1994 was an extraordinarily busy year for the Foundation and the BWTP network. After national workshops on Banking with the Poor in Sri Lanka, India, Pakistan and Nepal, reported in the last issue of the newsletter, the series was continued with a highly successful workshop in Indonesia. This was followed in November by the Third Asia-Pacific Regional Workshop on Banking with the Poor in FDC's home city of Brisbane. We report in detail on this major event in a special supplement to this issue. The months leading up to the Third Regional Workshop were a period of intense activity, with the preparation of documents to be tabled in Brisbane. Most notable was the report on Best Practice of Banking with the Poor. This will be published soon in revised form, reflecting the debate at the Workshop. An article on page 3 contains more details of our planned publication program. This extremely productive period was crowned by the announcement on Australia Day that our Founder, Bill Taylor, had received recognition by the Australian Government for his services to international development (see story this page). This issue of the BWTP Newsletter reports, for the first time, an activity of the Foundation not concerned with microfinance. We are about to commence a comparative study of the economic performance of the small island states of the South Pacific and Caribbean regions. While this marks a broadening of FDC's interests it does not mean any reduction in the Foundation's commitment to poverty alleviation by means of Banking with the Poor, or to its partners in the BWTP network. Bill Taylor honoured by AO award In its Australia Day awards announced on 26 January, the Australian Government has honoured FDC's founder and Vice Chairman, Mr K. William Taylor, by naming him as an Officer of the Order of Australia. The Government has recognised Bill Taylor's efforts over many years, both as an official of the United Nations, and through more recent non-government activities to reduce poverty in Australia and overseas. The citation for the award refers to his 'service to the development of aid abroad and to the community.' Many messages of congratulation have been received by Bill. Among them was one from the Chairman of the Foundation, Dr Brian Scott, who wrote : "We all salute your remarkable career of selfless, dedicated service, and the commitment and drive and wisdom you have contributed to the Foundation, as well as your wonderfully generous philanthropy. We are all privileged to serve with you on the Foundation Board, and rejoice that your country has now honoured you in this auspicious way." The BWTP Newsletter team joins Dr Scott in his congratulations. Bill himself is convalescing after heart surgery, which became necessary shortly after the announcement of his award. Readers will be pleased to hear that he is recovering well. Successful Jakarta Workshop The seventh and penultimate national workshop in the current series conducted under the auspices of UNDP's Asia-Pacific Regional Poverty Alleviation Programme was held in the Indonesian capital of Jakarta on 26-28 September 1994. The workshop was jointly hosted by Bank Indonesia and FDC with Bank Indonesia providing its auditorium as the venue. Considering Indonesia's experience with bank linkages through the PHBK project (see article page 3), Bank Indonesia saw the BWTP national workshop as providing an opportunity to review the role of the Indonesian linkage program. Such a review was timely in relation to the national program of poverty alleviation, recently inaugurated under Repelita VI, the Indonesian five-year plan 1994–1999. This new five-year plan will make enormous demands on NGOs and SHGs for the carriage of a wide range of poverty alleviation activities. Credit will be an increasingly important component of these activities, and Bank Indonesia saw the advantage of bringing together major NGOs to explore two questions:
The meeting was attended by a representative from each of 22 NGOs engaged in the linkage program, drawn from the 10 provinces of Indonesia in which the program is currently operating. Also present were representatives of Bank Indonesia, and of major state banks also involved in the linkage program (Bank Rakyat Indonesia, Bank Bumi Daya, and Bank Negara Indonesia). The Indonesian co-operative bank, BUKOPIN, was represented, as was PERBANAS (the Indonesian association of national private banks) together with the Federation of Peoples' Development Banks (BPR). Representation of NGOs from outside the capital was made possible by a grant-in-aid from the Australian Embassy in Jakarta. The following is a summary of the conclusions reported to the meeting:
Indonesia's PHBK project Since 1989, Bank Indonesia has conducted project 'PHBK' (Project Linking Banks with Self-help Groups). This project has been conducted with technical assistance from the German government through the agency of GTZ. At the time of the Indonesian national workshop last September, PHBK was under way in 10 of Indonesia's 27 provinces. It involved 72 bank branches, 49 NGOs, and almost 1,500 self-help groups with a total membership of more than 60,000 persons. The PHBK program is directed at the bottom end of the small credit scale. Total credit advanced by mid-1994 was Rp 13.5 billion ($6.25 million), and savings of group members totalled Rp 2.1 billion ($0.97 million). Strong leadership by Bank Indonesia has been the key to the success of PHBK, which is recognised by the national government's giving the scheme a key role in national poverty alleviation efforts (see story, page 2). Malaysia workshop delayed The final national BWTP workshop to be conducted under UNDP auspices as part of RAS/92/006 will be in Malaysia. The workshop is proposed for later this year with the participation of senior commercial and central bankers. In Malaysia the BWTP partner financial institutions are Bank Islam Malaysia Berhad and Credit Guarantee Corporation Malaysia Berhad. The NGO member of the network is Amanah Ikhtiar Malaysia (AIM), which has created a revolving credit facility directed at the needs of the poorest of the poor in that country, replicating the methods of the Grameen Bank of Bangladesh. While the workshop will aim to bring to the attention of other NGOs in Malaysia the benefits of formal linkages with financial institutions, a major objective will be to focus on the future needs of AIM for expanded loan capital. AIM has established more than 6000 SHGs with some 30,000 members. Total loans disbursed amount to around $15 million, with members' savings close to $2 million. AIM is very effective in targeting extremely poor people, yet achieves a repayment rate of 98 per cent. The major constraint on expansion of its lending is availability of loan capital. It is clear that AIM'S capacity to reach the poor could be substantially enhanced if more banks were to enter into linkage arrangements with it. The planned workshop will aim to convince bankers of the value of working with AIM. New Publications Documents produced for the Third Regional Workshop will be edited and published over the next few months. They are:
South Pacific study set to begin FDC is preparing a study to identify reasons for differing rates of economic growth in the small island states of the South Pacific and the Caribbean. This study, which will start in April and last for 3-4 months, will be a major new activity for the Foundation. Its findings are expected to be of considerable significance for the economic development policies of the island states of the South Pacific. For some years, the small island states of the Caribbean have experienced more rapid economic growth than island countries of similar size and economic circumstances in the South Pacific. The World Bank published a South Pacific economic overview in 1991 (and again in 1993) drawing attention to this disparity. These World Bank studies referred to the apparent paradox that low rates of economic growth in the South Pacific occurred in a climate of relatively favourable resource endowment and high aid flows. Within each of these two regions there are significant variations in levels of aid, geographic size, population and other factors. Broad regional generalisations may not prove to be valid. The study will consider the reasons for economic growth disparity between countries in the two regions through an examination of, among other things, government policies conducive to economic growth and their impact, trade and market related issues, comparative geographical advantages and disadvantages, and the role of aid in economic growth relative to these considerations. FDC has appointed two economists to conduct the study. They are Dr Te'o Fairbairn, a South Pacific specialist, and Dr DeLisle Worrell, Deputy Governor of the Central Bank of Barbados. They will be supported by an advisory panel chaired by Mr Savenaca Siwatibau, head of the UN ESCAP Pacific Operations Centre in Vanuatu, and comprising Dr Fred Fisk, formerly of the Australian National University and Dr Keith Worrell, of the Caribbean Development Bank. The study will be funded by the Australian Agency for International Development (AusAID, formerly known as AIDAB), FDC and the Forum Secretariat. It will be carried out under contract to the Secretariat and has been authorised by the Forum's Committee on Regional Economic Issues and Trade. Recommendations from the study will be presented to regional Heads of Government. |