Please contact us if you would like to receive DAGAinfo via eMail

DAGAinfo

28 September 2000
No. 112

 

In this issue:

1. FEATURE
Micro-Credit: The Development Devastation for the Poor

2. NEWS in Brief
Philippines: Civilians at Risk s Armed Forces Launch Marine Attacks
West Papua: Indonesian Military Build-up in West Papua
China: Mainland Firms Ill-prepared for WTO
China: Why the US Trade Votes Matters
Burma: European Parliament Resolution on Burma

3. RESOURCES Received

4. Urgent APPEALS
Extra-judicial Killings in Aceh

5. ANNOUNCEMENT

 

1. FEATURE - top
 

MICRO-CREDIT:
THE DEVELOPMENT DEVASTATION FOR THE POOR

Farida Akhtar
UBINIG, Bangladesh

 

The major development support that the poor people, mainly the poor women can receive today is Micro-Credit. It is seen as THE SOLUTION for Poverty. It has a magic capacity that the poor can be indebted and then they can overcome poverty. The impression that is given is that there is no need to develop the health sector, education facilities, or any other social support system for the poor; micro-credit alone can solve all the problems. While, since seventies, the third world governments are failing to pay back the loans and increasingly becoming defaulters, the poor were lauded for their disciplined submission to the rule of credit money, that is the financial capital mediated through development agencies and the banks for the "poor" like Grameen. Money circulated through the poor communities self-expanded often to 130% appropriating the remaining resources of poor in the form of interest. Indebting the poor has become the new game of development and is sweeping over the development discourse and the practice. This is profoundly an ingenious role invented by the elite, who manages global capital. This is no wonder why "micro-credit" became very popular in the United States and other developed countries. Now it's not the rich who should salvage the crisis of global capital, it is the poor who must shoulder the burden to keep the system in order. This is a specific feature of the present phase of globalisation which people often ignore, or do not take notice in the rhetoric of the "poor" and the glory songs of "micro-credit"

The Micro Credit Summit held in 1997 in Washington targeted to reach 100 million of the world's poorest families, especially the women in those families, with micro-credit for self employment and other financial and business services by the year 2005. Already reports show that 13.8 million of the "poor clients" have been reached by the year 2000.

Micro-credit can be seen as the latest development disaster through feminisation of indebtedness. Patriarchy has always taken advantage of women's good will of being easily oppressed, so is the micro-credit programme. This is women's indebtedness programme with high success rate of repayment. Women had to undergo group pressure, coercion and are often forced to make sure that they pay the loan regularly with high interest rates.

A parallel may be drawn with the coercive population control program. The early development theories talked about population control programme as the most important development intervention. It was said that population control was the only means to achieve development. Countries like Bangladesh must achieve a decline in fertility rate. Therefore, women were made targets for imported contraceptives that were not even suitable to their bodies. The Contraceptive Prevalence Rate has increased with some impact on the decline of the fertility rate, but the poor who have only one or two children have achieved hardly any improvement in their living conditions, health and education. It was the poorest sections of the population who were targeted for such intervention. Among the sterilisation target, 95% were women because they could be easily be coerced.

MICRO-CREDIT SENERIO IN BANGLADESH

Micro-credit, as defined by organisation like Grameen Bank, is an extension of small loans to "entrepreneurs" too poor to qualify for traditional bank loans. It has proven an effective and popular measure in the ongoing struggle against poverty, enabling those without access to lending institutions to borrow at bank rates, and start small business.

It was started in 1976 when Professor Muhammad Yunus and his colleagues started giving out tiny loans under a system later became known as the Grameen Bank. Grameen Bank is known world-wide for its micro-credit lending to the poor families, particularly to the poor women without any collateral. It lends credit to over 2.37 million borrowers in 40,066 villages spread all over the country at a high interest rate of over 20% and with a system of weekly mandatory repayment. The average loan size is US$160; repayment rate is 95%. The Grameen model has been replicated by 223 organisations in 58 countries.

In Bangladesh, most of the NGOs are engaged in credit operations. If any organisation wants to do any development work in Bangladesh, they will be asked to do credit operations. This is what the donor agencies want the NGOs to do. BRAC, Proshika, ASA are few big NGOs who have become more visible in the micro-credit operations. The apex body of the Micro-Finance Institutions (MFI) is called Palli Karma Shayak Foundation (PKSF). They subcontract smaller NGOs for reaching out the micro-credit. The smaller NGOs have to earn their own needs through the micro-credit programme. According to Credit Development Forum (CDF) of the Micro finance Institutions in Bangladesh, as quoted in the World Bank report (1999) "there are about 800 MFIs in the country with a total membership of about 7 million, of whom 82% are women. The cumulative disbursement made by these MFIs since their inception is estimated at Tk.44 billion, with current loans outstanding estimated at 9.6 billion. It is estimated that MFIs have created employment for about 54,000 people." [World Bank 99]

Micro-credit programme has demonstrated its success of high repayment rate, ranging from 92% to 98%. But this is done through different coercive and deceptive means. The Grameen Model was to have a peer group pressure on the loan recipient. So if one member in the group fails to repay, all other members ensure the repayment, otherwise they will not be eligible for the next loan. Other NGOs have taken different measures. The NGO workers are given targets for loan disbursement and recovery. On the basis of their ability to recover the loans they get their salaries. Some NCO have been more innovative. They recruit young women at a very nominal monthly salary (Tk.500 to Tk. 1000 per month, i.e. USD10 to USD20 per month) to collect savings and realise the credit instalments.

Like the garment factory, the big NGOs subcontract the micro-credit operations to the smaller NGOs. The small NGOs borrow money at interest rates of 2% to 5% from the big NGOs and then lend the money to the poor women at 15% to 20% interest rate.

MICRO-CREDIT DOES NOT REACH THE 'HARD CORE POOR'

It is now well documented by the mainstream organisations such as the World Bank that 'hard core poor', who account for about 50% of the poor population, or about 30 million people, are not reached in substantial numbers by micro-credit schemes. That is, if we talk about poverty alleviation, the micro-credit schemes are not even addressing the hard core poor in the first place. Although micro-financing does not talk about collateral, they are definitely concerned about the creditworthiness in terms of repayment capability. The poor must repay, other wise they are no good.

The micro-credit programmes have entirely shifted the priorities of development activities. It is no longer based on building support system for economic activities of the poor. Rather the development worker who was committed to reach the poor, are now asked to do only one thing, that is, lending out credit and ensuring repayment. In the early development paradigm, the poor were the receivers of resources, now they are the means to realise the interest of money capital that is circulating globally in the era of financial liberalisation. The field workers have to earn their own salaries. Financial sustainability of the lending NGOs has become a priority agenda. This has led the MFIs to operate on the basis of cost recovery and profit making. In doing that they charge high interest rate to the poor. The Grameen Bank interest rate on micro-loans is at least 20% per annum, and this is 8% higher than the commercial market rate in the country. The poor are paying more interest than the rich are.

THE HIGH INTEREST RATE

The entire burden of loan management is on the borrowers. Many studies on Grameen Bank have established this fact. According to a study done by Aminur Rahman, "until 1991, the Grameen Bank charged 16% annual interest rate on its micro-loans to members. In 1991, the Grameen Bank raised salaries of its workers by around 25% adding an additional cost to the lending programme of the Bank. The increased cost became a serious hindrance to profitability and the Bank responded to the problem in terms of rules of capitalist finance by increasing its interest rate on investment loans from 16% to 20%. It thereby loaded the increased cost on the borrowers (Rahman 99; p.79). The story is same for all the lending NGOs.

Although the official interest rate is 20%, it is in practice higher. The repayment schedule is a 52-week (one year) time cycle. The first 50 weeks cover the 100% repayment of the principal amount (the borrowers pay 2% on the capital amount every week). The remaining two weeks of the year are for payment of the interest and emergency fund. There is a deduction of 5% of the loan money for the Group Fund and a 1% for the Emergency Fund during the time of disbursement. These indicate that the actual interest rate would be much higher than the official rate. In fact, it is calculated to be as high as 30%.

BRAC has another system to ensure repayment. At the time of disburse of loans, they deduct Tk.50 per thousand of the loan sanctioned. The borrowers must have a savings account with BRAC. This savings money is also kept as a "collateral". They also help the borrowers to get the "wheat card" under the Vulnerable Group Programme of the World Food Programme. If the borrower fails to repay the loan then they are asked to bring wheat and sell, so that they can repay the loans.

WOMEN ARE TARGETED: "MEN ARE NOTORIOUSLY UNAVAILABLE"

The micro-credit programme is now seen as an empowerment programme for women. The international organisations promote Prof. Yunus as a saviour of women. Yunus became the most important speaker, besides Hilary Clinton, in the World Women's Conference held in Beijing in 1995 and also in the conference Beijing+5 held in New York this year. The only credit he has in his favour is the micro-credit. But why have women become the favourite? Was this planned from the beginning? No it was not. Grameen started as a bank for the poor, not as a bank for women. Initially only 50% of the borrowers were women, but gradually it was shifted only to women. Even when they give loans to the men, it is given through their wives (Yunus 98; pp.87 & 92). Although Grameen hoped to deal with the gender discrimination in the bank loans by focusing on women only, but in reality the benefit was more to the bank than to the women
themselves. The loan repayment can be better ensured through women. They are more reliable and responsible than men are. They are also more sensitive to peer group pressure and easier to control. According to ASA "one important reason for high repayment is female membership. In our country, the tendency of promptly repaying loans is found more among women than men. Moreover, women is always present at the residence. So, in order to avoid harassment of repeated reminders for payment, they deposit instalments regularly".

A Grameen Bank worker puts it as "women in the village are easily traceable". They are more regular in attending group meetings than men. Women are more reliable and more disciplined than men. "Working with women is easier for us than working with men". (Goetz et al 96)

This is the familiar argument given in favour of targeting women for family planning methods and particularly sterilisation. This is true for all kinds of coercion in the development programme. The International Centre for Diarrhoea Disease Research (ICDDR) has been conducting research on human subjects without their knowledge. In these trial programmes, it was always women and small children and hardly any men. When asked why they don't have men as research subjects, they said, "men are notoriously unavailable".

It is assumed that micro-credit empowers women. With this assumption, they argue that once women get income in their hands they have an access to resources and therefore they can take many decisions such as children's education, better food, treatment etc. While some improvement was felt in the beginning in many cases, the micro-credit is not an automatic instrument towards empowerment of women. Women take the responsibility of taking loans and repaying weekly instalments. But they do not necessarily decide what they can do with the money. In a study conducted by Aminur Rahman it is found that men are users of more than 60% of women loans and that 70% of the total loans approved in the village are actually used for different purposes other than sanctioned by the project (Rahman 99; p.75).

Violence has not diminished rather increased with the micro-credit. Women who fail to repay the full amount of the instalments each week face a lot of humiliation. The NGO workers use abusive language to the poor women in case of instalment. Sometimes, they keep their household items like cooking utensils. Proshika usually brings Police to arrest the defaulter women.

On the other hand, the male family members who used the women's loans do not feel responsible for repayment. Hence, women have to arrange for the money on her own. She even has to sell her chickens or get another personal loan from the moneylender. She becomes indebted in cyclical manner, hardly able to come out of it. Men also withdraw family support when they find women having money in their hands. These situations have lead to much domestic violence and even to divorce.

In order to deal these situations, women are also taking counter measures. The same woman takes loans from several NGOs, like Grameen, BRAC, ASA and Proshika and uses the money to pay different instalments. Women also lend out the money to other women or men and get quick return. Some women are found to be involved in the trade of smuggling goods in the border areas of Bangladesh.

MICRO-CREDIT A GUARANTEE TO THE CORPORATE PRODUCTS

Grameen's activity to expand the monetary circuit of global capital to the poor local communities impressed the elite of the world, who include President Clinton and the first lady. This is understandable. Getting a whole hearted support from the First Lady Hillary Rodham Clinton, Yunus became a favourite not only to the financial elite but also to the transnational companies, mainly the US corporations. Grameen became an easy access to the poorer families in Bangladesh for the introduction of technologies. Prof. Yunus has made several deals with transnational companies such as Telenor of Norway, Marubeni of Japan to promote cellular mobile phones. Prof. Yunus believes strongly that "if used properly, technology can help break down structural barriers, distances and cultural differences and help the poor share in economic well-being. With easy access to a telephone, they will suddenly be connected to the entire world. Grameen also wanted to have a deal with Monsanto to establish a centre and use the Monsanto proprietary agricultural chemical products such as Round up, BT cotton and wheat through micro-credit. BRAC has made a deal with ACI for hybrid seeds. BRAC has also made another deal with Pacific International for the maize seeds and with McDonalds for hybrid vegetable seeds. The borrowers are forced to take all these seeds.

BRAC also forces the borrowers to take hybrid poultry chicks. They deduct the money of the chicks and the feed cost. Even if the women say that they do not want to keep the foreign breed chicken, they have to take them. Usually the chickens die very quickly. But the borrowers have to pay back the loan with interest even on the dead chicken.

POVERTY ALLEVIATION OR EXTREMIST ERADICATION?

Although micro-credit has its role in linking the poor with the global capital, the interest of the western countries, especially of the US government, goes beyond that. Its political implication is a billion-dollar phenomenon. 83% of Bangladesh's population are Muslim. Often the country is termed as fundamentalist and the western media depicts that Bangladeshi women are facing the fundamentalist aggression every day. In fact, this is not entirely true, except for some sporadic incidences. But it seems that even micro-credit is now considered as a weapon against the so-called fundamentalist aggression, taking women as a means to achieve their own political goal.

Let me quote from the International Herald Tribune, (February 19, 1997)

"The success of micro-credit in combating fanaticism is finally being recognised this month. Hillary Clinton opened the World Summit on Micro-credit in Washington. The occasion highlighted the effectiveness in using tiny loans to help the most destitute people on earth pull themselves and their families out of poverty. But there is another, astonishing side of this story - the political consequences of putting capitalism to work for the have-nots. Micro-credit not only liberates the poorest of the poor from hunger, it liberates them, and us, from fanatical extremists."

Micro Credit does what billions of dollars worth of AWACS and Patriot missiles cannot. For decades, the West has tried to defeat fanatical extremists militarily; this has been bloody, costly and highly unsuccessful. But quietly, every day, the attraction of militant Islam is being blunted at the ballot box and in people's heart and minds, thanks to the economic development of the poor.

What is needed is patient start-up capital - 99% of the loans are repaid. After 20 years, Grameen is a commercially profitable bank. But more important, it saves its borrowers' lives - and it can save ours, too". (Jolis 97)

References

Rahmnan 99
Micro-credit initiatives for Equitable and Sustainable Development: Who pays by Aminur Rahman in World Development Report. Vol.27. No 1 . January 1999

Yunus 98
Banker to the Poor by Muhammad Yunus with Alan Jolis; University Press Limited Dhaka 1998

World Bank 99
Key Challenges for the Next Millennium, The World Bank, 1999

Goetz et al 96
Who takes the Credit? Gender power and control over loan use in rural credit programmes in
Bangladesh by M. Goetz and R. Sen Gupta in World Development Report 1996]

Obaydullah 2000
Grameen Bank's delivery mechanisms to meet women's needs by M.A.Obaydullah in Bangladesh Observer, 6 August 2000.

Jolis 97
Microcredit: A Weapon in Fighting Extremism by Alan Jolis; International Herald Tribune, Published by the New York Times and The Washington Post, Wednesday, February 19, 1997]

_____________
*[This article was presented at the APRN Conference on Poverty and Development Financing, August 2000, Jakarta, Indonesia.  More articles from this Conference will be available in this website at a later date.]

 

2. NEWS in Brief - top
 

PHILIPPINES

Civilians at risk as armed forces launch massive attack

18 September 2000

Amid reports that at least 600 civilians have been killed or injured since the Philippine armed forces launched its Saturday attack on rebel bases on the southern Philippine island of Jolo, Amnesty International appeals to the Philippine authorities to take urgent steps to ensure the safety of all civilians on the island.

"Indiscriminate bombing of the civilian population must be halted immediately.  No security crisis can justify a military offensive which involves the killing of civilians," Amnesty International said.

The Philippine armed forces have committed human rights violations within the context of counter-insurgency operations against armed opposition groups throughout the country, including extrajudicial executions, torture, "disappearances" and indiscriminate killings of civilians.

Amnesty International is appalled by reports that the armed forces have denied Jolo based medical and relief workers access to areas where innocent civilians, including children, are reported to have been killed or injured. A news blackout imposed by the government has made it impossible to confirm the numbers of civilian casualties, but government sources have so far admitted that four civilians have died.

Several thousand local villagers are reported to have fled their homes as bombings continue on the island, one of the poorest in the country.  All transport links to and from Jolo have been severed.

On Saturday, President Estrada ordered thousands of troops to launch an attack on bases of the armed Islamic separatist group Abu Sayyaf in an attempt to rescue 22 hostages being held by the group.  The hostages include 16 Filipinos, three Malaysians, two French journalists and an American. At least one of the Filipinos has been in captivity for nearly five months.  Other hostages, including several foreign nationals, were released recently reportedly for large sums in ransom money.

Amnesty International called on both the Abu Sayyaf group, which has committed human rights abuses including hostage-taking and killings, and the Philippine armed forces, to respect the 1949 Geneva Conventions.

"All parties to any conflict have a responsibility to respect the lives of civilians, and of combatants who are wounded or have laid down their arms" Amnesty International said.

 

WEST PAPUA

Indonesian Military Build-up in West Papua

Following moves towards independence in West Papua, the Indonesian armed forces are moving towards a violent response, with the introduction of new Indonesian troops into West Papua and the arming of anti-independence militias. West Papuan leaders are calling on the international community to speak out against this militarisation, and support dialogue on self-determination.

BETWEEN 29 May and 4 June 2000, the Second Papuan People’s Congress was held to discuss the issue of a transitional government for West Papua (the western half of the island of New Guinea, which has been occupied by Indonesia since the 1960s). Over 3,000 West Papuans attended the People’s Congress in the capital Jayapura (Port Numbay), including representatives from the central government and provincial administration, Papuan leaders living in exile, supporters of the OPM (Free Papua Movement) as well as observers from other parts of Indonesia. The Congress issued a Declaration of Independence on 4 June 2000. Independence activists stressed West Papua has been independent since December 1961 and the subsequent Indonesian take over through the 1969 Act of Free Choice was illegal.

Indonesia has responded with a major military build up. In the first week of August 2000, about five hundred KOSTRAD (Land Command Strategic Troops) were deployed to each of the thirteen regencies in West Papua (amounting to 6,500 new troops). The troops were deployed six hours after Indonesian President Wahid’s statement to the Indonesian Parliament outlining his willingness to offer West Papua autonomy, but not independence. On 8 August, Indonesia’s MPR (Provisional Peoples Consultative Assembly) agreed to reject the West Papuan Congress demands for independence, and instead to grant autonomy to West Papua.

Indonesian troops normally based in West Papua include several thousand regular and special forces (Kopassus) troops. Indonesia is also planning a new naval base for 3,000 marines in the district of Sorong in West Papua. There are also plans, announced in July, to send 2,000 troops of the police mobile brigade (Brimob) from Jakarta.

Already, the Indonesian military are supporting the creation of new anti-independence militias in West Papua, such as the pro-Jakarta Satgas Merah Putih (the Red and White Taskforce - the colours of the Indonesian flag). In 1999, this tactic led to massive human rights violations in East Timor, and the death of thousands. The Organ isasi Papua Merdeka (Free Papua Movement) fears that the Indonesian military is bringing guns from overseas to provoke West Papuans into responding with violence.

Militias armed by Indonesia caused a human tragedy in East Timor in 1999. This year, thousands have also died in clashes in Maluku, in militia attacks supported by elements of the Indonesian military. It is not too late for the international community to act to halt a similar tragedy in West Papua. Melanesian countries (through the Melanesian Spearhead Group) and the wider Pacific community (through the South Pacific Forum) can play an important role in the peaceful resolution of the current crisis.

West Papuan activist Jacob Rumbiak writes: "West Papuans urgently request international institutions, especially the United Nations, to protect West Papuans in West Papuan territory, so that another human disaster in the Indonesian Republic can be contained. West Papuans hope that the international community will not wait until West Papua is destroyed by the Indonesian government (that is still dominated by its own military) before it addresses the rapidly deteriorating situation. West Papuans consider that direct intervention is the duty of the United Nations, which must protect indigenous West Papuans. The problem is not an ‘internal’ political problem, but rather one that has to be addressed by the international community. Thank you for your attention. Please help avoid our disaster."

Senior church and NGO leaders in Jayapura have issued a statement this week seeking international support. Bishop Leo Labaladjar for the Catholic Diocese; John Gobay Chairman of the Synod of the GM Church of Irian Jaya; Robert Korwa for the Jayapura Legal Aid Institute; and other NGO leaders have stated:

In the interests of upholding human rights and democracy, we offer the following recommendations:

Firstly: The name Papua represents the cultural identity of the people of Papua land and the unfurling of the Papuan flag throughout the land is a symbol of the aspirations of the Papua people that were repressed during the New Order. We feel that the right of all people individually and collectively to express their opinions should be respected, and this includes the right of Papua people to call themselves Papuans and to unfurl their flag. We vigorously protest against the policy of the government, in this reform era, to repress this.

Secondly: We reject the proposal to amend Article 29 of the Indonesian Constitution, which would allow the state to interfere in people’s religious freedom.

Thirdly: We call on the government, both civilian as well as the TNT and police, and the regional government to respect the principle of dialogue. The government and the legislature should not open the way for the re-emergence of militarism in Indonesia. We therefore demand the immediate withdrawal of all the newly arrived non-organic troops. We are totally convinced that violence will never resolve our problem; on the contrary it will only bring new problems.

Fourthly: the wishes of members of the MPR to adopt a law on special autonomy for Papua should be postponed and there should first be dialogue regarding the matter with the Papuan people,

Fifthly: We call on all sections of the community, in particular the Papuan Presidium Council, religious leaders, traditional leaders, Satgas Papua, Red and White Satgas and the general public to stress the need for dialogue in resolving the conflicts. We should do everything possible to restrain ourselves so that we are not dragged into violent conflict, which can only result in loss of life and property for the ordinary civilians.

Sixthly: We urge the central government and the various components of the Papuan people to enter into dialogue to seek an overall solution to the Papuan problem.

[Pacific Concerns Resource Center (PCRC) has prepared a briefing paper on current developments in West Papua, in the lead up to this year's South Pacific Forum, to be held in Kiribati in October To obtain a copy, contact PCRC on email: pcrc@is.com.fj or fax: (679) 304755.]

 

CHINA

Mainland firms ill-prepared for WTO

WANG XIANGWEI
[SCMP 29/09/00]

Mainland officials and analysts on Wednesday hailed the trade deal approved by the US Senate overnight, which would give China the permanent normal trade status and remove the last major stumbling block for China's accession to the World Trade Organisation (WTO). However, they cautioned against over-optimism about WTO entry, saying that membership of the global trade body would bring problems as well as benefits.

They said that while WTO entry would bring long-term benefits for the mainland's economy and its full integration into the international market, expectations of an immediate boom in trade and investment were inappropriate.

"The WTO benefits for the mainland should come gradually, particularly in the area of foreign investment," Xu Xiaonian, executive director of research at the China International Capital Corp (CICC), an investment bank, said on Wednesday.

He said foreign investors would need time to see how the mainland would restructure its economy and implement the WTO rules.

Mr Xu and other mainland economists said the expected WTO entry was just the first step in a long march for mainland firms that have a lot to learn about how best to exploit the advantages of economic globalisation.

They said mainland businesses were ill-prepared for the challenges ahead.

"Solid and down to earth preparatory work is scarce, although officials and entrepreneurs have long been crying wolf," leading government advisor Lu Zhiqiang told the China Daily on Monday.

"As far as I know, few serious studies have ever been conducted into relevant laws on foreign trade, overseas investment, and rules and regulations of the WTO so that Chinese firms can meet challenges while undertaking their obligations," Mr Lu, the deputy director of the State Council's Development Research Centre, said.

Mr Xu of CICC said many mainland firms have not taken the WTO entry and its probable impact seriously.

He said that the mainland government has come under increasing pressure from industry groups to erect WTO-allowed trade and regulatory barriers to protect against an onslaught from foreign investors.

Many of the businessmen still have this 'so-what?' attitude that goes: even after China opens up its economy following the WTO entry, foreign investors will still need licences to do business on the mainland. They would urge the government to exercise tough approval standards to stunt foreign competition and protect domestic industries.

"While it is tempting to do so, the government should resolutely resist the pressure [from those lobbying groups]," he said, adding that failure to do so would only slow the pace and increase the costs of mainland economic restructuring.

Economists said the mainland authorities are also faced with the urgent and difficult task of restructuring and improving the mainland's legal and regulatory frameworks in accordance with WTO rules.

The government said it had already begun revising old laws and drafting the necessary new regulations.

Economists said that the government should focus its efforts on laws governing the industries that are largely regulated by government directives.

One such area is the capital market. For instance, the mainland has so far approved just one joint venture investment bank, China International Capital Corp. CICC is controlled by the China Construction Bank and Morgan Stanley Dean Witter.

"It has been approved as an exceptional case and there are no laws governing this area at all," Mr Xu of CICC said.

"But things will have to change once China is a WTO member."

Other economists said the government should step up the training of government officials and businesspeople as a matter of urgency.

Shi Wei, a senior economist at the State Council Office for the Restructuring of Economic Systems, said some provinces had started to invite him and his colleagues to give lectures to the officials over the impact of the WTO entry.

However, other economists said as mainland factories and institutions have been accustomed to relying upon government help, many of them were still waiting for the government to sort everything out for them.

"Those companies will never be ready until the day comes," Mr Xu said, adding that that could mean some mainland firms were likely to be forced into bankruptcy.

 

CHINA

Why the US trade votes matters

[BBC 19/09/00]

The US Senate has voted to grant permanent normal trading relations with China. BBC News Online's Steve Schifferes explains why that vote matters to the rest of the world.

What are permanent normal trading relations (PNTR)?

During the Cold War the US decided that it would only grant trading privileges to Communist countries after reviewing their record on human rights and immigration each year. This provision still applied to China, although Congress had never actually voted to block trade. China wants to join the World Trade Organisation and has agreed to open its markets to Western investment. In return, the US government promised to end the annual vote on PNTR.

Why does it matter?

If the US congress had voted to continue with the annual trade review, it would not have been entitled to gain the benefits of any trade liberalisation that China undertakes. Although China would still be able to join the World Trade Organisation, the uncertainty over its trade relations with its largest trading partner would undermine the significance of the move. Many supporters believe that integrating China - the world's fourth largest economy - in the world trading system is crucial to persuading China to liberalise its political and economic system. If the US had turned in a protectionist direction, it would have made trade negotiations with other countries, including the EU, more difficult.

What happens next?

To gain membership of the World Trade Organisation, China has to reach deals with all members of the WTO on measures to open its markets to foreign competition. It reached such a deal with the US in November, but only finalised agreement with the European Union in May. It could well be the end of the year before the WTO's technical panel approves Chinese membership - and some years after that before all of China's market-opening measures are completed.

Why had the issue become so politically charged in the US?

The vote to grant PNTR to China was only passed by the House of Representatives in May after much heated debate. The vote had a huge symbolic significance in the US, where it was the centrepiece of a battle between free traders and protectionists. Those Americans worried that free trade and globalisation had gone too far, including many unions, mobilised against the deal. They had support from many in the Democratic Party who were sensitive to the concerns of its heartland voters in an election year. President Clinton, a Democrat who cannot run for re-election, wants to make his mark in history by agreeing to the landmark trade deal with China, thus securing good relations with Beijing. He has sought the backing of the Republican Party and the business community, who were worried that a rejection would fuel the fires of protectionism across the US.

Why is it so important for China?

China's opening to the West since the l970s has led to a dramatic transformation of its economy which has quadrupled in size. Joining the World Trade Organisation would ensure that China continued on its path towards economic modernisation. China's economic reformers know that opening up the Chinese economy to Western competition could cause massive disruption and job losses. They believe that it is a necessary price to pay to strengthen China's power and prestige internationally. The annual vote on PNTR was seen as a humiliation for China as a great power. That is why China remains bitterly opposed to any human rights commission which the US Congress proposes setting up.

How will it affect the rest of the world?

The opening up of China will have a major effect on the whole world economy. China's market of 1.3 billion people will, over time, become a more attractive place to sell goods and services from the industrialised countries of Europe, Japan and North America. In so far as the deal stimulates China to grow faster, investment opportunities will be even greater. In the short term, Western industries could face more competition from Chinese imports in sectors like textiles, clothing and steel. And if China becomes an economic powerhouse it may become more assertive about playing a bigger role in Asia, challenging Japan and the US.

 

BURMA

European Parliament Resolution on Burma

[BBC 07/09/00]

The European Parliament, having regard to its previous resolutions on Burma, in particular its resolutions of 16 September 1999 and 18 May 2000, having regard to the two declarations of the EU Presidency on Burma (25 August 2000 and 2 September 2000),

  1. whereas it is 10 years since the National League for Democracy (NLD) won 392 of the 485 seats in Parliament in free and fair elections and whereas the elected Parliament, which is now represented by the CRPP, has still not been permitted to convene,

  2. whereas Mrs Aung San Suu Kyi has been trying for many years to restore democracy through peaceful means and has been awarded the Nobel and Sakharov prizes for her efforts,

  3. whereas in late August Burma's State Peace and Development Council officials barred a NLD delegation including Mrs Aung San Suu Kyi from meeting with NLD staff in Kungyangon,

  4. whereas the NLD members first refused to return to the capital and have lived on the roadside for several days, followed by their forced return to the capital, where according to Amnesty International Mrs Aung San Suu Kyi and her colleagues have been held incommunicado since 2 September,

  5. whereas at the end of March the governing body of the International Labour Organisation (ILO) documented the SPDC's maintenance of a system of forced labour without any sign of improvement, and adopted a resolution calling for sanctions against the Burmese Government,

  6. whereas the ILO Conference in Geneva voted on 14 June 2000 by 257 votes to 41, with 31 abstentions, to approve these measures against Burma but gave Burma four months to prove its willingness to abolish forced labour,

  7. G. whereas the regime agreed to the terms of an ILO mission to the country, which delays the implementation of these measures until 30 November 2000, when they will apply unless the regime demonstrates that it intends to fulfil in full the recommendations of the ILO's governing body,

  8. H. noting that the EU's efforts towards improving the situation through a dialogue with the Burmese authorities have remained unsuccessful, and regretting the recent readmittance of Burma to ASEAN and EU-ASEAN meetings,

  9. noting that the Council has still not responded to Mrs Aung San Suu Kyi's request to implement economic sanctions and has not taken any significant economic measures against the SPDC, and that the USA has already halted new investment in Burma,

  10. concerned by allegations that several Chinese military bases have been built on Burmese territory,

  1. Strongly condemns the violation of the freedom of movement, expression and assembly of the Secretary General of the National League for Democracy, the intimidation against her, the threats to the NLD's activities, her de facto house arrest since her return, and the fact that Western diplomats have not yet been allowed access to her;

  2. Requests that the Burmese authorities immediately allow freedom of movement for Mrs Aung San Suu Kyi and all citizens of Burma;

  3. Urges the Commission and the CFSP High Representative to make a determined effort to visit Mrs Aung San Suu Kyi;

  4. Calls on the SPDC to end its widespread practice of forced labour, which has been described by the ILO as a 'crime against humanity', and the associated 'human rights violations';

  5. Calls on the ILO to impose sanctions in November unless and until forced labour has been abolished in Burma;

  6. Urges the Burmese authorities to restore democracy and engage in dialogue with the opposition that could lead to national reconciliation in a united and democratic state;

  7. Calls on the governments of the ASEAN countries to persuade the SPDC to lift restrictions on the country's most prominent opposition leader and on the NLD members;

  8. Reiterates its call on the Commission and the Council, in cooperation with the USA, to implement economic sanctions against Burma and its exclusion from EU-ASEAN meetings, such as the December EU-ASEAN Foreign Ministers' meeting, while making every effort within the UN to isolate Burma until democracy has been restored;

  9. Calls on the Commission and Council to offer assistance to Burmese refugees in Thailand, Malaysia and India;

  10. Calls on the Commission and Council to investigate the allegations with regard to Chinese military bases in Burma;

  11. Considers that the governments of the EU Member states should advise their citizens against visiting Burma as tourists, particularly because many tourist facilities have also been created using forced labour;

  12. Instructs its President to forward this resolution to the Commission, the Council, the governments of the EU and ASEAN Member States and the governments of Burma, India, China and Japan.

 

3. RESOURCES Received - top
 

DAGA receives a lot of juournals, periodicals, newsletters and many other forms of printed resources from its network of Action Groups in Asia and around the world.  Please click on "Resources" in the left bar for an extended listing.

 

4. Urgent APPEAL - top
 

Extra-judicial killings in Aceh

The two student leaders who were abducted on 19 September at 5 pm in Banda Aceh were released on 20 September at 7.00 pm. Muzakir and Mohamed Saleh of Sira were seized from a car repair shop by seven men in plain clothes armed with pistols and long rifles. They were taken away in two jeeps.

Since the kidnapping and brutal murder of human right activist Jafar Siddiq Hamzah and the killing of Professor Safwan Idris, Rector of IAIN Ar-Raniry, the TNI has threathen and kidnapped student/human rights activist.

Professor Safwan Idris was a member of the Independent Investigation Commission that investigated Human Rights Violations in Aceh. He was a leading candidate for the position of governor of Aceh.

Violence and extra-judicial killings are escalating in Aceh. The list of Acehnese leaders kidnapped or killed since the beginning of the Humanitarian Pause in Aceh are as follows:
1. Jafar Siddiq Hamzah (Chaiman International Forum for Aceh)
2. Nasharuddin Daud (A member of Indonesian Parliament from Aceh)
3. Ismail Syahputra (Chief Speaker for Aceh Sumatra Liberation Front/Aceh Merdeka)
4. Teuku Don Zulfahri (Head of Free Aceh Council)
5. Teungku Ilyas Ibrahim (Head of United Development Party from North Aceh)

Requested Action: Imnediately write emails and letters to

  • call on the Indonesian government to immediately investigate the murder of Jafar Siddiq Hamzah and Professor Safwan Idris

  • call on the authorities to immediately investigate allegations that Safwan was extrajudicially executed by members of Brimob.

  • call on Indonesian and international government officials to demand that they protected the all human rights activist, including student.

SEND APPEALS TO:

Col. Sumantyawan Hadidojo Soedardjo
Chief of Police Aceh
Kapolda Aceh
Jl Cut Meutia No 3
Banda
Aceh
Fax: + 62 651 26689

Gen. Rusdihardjo
National Police Chief
Kapolri
Markas Besar Kepolisian RI
Jl. Trunojoyo 3
Kebayoran Baru
Jakarta Selatan
Fax: + 62 21 720 7277

Dr Alwi Abdurrahman Shihab
Minister of Foreign Affair
Menteri Luar Negeri
Jl. Pejambon No.6
Jakarta Pusat
Indonesia
Fax: + 62 21 3805511/360517/363750/3457782/360541/7245354


Send COPIES TO:

Mr. Kofi Annan
Secretary-General of United Nations
Palais Wilson
1211 Geneva 10, Switzerland
Fax: 41 - 22 - 917 0022 (Hotline - Human Rights)

Ms. Mary Robinson
Office of the United Nations High Commissioner for Human Rights
Palais Wilson
1211 Geneva 10, Switzerland
Telephone number: (41 22) 9173456
Fax number: (41 22) 9170213
E-mail: webadmin.hchr@unog.ch

B. Ramacharan
Deputy High Comissioner for Human Rights
Palais Wilson
1211 Geneva 10, Switzerland
Telephone number: (41 22) 917 9296
Fax number: (41 22) 917 9004
E-mail: bramcharan.hchr@unog.ch

Kapil Sibal
Chair Working Group on Arbitrary Detention
c/o Centre for Human Rights
Palais Wilson
1211 Geneva 10, Switzerland
fax to: (41-22) 917.01.23
email: webadmin.hchr@unog.ch

and to diplomatic representatives of Indonesia accredited to your country.

 

5. ANNOUNCEMENT - top
 

Conference on Development and Liberation in the third Millennium

The above conference is being jointly organised by the Urban Rural Mission and Develop & Service desks of the CCA. The conference is being proposed to assess the social development outlook in Asia and its impact on the lives of the poor.

Date: 16-21 October 2000
Veue: Kuala Lumpur

For more information on this event, contact Dr. Prawate Khid-arn at prawate@cca.org.hk

 


END

Return HOME

 

 

We hope that the materials in this website have been useful to your work and ministry.   You are free to reproduce the information on this website in your publications.   We only ask that proper credits be given to the writers as well as DAGA/CCA-URM.   We will also appreciate it very much that a copy of the publication be mailed to us at the address below:

Documentation for Action Groups in Asia (DAGA):
96 Pak Tin Village Area 2
Mei Tin Road, Shatin, NT
HONG KONG SAR
Telephone: (852) 2697-1917
Fax: (852) 3017-2377
E-mail: dagainfo@daga.org.hk