Vol. 5 Num 903 Mon. December 11, 2006  
Front Page

Yunus unveils vision to end global poverty
Nobel Committee terms him 'Modern Gandhi' as he receives peace prize

Micro-credit pioneer Prof Muhammad Yunus of Bangladesh, founder of Grameen Bank, unveiled a bold vision for ending global poverty as he was awarded the Nobel Peace Prize yesterday.

"Poverty is a threat to peace," the economist turned humanitarian banker said accepting the 1.1 million euro (1.4 million dollar) prize. "The frustrations, hostility and anger generated by abject poverty cannot sustain peace in any society in the world."

The Grameen Bank, which shared the award, has helped millions in Bangladesh extricate themselves from penury through tiny, collateral-free loans, and has been successfully emulated throughout the world over the last decade.

In his prepared speech, Yunus outlined the contours a parallel economy based on self-sustaining "social businesses" -- such as Grameen and several joint ventures he has created with multinational corporations -- that reinvest profits rather than paying dividends.

"By defining 'entrepreneur' in a broader way we can change the character of capitalism radically, and solve many of the unresolved social and economic problems within the scope of the free market," Yunus said.

Once recognised in law, Yunus predicted, these social businesses will eventually develop their own capital markets to attract investment.

Calling the 66-year-old Bangladeshi a "modern Ghandi," the Norwegian Nobel Committee saluted his efforts "to create economic and social development from below.

"Lasting peace cannot be achieved unless large population groups find ways in which to break out of poverty. Micro-credit is one such means," said Committee Chairman Ole Danbolt Mjos, adding that such initiatives "advance democracy and human rights."

Yunus also used the Nobel platform yesterday to criticise purely military strategies for combating terrorism, which often springs, he said, from deep-seated poverty.

"I believe that terrorism cannot be won over by military action," he said. "I believe that putting resources into improving lives of poor people is a better strategy than spending it on guns."

Also accepting the award on behalf of Grameen Bank's seven million investor-borrowers was Mosammat Taslima Begum, who used her first 16-euro (20-dollar) loan in 1992 to buy a goat.

Today she has expanded her entrepreneurial activities to include a small mango orchard, a fish pond and a rickshaw for transport -- operated by her husband -- and is one of the bank's nine elected board members.

"If you multiply Taslima by seven million you get a sense of the impact of Grameen Bank in Bangladesh," Yunus told journalists on Saturday.

All but two or three percent of the borrowers at Grameen, which is 94 percent owned by depositors, are women, one of three focal points for the 2006 award.

"The Norwegian Nobel Committee wishes to focus attention on dialogue with the Muslim world, on the women's perspective, and on the fight against poverty," Mjos said.

Yunus said that new mechanisms must be found to redress gaping inequalities in wealth distribution, noting that 60 percent of the planet's population live on only six percent of global income, and that one billion people subsist on less than a dollar a day.

But micro-credit is only part of a broader vision in which Yunus sees the development of a kind of socially-conscious capitalism.

He has already launched several social businesses, which he hopes will motivate established corporations and young entrepreneurs to follow suit.

A partnership with French food giant Danone, for example, produces and markets nutrient-rich yogurt at near break-even prices in Bangladesh, while another venture -- with US companies Cisco Systems and Quadcomm -- focuses on providing affordable access to mobile telephony and the Internet.

Both are what Yunus calls "non-loss, no-dividend companies."

Indeed, Yunus argues that modern communications technology -- mobile, borderless -- is one of the most powerful tools available for eradicating poverty.

One of Grameen's most successful lending programs has targeted rural women who borrow money to purchase a mobile phone, and then sell telephone services in their village.

There are today over 300,000 of these so-called "telephone ladies" throughout Bangladesh, including four on the 13-member board of directors of the bank.

All of them came to Oslo this weekend to share in the glory of what Yunus describes as their collective achievement.

See Special page for full text of Prof Yunus' Nobel lecture.

Prof Muhammad Yunus and Grameen Bank representative Mosammat Taslima Begum receive the Nobel medal and diploma from the Chairman of the Norwegian Nobel Peace Prize Committee Ole Danbolt Mjoes at Oslo City Hall yesterday. PHOTO: AFP