News & Politics - Nobel Peace Prize goes to Bangladeshi economist Muhammad Yunus, Grameen Bank

**Avatar** · 10-13-2006, 02:32 AM

Quote:

Nobel Peace Prize goes to Muhammad Yunus and Grameen Bank

OSLO (AFP) - The Nobel Peace Prize has been awarded to Muhammad Yunus of Bangladesh and the Grameen Bank which offers loans to poor people without any financial security.

"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 a statement from the Norwegian Nobel Committee on Friday.

More here.

Rather surprising, but I don't think you can fault the reasoning.

Lexis · 10-13-2006, 05:45 AM

I was just going to come post this because I'm so happy the work of this organisation is being recognised. And the reasoning is sound - peace is hard when people are suffering.

Papri · 10-13-2006, 06:30 AM

I think this is great. I have family in Bangladesh and the organisation is really popular across the whole country.

goodnightboy · 10-13-2006, 06:55 AM

That's great

it really is. I'm doing South Asian Studies as part of my modules for university and Bangladesh is one of the countries. They've got a lot of problems, and the underlying cause of a lot of it is poverty, so this is really good news. You're right, you can't fault the reasoning.

elisheva · 10-13-2006, 02:40 PM

Micro-credit loans, from the little I know (still learning!) about international development, seem to be one of the best new tools for local development. It's great that's being recognized.

(They also have the added plus of opening up opportunities for people who traditionally have less economic power, such as women and I think I heard of it also in connection with the former "untouchables" in India.)

Papri · 10-13-2006, 04:28 PM

having said all that though, the interest rates are reportedly really quite high...so while it is a better option than the big banks, it's potentially not as user firnedly as it could be, or indeed, once was.

goodnightboy · 10-15-2006, 12:50 AM

Ahh, it's the same thing all over again, isn't it? Incentives and such look good on paper, but the reality is often very different. Time and time again it's like that: corruption, inefficiency, ineptitude - it all contributes to the poor not receiving the aid that is calculated with them in mind. Still, aid (in any form) is better than nothing, and especially this kind of aid (aid that helps them pull themselves out of poverty rather than just provide short-term relief, whcih creates an environment of dependency).

OMG thsi is freaky. I was typing a question on how micro-credit actually helps women, the Harijans (Dalits, Untouchables, whatever you want to call them) and I happened to look at the advertisments and the very first one I saw was:

Quote:

What Is Microcredit?
People lift themselves from poverty with tiny business loans.
ideaexplore.net/news

Seriously though. Micro-credit...it sounds really familiar, like something I've studied before. I can't remember what, though.

chicah · 10-16-2006, 06:38 AM

I think he deserved it. Although I can think of a couple of other candidates. Good to see that people still respect the peace prize, we got quite some fuzz when they gave it to Arafat.
But hey, we Norwegians are one weird people

better learn that as soon as possible.

I think the job the organization is doing is great. Although I hope the show is not what is was like last year, the last few years I've felt like they've focused more and more on celebrities and dresses. I mean, Julianne Moore in small Norway, no wonder people are excited! But this isn't about celebs or the nicest possible dress. It's that superficial thinking this prize wants to contribute to stopping. It's about the peace prize winner and it's important not to forget that.

elisheva · 11-16-2006, 08:05 PM

An informative mini-interview with Yunus:

Quote:

Microcredit: The poor always repay

Richard Foot
CanWest News Service

Wednesday, November 15, 2006
HALIFAX -- Two decades after he founded Bangladesh’s Grameen Bank economist Muhammad Yunus is now a global celebrity, winner of the 2006 Nobel Peace Prize in honour of his pioneering work in the microcredit industry.

Yunus was in Halifax this week at the Global Microcredit Summit, where CanWest News Service spoke to him about the multi-billion-dollar phenomenon he inspired.

Question: You have said that even in the poorest countries, "we are living in an ocean of money." What do you mean by that?

Answer: In villages in the developing world there is enough money, but that money is not available because those who have it, put it in savings accounts in banks from far away, and the banks send it out to their headquarters in metropolitan centers, where the money accumulates and the banks give big money to big people.

If we have a bank operating right in the village, people find it convenient to put their money there. And those who had always kept their money under the mattress, they also deposit their money in the village bank. Last year we opened a branch every day of the year. This year we opened two per day. We don’t give those new branches money. Their task is to mobilize money in the area they’re working, and in turn lend that money out to the local poor people.

The money people need for microcredit is already their in their midst. It’s just a question of mobilizing it.

Q: Grameen Bank has a 99 per cent success rate in getting its loans repaid. Yet its clients have no collateral. What motivates them to pay back their loans?

A: The poor always pay.

Q: Poor people are more honest?

A: No. They are motivated by their need. If they borrow money and don’t pay it back, the door is closed to them when they come back for more.

Q: Is microcredit a panacea? Can it solve global poverty?

A: Not by itself. Nothing happens by itself. Education doesn’t solve poverty by itself, health doesn’t solve poverty, good governance doesn’t solve poverty. You need every piece. Microcredit is an important missing piece that never existed before.

Anyone will tell you a solution to poverty is to create jobs. But in Bangladesh and other developing countries, wage-paying jobs are very difficult to come by. So why not also create self-employment? In Third World countries most people survive in the informal sector — they push carts, sell something on the street, deliver something. Why aren’t we supporting them? You need money to get a start in self-employment.

Imagine if all the banks in Canada shut down and didn’t exist anymore. What will happen to your life? It would collapse. It’s a Hollywood horror movie. For the majority of the world’s population, that’s exactly the situation. If banks are so important for us, why shouldn’t they be important for the poor?

Q: To succeed, microcredit requires an entrepreneurial spirit. Is there more of that spirit in developing countries with large informal sectors than there is, for example, in Canada?

A: All human beings are entrepreneurs. Some have found it out because society has allowed them to discover themselves. Some never found out, because they’re given to believe that their only ability in life is to serve others. But open up the opportunity for everybody, and you’ll be amazed how the entrepreneurial spirit comes out. Microcredit opens up the doors. The woman who was scared to death when you told her she could raise five chickens, she now has 5,000 chickens and she can manage it.

Q: Grameen Bank even lends money to beggars. How does that work?

A: We told beggars, as you go from house to house begging, would you care to carry some merchandise with you, some cookies, candies, toys for the kids? When you knock on the door, give people the option to give you money as a gift, or to buy something from you. And if people buy from you and your business picks up, you may no longer have to beg. Today we have 84,000 beggars in that program.

Q: Is the World Bank doing its job to alleviate global poverty?

A: They could do better. Giving money to governments becomes an attractive field for corruption. I keep saying, "Why don’t they loan this money to the private sector instead of governments?"

Suppose the World Bank or United Nations built a bridge in Bangladesh. Instead of giving it to the government, give it to a company owned by local poor women, and out of the proceeds of bridge tolls they collect, they will maintain the bridge, and with the surplus they’ll build another bridge in a few years.

The World Bank says, "Our job is upgrading infrastructure." But who owns this infrastructure? They say poor people cannot own a bridge company or a telecommunications company. But Grameen Bank is owned by the poor people. We have professional managers. Our shareholders just happen to be very poor people.

Q: I understand Oprah has invited you onto her show. What was it like to win the Nobel Prize and become an instant global celebrity?

A: It’s fantastic. Suddenly everybody’s watching you and listening to you. We used to have to scream our heads off to make people hear what we were saying. Today even if we whisper, the whole world hears our message.

Q: In war-torn countries like Afghanistan, what’s the best path towards peace — fighting poverty, or fighting the Taliban?

A: Terrorism cannot be stopped by fighting wars. Poverty is a breeding ground for terrorism. It’s easy to breed terrorists in Afghanistan, or Pakistan or Bangladesh or wherever, because there are extremely poor people. Osama bin Laden came from a rich country, but his ideas flourished in the poorest countries in the world.

Poor children are sent to madrassas because their parents believe their children will be clothed and fed, and they don’t have to pay any tuition. Reducing poverty will reduce one of the basic, root causes of terrorism.
© CanWest News Service

Microcredit: The poor always repay


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