(WOMENSENEWS)--Microcredit programs, especially for women, have been justifiably criticized in the past for falling short of real development aid.

The programs--in which lenders extend small loans to individuals or very small enterprises--are often too small to make any long-term difference and impose interest rates around 20 percent--too high to allow for much real capital formation.

While micro credit has been a phenomenal success by some terms--the number of borrowers topped 55 million by 2004 and the United Nations is making this the Year of Micro credit--critics also pointed out that it is no panacea.

Low income, they say, is only part of the poverty trap. Poor health, lack of sanitation, bad schools or no schools at all and a low status of women in society are burdens that limit the ability of loans to actually improve life. The U.N.'s Development Program measures these drawbacks in an annual report.

Rounaq Jahan, a Bangladeshi feminist and author, has argued that there is scant evidence that microcredit alone empowers women.

But if ever the time and place were right for the quick introduction of a huge infusion of microcredit loans, it is now, in the stricken coastal regions of South and Southeast Asia.

While government leaders talk about debt relief for nations that may or may not transfer those savings to local people most affected, a strong chorus of economists has been saying, "Hold on. The financial effects of this tsunami disaster are not going to be felt mostly at the national level."

Small Entrepreneurs Flattened

For example, in the hard-hit tourist industry, economists are now calculating that more than three-quarters of business losses will be borne by small and largely uninsured entrepreneurs. You know them: the seaside restaurant owner, the guy who rents beach chairs, the woman sewing and selling sarongs.

Women. That's the other part of this equation. Among all the famous voices and faces heard and seen on television screens in the last few weeks, only James Wolfensohn, president of the World Bank, has articulated the importance of women to rehabilitation and relief. Wolfensohn was speaking at an impromptu news conference while touring Sri Lanka, where many fishermen died and left behind women who may never have had to work for pay and children whose needs will have to be met.

Sri Lankan women are, on the whole, well educated--the country has one of the region's highest female literacy rates. As a result, they--along with Thai women--are in a good position to learn new skills to compensate for losses. So let's get going: This is the best place to start.

Wolfensohn, who says that he is planning to step down as World Bank president in June, has been one of the strongest promoters of women in the larger United Nations system. The World Bank has been focusing for several years on the crucial role of women in development, while the United Nations itself has weaseled out of its commitment to women on several fronts.

U.N. Leaders Buckle on Women's Rights

Most notably--and despite urging from U.N. agencies as well as nongovernmental organizations--U.N. leaders, bowing to a range of conservative governments, have allowed gender rights, sexual choices and universal access to health services for women and girls to be eliminated from the Millennium Development Goals, those international targets for eliminating or sharply reducing poverty by 2015.

Without giving women these tools to take charge of their lives, neither poverty nor HIV/AIDS can be mitigated. That's because women are critically important to families and families are the building blocks of communities. The devastated areas of Asia would prove the point, if the world would stop looking only at the big macroeconomic picture and begin focusing on a million individual economic and financial needs.

Yes, the high cost of microcredit interest rates can be crippling over the long term. And yes, the claims of microcredit have also been questioned by anecdotal evidence that a lot of the loan money was collected by women and then given to men.

In the wake of this disaster, that problem should be forgotten and the short-term needs of people should be the top priority.

In the fishing communities of Asia, many hardworking men who survived have no assets other than a ruined boat, or no boat at all. In television interviews they say that they can live with interest rates of 20 percent or higher, just to get back to sea. They know that this is a one-time expense that is essential to future economic independence, and they deserve to be heard, too.

Put it to the test.

Barbara Crossette was chief correspondent for The New York Times in Southeast Asia and South Asia and later the paper's U.N. bureau chief.

For more information:

As Tsunami Recedes, Women's Risks Appear:
http://www.womensenews.org/article.cfm/dyn/aid/2137

Trickle Up Program:
http://www.trickleup.org

The World Bank Group--Tsunami Recovery:
http://web.worldbank.org/WBSI TE/EXTERNAL/COUNTRIES/0,,contentMDK:20311876~page PK:137040~piPK:137042~theSitePK:136917,00.html

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