Nobel Peace Prize to Muhammad Yunus, Grameen Bank

Posted on by

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.

124 thoughts on “Nobel Peace Prize to Muhammad Yunus, Grameen Bank”

  2. Just FYI. I posted a story with Vikram Akula—Founder and CEO, SKS Microfinance in the News Tab.

  3. The Nobel Prize did well by choosing the Turkish novelist Orhan Pamuk yesterday and the banker amd social visionary Mohammed Younis today.

    Kudos. The Banglas have cornered the brown Nobels!

  6. I read this article and it brought tears to my eyes. I love the whole idea of microcredit: to help the individual acquire tools to develop their own economic life and interests and to, hopefully, enjoy the fruits of that hard labor. This man is truly worthy of such an honor. What a wonderful choice.

  7. Bravo! Finally…the Nobel has been awarded to a man deserving of the honor. Peace through Prosperity.

    btw, amartya sen, while having been born in pre partition Bengal, is an Indian citizen.

  8. Interestingly, the vast majority of borrowers are women. Men tend to drink away the loans, explained one microlender (I forgot who, but i think it was Vinod Khosla). This may put a dent in plans to bring microfinance to the west, where noticing the obvious is considered bigotry.

    Anyway, the empowerment of women is one reason, some have theorized, why Islamic fascists have targeted the bank; which makes sense, since the bank hasn’t invaded iraq or supported israel as far as I know.

  9. Kudos. The Banglas have cornered the brown Nobels!

    V.S. Naipaul won for literature, and is a non-Bengali brown. Ditto for Subramanyan Chandrasekhar.

  13. what’s really depressing is that after watching CNN for two hours, not once have they mentioned the peace prize or its winner. but they have mentioned bono and his efforts and are planning to show a piece on him and his red initiative shortly. kudos to him, don’t want to take anything away, but the media really has tunnel vision. if bono or geldof had won the peace prize, as many suggested, it would be the lead story.

    update: well they just mentioned it, but its been relegated to a soundbite, that too on CNN International’s noon news show.

  14. Noticed that you have listed this post under “Economics”. Freudian slip? I hope.

    How is microcredit not related to economics? And what’s Freud gotta do with it?

  16. While on the topic of Nobels, do you guys think there will be other Brown Nobels in the near future? Who?

  18. Siddhartha – I just finished the Mimic Men and it reminded me how vital V.S. Naipaul’s writing is…it’s just brutally honest. The whole scene on the beach with the swimmers who don’t make it back and the fishermen who watch over the whole thing? Shivers down spine….

  21. I was joking. I assumed that you, like me, considered him an Economist more than a peace activist. Thus the Freudian Slip.

  22. So Bangladesh has its second Nobel Winner! First Amartya Sen, now Mohd. Yunus….

    claiming amartya sen as bangaldeshi is like claiming pervez musharaf as indian

  23. V.S. Naipaul won for literature, and is a non-Bengali brown. Ditto for Subramanyan Chandrasekhar.

    You forgot C.V. Raman.

  24. I assumed that you, like me, considered him an Economist more than a peace activist.

    Yeah, it really doesn’t have much to so with peace. It’s tempting to make a correlation between poverty and social unrest/terrorism/violence/crime/etc but some of the wealthiest countries have the highest crime rates.

    I understand the more mobile and less static or class-oriented a society is, the more likely it is to have social unrest. People know their place in the old world so things are rather peaceful as Marx lamented (opiate of the masses) but the new world created greed and envy as even the lowest classes think they can be president, as montesquieu observed. These are broad theories and i’ll try to dig up some razib-like data to support it later.

    So, by creating hope, greed, envy, and lack of contentness; it’s possible mircofinace can lead to less peace and more social unrest.

  25. Abdus-Salam won in 79 for physics. Born in Sahiwal, Punjab, he is one of two Punjabis to win the prize. The other, Khorana (68, medicine) also went to Punjab university in the 40s.

    Chandrashekhar (Physics, 1983) was born in Lahore, but was obviously not Punjabi.

    That’s three Bengalis (Tagore, Sen, Yunus), two Punjabis (Abdus Salam, Khorana) and two Tamils (CV Raman and his nephew Chandrashekhar).

    (I’m not counting Mother Teresa)

  26. Men tend to drink away the loans, explained one microlender (I forgot who, but i think it was Vinod Khosla). This may put a dent in plans to bring microfinance to the west, where noticing the obvious is considered bigotry.

    Iterations of microfinance for women are already among us.

    There’s a San Francisco based desi (disclaimer: she’s also my friend) named Farhana Huq with Bangla-Pak roots who has modified the microcredit idea in order to employ it with immigrant women in the U.S. She’s built it up from nothing in less than 6 years – I think they operate at $500,000+ a year these days (but don’t quote me on it) and she’s gotten props from the likes of Isabel Allende and the Ashoka Foundation.

    More on her gig at the CEOWomen (Creating Economic Opportunities for Women) site.

  27. So, by creating hope, greed, envy, and lack of contentness; it’s possible mircofinace can lead to less peace and more social unrest.

    yes. probably. i have a cousin who is a development economist in bangladesh and corruption at many of the lending institutions is rife and results in BMWs for the new middle class. i might blog the topic this weekend…i went to bangladesh in 1989 and 2004, big changes.

    btw, sen, unlike musharraf, seems to be more positive toward the land of his familial origin, so i think the claim is very stretched, but it isn’t as ludicrous. also, tagore had family lands in east bengal.

  28. So, by creating hope, greed, envy, and lack of contentness; it’s possible mircofinace can lead to less peace and more social unrest.

    What?? Some of you people are just heartless and ridiculous. A small loan to take someone out of indentured servitude, and the best you can say is that it could lead to “lack of contentness”? You think extreme poverty is more peaceful?

    For shame.

  30. Kobayashi:

    I’m all for microfinance, I just don’t think it has much to do with peace. Creating wealth? Yes. I’m all for wealth at the expense of stability. creative destruction and all that jazz. I’m an american and it’s nice to see the subcontinent become americanized.

  31. Re: counting Sen as Bangladeshi, yes, its quite reasonable, he has on numerous occassions spoken about his fondness towards his janam-bhumi. Here is a description of his visit to Bangladesh:

    Sen was granted honorary citizenship of Bangladesh. Prime Minister Sheikh Hasina handed over the certificate of honorary citizenship and a Bangladesh passport to Amartya Sen at a ceremony in Ganobhabhan, the Prime Minister’s official residence.

    http://www.hinduonnet.com/fline/fl1601/16011340.htm

  32. They are not being hard-harded Mr. Kobayashi. They are trying to discuss the possible outcomes of a particular action: it will definitely help the deserving individual who receives the microloan but it may also cause some societal tensions, as well. Chaning a woman’s status in society will be problematic: it won’t go smoothly all the time. Personally, I don’t see how bringing a nation out of poverty can help but dislocate and cause tensions. As the US increased it’s prosperity in the last century, there were many populations dislocations, including from rural to urban, the changing status of women and minorities. These were undeniably good things, but the change was often difficult and caused tensions…..

  33. MD, you want a weird illustration of ‘dislocation’? my uncle had to drive 100 miles north of dhaka to find a ‘decent maid.’ the reason? all the ‘eligible girls’ are working in textile factories now and so aren’t available as drudges for the upper middle class (and honestly, my uncle is more than upper middle class, so it is a sign of how many young women are now employed in the industry that he had to go searching).

  34. While on the topic of Nobels, do you guys think there will be other Brown Nobels in the near future? Who?

    Rushdie, especially if the discourse on Islamism grows more vociferous.

    An environmental activist in peace, especially as the clowd above India goes darker, and they start blaming the Third World emerging economies for the coming global ruin 🙂 Maybe Sunita Narain.

    Science I have no competence to judge. There are lots of desi academics in the US, but there’s usually a twenty year lag in selecting.

  35. Re: counting Sen as Bangladeshi, yes, its quite reasonable, he has on numerous occassions spoken about his fondness towards his janam-bhumi.

    Yes, he does. Even in his NP acceptance speech he talked of Bangladesh, and his work with economists there with lot of respect and affection. However, pre-partition Bengal was 100% India, and that technicalilty should not twisted.

    So did Abdus Salam who visited India (as he was born and grew in pre-partition India) often and seeked out his old teachers. In fact, his institute @ Trieste has done lot for developing countries sciece.

  36. Whose God is it anyways –

    Prof.Bhagwati’s ( who, btw, deserves the Nobel for Economics more than Phelps)wrote this charming piece on the Bono-Geldof misguided express.

    Dear Bono,

    Having worked in development for almost 50 years, and on foreign aid for almost as long, I confess to a slight sense of déjà vu regarding your collaboration with Bob Geldof to increase aid flows to reduce poverty, especially in Africa. After all, one may ask, which big policy figure in the developmental field in the postwar years has not worked towards the elimination of poverty and demanded that aid flows be increased to that end? Yet, I do not agree with those who write cynically that the poor have done more for the rock stars than the rock stars have done for the poor. Your dedication certainly lends an extra edge to the efforts made by many over the years in this great cause.

    But I am afraid your energies have been misdirected when they are used to advance an agenda that is based on two obsolete and counter-productive premises: first, that aid for Africa must be spent in Africa rather than outside it; and, second, that we must work to increase aid flows to a target of 0.7 per cent of gross national product.

    The key problem in much of Africa is what has long been called the “absorptive capacity” problem: will aid be used productively or will it be wasted? This issue was understood by the pioneering development economists Paul Rosenstein-Rodan and Gunnar Myrdal. The former estimated aid requirements in the 1960s by reference to this notion. He calculated how much investment was required to help accelerate the growth rate of an aid recipient, based on an assessment of that country’s ability to manage such growth. Foreign aid would then be given to finance the investment, provided that the recipient made a matching effort to increase domestic savings as well.

    But many economists became sceptical. They argued, with substantial empirical evidence, that when aid was provided, the recipients were likely to reduce, rather than increase, their own savings efforts. This was an early recognition of the “aid curse” that afflicts some aid recipients. Uncritical proponents of aid deny this effect even as they talk of the “oil curse”; as if largesse from the windfall of oil earnings is somehow more corrupting than largesse that comes from aid donors.

    The large amounts of aid given to Africa and the small results that have generally accrued from them require us to look at the absorptive capacity question with a critical eye. We should disregard the hysterical charge that everyone who questions the effectiveness of a sudden and substantial increase in aid flows is a heartless reactionary. The increase in the number of democratic governments in Africa, and some bold initiatives by the African Union in places such as Darfur, have increased the absorptive capacity of a growing number of African nations. But that justifies a graduated increase on spending in Africa rather than a substantial and sudden one.

    In addition, absorptive capacity is far less of a problem if increased aid for Africa is spent outside the country. Spending can be increased in the rich countries to develop vaccines and cures for diseases that severely afflict Africa, such as Aids and malaria. Research on cures for diseases such as yellow fever and sleeping sickness should be well financed. Since much of Africa suffers from huge skills shortages for virtually every developmental problem, education and training of African students in western universities could be vastly increased. They will mostly stay abroad. But then the west should develop and pay handsomely for programmes where they can contribute in other ways, such as short-term visits to train others, for instance. Until these shortages ease years from now (as they did in the 1990s in India; the “brain drain” was a big issue there in the 1950s) as more nationals are trained and find return attractive, surely we could send out more of our own. I have advocated programmes such as a Grey Peace Corps that would find our aged and retired doctors, engineers and other professionals jobs in Botswana, Zambia and other African nations.

    But, if you have erred in allying yourself with the development experts who wrongly focus exclusively on aid spending in Africa itself, a greater folly is to have tied your initiative to the aid target of 0.7 per cent of GNP. This target goes back to 1969 and has not been met except by a tiny fraction of donors, essentially the Scandinavian countries. The problem is that thetarget relates to government spending. Fiscal spending is subject to what economists call “hard budget constraints”. There are always many demands on the government. The US, for instance, has just had a colossal increase in spending on the Iraq war and on Hurricane Katrina relief and reconstruction. Even Paul Martin, the progressive former prime minister of Canada, was most reluctant to sign on to this target last year at the United Nations.

    Richard Manning, the head of the development assistance committee at the Organisation for Economic Co-operation and Development, recently expressed concern that the main European Union donors would fail to fulfil even proposed aid increases, way short of 0.7 per cent of GNP, pledged for 2010. With all the good intentions in the world, developmental aid will take the back seat against politically more pressing needs.

    How, then, are we to translate the enthusiastic altruism that you have generated, dear Bono, into larger, sustained flows of aid? Surely the answer is to go after personal, rather than governmental, flows. Personal spending on aid typically runs into softer budget constraints. With all the charitable spending I do, I could always forego a dinner at Maxim’s and eat at McDonald’s instead, pledging another $100 to the Geldof-Bono aid fund. So, if you take seriously the estimated audience for Live8 concerts at 2bn, halve it for those who were there for a lark or are impoverished themselves, and halve it again for those who attended the concerts twice, you would have half a billion who could sign up for an average pledge of $50 a head as a supplement to their normal giving, yielding a net sum of $25bn outright. The money would be worth almost twice that amount in actual aid, since they would be grants whereas most aid consists of loans that must be repaid.

    This would mean abandoning some of your current allies. But you can do nothing less if your efforts are to yield results. In a recent interview, you said that you expected your music would endure forever but poverty would have ended in a hundred years. I wish you good luck on your music. But not even a hundred years would suffice to end poverty if you fail to correct your course.

    Jagdish Bhagwati is an adjunct fellow at AEI.

  39. On the matter of browns winning Nobels, it is confusing to try to identify many of their backgrounds. Amartya Sen seems to identify himself with whatever country sings his praises. My grandparents had roots in East Bengal too, but they never considered themselves anything but Indian.

    Abdus Salam, who won in 1979 for Physics, was teaching in Italy at the time, and was born in 1926, before Pakistan even existed. But he chose to identify himself as a Pakistani teaching in Italy.

    Khoran is a bit more straightforward – a Punjabi born in India in 1922, but won the prize while teaching at UW Madison.

    Naipaul – well, the Trinis and other Caribbeans don’t much care for him. And while Indians may take some pride in his winning in 2001, he chooses to live in the UK.

    I guess you could say that the brown diaspora can take some pride in their achievments, but I’m willing to bet that Indian Bengalis will place more emphasis on Sen and Tagore, while Bangladeshis highlight Yunus. It’s all good.

  40. “While on the topic of Nobels, do you guys think there will be other Brown Nobels in the near future? Who?” in order of preference. my preference

    Jagdish Bhagwati

    Sunita Narain

    Nandita Das (since this my list)

  41. Some of you people are just heartless and ridiculous

    A Ha!!! I finally got you Kobayashi. You are oppressing me and I feel unsafe. Go marry Pardesi Gori.

  43. but I’m willing to bet that Indian Bengalis will place more emphasis on Sen and Tagore, while Bangladeshis highlight Yunus.

    bangladeshis who aren’t goat-bearded fanatics are pretty high on tagore actually (e.g., 3/4 of bangladeshis). he died before partition so he has less strong of an association with post-1941 states.

  44. Hmmm, so no bengali has won in the sciences. Only punjabis and Tamils.

    True, but CV Raman won for his work at Calcutta University.

  46. bangladeshis who aren’t goat-bearded fanatics are pretty high on tagore actually

    In Himalaya, Michael Palin’s travel show, he ends his multi-nation trip in Bangladesh, with visist to Sylhet and Dhaka. The last scene is him on a ferry alongside a Bangladeshi singer whose specialty was Tagore songs.

  47. Hmmm, so no bengali has won in the sciences. Only punjabis and Tamils.

    People like Satyen Bose should have won it.

    with post-1941 states.

    It is post-1947.

    Most of the people see pre-1947 as a collective past.