also recently amended the Criminal Code to make insulting the homeless a criminal offence. In response to criticism that Hungary's shelters simply do not have the resources to accommodate the estimated homeless, especially in Budapest, Kumin stated that, “There are plenty of places for daytime and for nighttime shelter. We believe that [the

homeless are] almost 100 percent covered.” The government also states that €1.2 million have been allocated for homeless services in 2013 alone, such as for meals and health services, in addition to about €28 million in funding, including normative subsidies to local agencies and support programs. The Human Resources Ministry backed these figures. According to the Huffington Post, the government issue a statement on September 30 that said, "…the provision has been adopted primarily in the interest of the homeless people, in the aim to avoid that while there are enough shelters to stay at for all of them, they rather choose to stay at public areas where they risk freezing to death in winter." Indeed, Kumin claims that between 2006 and 2010 (when Prime Minister Orbán came into power), 131 homeless people froze to death, and that since 2010, only one person has died from such causes.

However, many civil society groups remain concerned about the effectiveness and intent of these laws. In an interview with the Huffington Post, Éva Tessza Udvarhelyi, a worker with the Hungarian nongovernmental organization, The City is for All, argued that the government aims to appeal to voters and hide the homeless, especially to tourists. "They think the only problem about homelessness is that it's visible, not that it exists," Udvarhelyi said. The organization has been adamant about revoking Hungary’s new law against the homeless, using tactics such as writing to the European Commission and UNESCO, the UN organization that designates World Heritage sites and promotes and protects cultures. The organization has also held peaceful demonstrations, including a protest in the assembly room of the Budapest City Council, which

delayed the state’s meeting for several hours before the organization was removed by police. The council proceeded to pass the new law in Budapest. On The City is for All’s website, the organization expresses that homelessness, “…should be eliminated through social policy and

However, targeting the homeless, one of the most vulnerable social groups, by legalizing a potential human rights abuse and thus seemingly circumventing the foundation of the issue may not be the most beneficial or timely course of action. not punitive measures.”

Due to the fiscal crisis that infiltrated many institutions and countries in recent years, Hungary is not alone in implementing austerity measures and facing difficult times. However, targeting the homeless, one of the most vulnerable social groups, by legalizing a potential human rights abuse and thus seemingly circumventing the foundation of the issue may not be the most beneficial or timely course of action. Will prohibiting the homeless from living in public spaces effectively move them into shelters where they may receive better assistance, provided the conditions are adequate? Or does it simply act to blanket the issue of homelessness and poverty in Hungary in order to increase tourism and ease the minds of wealthier citizens? Is Hungary really attempting to criminalize the homeless, and might other countries follow suit?

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The quest of righ ts for th e Ecuadorian Amazon: A political evolution of Ecuador's legislation

by: Camila M. Moya Rosario

Introduction: Under the guidance of president Rafael Vicente Correa, on September 28, 2008, the Ecuadorian state approved its twentieth constitution by an 80 percent margin. This constitution is the first in the world to recognize legally enforceable rights to its ecosystem. The nature deemed to be protected by this constitution is mostly concentrated in the Andean highlands and Amazon lowlands of Ecuador.

This paper will focus on the economic and political transformation regarding La Región Amazónica del Ecuador, commonly known as “El Oriente,” that extends over an area of 120.000 km² and has about 4.8% of the population (BBC). These new efforts to protect and give rights to the Amazon in Ecuador raise the question of how Ecuador, with its colonial past and present grievances, developed one of the most extensive legislative pieces in the world, becoming the first country to introduce a constitution that gives rights to nature? This essay will try to demonstrate how Ecuador has come to adopt its latest magna carta and used it to address the rights of indigenous peoples and to protect and give rights to mother nature while respecting the pre-colombian notion of pachamama or buen vivir8.

8 Pachamama (mother earth or mother world in english) is a Quechuan or Aymaran term used to refer to the goddess revered by indigenous people in the Andes.

“The land has a deep meaning in the cosmic lives of indigenous peoples in the Andes; she is the mother that

In order to understand the political evolution that has allowed a shift in Ecuador, specifically in relation to the Amazon, this essay will then explore the reforms that have addressed the problems of indigenous peoples, how indigenous movements gained political leverage, the context in which the newest constitution was developed and the challenges that have arisen for indigenous peoples living the Amazon basin. The analysis of the political evolution pertaining to indigenous rights will demonstrate how Ecuador, a country with colonial grievances and present dependencies in nature, has emerged with such an intricate constitution.

A historical overview of the econom ic and political changes: The provinces that encompass the Ecuadorian Amazon have been exposed to a series of socio- cultural and environmental impacts that have been occurring since the discovery of the welcomes us, or the pachamama. It is the space where life is created and re-created. In the indigenous view, men and women should 'raise mothe mother land and let her raise us'” (Bruckmann 606).

Buen vivir is the spanish tranlastion of a Quechuan worlview sumak kawsay. The notion of 'buen vivir' “describes a way of doing things that is communitycentric, ecologically-balanced and culturally-sensitive" (The Guardian).

natural wealth in the region. From these conflicts emerged the now and familiar, and perhaps misleading, nationalist slogan “Ecuador is, has been, and will always be an Amazonian country.” In order to understand why Ecuador was in such profound need to change its socio-economic and political politics, it is important to revisit past policies that either directly or indirectly affected the Amazon and the indigenous peoples that inhabit it.

Indirectly, the industrialization of the state of Ecuador allowed for the creation of an active civil society, and the formulation of laws that addressed indigenous inequalities. Directly, there are two major legislative reforms that affected the rights of indigenous peoples in the Amazon: the plan de comunas of 1937 and the agrarian reforms of 1964 and 1973. It is only through these improvements in the legislative system of Ecuador that some space was made for indigenous communities to organize and to start gaining political leverage.

For much of the country's history, the Amazon was never a predominant topic in Ecuadorian politics.

National attention to the Amazon only increased in the late twentieth century as a result of the border conflicts with neighbouring country Perú. The Amazon also received more attention because it came to represent an “empty” space to send colonists after the agrarian revolution. During the last two decades of the 19th century, like many other neighbouring countries, Ecuador questioned the intervention of the state and started a period of the liberalization of markets and privatization of public enterprises. As a result, in the later half of the 19th century, Ecuador followed a laissez-faire economic model. Presidents like Gabriel García Moreno and Eloy Alfaro promoted the national economy to large landowners and external markets (Cepeda, 139). It is only during the 20th century that the government of Ecuador began to intervene in the economy because of its prolonged crisis. The state intervened to maintain the revenues of public finances, and as a result of the dissemination of social issues in Ecuador, the state began to create legislation for the benefit of workers (140). During this period there was a lot of national investment, specifically for the development of the production of banana, which became the most exported produce in Ecuador at the time (141).

The first law that the state promulgated in order to give social rest to indigenous movements in Ecuador was La Ley de Comunas in 1937 (Lucero, 27). La

Ley de reformas agrarias y colonización had two fundamental objectives: to overcome the existence of the 'huasipungo' (the traditional arrangement of indigenous) and to restructure the property of the land in order to reduce the existence of large states that were concentrated in a few families so that the land could be given to landless campesinos and indigenous people. It was not until this legislation that the state began to re-imagine the place of indigenous people; there was a transformation in the way the state viewed indigenous peoples as the legislation referred to them as campesinos (peasant) instead of indígenas (indigenous in spanish). Even though the ley de Comunas of 1937 was supposed to be a protective legislation for indigenous, it came to serve as a compromise between the large land concessions that were established during colonial times, and the project of the indigenistas 9 , “who worried about the experience of the Mexican Revolution, and saw in the agrarian conditions the ferment of social conflict.” (29) As a result, the 1937 legislation recognized that there were campesino settlements that were not incorporated in the Ecuadorian division of the state. Since the expedition of this legislation, the comunas have become the way that has been used the most to group indigenous peoples in Ecuador. Since then, many indigenous communities have adopted this new judicial status that legalizes the relationships between families and family groups in rural populations. This law did not result from the desire to give protection to indigenous peoples, but it rather resulted from the competition between the coastal elites for “progressive” legislation that “helped Indigenous elude the debt-patronage system of the haciendas” (Lucero, 28).

The second important constitutional reform for indigenous peoples in the Amazon resulted from the period of state intervention that happened during and after the second half of the 20th century.

In the 1960's, Ecuador was one of the most backward countries in Latin America, with precarious living conditions for the general population, a highly reduced corporate capacity, very poor infrastructure and public services, and a predominantly agrarian sector with very limited growth of foreign capital. The period following the ley de comunas is where we can observe the consolidation of the modelo nacional estatal desarrollista (in english, national model for state development). La Junta Militar, the working government at the time, through economic politics used the state as an instrument to adopt the Plan 9 Indigenistas were part of the political ideology in several Latin American countries that emphased the relation between the nation state and Indigenous minorities called indigenismo.

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de Desarrollo (1962-73) and to develop the modernization of the institutional reform. At this time, the Ecuadorian state began to intervene in the economy and politics to help the modernization of the country. The two governments of La Junta Militar used new policies like protectionism, selective credits, facilities of foreign investments, tributaries exonerations, etc. (Cepeda, 144) to speed the modernization process in Ecuador. The national policies and the economy of the country dramatically changed due to foreign intervention that accompanied the Cuban Revolution and the oil crisis. As a result of the threat of the Cuban Revolution, external pressures allowed for the legislation of the agrarian reform of 1964, in hopes that it would promote the modernization of Ecuador to a free market economy (143).

This is precisely the time when the two agrarian reforms take place in Ecuador.

The agrarian reforms of 1964 and 1973 looked for: “1) the divestiture of large landholdings and redistribution of land to smallholders and the landless and 2) the colonization of lands considered uninhibited” (Perreault, 104). Because of the nature of these two legislations, indigenous land claims to the Amazon were declared fallow lands, making them vulnerable to commercial interests.

This change resulted in intense pressures on the resource bases of indigenous groups. The ley de comunas y colonización and the agrarian reforms shaped the scale of indigenous politics by allowing for rural modernization to take place. More importantly, these legislative changes required indigenous communities to receive personería jurídica or legal incorporation to the state. The legal incorporation of indigenous people to the state meant that they could “receive title to lands, water resources, agricultural credit, infrastructure, or any other benefit made available by the state” (Perreault, 101). This political change effectively led to the creation of localized indigenous organizations within communities, so that they could consolidate their newfound political rights. This constitutional reform became a very important landmark for the protection of indigenous peoples in Ecuador, who since have “developed national (and international) linkages in the development of arguably the most powerful indigenous movement in the continent” (Lucero, 24). Is it not until now, that “indigenous peoples are to some extent incorporated into national politics” (24). Having legal incorporation for indigenous people in the state is significant not just for the transformative nature of the constitutional law in Ecuador, but also for the fomentation of the rights of nature.

However, the Amazon did not become an area of contention until the discovery of petroleum

reserves in the area “that funded the modernizing initiatives of the military government of the 1970s” (37). This period coincides with the agrarian reforms, which gave rise to large-scale settlements and the constructions of roads and infrastructure of formerly remote parts of the lowlands. The economic situation of Ecuador began to improve thanks to the petroleum reserves that produced revenue from public and foreign investment. From 1973 onward, the prices of petroleum began to go up and with this, the entry of capital from exports incremented the resources that the state had in a spectacular way. The magnitude of wealth produced from 1972 to 1974 was equal to all of the income from national exports of a century and a half, making this period of Ecuadorian history known as the “petrolerismo” (Cepeda, 147). However, this era ended abruptly as the international prices for petroleum began to drop during the 1970's oil crisis. This drop resulted in a period of international intervention where many Latin American countries had to go under austerity plans to pay for their foreign debt. In Ecuador, these austerity measures were known as “la Filosofía y Plan de acción,” meaning the state had little intervention in the economic affairs, and prioritizes the development of foreign investments. For the second time, Ecuador began to disengage the state from its economic politics, because at the time there was a belief that state intervention was not necessary in order to stabilize an economy. Regardless of the political state of Ecuador, during the 60's and 70's, the country industrialized. Since this time, Ecuador has begun to engage in neoliberal politics. The discovery and exploitation of petroleum reserves in Ecuador have resulted in growth of capital, diversification of markets, and mobilization of rural populations. But there are also negative effects that continue in the rural areas of the Amazon. “Deforestation, contamination of rivers, and the intense pressure of lands and resources brought by colonization all contributed to a disruption of indigenous life ways in the region and proved to be powerful issues around which indigenous organization would [later] mobilize” (Perreault, 105).

In contrast to the United States, Ecuador did not have an industrial revolution. Rather, it absorbed pre-existing technologies and economic models, allowing modern businessmen to grow at the expense of the state. Regardless, this period was an important foundation for the promulgation of indigenous rights and the rights of nature because the rapid economic growth resulted in a widening of the civil society, specially within the labour sector. It is in this period that many indigenous movements started to grow and become respected and heard in Ecuador. During this time, the middle class sector

secured its position as a result of the expansion of the educational system, the professionalization of university students, business creation, and the inclusion of this class as employees in the government sector. This resulted in a rapid urbanization of rural communities and the start of the adoption of the modelo empresarial, as the state was seeking to convert the private enterprise into the principal agent for the promotion and development of Ecuador. This model concluded with termination of the two military governments of the petroleum era. From the 1980's onward, the state began to adopt neo-liberal policies to promote the role of the private enterprise in the economic sector.

These policies, also adopted in other Latin American nations, resulted in an economic crisis for nearly two decades. The institution of these policies made Ecuadorian society question the economic policies that the constitutional governments had put in place, since they had not achieved their objectives.

These policies allowed many foreign enterprises to tap into the wealth and resources of Ecuador while sacrificing the life of the Ecuadorian nationals.This resulted in a political vacuum that was later filled by leftist governments in all Latin America.

Before we explore the rise of Correa's government in Ecuador, it is necessary to understand the political transformation that the indigenous movements suffered , in order to fully capture how the country transitioned its legislative laws to include the rights of nature.

The quest for Indigenous Rights: Since the histories of indigenous movements, as Mariátegui stressed, “are unintelligible apart from the history of land,” it is important to discuss in greater detail the constitutional changes that the Ecuadorian state has suffered in order to give rights to indigenous peoples, and ultimately the rights to the protection of their land. As we have previously discussed, the Ley de Comunas of 1937 and the agrarian reforms of 1964 and 1973 are cornerstones for the promulgation of rights of indigenous peoples and as a result, the rights of nature. Within the last two decades, the evolution of social movements in rural areas of Latin America, especially in those inhabited by indigenous peoples, has gained momentum and political weight. The rise of social movements resulted in demands from indigenous peoples for

the state's acknowledgement of issues like the recognition of the plural nature of ethnicities, the transfer and finance of educational programs, and the entitlement of territories. Sadly, even though laws helped the promulgation of the rights for

indigenous peoples, it is not until the Amazon became a source of important natural resources that the state began to pay more attention to the problems and the protection of this region. As demonstrated, the mechanization of the Ecuadorian state became a central step for the development of an active civil society in Ecuador. With the continuous political importance of indigenous groups in Ecuador, the rights that encompass their lands and their cultural traditions have become a pivotal topic in the reformulation of the legislation in Ecuador. After understanding how, in a few years, Ecuador was able to industrialize and produce an active civil society that was able to actively reject government policies that only benefited foreign investment at the expense of its people, we can begin to examine the trajectory of the country, its newest legislative instrument, and how the government is implementing its new policies.

As we have seen, “over the past 30 years, and in particular since the late 1980s, indigenous organizations in Ecuador have asserted their claims vis-a-vis the state, through both popular mobilization and electoral politics” (Perreault, 102). This political mobilization would have not been possible without two important factors: the bulk of the indigenous populations living in rural areas and the shift and redefinition of indigenous peoples as social actors from campesinos to indígenas (Zaldívar, 218). As we have previously discussed through our historical overlook of the state of Ecuador, the industrialization of Ecuador led to dramatic shifts in the rural areas. For example, the traditional haciendas disappeared and the economy of the indigenous-farmers was inserted into the national and regional markers because of the agrarian revolution. The “agrarian reforms move[d] the “Indian problem” from the semiprivate sphere of ethnic administration to a national public sphere in which national development plans were debated and nationwide protests were planned” (26).

But it was not until the 1990's that the Amazon became a place for indigenous organizing with the rise of the Confederation of Indigenous Nationalities of Ecuador (CONAIE). The CONAIE is a confederation of local, provincial, and regional indigenous nationalities that encompasses indigenous peoples from both the lowlands Amazon basin and the Andean highlands. Although this organization represents a minority of the population (estimates range from 7% to 40%), over the past 20 years, it has gained a lot of political significance.

This confederation successfully grouped the country's 14 indigenous nationalities into a “recognizable force for social justice” (Becker 48).

The recognition for the rights of indigenous peoples in Ecuador has largely been successful because it has been able to organize all indigenous nationalities living in the high and lowlands of

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Ecuador. The organization of the movement has allowed for the voice of indigenous people to become one uniform movement. Since the creation of CONAIE, the organization has led many demonstrations. For example, “the CONAIE led massive marches, blockades, and protests that became known during the June 1990 uprising, which marked the dramatic return of indigenous people to the national stage of the political scene” (Lucero, 32). As an organization, CONAIE's most significant advancement for the rights of indigenous peoples has been the legislation of the redefinition of modern indigenous groups as nacionalidades. As a result, “Ecuador is the only country in Latin America in which indigenous organizations have made significant progress in institutionalizing the unit and idea of indigenous 'nationality'” (32). This political gain resulted in the search of indigenous peoples for the recognition of the pluri-national state of Ecuador, which was obtained in the Constitution of 2008. This discourse became part of the indigenous platform in the contention for indigenous rights. The indigenous leaders and social movements continue to be an important voice for Ecuadorian people living in the lowlands of the Amazon basin and the Andean highlands.

The policies that have been introduced by the current government have proven to be nationalistic in nature. Rafael Correa, the current president, has been working against external pressures like the World Bank and the International Monetary Fund to try to divorce the state from previous neo-liberal ideas. Correa has also spoken favourably about the role of indigenous communities and their economic position (Jameson, 69). Even before Correa became a president of the state, he had worked on unorthodox policies to restore policy space and give more room for indigenous peoples to become part of the economy of Ecuador. In Fact, the Correa party gained support from indigenous organizations even before Correa won the election, especially from Leon Roldo's Democratic Left Party. Furthermore, the progressive policies proposed by Correa mirrored some of the ones that had been previously supported by indigenous leaders, such as the rejection of a freetrade pact with the United States, the removal of the U.S base at Manta, and the reassessment of the external debt (69). All of these proposals, made before the elections of Correa, gained the support of indigenous peoples and organizations that had been pushing for these demands.

Before the approval of the constitution, the indigenous movements pushed forward so that the constitution provided them with the plurinationalism that they desired so that it could give them a base for entering the political arena. “The

CONAIE held its third congress in January 2008 and called for the recognition of Ecuador as a plurinational state” (69). Another wave of massive demonstrations occurred under the presidency of Marlon Santi, a member of CONAIE who had been involved in the Amazon indigenous resistance to oil exploitation.

These demonstrations aimed to articulate the indigenous peoples’ demands for the assembly that was responsible for the writing of the constitution. In March, approximately 5,000 indigenous peoples supported the delivery of a manifesto where they called for a pluri-national state, indigenous autonomy over their territories, and the acceptance of their languages, since Spanish was the only official language in the former constitution. A month later, CONAIE achieved most of its demands as the inclusion for the pluri-national as well as the reference to Pachamama in the new Constitution was approved by the state.

Furthermore, the assembly voted to include Quechua and Shuar to be included as the official languages of Ecuador.

CONAIE is one of the biggest organizations that continues to fight for the rights of indigenous peoples in Ecuador. There are other organizations and political movements that are also promulgating the message of indigenous leaders and communities, both internationally and nationally.

CONAIE however has been the most important political actor within the indigenous communities, since it has gained a lot of leverage and respect.

With the discussion of indigenous movements and how they were able to include legislation that fights back against the inequality which autochthonous populations have endured since colonization, it is important to understand that it was not until the state recognized these populations as personería jurídica and indigenous communities started to fight together that they were able to successfully voice their needs. However, there are big discrepancies between past constitutions and the newest constitution of 2008, in relation to indigenous rights. For this reason, it is important to understand the context in which this new constitution was written and approved, and who the bigger actors were in the promulgation of rights for indigenous peoples.

From 1998 to 2008: The constitutional reforms in Ecuador The ability for us to talk about the social movements in Ecuador was due to the fact that indigenous knowledge is largely connected to the Amazonian land. The adoption of the Pachamama philosophy in the newest Constitution emphasizes the recognition of the state's indigenous roots. As this paper has demonstrated, the country of

Ecuador has suffered a rapid socio-political and economic change over the past few decades. The economic changes that benefited the economy and the society of Ecuador did not happen until the 1960s, when the discovery and extraction of petroleum began in the province of Oriente. The participation of indigenous movements only started to occur during the last two decades of the 20th century. Since then, the indigenous groups have had a lot of legislative success in Ecuador with the recognition of nacionalidades and with promulgation of the rights to nature.

The creation of a new constitution for Ecuador became part of the political campaign by current president Rafael Correa for the presidential election of 2006. After taking office in January of 2007, Correa began to propose constitutional changes to the National Congress, which at the time was largely occupied by members of Correa's opposition party. The National Congress was opposed to Correa's proposal for the creation of an asamblea constituyente to reform some of the laws of the Constitution of 1998. Correa ended up receiving the support of the Tribunal Supremo Electoral who decided to do a consulta popular.

Again, this became a problematic issue since the Congress decided to dismiss his idea and put on trial 4 members of the electoral organism. Luckily for Correa, the new Congress was voted in, and with the dismissal of almost 60 congressmen, the majority within the Congress favoured Correa's government and approved the decision to call for a referendum. Because of this decision, on April of 2007 the Consulta Popular approved the creation for an asamblea constituyente, which wrote a new constitution. The constitution of 2008 was approved by about 80% of the country. Clearly, Correa, who continues to be the president of Ecuador, has been the force behind this new constitution. We can observe that in Ecuador, like many other Latin American countries, the traditional political parties have started to become less popular as a result of the continuing economic and political crisis, allowing for the successful emergence of parties that oppose the neo-liberal policies implemented in the later half of the 20th century.

The new constitution promised to stop the neo-liberal policies that had allowed the elite to

become wealthy while the majority continued to be marginalized and impoverished. Correa declared that “today Ecuador has decided on a new nation” (Partlow) when the constitution passed with majority. This constitution promised the people of Ecuador new policies that would bring stability and equality to the nation. While the constitution of 2008 was being written, the indigenous

communities appealed some of the policies that were going to be included in the legislation to President Correa. The biggest concern that was put forward by the indigenous communities was whether or not the constitution would embrace the pluri-national nature of the state, as they wanted Ecuador to recognize itself as a pluri-national state.

They worried that “Correa's emphasis on individual rights and the idea of a “universal citizen” excluded indigenous peoples, with their communal-based societies” (Becker 48). CONAIE hoped that the new constitution would put an end to the policies that allowed 80% of the population to be excluded from the political process (Becker 48) while only letting a few participate and become wealthy for the last 177 years (48). Thus, indigenous organizations pushed for the recognition for collective rights in the constitution so that the concern of indigenous peoples were to be incorporated in national politics.

Since there have been so many constitutions in the state of Ecuador, for the purpose of understanding the legislative changes that the state has suffered in relation to the Amazon, we will compare the laws that relate to indigenous rights and the environment: the constitutions of 1998 and 2008. There are many laws that tend to speak in favour of the protection of the environment, specifically in relation to those who are affected by any environmental changes. For example, the constitution of 1998 establishes that “El Estado protegerá el derecho de la población a vivir en un medio ambiente sano y ecológicamente equilibrado, que garantize un desarrollo sustentable” (Constitución 1998, title III, chapter 5, art. 86). Particularly, in relation to the development of practices that might harm the environment, the Constitution of 1998 establishes that “Toda decisión estatal que pueda afectar al medio ambiente, deberá contar previamente con los criterios de la comunidad, para lo cual ésta será debidamente informada. La ley garantizará su participación” (Constitución 1998, title III, chp 5, art.

88). Both of these articles can be also observed in the newest 2008 constitution whereby “Se reconoce el derecho de la población a vivir en un ambiente sano y ecológicamente equilibrado, que garantice la sostenibilidad y el buen vivir” 10(Constitución 2008, title II, chp 2, art.14).

The indigenous movement, as previously discussed, fought in the 1980's and 90's for the recognition of the acknowledgement of nationalities for their native peoples, which would mean the acknowledgement of the existence of a plurinational state. The recognition of a pluri-national state would imply the recognition of the cultural 10 “the right of people to live in a healthy and ecologically balanced environment, to ensure the sustainability and good living is recognized”

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diversity within Ecuador. Furthermore, if the plurinational state would be recognized, it would be included within the institutional and political structure of the state (Grijalva). The constitution of 1998 established that “los pueblos indígenas, que se autodefinen como nacionalidades de raíces ancestrales, y los pueblos negros o afroecuatorianos, forman parte del Estado ecuatoriano, único e indivisible” 11 (Constitución 1998, title III, chp 5, art 83). This means that the state had already given collective rights to indigenous peoples. Therefore, the constitution of 1998 already addressed the cultural diversity of the Ecuadorian state and gave indigenous peoples collective rights. The constitution of 2008 takes this issue further, declaring that the Ecuadorian state is a pluri-national and inter-cultural state. In relation to the collective rights that had been previously acknowledged by constitutions like the 1998 one, the cultural references about indigenous peoples in the areas of language, health, education and rights have been extended and enriched.

For example, the Constitution of 2008 gives indigenous peoples the collective rights to be free of racism and discrimination (arts. 57.2-57.3), to maintain their own legal systems (section 57.10), to establish and maintain their own organizations (art.

57.15), to be consulted before the adoption of legislative measures that may affect indigenous peoples or groups (section 57.17), the right to limitation of military activities in their territories (Article 57.20), that cultural diversity is reflected in the public education and the media, and other rights concerning peoples in voluntary isolation (art. 57). In addition, other rights that were already established by the constitution of 1998 were extended, including the right to preserve indigenous practices of biodiversity management(Art. 84.6 of the 1998 Constitution), which was complemented in the 2008 constitution with new State obligation to establish and implement such programs in coordination with communities (art. 57.8) (Grijalva). Another example relates to the right to participate as government agencies representatives: in the 2007 constitution, this right was expanded it to include the participation of indigenous peoples in the design of plans and policies that affect them (Article 57.16).

As we can see, the causes that indigenous communities fought for since the rise of social movements in the 1980's have been reflected in the newest constitution of Ecuador.

11 “indigenous peoples and black or people of african descent, who define themselves as nations with ancestral roots, are part of the Ecuadorian state, that is unique and indivisible”

The biggest addition of the constitution of Ecuador in relations to the continuous fight for the protection and promulgation of indigenous rights to their culture and their lands is the acknowledgement of Ecuador's ancestral past with the inclusion of the notion of 'buen vivir' or pachamama that can be seen throughout the constitution of 2008 and all of its 444 articles.

Unlike all other constitutions, the preamble of the 23rd constitution of the state of Ecuador establishes that: “NOSOTRAS Y NOSOTROS, el pueblo soberano del Ecuador RECONOCIENDO nuestras raíces milenarias, forjadas por mujeres y hombres de distintos pueblos, CELEBRANDO a la naturaleza, la Pacha Mama, de la que somos parte y que es vital para nuestra existencia.” 12 (Preámbulo, Constitución 2008).

It is argued that the inclusion of the notion of 'buen vivir' was done as a media to response to previous expectations to progress, growth, development and well-being, so that it could give unity and coherence to the newest Constitution of Ecuador. In a way, the inclusion of this notion could serve to overcome the “disfuncionalidad existente entre la parte dogmática y la parte orgánica de la Constitución” 13 (León) of the constitution of 1998.

The concept of 'buen vivir' is integrated in this legislation by making connections of this notion with fundamental rights. The notion is also applied to concepts like economic sovereignty and social participation. The application of the pachamama or 'buen vivir' notion does not only apply to rights as it also applies to responsibilities. This makes the notion of el 'buen vivir' the objective of the state of Ecuador. Another issue that the notion tackles – and one which Correa has been seeking to revert – is the environmental and human exploitation that existed under past neo-liberalist policies in Ecuador.

Through the use of sumak kawsay (Quechua for good living or el buen vivir) as a foundation for the legislation in Ecuador, there is an elimination of the possibilities of past neo-liberalist policies that allowed and fomented the appropriation and extraction of the natural and human wealth of the country.

Before the 2008 constitution was approved, CONAIE took a project which has not been added to 12 "WE, the sovereign people of Ecuador RECOGNIZING our ancient roots, forged by women and men of different origins, CELEBRATING nature, the Pacha Mama, which is vital to our existence and of which we are part of ."

13 “the existing dysfunctionality between the dogmatic and thethe organic part of the Constitution "

the constitution to the attention of the assembly.

CONAIE wanted an advancement in the development of collective rights within the legislation. They proposed that the constitution should make an explicit reference which stated that the lands inhabited by indigenous peoples should be autonomous and self-governed by indigenous authorities. It is important to mention that CONAIE had other important gains in the 2008 constitution with respect to collective rights. Article 177 states that “Las autoridades de las comunidades, pueblos y nacionalidades indígenas ejercerán funciones jurisdiccionales, con base en sus tradiciones ancestrales y su derecho propio, dentro de su ámbito territorial, con garantía de participación y decisión de las mujeres. Las autoridades aplicarán normas y procedimientos propios para la solución de sus conflictos internos, y que no sean contrarios a la Constitución y a los derechos humanos reconocidos en instrumentos internacionales. El Estado garantizará que las decisiones de la jurisdicción indígena sean respetadas por las instituciones y autoridades públicas. Dichas decisiones estarán sujetas al control de constitucionalidad...” 14 (Constitución 2008, Chp 4, Sec II, art 177). This article gives more autonomy to indigenous authorities and a reduction of restrictions to the indigenous jurisdictions that were put in place in the constitution of 1998.

Since the approval of the Constitution, the current government has had to deal with many problems that the legislation of the constitution of 2008 left unclear. Correa affirms that through these constitutional changes, the mistakes that were

carried out by past administrations will be corrected.

However, many criticize some of the aspects of his policies concerning the Amazon Region. To finish with our discussion of the political and economic evolution of Ecuador, we need to address the new challenges that Correa has been presented with since the 2008 legislation has come into effect. As we will discuss, Correa has had to deal with criticism from the opposition about the ambiguity of some of 14 “The authorities of the communities, peoples and nations exercise jurisdictional functions based on their ancestral traditions within their own, guaranteeing the inclusion of women in the participation and decision making process. The authorities will apply their own rules and procedures when resolving internal conflicts, which will not contradict the constitution and human rights recognized in international instruments. The State shall ensure that the decisions of indigenous jurisdiction is respected by public authorities and institutions. Such decisions are subject to judicial review...”

the articles within the constitution as well as the current economic dependency on oil, the extraction of petroleum in the Amazon region, and the petition by indigenous peoples that the state grants autonomy over their territories.

PostConstitutional Ecuador: New challenges to Correa's Constitution: President Rafael Correa stressed that the process of change in Ecuador has been essential and largely democratic, participatory and inclusive respecting the aspirations of millions of citizens who strongly supported this recvolution (D' Hollander 57). Correa also reminded citizens that during the public consultation (consulta ciudadana), the nation overwhelmingly participated in the referendum of April 2007, with over 80 percent of the vote for the National Assembly. The 2008 Constitution establishes a state of rights, based on collective and environmental rights, where the State becomes the guarantor of nature as it shifts the priorities that were given to individuals as stated in the previous constitution. The major challenge for this constitution is how it will continue to allow the market economy and the rights of the state to be fulfilled while respecting and protecting the collective rights of nature. Furthermore, how will the legislation be interpreted since its language has shifted from a constitution of freedoms to a constitution of well-being that is built upon the ancestral philosophy of the pachamama or buen vivir. The philosophy adopted in the language of the constitution originated from the Quechua text Sumal KKawsay, which is quite different from the previous constitutions of Ecuador.

Article 71 of the chapter “Derechos a la naturaleza” of the Constitution of 2008 states that “La naturaleza o Pacha mama, donde se reproduce y realiza la vida, tiene derecho a que se respete integralmente su existencia y el matenimiento y regeneración de sus ciclos vitales, estructura, funciones y procesos evolutivos 15 ” (Constitución 2008, cap 4, art 71). Latin American countries seem to re-generate the politics of the state anytime that there is a period of instability, which occurs often.

Regeneration of politics usually results in a constitutional reform. After Venezuela, Ecuador has changed its constitutions more times than any other country in South America. It seems that there is a constitutional reform with every political party that comes into power. The fact that there is a long tradition of promising constitutional rights that ultimately are not implemented has been one of the greatest worries of the opposition in Ecuador. The doubts stem out of both the fact that constitutional 15 “Nature or Pachamama, where life is reproduced, its existence MAINTENANCE and regeneration of its vital cycles, structure, functions and evolutionary processes is entitled to be fully respected”

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reforms never seem to stop the instability and volatile nature of the country, and the doubts of the applicability of the constitution, which is left up to interpretation.

The economy of Ecuador has been perpetually dependent on oil since Texaco began oil extraction in the late 1960's. In the last decades, multinational organizations as well as state owned companies have been exploiting this natural resource. The government of Ecuador nationalized all the petroleum companies even before Correa became president, which in some ways has helped with the protection of the land and the peoples that surround the areas where petroleum is being extracted. However, these state-owned companies are still the largest pollutants of the environment in the Amazon. Just as Alberto Acosta argues, now that the Constitution has given the necessary laws for the protection of the environment, “ahora tenemos que construir la jurisprudencia adecuada para que la naturaleza pueda ser sujeto de derechos y no quede sólo en un discurso lírico 16 ” like other constitutions have before.

The biggest ambiguity that is found in the constitution is in relation to the extraction of nonrenewable resources of the state. The new constitution states that: “se prohíbe la actividad extractiva de recursos no renovables en las áreas protegidas” (Constitución 2008, Cap II, sec 1, art.

397). However, there is an exception to this law: “Excepcionalmente dichos recursos se podrán explotar a petición fundamentada de la Presidencia de la República y previa declaratoria de interés nacional por parte de la Asamblea Nacional, que, de estimarlo conveniente, podrá convocar a consulta popular17” (Constitución 2008, Cap II, sec 1, art.

397). This article means that any president can decide whether or not it is convenient to exploit nonrenewable resources. This concern becomes even greater because the state of Ecuador is still not moving towards other economic resources that can produce wealth from renewable resources. However, it is important to remark that the previous constitution of 1998 gave legal authority to any member of the government to give permission for the extraction of any resources, even if the extractions are in protected areas.

16 “We now have to build the appropriate case so that nature can become a subject entitled to rights so that it does not remain sitting on a lyrical speech” 17 “Exceptionally, these exploitative resources may be subtracted with a request of the President of the Republic having a previous national interest expressed by the National Assembly, if the president deems fit, he may call a referendum”

The opposition also argues that the recognition of rights for the environment will ultimately clash with the interest of companies that work with the extraction of natural resources. The Correa administration have frequently made contradictory comments about the exploitation of the environment, which goes against the rights of nature. To answer to all of these questions, the expresident of the Asamblea Constituyente of the newest constitution, Alberto Acosta,stated that “si bien somos el primer país del mundo que establece que la naturaleza tiene derechos, no estamos solos.

Poco a poco gestando una conciencia de que sin naturaleza respetada no hay vida del ser humano asegurada.” Indeed, it is important to remember that the first step towards the respect and the promulgations of rights is that they themselves have legislative power. The government of Correa has come through with the promises he first made during his first campaign: the creation of this new constitution, the rejection of a free-trade pact with the United States,and the removal of the U.S base at Manta. Now, the government of Correa is left to figure out how the rights that were given will translate into the politics and economy of Ecuador.

Since the re-election of the Correa administration for a second term, the government has started to promote initiatives to end the degradation of the Amazonian jungle and the local indigenous communities that surround the jungle.

Today, it is estimated that 46% of the jungle has been lost to deforestation and degradation, making Ecuador's jungles the 2nd largest deforested area after Brazil. The first initiatives that the government has taken have been to alleviate the poor living conditions of the estimated 629,000 people living in the lowland territories of the Amazon. Through the aviation forces and the marines, the government will provide a small plane that carries five people, an airplane for 30, and a helicopter to provide sanitary access to these communities. In order to communicate with these large jungle areas, the government has started to build a series of seven docks and supply each with boats for transportation.

Furthermore, the government has started to work with those indigenous communities that live in voluntary isolation to stop these communities from exploiting wood. Similar to successful projects in Costa Rica, the government will provide companies with monetary incentives in order to stop these and other communities from taking down trees. The government also has started to develop a plan of micro-loans for indigenous communities through the Banco Nacional de Fomento so that they can start to participate in the local communities, especially through eco-tourism and farming.

In relation to the extraction of petroleum, the government approved a 15 million dollar investment plan to evaluate and compensate for the damage produced by the exploitation of petroleum in these areas. The government is also creating an Observatorio de Investigación Amazónica for the investigation of possible sustainable economic models and the discontinuation of the extraction of the crude oil. Finally, perhaps the biggest proposal of the government, called the Yasuní-ITT, suggests that countries around the world gather together and pay the government to not extract the second largest pool of petroleum that lays underneath the Yasuní National Park. However, many have argued that these solutions seem very utopic and out of order.

Correa and his government now have to begun to re-think which national policies and economic models best suit the constitution that they have created. The general opposition and the citizens of Ecuador are left to inquire what the future of the Yasuní National Park will be. In past elections, many candidates have claimed that they would drill for oil in the park. Even though Correa's plan is to seek global finance to keep the natural resource untapped in the Yasuní Park promotes national pride, this solution seems far-fetched. The fact that any president is able to give permission for the extraction of any resources, either renewable or not, has spurred international fears about the future of the park once Correa is out of office.

Conclusions: It was not until the start of the 20th century that many Latin American intellectuals that had been living in Europe began to re-think the Latin American conscience about indigenous peoples, partly because they were searching for a new voice within Latin American literature. For the first time, indigenous identity was elevated in the works of artists like Diego Rivera and Guatemalan writer Miguel Angel Asturias. These artists began to elevate their indigenous roots, in part to differentiate the Latino-American literature and culture from those Native to Europe. El indigenismo, which started in Mexico after its revolution, began to denounce the poor socio-economic and political

situation of the indigenous peoples that had been internalized during the era of colonialism. It could then be argued that the indigenous movements started from members of Latin societies that were not indigenous themselves. However, their work contributed to an idealization and newfound respect for the pre-Colombian cultures in Latin America.

Even though the movement allowed for the indigenous cultures to be integrated in the cultural

patrimony, the indigenous peoples continued to be discriminated and left on the margins when it came to politics. This is why it is quite remarkable that a country like Ecuador, which was not industrialized until the 1960's, has allowed for strong indigenous traditions, where indigenous peoples are not just part of the patrimony of the country, but are able to carry political weight that is perhaps greater than the population that the groups represent.

The search for indigenous rights and equality has finally begun to have some influence in countries like Ecuador and Bolivia. It is quite obvious that political leverage is imperative for indigenous peoples to be heard and included within the political imaginary of any Latin American country. Ecuador, like many other countries in the region, has had to overcome the grievances left by the Spanish colonization, in order to include and respect the voices of its native peoples.

Furthermore, Ecuador has had to deal with the external pressures that formed paternalistic relationships with countries and institutions like the United States, the World Bank and the IMF, all of which pressured its governments for policies that only benefited their external interests. As the essay has shown, the legislative road to equality in Ecuador can be long and tedious until a government with leftist tendencies rose to power and gives political leverage to indigenous communities. When comparing the Constitution of 2008 with past constitutions like the one of 1998, it is very obvious that even though indigenous peoples started to be included in the legislative practices of the country, there is still much to be owed to them in terms of cultural autonomy and their political and economic powers. The perpetual inequality of the policies in Ecuador, which continued to marginalize the majority while benefiting the few wealthy families in Ecuador, caused great dissatisfaction amongst the general people of Ecuador. As a result, the people elected a president that called for policies against the neo-liberal course which the nation had taken during the last century. Even though there have been large criticisms against the government of Correa, especially around the protection of the Amazon and the current dependency on oil for the economy, Ecuador is at the worldwide forefront of environmental protection because of the collective rights that were granted to nature in its most recent constitution.

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