This article first appeared in Forum, The Edge Malaysia Weekly, on February 22 - 28, 2016.
THERE is no shortage of social issues today that require holistic interventions that integrate state-run programmes, community involvement and voluntary initiatives to address the people’s basic needs and promote their well-being.
The issues range from gaps in the availability of social goods like housing, health services and education to social disadvantage, delinquency and even ethical breakdown, to suggest different aspects of the concerns that preoccupy us in these times.
Current approaches to these challenges suggest that the difficulties will only become more acute.
Despite the evidence of progress in human development in global programmes such as the United Nations’ Millennium Development Goals, which showcases dramatic improvements in the developing world in almost all its eight goals over the past 15 years, there is ample proof that much is not right with the state of our world today.
The World Economic Forum’s Top 10 Trends of 2015, for example, provides a useful handle on these concerns. Top on its list is worsening income inequality, with the richest 1% accumulating wealth at an unprecedented rate, leaving the middle and lower classes struggling. The persistent growth of joblessness comes second, accompanied by a growing dissatisfaction with government responses to the problem. This, in turn, is reflected in the next two trends, namely, lack of leadership and the weakening of representative democracy.
Next, the growth in security concerns is reflected in two focal points — rising geo-strategic competition and intensifying nationalism. Overall, two major concerns dominate the list — economic and environmental crises. The consequences of short-term economic thinking and the reckless use of natural resources, the WEF report states, are being seen in water disputes between neighbouring nations and a string of unparalleled environmental disasters, ranging from a global deforestation threat to the erosion of agricultural capacity and the devastation of biodiversity.
These indications should tell us that even if unlimited access to resources were available, there would be no assurance of equitable outcomes, security or sustainable growth if attention is not paid to ensure that the human dimension of these issues is given proper attention.
It is a wonder that vast amounts of resources, both public and private, continue to be expended on efforts to address complex problems like economic disadvantage, social delinquency and underperformance in education or at the workplace, focusing intently on programmatic solutions, but excluding the psychosocial aspects of change.
The experience of microfinance programmes is a good illustration in this regard. Beyond the image of such schemes as lifelines for the unbankable poor, a significant number of reports suggest, remarkably, that while about 5% of borrowers do get out of poverty every year, many others can run into worse problems than they had previously, including sinking into a cycle of debt.
In an indictment of microfinance, David Roodman, of the US-based Centre for Global Development, wrote an op-ed in The Washington Post, based on research by MIT economists in Hyderabad, India. He said that while small loans caused more families to start micro-businesses such as sewing saris and existing businesses saw higher profits, over the 12 to 18 months the researchers tracked, the data revealed no change in bottom-line indicators of poverty, such as household spending and whether children were attending school. Perhaps those who made more from their own businesses earned less in wages outside the home.
A study in Manila by American economists Dean Karlan and Jonathan Zinman also found no effect on poverty for families one to two years after they received a loan.
Another dimension is provided by Care International expert on microfinance, Ajaz Ahmad Khan, in a blogpost in July 2015: “Poverty is multidimensional and includes poor health, lack of education and skills, inadequate living conditions, and the threat of violence, as well as lack of income and the poor quality of work. In this complex environment, while microfinance may help, it is unrealistic to expect a single intervention by itself to address all these other issues and dramatically change poor people’s lives.”
This points to the importance of a radical rethink about current approaches to social interventions in order that a holistic, integrated methodology for improving lives at the bottom of the socio-economic pyramid can evolve.
Clearly, enduring solutions are more likely when behavioural dynamics is included in an integrated approach to these problems. The US-based social action group Global Partnerships, for example, bundles financial products with low-cost social services such as medical check-ups, training in agriculture, and so on.
Its approach sees low-income borrowers as individuals and family members who need advisory, educational and health services.
Clearly, such an organic perspective on social problems like poverty or delinquency is much more likely to address underlying obstacles that can thwart a social change initiative, compared to the more usual remedies that view these problems in isolation.
Despite its obviousness, however, we have so far managed to ignore the crucial role that behavioural factors can play in the success or failure of such efforts.
R B Bhattacharjee is associate editor at The Edge Malaysia
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