Monday 23 Jul 2018 | 15:52 | SYDNEY
Monday 23 Jul 2018 | 15:52 | SYDNEY

Other paths to development


Jenny Hayward-Jones


25 February 2010 10:49

The space given to aid issues in the Australian media over the last fortnight gives me hope that more Australians might be interested in the international debate on development than I previously thought.

But discussion in the developed world about 'development' tends to focus on how much aid rich countries give to poor countries rather than the development process itself. Australia spends $3.8 million in aid to reduce poverty and promote sustainable development. Taxpayers have a right to know how their aid dollars are being spent and should be engaged in discussion on more effective ways of using aid. 

But although it is easy to blame donors like Australia for slow development progress, particularly in the Pacific, it is worth remembering that aid and development are two different concepts. Aid is only a small part of the development story for countries that have lifted their communities out of poverty.

Former governor of the Central Bank of Solomon Islands, Tony Hughes, said at a recent conference in Vanuatu that the Pacific was 'hooked on aid' and pointed to another path to development for the region by highlighting the importance of microfinance and the availability of credit for small enterprises. His comments endorse the valuable work of Muhammad Yunus and his Grameen Bank, winner of the Nobel Peace Prize in 2006 for innovative work in using microcredit to lift millions out of poverty.

Muhammad Yunus considers credit to be a fundamental human right. His ideas for combating extreme poverty with small loans for the poor fueled the growth and rapid expansion of microfinance organisations around the world. While recent evidence shows microfinance for the poor may not be the silver bullet we hoped, there is still a critical need to address the availability of credit for business development in poor countries.

Yunus is now promoting the creation of 'Social Business Enterprises' where the poor will participate as owners and beneficiaries of an economic value chain. The private sector can participate as partners and lenders of their business talents and technologies. Australian readers may be interested to know that Business for Millennium Development will host Muhammad Yunus in Australia to present his Social Business concept at events called 'The Power of Small' in Sydney, Melbourne and Canberra in March.

A fresh approach to thinking on development that doesn't rely solely on government is badly needed. Professor Yunus may just find a newly interested audience in Australia.

Photo by Flickr user World Economic Forum, used under a Creative Commons license.