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27 Sep, 2009

Nobel Laureate Muhammad Yunus: How to Alleviate Poverty and Insecurity

Originally Published: 27 Sept 2009

A little more than a month ago, Bangkok was fortunate to host two Nobel laureates, Dr Joseph Stiglitz and Prof Muhammad Yunus, within the span of a week. In their public appearances, both conveyed powerful messages about how they saw the world today and where they felt it should be going next.

Although Dr Stiglitz, being Jewish and a former World Bank executive turned critic, got the lion’s share of the publicity, it was in fact Dr Yunus, a Muslim and globally recognised “banker to the poor”, who conveyed the same message as Dr Stiglitz, albeit in a more befittingly down-to-earth and grassroots manner.

Today, as delegates stream into Bangkok for the penultimate round of talks on attaining a global climate change agreement, it is the words of Dr Yunus that they need to keep foremost in mind.

While Dr Stiglitz condemned “the system” and its various political, financial and economic institutions for creating the global financial crisis, Prof Yunus suggested that those who created, aided and abetted the system were really responsible. Dr Stiglitz focussed on the policies, Prof Yunus on the people who created those flawed policies.

The challenge that this generation faces, asserted Dr Yunus, is to hand over to the next generation “a safer world, a more beautiful world than we inherited…..We have received a dangerous world and made it more dangerous to our next generation. That has to be reversed.”

He added, “Poverty is created by the system that we built. And many of us are involved in creating that system, in promoting that system. So if you want to see poor people get out of poverty, you have to change the system. If you go back and redraw and redesign the system in a way nobody will be deprived, nobody will be rejected, or misses the opportunity to discover themselves, then they will all come out (of poverty).

“If you don’t change the system and go back to (business as usual) again, it will be a very foolish thing to do.”

Last week, Dr Stiglitz presented to the U.N. a report on ways to restructure and re-engineer the global financial and economic system. Prof Yunus’ assignment was less lofty. He was in Bangkok to inaugurate at the Asian Institute of Technology a “Yunus Centre”, which he hoped would incubate an entirely new educational system to inspire young people to utilise their talent and harness the mind-boggling power of technology for a greater global good.

He said, “If we can imagine a world where nobody should be a poor person, we can create it. If we don’t imagine it, it will be never done. Imagining it is a first and most important precondition. It should be done in a way that young people who will be the forefront of it would like to see it (being achieved) in their lifetime.

“Poverty is not created by the poor people. It’s not their fault. They are as good human beings as anybody else; they are as creative and enterprising as anybody else. Simply they get never a chance to discover their own talents, unwrap their own gifts that they carry as human beings, to find out what a treasure each human being has inside of them.”

He said his own microcredit financial institution, the Grameen Bank, was a living example of how the system could be changed.

“This is what we have done in our work, challenging the financial institutions who do not lend money to the poor people. Almost two thirds of the world population has no access to the financial system. So we opened that door. People said it cannot be done, it is impossible. We made it happen in a small way, and then gradually it has spread all over the world. And it works beautifully.

“It is remarkable that when big banks, with lots of collateral, lots of lawyers around them, are collapsing, microcredit is working everywhere without any collateral, without any lawyers. Their (the poor people’s) repayment has remained as high as ever.”

Dr Yunus said that the various crises facing the world today “is not something that was suddenly created by someone. It is a continuous process.” And because it has created other associated problems like income disparities, poor health conditions, social problems, etc., it is precisely why “we cannot go back to that which creates all these problems.

“We need a new system which will change this situation and overcome the problems so that we have a world where poverty will not exist, environmental problems will not exist, and health care will be state of art and available to everybody. And it’s possible.”

Said Dr Yunus, “In the process, we are talking of a new framework for economics. Today economics has only one kind of business, to make money. Profit maximisation is the mission of business. And I am pointing out that that is not consistent with the human being that we see around us. Real human beings are not one-dimensional. But economics somehow imagines that they are, that all they do is make money.

“We are not (just) money-making machines. We enjoy making money but there are other enjoyments also. So we have to take all the enjoyments, not just one enjoyment.”

Dr Yunus said human beings are both selfish and selfless at the same time, and both need to express themselves.

“The basis of selfishness is created. It takes the form of conventional business that we see where we accumulate everything for ourselves. But I am proposing to create another kind of business based on selflessness, where getting things for myself is not the intention. The intention is to make it happen to others, and nothing for me. I am calling it social business. So we can do both.

“Social business is non-loss, non-dividend company that is set up especially for addressing a social problem like environment, food security, health, but functions as a business. This means that the money invested in it recycles and continues to work, unlike a charity given through foundation, trusts, and so on.

“Where charity goes, it never comes back. It achieves only once. But if you put that money into a social business format, it recycles, achieves much more. So we are encouraging the young people to look at this option and choose their life, how they will divide themselves between money-making aspects and social business, (in order) to change the world.”

Noting that today’s generation, and especially the young, is very enamoured of technological gadgets, he said, “All these technologies are in the control of the money-making business. The only use they make of it is to make more money. So I am saying, why don’t you open it up? So that you make money and at the same time, and let this technology be used (for) social business to wipe out the problems we have.”

That, he said, would be the role of Yunus Centre – “how to bring business and young people together, to work together, bring together technology, the creative minds of business and creative minds of the young people and the dreams of young people to apply it to social business so that we can have a different kind of world.”