Microfinance in Afghanistan has led to increased business activity, employment opportunity and assets, as well as improved socio-economic status for women.

When the Taliban regime lost power in 2002, it left a devastated country behind. With no functioning banking system, Afghanistan’s entire economy was financed by informal moneylenders.
The World Bank, CGAP (the Consultative Group to Assist the Poor), and the donors that followed, seized the opportunity to establish a model microfinance industry in this virgin territory--doing things right, from day one. Four years later, microfinance in Afghanistan is thriving despite deteriorating security in the country, and a new impact survey has found that the benefits to clients are real.

Rebuilding
Sosan Naeem moved back to Afghanistan in 2003 after 12 years in Pakistan, where she and her family were war refugees. Rebuilding a life in Kunduz Province, North Afghanistan, was not easy.
When Sosan took a $150 loan from the Child Fund Afghanistan (CFA), she was able to invest in her husband’s business selling animal skins, and to use the rest of the money to buy a lamb, providing milk and rearing potential.
Her family’s income increased, and she and her husband were able to gradually build up their business and rebuild their home.

Origins
In 2002, the World Bank and prominent members of the new Afghan government joined forces to establish a single mechanism for channeling what was hoped would be major investments in a new, rapid-growth microfinance industry.
The Microfinance Investment Support Facility for Afghanistan, Ltd. (MISFA), the apex institution that funds the CFA and 14 other MFIs, was funded via the World Bank’s Afghanistan Reconstruction Trust Fund (ARTF), and CGAP was quickly brought on board to provide critical microfinance technical expertise.

Microfinance Apex
In just four years, MISFA has catalyzed the growth of Afghanistan’s fledgling microfinance institutions (MFIs), helped implement a state-of-the-art national regulatory framework, and initiated the “Afghanization“ of the microfinance sector.
The 15 microfinance institutions (MFIs) funded by MISFA have beaten the odds in a difficult and worsening security situation to reach 385,000 clients by July 2007, and seventy percent of those clients are women. They disbursed 808,000 loans totaling $282 million, with a portfolio outstanding of $87 million. Five of MISFA’s MFIs had achieved operational self-sustainability by that date.
Empowerment & Opportunity
Ultimately, MISFA’s most important success lies with the impact the project has had on the lives of poor people, particularly women, in Afghanistan.
The Institute of Development Studies and a local market research firm just released research showing that microfinance in Afghanistan has led to increased business activity, employment opportunity and assets, as well as improved socio-economic status for women.
Interviews with more than 1,000 households across five regions of the country in the spring of 2007 revealed that 700,000 employment opportunities have been created for women like Bibi Hawa, who returned to Gabriel village on the outskirts of Herat 11 years ago from Iran.
When the young mother heard that the NGO BRAC was assisting people in her village to set up small businesses, she thought she could put her tailoring skills to good use.
Her first loan of Afs. 8,000 helped her to buy a sewing machine, tables, and an iron to set up her small tailoring business. With the security of the additional income, she was able to put her children in school.
Slowly repaying and borrowing again--her second and third loans were for Afs 12,000 and Afs. 20,000 each--the family now has two shops in the village market that sell clothes for men, women and children--all tailored by her. One of the shops is run by her husband while the other is looked after by her eldest son.
Such changes--affecting the standard of living of the entire family--perhaps explain why eighty percent of women clients in the study also reported an “improved attitude“ in their husbands and other relatives.

GMÕs $38.7 billion losses for the year contrast sharply with arch rival Toyota's performance.

Having just recorded the biggest annual loss by an automotive company and offered its 74,000 unionized workers voluntary redundancy, it seems obvious to conclude that the world’s largest carmaker by sales is in deep trouble.
General Motors’ (GM) $38.7 billion losses for the year contrast sharply with arch rival Toyota’s performance. The Japanese giant’s net profits for the last three months of the year came in at $4.3 billion. For the year to 31 March it expects net profits to total $15.8 billion.
According to BBC, GM’s title as the number one carmaker remains true only in terms of sales. In 2007 it sold 9,369,524 vehicles--only 3,000 more than Toyota.
But by most other measures, most notably profits, the General has long since been demoted from the top spot.
Indeed, the fact that Toyota has long been the world’s most profitable carmaker is reflected in the company’s $196 billion market value--some 12 times the value of GM.
“The downside for GM is that if you bought GM stock in 2000 when [chief executive] Rick [Wagoner] took over, it was $75 a share,“ points out Paul Ingrassia, co-author of Comeback; The Fall and the Rise of the American Automobile Industry.

American Weakness
GM’s home market has been particularly tough in recent years. As a proportion of GDP, or gross domestic product, the American people are spending less every year on autos.
Hence new car and light truck prices have been falling by between 2 percent and 4 percent per year for more than a decade, and given that the US is in danger of suffering a recession there are few reasons to expect the situation to improve.
“The state of the US economy right now is at the weakest point since 2001,“ says GM economist Ted Chu.
In addition, soaring petrol prices have forced a rapid shift in the tastes of drivers, away from big pick-ups and sports utility vehicles, which account for more than half the cars sold by GM and its Detroit rivals Ford and Chrysler, towards fuel efficient alternatives produced by foreign competitors.

Done Deal
In spite of this, though, the future of GM--and indeed that of its fellow American carmakers--looks brighter than it has done for years, according to Ingrassia.
Much of this is thanks to a “historic“ deal struck with the United Auto Workers union, which he says “has the potential to be a game changer“.
Under the deal, GM agreed to pay $29.9bn into a fund that would take over responsibility for its retired workers health care liabilities--indeed, it was largely this commitment that forced GM’s 2007 net losses to such an astronomical level.
“Until recently, the Detroit companies could be defined, perhaps with some tongue in cheek, as more pension and benefit funds than car companies,“ Ingrassia explains.
Following the UAW agreement, “they’re free to make sensible, rational decisions“, he says. For instance, it is offering its unionized workers, who currently earn $28 per hour, voluntary redundancy.
This is part of its efforts to replace them with flexible workers who are paid half that, a shift that has been made easier by a single-state recession in Michigan, which contributes to the downward pressure on wages.

Shrinking Giants
“The Detroit companies will not dominate in the auto industry the way they once did [and they] will all be smaller enterprises than they once were,“ predicts Ingrassia.
But they have started making good vehicles again, for the first time in years, and that is a good start for companies eyeing a revival, he observes.
“We are starting to see some excellent products coming from Detroit, especially from General Motors,“ Ingrassia says, and January’s US sales figures back him up.
Outside North America, GM is not only driving fast-rising sales by building new factories in countries where labour is cheap compared with the US. It is also profitable, and in all regions except Europe its profits are rising fast. Indeed, even in Europe the American giant is making profits.

Asia isn't yet a haven for investors.

It isn’t just the seriousness of the subprime-mortgage crisis that’s unsettling.
What’s also disturbing, from an Asian perspective, is the scale of the stimulus package that has been put together to keep the US economy from tipping into a recession.
At $168 billion, the largess is almost three-fifths more generous than the record $107 billion that 22 rich nations together gave out as official foreign aid in 2005, the year after the devastating Indian Ocean tsunami, reported Bloomberg.com.
Middle-class Asians ought to turn green with envy at the home bias implicit in the munificence of the George Bush administration. Unlike the 111 million US households that will enjoy some tax rebate, there won’t be any checks in the mailbox for the Asian workers.
All they can do, if the going gets rough, is to blame their karma; and since many Asian cultures believe in rebirth, there’s always hope for better luck in the next life.
With the US Federal Reserve slashing interest rates, economies in the region are looking vulnerable. At the same time, if consumption in the US doesn’t revive quickly, exporters in the region may start cutting jobs. There already are signs of trouble: Taiwan’s unemployment rate unexpectedly rose to a seven-month high in December.
The talk last year was of a resurgent Asia decoupling from a slowing US economy and marching to its own beat. After the synchronous $5.2 trillion rout in global stock markets in January, those expectations have evaporated.
Just last month, the $3 billion initial public offering of Reliance Power Ltd. was rated subscribe by three out of four analysts. India’s biggest IPO attracted orders for 73 times the stock on offer when it closed on Jan. 18; yet, the shares fell as much as 21 percent on debut yesterday on the Bombay Stock Exchange.
India’s hunger for energy hasn’t abated in one month. The stock took a drubbing because of events unfolding half a world away.
Asia isn’t yet a haven for investors. Nor is the region’s rapid economic growth any match for Western prosperity. And that’s as true at a national level as it is for individuals: Being born in a developed country remains, by far, the biggest prize in the ultimate lottery of life. This may explain why rich countries pay poor ones for limiting annual emigration to less than 0.1 percent of the latter’s population.
However, this compensation, which goes by the name of official development assistance is only 0.3 percent of rich nations’ annual economic output, with the US contributing just 0.17 percent of its gross national income in 2006. By contrast, the plan that the US Congress has passed and sent to President Bush to reinvigorate the economy will cost the Treasury about 1 percent of national income.
This is an opportune time for Asian countries to drop the macho rhetoric about their non-existent economic resilience and demand--together with Africa--that rich nations fulfill their 1970 pledge to devote at least 0.7 percent of their national income to foreign aid.
The inordinate delay in meeting that goal has slowed the adjustment that’s needed to create a more balanced global economy with multiple centers of demand.
As long as Asian workers have little chance of improving their relative standing in the world without hoping to be reborn as Germans or Americans, decoupling will remain a myth.

Global carbon trading has gained momentum. The Worldwatch Institute, drawing from various studies, places the total value of the trade in 2007 at $59.2 billion, an 80 percent increase over 2006. As the 2012 deadline for reducing emission levels approaches, the volume of carbon trading will be enormous, reported Hindu.com.
Asian countries are the biggest sellers and western countries the biggest buyers. A World Bank report on the 2007 carbon market shows that China has a market share of 61 percent and India 12 percent.
The Government of India, as a part of its commitment to the Kyoto Protocol, set up in 2003 a National Clean Development Mechanism Authority, which has been reviewing proposals for carbon credits. However, the final credits are issued by the Executive Board of the Clean Development Mechanism at the United Nations Framework Convention of Climate Change (UNFCCC).
India has garnered 35 million of the 102 million Certified Emission Reductions (CERs) issued up to January 2008. This augurs well for the country and its entrepreneurs.
Nevertheless, a few issues surface time and again to remind us how the system can be improved. The pricing of CERs has become a major issue. Studies by groups such as the Centre for Science and Environment, New Delhi and by the New Zealand government on CER pricing have highlighted the lack of transparency. This hinders the just distribution of benefits and paves the way for manipulation.
The data available indicate that the price of CERs ranges from $11 to $22 and naturally such wide variation raises troubling questions. Arguments for lower prices emphasise scale, risk, and delay in delivery of CERs as determining factors.
However, the sellers who bear the burden of investment and delivery should be able to reap the benefits of better prices where they exist.
Information on prevailing prices should be easily and freely available. This becomes important in the context of calls for including community projects in the carbon trade.