Fairtrade as ’supermarket internationalism’

Matthias Varul has a nuanced assessment of fairtrade over at e-IR – it’s worth a read and I reckon he’s got it pretty much spot on. To top and tail it:

The idea of fairtrade is, at first glance, a paradoxical one. Observing that the capitalist world market works to the disfavour of producers in the Third World, left wing and Christian campaigners from the 1970s onwards tried to use this unfair market to establish equitable North-South trade relations. The paradox is encapsulated in the slogan: “In the market against the market”…

Fairtrade goods on the supermarket shelves may be sometimes misused to buy a clear conscience – but at the same time they are the bad conscience of the postcolonial world of consumption. The Adam Smith Institute complains about a “moral monopoly” that the fairtrade movement has established – and in a way it’s fair to say that it has. There now is compelling plausibility for fairtrade. Such plausibility might not be strong enough a reason to determine individual purchasing decisions – but it may prepare the ground for institutional safeguards and legislation that might one day make fairtrade a thing of the past by making sure all trade is fair.

I’ll probably be blogging more about this as my dissertation progresses. Dr Varul is also running a day seminar on the topic in October – more info here.

Kiva.org: bringing microfinance to the masses

Recently I was doing some research on microfinance and discovered Kiva.org. It may or may not be new to the reader, as it’s been going since 2005, but for me it was a fascinating find. Kiva is a nonprofit organisation which combines the internet, individual philanthropy and microfinance. It’s backed by the Clinton Global Initiative, the Rockefeller Foundation and a host of corporate partners.

Ordinary citizens (usually in the developed world) make a small loan to one of Kiva’s vetted entrepreneurs (usually also ordinary people, this time in the developing world). We’re talking about as little as $25, a similar amount to an average charitable donation. The transaction is facilitated by PayPal, which forgoes its usual fees.

Those individual $25 loans are combined into a larger sum (as of 31 August, the average loan made is $469.95) and that sum sent to a microfinance institution “on the ground”, who pass on the money and general help and advice to the entrepreneur.

Vahobjon, a Kiva entrepreneur in Tajikistan. Photo by juxtapose^esopatxuj.

The loans made through Kiva now exceed $41 million, from 331,372 lenders. Oh, and the repayment rate is an impressive 98.48%. The only catch is that you don’t get interest, at present, anyway.

It should be borne in mind that microfinance is not perfect – see the work of Milford Bateman, among others – but there can be little doubt that it is often has a highly positive impact, on the individual level at least. Kiva.org is a very exciting project and makes for a more tangible, targeted and perhaps more useful way for concerned citizens in the West to help encourage international development. It will appeal especially to those who prefer the “bootstraps” approach to poverty-alleviation.