The crime of alleviating poverty

a local community currency battles the Central Bank of Kenya – Published on Intrepid Report, by Ellen Brown J.D., July 1, 2013.

Former Peace Corps volunteer Will Ruddick and several residents of Bangladesh, Kenya, face a potential seven years in prison after developing a cost-effective way to alleviate poverty in Africa’s poorest slums. Their solution: a complementary currency issued and backed by the local community. The Central Bank of Kenya has now initiated charges of forgery.

Complementary currencies can help eradicate poverty.  

  • Proving that may be difficult in complex economies, due to the high number of factors influencing outcomes. But in an African slum with little of the national currency available, supplying residents with an alternative currency has a positive effect that is obvious, immediate and incontrovertible.
  • This was demonstrated when Will Ruddick, an American physicist, economist and former Peace Corps volunteer, introduced a complementary currency into a Kenyan slum called Bangladesh, near the coastal city of Mombasa. Will’s local development organization, Koru-Kenya, worked with over one hundred small business owners in Bangladesh, who agreed to give each other the equivalent of 400 shillings (about €3.5 or $4.60) in mutual credit in the form of business vouchers called Bangla-Pesa. Half of the vouchers would be available for spending on each others’ products and services, and half would be spent into the community on public projects such as waste collection and health services. Allocation decisions were democratic and transparent, and the new currency was backed entirely by the community’s own resources and insured by a system of group guarantors, not by the Kenyan government or a development agency.
  • The project was launched on May 11, 2013. The immediate effect was an increase in sales of 22%. That meant increasing incomes and purchasing power by 22%. These exchanges were of goods and services that without the additional currency would have been thrown away or gone to waste, not because they were unmarketable but because potential customers did not have the money to buy them. Introducing Bangla-Pesa worked to move the economy forward at full capacity, connecting the community to its own resources when the only things lacking were those slips of paper called “money.” A compelling video on the project is here.
  • The successful Kenyan experiment quickly earned endorsements from the United Nations, The Hague and the International Reciprocal Trade Association. Indeed, no other poverty alleviation or local governance program can compete with the cost-effectiveness of this approach, which is easily replicable in poor communities across Africa. The plan was to expand it to other villages in a democratic grassroots fashion so that it could provide a local medium of exchange for people throughout the continent. This would be done via mobile phones with a system provided by Community Forge, an organization based in Geneva that supports the development of community currencies worldwide.
  • But that plan was unexpectedly interrupted on May 29, when Will and five other project participants were arrested by Kenyan police and thrown in jail. Besides Will, who is married to a Kenyan aid worker and is a new father, the others include local community business owners who are parents and grandparents, a youth activist, a volunteer mother, and the caretaker of seven orphan children.
  • The police at first accused the group of plotting a terrorist overthrow of the government, claiming that Bangla-Pesa was linked to the MRC, a terrorist secessionist group. When that link was easily disproven, the Central Bank of Kenya was called in and charges of forgery were formally placed. Will and his fellow suspects have been released for now on a bail of EUR 5,000 and await trial on July 17. If convicted, they face seven years in a Kenyan prison.
  • Despite these perilous circumstances, Will remains optimistic. “The exciting thing,” he says, “is that these systems really do show a means of poverty reduction—and my hope is that after this case we’ll be allowed to spread them to slums across Kenya. There have been years of precedent for complementary currencies as a solution to poverty, and today there is no doubting it.”

Successful precedents from Switzerland to Brazil … //

… The legal debate: mutual credit or counterfeiting? … //

… Although these various measures increased the currency in circulation, prices did not inflate. To the contrary, studies found that in provinces in which the national money supply was supplemented with local currencies, prices actually declined compared to other Argentine provinces. Local exchange systems allowed goods and services to be traded that would not otherwise have found a market.

This salutary effect was also observed in Bangladesh. “With Bangla-Pesa,” says Ruddick, “we’ve seen that a circulating community-backed interest-free credit is a low-cost, effective way to increase local liquidity and decrease poverty.”

The defendants just need to prove that in court. A crowd-funding campaign is being used to raise the money urgently needed for their defense. The link for contributions is here. To sign a petition begun by a delegation at The Hague supporting the Bangla-Pesa, click here.

(full text with many hyper-links).

(Jamie Brown contributed to this article.
Ellen Brown is an attorney and president of the Public Banking Institute, PublicBankingInstitute.org. In “Web of Debt,” her latest of 11 books, she shows how a private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are webofdebt.com and ellenbrown.com
).

Links:

David Icke at the Bilderberg Festival 2013, and more, on HBB, by blog owner, July 2, 2013;

The contemporary significance of the Declaration of Independence and the Battle of Gettysburg, on World Socialist Web Site WSWS, by Joseph Kishore, July 1, 2013;

7 Future Methods of Mind Control, on Activist Post, by Nicholas West, June 30, 2013.

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