Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : THE OPENING OF THE RSC-AP MEETING
Tarikh/Date : 13/10/97
Tajuk/Title : THE OPENING OF THE RSC-AP MEETING
1. First of all, I would like to extend a warm welcome
to all delegates to this meeting of the First Ladies
Regional Steering Committee on the Economic Advancement of
Rural and Island Women of the Asia-Pacific Region (RSC-
AP). Your presence here today is evidence of your
interest and commitment towards achieving the objectives
of the RSC-AP.
2. A substantial number of women in the Asia Pacific
region live in the rural areas. Despite concerted efforts
to eradicate poverty in these countries, vast numbers of
rural women still live in poverty. It is for this reason
that a meeting such as this is important to ensure a
better coordinated effort towards resolving this deep-
rooted problem.
3. All over the world, the feminisation of poverty has
increased the realisation of the need to develop more
effective and appropriate policies, strategies and
programmes to improve the living standards of rural women.
Non-governmental organisations have played increasingly
important roles in advocating poverty reduction, thus
complementing national governments' efforts at improving
the lives of the poor, generally increasing productivity
and the more equitable sharing of national wealth.
4. Some of these institutions have grown to be mass-
based banking institutions. Institutions such as the
Grameen Bank, Association for Social Advancement (ASA) and
Bangladesh Rural Advancement Committee (BRAC), and Amanah
Ikhtiar Malaysia (AIM) are examples of institutions that
have successfully reached out to thousands of rural poor
women. The important discovery of micro-financing, a
powerfully effective and efficient tool in poverty
reduction and in bridging the income gap between the poor
and the rich, marks the beginning of a new era towards the
ultimate eradication of poverty in our nations.
5. In Malaysia, progressive national and rural
development efforts over the past four decades have
reduced the incidence of poverty substantially. The
reduction in the incidence of poverty from more than 70
percent at the end of 1969 to less than 10 percent by the
end of the Sixth Malaysia Plan is testimony of the
success. However, despite this impressive gains, much
work remains to be done. This is an area which is common
to us all and an experience which we can share.
6. The Malaysian Government also acknowledges the role
of the Centre for Policy Research at University Science
Malaysia (USM) in their Research and Development efforts
that have successfully replicated the Grameen Bank
Approach and in the process has generated self-reliance
among the rural poor of Peninsula Malaysia. From an
applied research project of USM, initiated in 1986 with
the collaboration of the Selangor State Government, the
Islamic Economic Development Foundation (YPEIM), the
Economic Planning Unit (EPU) and the Implementation
Coordination Unit (ICU) of the Prime Minister's
Department, the Ikhtiar Project was institutionalised in
1987 as a private registered Trust of Amanah Ikhtiar
Malaysia (AIM). In close collaboration with other state
Governments and the Ministry of National and Rural
Development, AIM has an outreach of 47,000 poor
households, i.e almost half of the poverty households in
Malaysia.
7. The increasing needs of on-loan funds has made AIM
resort to sourcing funds from private commercial banks and
the Credit Guarantee Corporation. To date, AIM has
contributed more than RM20 million and AIM's repayment to
these financial institutions has been impressive.
8. Women in the Asia Pacific region have the most
poverty load in the world. The effort to find the means
of generating as well as increasing their income becomes
crucial. It is therefore appropriate and timely for the
RSC-AP, to focus its attention in alleviating the poverty
of the rural women. One of the main constraints towards
the realisation of poverty-free nations in the Asia-
Pacific region is in financing the numerous poverty-
focused Micro-Finance Institutions (MFIs) so as to become
sustainable financial institutions that can really tackle
massive rural poverty not only by increasing their incomes
but also of empowering rural women to improve their own
lives.
9. From the RSC-AP Teheran Seminar in April 1997, the
idea of an independent national revolving fund is proposed
and adopted as the most crucial measure towards achieving
the goal in reaching 70 million poor women in the Asia-
Pacific region with the poverty-focused MFIs by the year
2005. We believe that mobilisation of financial resources
from within our own nations should be the first step
towards self-reliance and gaining dignity for indigenous
ways of generating funds. This is more appropriate than
relying on multilateral and bilateral donors. The
indifference of the rich countries to our economic
situation should motivate us enough to take the
initiatives in looking into the potential of this region
for alternative paths to sustainable progress. In fact,
collectively the nations of RSC-AP can mobilise resources
without the need to be overdependent on developed
economies. If countries in this region are to put their
acts together in promoting and implementing the poverty-
focused micro-finance for self-employment, we can expect
massive poverty reduction in the next decade, thereby
complementing the national effort of the respective
governments further.
10. Experience has shown that international financial
institutions which are expected to assist the poverty-
focused MFIs have instead served the big financial
institutions and foundations in the guise of assisting the
poorest. They undermine micro-finance by perpetuating the
mentality of charity to these financially viable
institutions, which eventually deprive them of the
critical missing link to the scaling-up of outreach to
more poverty households and reaching financial viability
and sustainability, i.e funds for capacity building and on-
lending.
11. These are grounds to believe that the time is
propitious for a new initiative. The barriers which have
acted as stumbling blocks to many countries in the Asia-
Pacific region should be sufficient lessons for us to
strengthen our resolve and commitment to establishing our
own indigenous and small MFI -- friendly financial
institutions. I believe that through concerted efforts
and commitment from NGOs and the private sectors, we can
create the greatest social development engineering for the
poor in the next century. Towards this end, the RSC-AP
funding proposal can be utilised as an alternative to
those multilateral multi-donor international fund intended
to assist the poor.
12. While funding proposals as envisioned by RSC-AP can
be replicated in many other member nations, we should also
consider establishing a national revolving fund along the
lines of Palli Karma Sahayak Foundation (PKSF) of
Bangladesh, whereby the government establishes a non-
profit institution under the Company's Act whose sole
objective is to provide loans to small MFIs to scale-up
their operations while promoting other NGO's to go into
poverty-focused Micro-Financing.
13. Given the magnitude of the demands to serve the needs
of 70 million poor women by the year 2005, RSC-AP member
nations have to create both capacity-building and on-
lending funds from other private as well as public
sources. As all our countries have quite a number of
private and public commercial banks and financial
institutions that are cash rich, MFIs have to access those
resources much more in the near and medium term, but in a
purely commercial endeavour with near perfect repayment to
attract these financial institutions to participate. MFIs
in the long run will enable the poor to have their fair
share of the economic wealth and resources.
14. As has been successfully demonstrated by the Grameen
Bank of Bangladesh, it is not only a bank for the poor but
also owned by the poor themselves as 92 percent of the
shares are in the hands of the poor mostly women borrowers
who put up a nine member Board of Directors from among
themselves. Grameen is showing the way for RSC-AP to
replicate in providing basic communication on
infrastructural facilities such as the Grameen solar
powered telephones, Grameen Internet, the Fisheries
Foundation, the Agricultural Foundation and Grameen
handlooms Checks.
15. Housing is another arena that the poor are very
poorly endowed with. In countries that have massive rural
poverty, providing affordable housing for the poor is an
increasing and difficult challenge to most governments in
the Asia-Pacific region. Here again, we have the Grameen
Bank model in providing us the important lead through
housing loans to poor borrowers and allowing repayment
over 10 to 15 years at a market interest rate of 8 percent
per annum. This again proves that the poor are self-
reliant and bankable and such track records are almost
universal in banking among the very poor and has passed
the test of time.
16. To achieve this noble endeavour, the banking sector,
governments and MFIs should work together towards creating
a supportive national policy framework for the creation of
an environment for MFIs to be nurtured into financially
viable and sustainable institutions that will complement
the national goal and self-reliance strategy in our
communities, thus making them less dependent on foreign
donors.
17. The tasks before us are formidable. However, with
invaluable assets and dynamism in working towards common
prosperity and stability in the region we will together,
God willing, achieve our desired goals. Malaysia is
committed to ensuring that RSC-AP remain strong, viable
and a cohesive regional organisation. I am confident that
we will succeed.
18. On this note, I now officially declare the Meeting of
First Ladies RSC-AP open.
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