A fine, fine choice for the Nobel Peace prize! Mohammed Yunus and the pioneering micro-credit institution he founded, Grameen Bank. More on this as we get time to put together a full post, but here is the Nobel Peace Prize committee press release:
The Norwegian Nobel Committee has decided to award the Nobel Peace Prize for 2006, divided into two equal parts, to Muhammad Yunus and Grameen Bank for their efforts to create economic and social development from below. Lasting peace can not be achieved unless large population groups find ways in which to break out of poverty. Micro-credit is one such means. Development from below also serves to advance democracy and human rights.
Muhammad Yunus has shown himself to be a leader who has managed to translate visions into practical action for the benefit of millions of people, not only in Bangladesh, but also in many other countries. Loans to poor people without any financial security had appeared to be an impossible idea. From modest beginnings three decades ago, Yunus has, first and foremost through Grameen Bank, developed micro-credit into an ever more important instrument in the struggle against poverty. Grameen Bank has been a source of ideas and models for the many institutions in the field of micro-credit that have sprung up around the world.
Every single individual on earth has both the potential and the right to live a decent life. Across cultures and civilizations, Yunus and Grameen Bank have shown that even the poorest of the poor can work to bring about their own development.
Micro-credit has proved to be an important liberating force in societies where women in particular have to struggle against repressive social and economic conditions. Economic growth and political democracy can not achieve their full potential unless the female half of humanity participates on an equal footing with the male.
Yunus’s long-term vision is to eliminate poverty in the world. That vision can not be realised by means of micro-credit alone. But Muhammad Yunus and Grameen Bank have shown that, in the continuing efforts to achieve it, micro-credit must play a major part.
fwiw.. by 70’s desi standards, a 10% govt ownership is about as close to totally free market as you can get.. That’s a lower state ownership than many ostensibly “free” european banks…
for those wondering about celebration, there’s one going on right now in the Bangladeshi neighborhood of Macdonald Ave. in Brooklyn.
hmmm…by those standards, the prophet of British imperialism would be a desi Nobel laureate.
touche.. my point was that if you claim Naipaul to be desi.. then we might as well expand the definition and call Ross desi
Not giving loan to an individual but a group. You can spin it around and say cooperatives work. It is also not capitalism since their main aim is not to maximise profit but other benifits, and ofcourse they make a point of not loosing money. Microcredits’ success is disproporinate to the actual income generated or saved due to the spinoff activities. You might as well spin it as “a self-sustainable project for collective good”.
Key points being not using force and creating an appropriate solution which works.
We’re in broad agreement about most points; the root difference is the semantic definition of “capitalism”… You’re arguing it’s “profit maximization” (and thus Grameen isn’t capitalism). I’m arguing that profit maximization is just one outcome of capitalist systems BUT that the real defining aspect is “not using force” (and thus Grameen is consistent with capitalism). I hunted around on Wikipedia a bit and found this “philosophical” definition of Free Markets –
By way of analogy, Bill Gates voluntarily donating up his billions for Malaria programs is 100% consistent with Free Markets / Capitalism because the capital owner (Bill) is acting voluntarily. He is NOT, however, profit maximizing in the strict dollars sense. But, neither am I when I splurge and engage in most forms of consumption rather than investment.
that is news to me. So maximisze profit/efficiency and all other good things will follow is not capitalism ? Why isn’t “Infantile marketism” still a major force.
It was an American abolitionist named Lewis Tappan who is credited with starting the first credit rating agency
From Wiki entry:
Read the Wiki entry if you dont know about Tappan… Being a capitalist and a humanist isnt an either or thing.
voiceinthehead:
I think you’re reading too much into group lending. Traditional lenders often ask for co-signers to loans in order to utilize social pressure and insurance for repayment..
The beauty of the program is that it is not an entitlement, it is not a government program, and thus it creates the opposite of a culture of dependency…empowerment. The borrowers are not asked to sacrifice their own profits for the greater collective good. The poor are learning to live as capitalists.
i’ve heard yunus himself say his primary goal is to turn a profit. That he may have ulterior motives is not unusual for capitalists despite the stereotype of them (Companies often have other goals: he biotech entrepreneur who wants to cure cancer, the newspaper publisher who wants to be the paper of record, fair and balanced). And since youÂ’ve read Rand, i’m sure you know all her heros sacrificed money, power, prestige, indeed virtually everything but their selves, for their principles.
It’s certainly the caricature of Capitalism used by many of its detractors and that view certainly gets a lot of airtime. But, in most serious environments, folks accept that there’s more to capitalism than just maximizing returns (heck, there are things I could be doing right now to max profit / efficiency but I LIKE discussing esoteric topics with folks on the internet and no one’s forcing me to do otherwise – and noone would accuse me of not being a capitalist ;-).
I’m not familiar with this? Googling didn’t turn anything up either. Got a pointer?
As far as I can tell, the magic of Grameen is that there has never been state involvement. It’s been a private entity from the outset…
Actually the bank is substantially subsidized by grants and aid agencies, even after charging rather high interest rates. The project isn’t economically viable in and of itself.
Kumar Pallana:
from what i understand the fund/bank itself turns a profit and is econimically viable in and of itself. But he funding of the bank itself started with govt $$ below market rates, although these days the govt of bangledesh only owns 6% of the bank.
The theory, going forward, being championed by vinod khosla is that this template could be duplicated w/ private $$ b/c it has proven itself to be economically viable. there is some controversy, and to be honest it sounds a bit too good to be true, but if you have any sources that contradict what i say i’d love to see them.
Argh. It should have been “Why is Infantile …” So holding corporates and govt accountable for externalities on threads like this doesn’t make me or the blog tilt left. http://www.sepiamutiny.com/sepia/archives/003647.html. You mean your fans, who donot express their views and wish for glorious past when you blog more do not have your support.
Manju thanks for providing an example of “infantile capitalism”. Why is its beauty enhanced by the simple fact that it is not a govt program. Wouldn’t govt programs which do not involve force, dependence, entitlement be as good as any. Wouldn’t they be entitled for the capitalist label.
If the government did it it would invlove force. Think about it.
No, in 1995 a world bank report judged the bank to be financially unsustainable and this 2002 article reports pretty much the same, a heavy dependence on foreign aid in the funding of the bank, and this is after already charging 20% interest rates. The article goes on to deflate a lot of the microcredit hype by pointing out various inconvient facts of its actual track record.
http://taylorandfrancis.metapress.com/index/YWH5NC61HYC14JAP.pdf
Microcredit seems to me to be the basically the right-wing counterpart to the government bureaucracy solutions of the 60s and 70s, heavy on rhetoric, light on results. Seems to almost be a familiar pattern now in the economic development literature, schemes get proposed that vindicate some particular ideology and the poor stay poor.
I wanted to leave a comment on how peace in today’s world depends on more than just talk. Last year someone won for planting trees…a lot of them…and rightly so (IMHO)
AND
If you want to see a Nobel peace prize winner in the flesh, and you happen to be in DC…
Busboys and Poets Books 2021 14TH STREET NW 202-387-POET Questioning…challenging…re-thinking…the world behind the headlines. Operated by Teaching for Change
October 20, 2006 (Friday)
8:00 – 10:00 PM (Langston Room) Nobel Peace Prize Winner WANGARI MUTA MAATHAI will discuss and sign her new book Unbowed. Wangari Muta Maathai is a Kenyan environmental and political activist who in 2004, was awarded the Nobel Peace Prize for “her contribution to sustainable development, democracy and peace.” She is the first African woman to receive the award. Hon. Dr. Maathai is also an elected member of Parliament and served as Assistant Minister for Environment and Natural Resources in the government of President Mwai Kibaki between January 2003 and November 2005. This event is free and open to the public.
sorry she won in 2004, not 2005
I met Wangari Maathai years before she won the Nobel, and she impressed me. However, she does have some bizarre and (IMHO) ill informed views about AIDS.
I admire Honorable Younus’s clear vision. His 2003 lecture in Common wealth nations, according to me, have the strength to be awarded with Nobel Prize. But he has done a lot more than that. He has not given the philosophy but he has acted upon it. According to me this is the point where Marx failed but he has succeeded by implementing his thoughts in a country remaining away from the Power. He has done and is doing a great job. May Allah help him in achieving his all the goals and may his all dreams be shaped in to reality. With love
Nobel Laureate Dr. Yunus : Let charity begin at home
In a recent interview with a young group of representatives of the Hong Kong Bridge Society, Professor Yunus identified the weak political system as the root cause of corruption and held the political parties responsible for nourishing the same. In his typical style, especially after wearing the current crown of the debated Nobel Peace Prize, he prescribed yet again a poor and wilfully “distracting from the root cause” solution, by asking the children to revolt against their parents by showing strong hatred to them in such cases. Although I do not endorse his ideas or solutions, I would expect him to let charity begin at home in testing his own prescription. Professor Yunus must be aware that an official request has already been made on 10.12.06, in response to an appeal by the Durniti Daman Commission (a new and supposed to be independent version of the former Anticorruption Bureau) to enquire on the allegation of illegally smuggling out of Bangladesh, thousands of crores of taka (worth a few thousand Nobel prize money and the highest-scale corruption in a single sector which evidently made Bangladesh much poorer and the drainage of huge amount of money is still continued) by the Grameen Phone and the Grameen Bank. The complaint also includes illegally snatching sky-high interests by bluffing the 70 lac simple women folk borrowers. The matter was published on 04.12.06 in the Daily Ittefaq too. According to a report published in the daily Ittefaq on 18.12.06, Professor Yunus confessed that a share holder of Grameen Phone is responsible for illegally snatching crores of taka from the poor people of Bangladesh. Grameen Phone was enjoying the monopoly of mobile phone business since 1996. Recently, in the competitive market, they had to drastically reduce the price of their sim cards to Tk. 500/- from Tk.1,50,000/- (!) , call charge per minute to Tk.0.80 from Tk. 7.00, recharge system to monthly/biyearly/yearly basis from only 21 days, which obviously makes the allegation of illegally smuggling out of Bangladesh, thousands of crores of taka justifiable, on the basis of their more than 1-crore subscribers. It is not unknown anymore to anybody that because of the friendship with Mr. Clinton (since his studentship) and Ms. Hillary and the service of President Clinton as the “Chief Publicist” of Professor Yunus and “many other reasons ” which pleased (!) the western world, Professor Yunus was a top favorite person to the West. Therefore, the people certainly has the right to ask Professor Yunus, how effective was his influence (backed by the interested powerful western countries) in getting the right of monopoly mobile phone business in the country for Grameen Phone and which government(s) and govt. servant(s) were responsible for giving that gift of monopoly, and why he is admitting all these now after thousands of crores of taka have already been looted out illegally from the poor people of Bangladesh and why didn’t he unveil the conspiracy beforehand. Regarding Grameen Bank, let a research oriented write-up styled as “Grameen Bank : Poverty alleviation or elevation” (1994), published in 1995 in largely circulated dailies and periodicals be referred to. The research work was sent to many places both at home and abroad including Grameen Bank, Ministry of Finance and Bangladesh Bank for their comments and necessary action. Later, many similar write-ups and letters on Grameen Bank and NGO’s have also been published, each in the largely circulated dailies and periodicals in the last more than one decade. But no reply has yet been received from any authority including Grameen Bank. Although, there were many allegations against Grameen Bank in those write-ups and letters, only 4(four) of them are placed today. (1) Effective minimum rate of interest on general loans of Grameen Bank is 36% (correctly 43.63%). (2) It is better to take loans from the blood-sucking money lenders offering loans @ 219% interest than from Grameen Bank, because of the additional hard conditions of Grameen Bank, besides interests. (3) The propaganda that “Grameen Bank gives loan without any security” is nothing but a complete bluff. (4) The Western countries become very happy if a portion of their uncountable and surplus wealth from the sale of arms is reinvested in the exorbitantly high interest oriented poverty business, since they get hardly any place to invest such a huge wealth with guaranteed return. Elaborate discussions have been made in the above mentioned write-ups. In a recent interview with the TV channel-I, Professor Yunus, on the question of money lending at exorbitantly high rate of interest replied “various comments are normal in new kinds of ventures”. No, Dr. Yunus, your such answers or even hundreds of foreign Nobel certificates aren’t acceptable answers to the very serious type of allegations against Grameen Bank. Therefore, I would expect the family members of Professor Yunus to revolt and pressurize him either to accept the serious allegations like making the motherland poorer to a great extent and illegally snatching sky-high interests by bluffing 70 lacs of simple women folk borrowers or to face the long over due challenges with courage and honesty, by arranging a seminar in the presence of a patriotic media.
On the question of root causes of corruption, well-planned poverty sustainability and moral degradation programs, discussions have been made in the above mentioned write-ups and also in a recent world wide widely publicized (more than 6090 international sites including Wikipedia and Guardian Unlimited, many commercial CDs have also been brought) article titled “100-Dollar Laptop: UN Secretary General’s Office shouldn’t be used for exploiting the poor”.
Nazmul Huda 38/10 Siddheswari Road, Dhaka-1217 nazinvbd@yahoo.com
To: Post number 4 · SP on October 13, 2006 11:44 AM – Amartya Sen is an Indian and not a Bangladeshi. Get your facts right before commenting anyhow you like please.
To post No 31 · Al beruni on October 13, 2006 01:03 PM – Going by your logic if Bangladesh had granted a honarary citizenship to Saurav Ganguly and Sachin Tendulkar- and later they win the cricket world cup for India- then you will say Bangladesh won the World cup?. This is rubbish logic.
To post No 31 · Al beruni on October 13, 2006 01:03 PM – Going by your logic if Bangladesh had granted a honarary citizenship to Saurav Ganguly and Sachin Tendulkar- and later they win the cricket world cup for India- then you will say Bangladesh won the World cup?. This is rubbish logic. Bangladesh does not have the educational system or infrastructure or expertise to create economists of the calibre of Amartya Sen.
Well, does India have educational system or infrastructure or expertise to create economists of the calibre of Amartya Sen? Sen began his schooling at St Gregory’s School (in Dhaka), he attended Presidency College in Kolkata, and then continued on to Cambridge. One can’t claim he has had a purely Indian education, can one? As for being Bangladeshi- well, he is Bengali and hails from Wari which is in Dhaka, and speaks in Bengali when he is in Dhaka. It has nothing to do with honorary citizenship. Sachin Tendulkar ain’t Bengali, so we don’t care about him. Sourav on the other hand does have a huge fan following in BD. Simply because he is Bengali. We are mighty proud of him and his achievements, just like we are proud of Ravi Shankar, Satyajit Ray, Sushmita Sen, Jhumpa Lahiri etc. Bangladesh (land of Bengal) is the place the Bengali language and Bengali culture reigns supreme, and we shall always take pride in all the Bengalis who make their mark, whether they be from India or from the UK.