Proposal For Nobel Prize For Yunus

Clinton suggests a radical approach to development
based on Grameen Bank model

At Home and Abroad

S SM Ali

(Reprinted from The Daily Star of September 19, 1992)

Proud as we are of the performance of the Grameen Bank, a success story of Bangladesh, we should be gratified with the suggestion of the US presidential nominee of the Democratic Party, Bill Clinton that Prof Muhammad Yunus, the founder and the chief executive of this unique institution, should be awarded a Nobel Prize.

The Governor of the Arkansas who dealt with the relevance of the Grameen Bank to his own state, one of the poorest in the United States, made the suggestion during a wide ranging interview to a team of writers of the Rolling Stone, a popular high-circulation US magazine, published in its latest issue of September 17.

The clipping of the interview has just been made available to The Daily Star.

In discussing the performance of the Grameen Bank, Clinton spoke on problems facing his state and suggested how a radical approach to the banking system could help the disadvantaged groups.

He said, "I think, every major urban area and every poor rural area ought to have access to a bank that operates on the radical idea that they ought to make loans to people who deposit in their bank."

Then, when asked to elaborate on his radical approach, Clinton referred to the South Shore Bank, essentially a development oriented institution, which had been in operation in his state. "It's made some mistakes, but on balance, its done a lot of good," he added.

This is when he made his first reference to the Grameen Bank during the interview.

Said the US presidential candidate, "You know, the South Shore Bank's Good Faith Fund (providing) loans to real low-income people, mostly for self-employment ventures, was based on the work of Muhammad Yunus at the Grameen Bank in Bangladesh, which until the recent natural disasters, had a ninety-seven percent loan-repayment rate, better than the commercial banks in Bangladesh, even though it was making loans almost exclusively to poor people."

Clinton's thorough knowledge of the Grameen Bank took one interviewer, William Graider, by surprise. He asked, "I am intrigued because, with a few eccentric exceptions, I think, you are the only politician I have encountered who has heard of the Grameen Bank."

Clinton replied, "I think, Muhammad Yunus should be given a Nobel Prize." Then, the Governor went into some details as to how he came to know about the Grameen Bank, through the roommate of his wife in college, and then of his one hour and a half meeting with Muhammad Yunus in Washington.

To quote the presidential candidate again, "I spent an hour and a half with Yunus. I was just blown away. It was obvious what the parallels were. He made enterprise work. He promoted independence. Not dependence. The idea struck me that whenever the power of the government is used to create market forces that work, it is so much better than creating a bureaucracy to hire a bunch of full time people to give somebody a check."

From there, Clinton moved to other topics outlining his ideas for the regeneration of the economy and the revival of a new spirit, the kind of spirit that once moved the hearts and minds of people during the Kennedy presidency.

The proposal from Bill Clinton to give a Nobel Prize to Yunus comes at a time when grassroot development in most Third World countries faces one challenge after another. While many approaches are being rejected, donor nations and agencies encounter resistance in selling their prescription for "structural adjustment" to countries which cannot -- just cannot -- cut out agricultural subsidies or open their doors wide open to free imports.

In this scenario, the Grameen Bank provides an option that has granted the widest possible acceptance from all quarters, from the World Bank and UNICEF to national governments and voluntary organisations. Now, a presidential candidate in the United States has emerged as its latest -- and apparently strongest -- supporter.

The Nobel Prize Committee has so far taken little notice of exponents of Third World development which aims at the reduction of the poverty level, through direct participation of the poorest of the poor, placed in the low-in-come groups. It has taken still less notice of people who are also themselves participating in the development process, instead of attending seminars and delivering seemingly learned talks.

The claim of Muhammad Yunus to a Nobel Prize would, therefore, rest on the award committee looking at the work of this Bangladeshi expert from a different perspective.

However, it won't be that unusual a choice as some may think.

In 1970, Norman Borlaug of the United States won the Nobel Peace Prize for his work in producing the high-yield variety of wheat that rescued Asia from famine and paved the way for a Green Revolution.

There is an invisible link between the work of Yunus and the success story of Borlaug. Both are geared to the grassroot development in the Third World by changing the realities which poor farmers and people with hardly any income had been taught to accept for generations.

There is another link between these two outstanding men from two different parts of the world.

While Muhammad Yunus continues to expand the network of the Grameen Bank -- its latest newsletter puts the number of its branches at 961 -- and inspires countries even in other continents to follow the model, Borlaug, now 78, has now turned to Africa to see if parts of the continent, now facing drought and famine, can have its own Green Revolution.

Tentatively, Borlaug's answer is "yes", reports Richard Critchfield, one of the best writers -- my own favourite for decades -- on rural development. Author of "Those Days" and "Villages", Critchfield may also be in his late seventies.

Borlaug's remedy is simply this: Marshal all available knowledge of African crops, fertiliser use, control of insects and weeds, and use of moisture. Then, try all this out in African fields.

The initial results of Borlaug's experiments in several African countries are highly promising. In many places, yields have risen an average of 2.5 times. Borlaug began with wheat and sorghum in Sudan and maize in Ghana. Despite the civil war, the Sudanese harvested 800,000 tons of wheat in March, up from 160,000. Ghana's maize production has gone up by 40 percent. Mexican scientists working with Borlaug are now operating in Tanzania. Benin and Togo and are moving into Nigeria and Ethiopia.

In short, Borlaug would do in Africa -- he would certainly try his best -- what has worked in Asia.

Unfortunately, Borlaug encounters some opposition, some of it, sadly enough, stemming from the World Bank.

To quote Critchfield, "World Bank senior officials are wedded to such voguish policies as structural adjustment. Sensible enough in theory, it goes wrong in practice when the bank opposes fertiliser subsidies and argues that more research in needed. The Bank funds what it calls its 'training and visit' system of 27 African countries."

Then, Critichfield quotes none other than Borlaug as telling him during a meeting in Washington, "The World Bank says you can't justify this field work because enough research has not been done, even though we have demonstrated clearly that we can double, triple, sometimes even quadruple yields." Then, Borlaug adds, sadly and not sarcastically. "They have never lived in Africa. They live in an ivory tower called the World Bank."

This account of the battles Borlaug is fighting in Africa may remind Yunus of what he had faced in setting up the Grameen Bank in Bangladesh, the hostility from commercial banks, the scepticism of the public and shortage of funds, among others.

Both Borlaug and Yunus have come a long way in reaching their goals, in saving millions of people from hunger and unemployment. Maybe this is why the success of one reminds me of the work of another.

Besides, who knows that in not too distant future, the two may be working together as a team, in changing the grim realities in two of the most impoverished regions of the world. South Asia and Africa.

Profile

Muhammad Yunus, the visionary and developer of the unique microcredit concept, was born at an obscure village in Chittagong in June 28, 1940. He was the third of 14 children of Sufia Khatun and Mohammed Dula Miah, a jewellery merchant. But five siblings of Yunus died in infancy.

Yunus is now leading a happy life with his wife Mrs Afrozi and daughter Deena.

The Grameen Bank, which Muhammad Yunus founded and shares the Nobel Peace Prize 2006 with, now has 2,211 branches covering 70,370 villages and 6.5 million people.

Coming of a well-off family, Yunus was able to attend preparatory school in Chittagong. After that, he studied in Chittagong Collegiate School and Chittagong College. He completed his BA and MA from Dhaka University. He received his PhD in economics from Vanderbilt University in 1969 after getting Fulbright scholarship. He did some teaching in Colorado University too.

Towards the end of his seven-year stay in America, Yunus supported the Bangladeshi freedom movement. when West Pakistan forces occupied the capital Dhaka. Returning to Bangladesh and observing the poverty of rural people in the clutches of exploitative moneylenders, Yunus came up with the idea of microcredit.

Yunus first involved himself in fighting poverty during the 1974 famine in Bangladesh. He discovered that very small loans could make a significant difference to a poor person's ability to survive. The first loan he gave was of $27 from his own pocket. He lent it to 42 female basket weavers in the village of Jobra near Chittagong University. He discovered that they could repay the amount very quickly by selling their goods in the market.

However, banks were not interested in giving tiny loans to poor people and they considered the poor to be bad borrowers. In 1976, Yunus launched the activities of Grameen Bank and started giving loans to poor Bangladeshis against the advice of banks and the government. He carried on giving out micro-loans and in 1983, he officially formed the Grameen Bank, meaning village bank, on the principles of trust and solidarity.

The Grameen Bank's method of giving out loans is now used in projects in 58 countries, including the US, Canada, France, the Netherlands and Norway.

In 1997, Professor Yunus led the world's first microcredit summit in Washington, DC.

Dr Muhammad Yunus received over 60 different national and international awards before winning the Nobel Peace Prize, 2006