Nobel Peace For Have Nots
Palash Biswas
(contact: Palash Biswas, c/o Mrs arati Roy, Gosto Kanan, Sodepur,
Kolkata - 700110, India, Phone: 033-2565-9551-residencde)
Without any sinificant media hype Bangladeshi real life economist and
banker Mohammad Yunus and the Grameen Bank founded by him were today
awarded the Nobel Peace Prize for pioneering their work in helping
millions, especially women, in the country overcome poverty through a
system of small-scale loans,micro credit,the extension of small loans
to benefit poor entrepreneurs.The Nobel Committee said Yunus and the
bank he founded had used the innovative program to "create economic
and social development from below." Women have been some of the
biggest beneficiaries of microcredit, which provides small loans to
entrepreneurs too poor to qualify for traditional bank loans.
From Adam Smith, the father of economics, economists tend to support
the ruling capitalist class and always are associated with
establishment and system. Muhammad Yunus is incomparably the most
honoured social activist of our era and he does not identitify
himself with the ruling elite economists.He could have been
established himself in the developed part of the globe and could have
preached poverty eliminination with theories, papers and surveys. But
he used applied economics a tool of class mobilisation of the most
neglected underclasses of an underdeveloped country like Bangladesh.
No doubt , we the unfortunate Indians miss an economist like him as
we are quite habitual to expect the great Indian brain drain flow
towards West. Yunus has received so many awards that prize-givers vie
not to be left behind.It is difficult to believe that Yunus started
as a student and teacher of economics, for although economists
believe they work to make the world a richer place, they do not have
much time for doing good. In 1974, while surveying the famine sick
villages Ynus declared that those villagers belonged to his family.
He never denied the responsibilty of his family liabilities.Recently,
Grameen Bank floated a mutual fund to enable its clients to invest in
the stock market. But its focus is on women, and on women who do not
have the opportunities that money or urban life bring. It would give
Reserve Bank a fit, but the women borrowers own 94 per cent of the
Grameen Bank's equity; and 99 per cent of them repay their loans.
What began as an academic research project with a practical testing
ground in the poverty-stricken villages around Chittagong in
Bangladesh grew into a successful story of social entrepreneurship
which changed the way economists and policy-makers thought about the
eradication of poverty.
.The BBC's Lars Bevanger in Oslo said this year's winner caught most
there by surprise. Many commentators had
expected an award to someone involved in peace talks.
Mr Yunus, 66, said he would use the 10m Swedish kronor ($1.35m,
£730,000) prize money to "find more innovative ways" to help the poor
launch businesses. He said he was delighted at the news and proud of
the bank's achievement.
The Nobel Committee cited how his Grameen Bank aids the poor "to
bring about their own development". And the concept of extending
loans to a largely female client base has also been credited with
reducing domestic violence by giving women a previously unattainable
degree of independence.
Before Yunus, Tagore and Sen were the two Bengalis who won the Nobel.
Some include Mother Teresa in the list as she lived and worked in
Calcutta. Mother teresa from Kolkata also won Nobel Peace.
The largest Bengali Daily from Kolkata published the news with a
screaming headline emphasising unnecessarily on the achievement of Dr
Amartya sen that dr. Yunus gets Nobel after Aramrtya. Firstly Sen get
the Nobel Memorial prize for economics, which is not considered a
nobel prize at all by some quarters. Dr Subodh Chandra Roy has
authored a book on this topic and is already engaged with leagal
fight with the group publishing the headline. Secondly, Sen hes
written so many things and said a little more , but he is nowhere ,in
no sense involved seriosly with an agenda of poverty elimination.
While Yunus got a nobel peace for his Grameen Bnak, directly involved
in poverty eliminination. His microcredit modelis adopted by more
than hundred countries including the leader of unipolar globe, the
superpower armed with globalisation, IMF and World Bank, United
States ofamerica. Bengalies all over the world have regained the lost
memories and sentiments of Bengali Nationality. The history of
getting Nobel by Rabindra Nath Tagore and Mother Teresa is being read
aloud.
Just thought you might find the following interesting. Amartya Sen is
not only the first Indian to win the Economics Prize it is the first
time
that work on poverty has gained this kind of international recognition
(compared to fancy theoretical shenanigans!) .But may we dare to cite
any instance of an interferance of Sen to change the economic system.
Yes, Yunus has done it.
Hence, please don`t compare Yunus with Sen.
Mr Yunus set up the bank in 1976 with just $27 from his own pocket.
Thirty years on, the bank has 6.6 million borrowers, of which 97% are
women, according to the Grameen website. Mr Yunus is expected to pick
up the award and prize money during a ceremony in Oslo in December.
The award of the Nobel Peace Prize to Bangladeshi economist Professor
Muhammad Yunus has focused the attention of the world on the
microcredit scheme he pioneered.
Returning from the US, Yunus was shaken by the 1974 famine and
headed to the villages to see what he could do.He found the region's
women in severe debt to extortionate moneylenders. His initial goal
was to persuade a bank manager to give villagers regular credit, but
the banker said that was impossible without a guarantee.Yunus set out
to prove him wrong and never looked back. Grameen Bank has lent $5.72
billion since it began. Of this, $5.07 billion has been repaid.Today
the bank is 94 per cent owned by the rural poor it serves and 6 per
cent by the government.Grameen Bank claims to have 6.6 million
borrowers, 97 percent of whom are women, and provides services in
more than 70,000 villages in Bangladesh.
"At GB, credit is a cost effective weapon to fight poverty and it
serves as a catalyst in the overall development of socio-economic
conditions of the poor who have been kept outside the banking orbit
on the ground that they are poor and hence not bankable," the
committee said.
"We congratulate Muhammad Yunus for his achievement,"Prime Minister
Khaleda Zia said, a view shared by her rival Sheikh Hasina.
The relevance of Dr Yunus and his unique attempt, high Bank interest
rates, cooperative movement in India with alarming facts, Achievement
of Left ruling the other part of Bengal and sensex related economies
of this sub continent must be analysed while we congratulate Dr
Yunus. We should also not forget that Muhammad Yunus of Bangladesh
and the Grameen Bank have been jointly awarded the 2006 Nobel Peace
Prize. Mr Yunus, an economist, founded the bank, which is one of the
pioneers of micro-credit lending schemes for the poor, especially
women, in Bangladesh. The role played by the bank is very significant
as we see the collapsing cooperative movement in India and
particularly the ways adopted by West Bengal communist government for
capitalist development forgetting all the achievement of land reforms
and the entire rural sector.
Bangladesh is one of the world's most densely populated countries,
with its people crammed into a delta of rivers that empties into the
Bay of Bengal.Formerly East Pakistan, Bangladesh came into being only
in 1971, when the two parts of Pakistan split after a bitter civil
war which drew in neighbouring India. Bangladesh spent 15 years under
military rule and, although democracy was restored in 1990, the
political scene remains volatile.Hemmed in by water, the capital
Dhaka is expanding skywards . Poverty is deep and widespread; almost
half of the population live on less than one dollar a day. However,
Bangladesh has reduced population growth and improved health and
education. The economy of the country is run mostly by Bangladesh
aid club. Japan is the most prominent aid giving country for
Bangladesh. the country is sharply divided in two groups- Haves and
Not Haves. Middle class is disappeared. The not haves consist of the
ninety percent of the population.The major employer is agriculture,
but it is unable to meet the demand for jobs. Thus many Bangladeshis -
in common with citizens from other countries in the region - seek
work abroad, sometimes illegally. The country is trying to diversify
its economy, with industrial development a priority. Overseas
investors have pumped money into manufacturing and the energy sector.
Political tensions have spilled over into violence; hundreds of
people have been killed in recent years. Attacks have targeted
opposition rallies and public gatherings. Senior opposition figures
have also been targeted. Concern has grown about religious extremism
in the traditionally moderate and tolerant country, which found
apparent form in a string of bomb attacks in August 2005. The
government, which long denied that it had a problem with militants,
has outlawed two fringe Islamic organisations. Bangladesh has been
criticised for its human rights record, with particular concern about
assaults on women and allegations that police use torture against
those in custody.
The low-lying country is vulnerable to flooding and cyclones and it
stands to be badly affected by predicted rises in sea levels.
Here Grameen bank has 2226 branches from which the micro credit
scheme is run. Bank credit without security is quite unthinkable in
this subcontinent. In India, we celebrated the centenary of
cooperative movement recently. In our nationa lplans and budgets
rural development has been always a priority. India is basically a
agririan country and inspite of boasting of great achievement of
cooperative movement we could neither manage bank credit for the
havenots without security nor we could help the poor peasnats to
sustain themselves . We see the suicide incidents headings almost
daily in the newspapers and just feel sympathetic. Moreover, in India
poverty elimination has been always on top in political agenda. In
mid term elections of 1971, Mrs Indira Gandhi introduced first the
slogan`GARIBI HATAO, SAMAJBAD LAO'. With Bangladesh liberated Mrs
Gandhi romped homewith landslide majority. Banks were nationalised
for socilist innovation. After four decades, unfortunately we see
that the political agenda was never put on action. With
globalisation, the nationalised banks as well as the multinational
ones adopt a credit policy suiting the Haves only. Bank loans are
available for the affluent classses. Nationwide branches of State
Bank of India also failed to help the underclasses.Globalisation has
introduced a new credit policy which promote consumption of consumer
goods and helps a little to enhance productivity and production
system. Sensex has bacome the index of national economy and growth.
Small savings and PF interests decline mercylessly. And it seems,
sooner or later India goes the Bangladesh ways dividing itself
vertically between Haves and Not Haves.We could not pass the woman`s
reservation Bill in the parliament while the general condition of
woman in Bangladesh , socially, economically and religiously , is
very poor in coparision to Indian women. In these adverse
circumstances no less than ninty four percent of creditholders are
women.
Inspired by him, India, which has given him several awards, also
introduced the micro-finance concept. Travelling in Europe, Prime
Minister Manmohan Singh congratulated his "personal friend" and
an "outstanding South Asian".
"It comes to me as no surprise. I rejoice in his achievement," Singh
said. After India attained Independence in August, 1947, cooperatives
assumed a great significance in poverty removal and faster socio-
economic growth. With the advent of the planning process,
cooperatives became an integral part of the Five Year Plans. As a
result, they emerged as a distinct segment in our national economy.In
the First Five Year Plan, it was specifically stated that the success
of the Plan would be judged, among other things, by the extent it was
implemented through cooperative organisations.
Dr Manmohan Singh should know what happened to our cooperative and
nationalised banking secotors as both failed to launch micro credit
system at any level. The honourable Prime minister and an economist
engaged with World Bank and IMF should know well that Professor Yunus
has always emphasized the distinction between the Grameen Bank's
concept of micro-credit and other prevailing forms of small-quantum
credit obtainable in rural areas, including that from the informal
money-lender and other traditional informal groups, or groups sharing
a common economic activity as livelihood. According to him, the
Grameen Bank model focuses on credit as a human right, and is
targeted to help poor families help themselves, especially women.
Each borrower would have to belong to a group. There are obligatory
as well as voluntary savings programmes that borrowers must
participate in.
Fellow Nobel winner Amartya Sen told The Telegraph from Harvard: "I
am absolutely delighted…. (He) has made a big difference in
Bangladesh and will be making a big difference across the world…."
Yunus is a visionary person. He is someone who can convert
constructive vision into social reality - Amartya Sen
Hundreds of friends and admirers gathered at Yunus's Dhaka home to
greet him with flowers and garlands.
No wonder that the Grameen Bank is one of the most widely emulated
institutions in the world. Not least in India, where a couple of
hundred rural banks were started. But here, the experience was less
exhilarating. Many borrowers did not repay; defaults were so serious
that almost half of the rural banks went bankrupt and were merged
with the others — weakening the latter.Indian banking and
cooperative, both sectors face alarming crisis as it defends the
stronger and neglects the poor. Even Panchayati Raj and its
successful record in states like Bengal, could not help this.
Cooperative system Is near total failure in Eastern India including
Bengal, Orrissa, Assam and Bihar.
So what are microcredits?
They are very small loans, typically less than $100 (£54), made to
the rural poor in developing countries who normally do not qualify
for traditional banking credit. This is often the only way they can
establish a business and lift themselves out of poverty.
Professor Yunus founded his Grameen Bank in 1976 during a devastating
famine in Bangladesh.
Today it has 6.6 million borrowers of whom 97% are women. This focus
on female borrowers in a society where women are frequently forced to
take responsibility for their entire family is one of the
characteristics that caught the Nobel Committee's attention. Grameen,
which means village, is an idea that has spread to more than 40
countries including Sri Lanka where women's banks were already a
familiar concept.
Yunus could not bear the plight of people starving in the famine of
1974 in Bangladesh, and took students to a village to find an
economic solution for the crisis. They tried various things, but the
one that worked was small loans to a group of village women. It was
lending with a difference. Unlike conventional bank lending, it was
unsecured; instead, Yunus invented a new collateral, namely the
solidarity of poor women. They together guaranteed the loan of each;
if one failed to pay, the others did for her. They not only promised
to repay, but collectively insured the loans they took. The poor
often help out their neighbours; Yunus used their modest but routine
generosity to make lending to them viable. He confined his generosity
to the poors only whereas we see this generosity is always endowed
with the higher income group in India by Indian banking system. The
default on the part of heavywieghts tendto cause pauses like failure
in the system itself. It happend to be the same story in the
cooperative movement, nevertheless.
How do microcredits work?
Grameen transactions take place at the village level, usually in a
local hall or temple. Typically a Grameen borrower will use a loan to
buy tools and equipment to set up on their own. As the microcredit
idea has grown the Grameen organisation has extended into foundations
dedicated to fisheries and irrigation.
By avoiding both employers and unscrupulous local money lenders the
Grameen loan aims to break a circle of exploitation that frequently
condemns rural villagers to lives of poverty.
And because the loans are often repaid by villagers banding together
in loan clubs, this has led to accusations that some of the poor can
come under peer pressure to repay the money they owe when times are
tough. Grameen Bank has also survived accusations that it lacked
adequate funds, though Professor Yunus was adamant that his bank
could repay all of the money it raised from the commercial sector.
Despite some concerns, Professor Yunus and his ideas have attracted a
growing band of advocates, including the former US President Bill
Clinton and his wife Hillary
Recently, Grameen Bank floated a mutual fund to enable its clients to
invest in the stock market. But its focus is on women, and on women
who do not have the opportunities that money or urban life bring. It
would give Reserve Bank a fit, but the women borrowers own 94 per
cent of the Grameen Bank's equity; and 99 per cent of them repay
their loans.
"I'm very very happy. It's a great honour for us and for Bangladesh.
It's a recognition of our work," Yunus told the BBC Bengali
service. "As a Bangladeshi, I'm proud that we have given something to
the world. Our work has now been recognised by the whole world. " The
66-year-old Yunus, the first Bangladeshi to win a Nobel prize,
said: "I think this is a wonderful recognition of our efforts at
Grameen Bank, and for all the women who work for us and who have made
Grameen Bank a success. "I am proud of the whole country," a beaming
Mr Yunus told reporters at his home here. The award will "inspire him
to complete his future plans", said the economist whose Grameen Bank
was honoured with India's Gandhi Peace Prize in 2000. The prize
includes 10 million Swedish kronor ($1.4 million). Mr Yunus said he
would invest the cash into his financing offers for the poor.
Announcing the award, the Nobel Committee in Oslo said it was given
for efforts by Mr Yunus and the bank to "create economic and social
development from below". "Across cultures and civilisations, Mr Yunus
and Grameen Bank have shown that even the poorest of the poor can
work to bring about their own development," the Nobel Committee said
in its citation.
Mr Yunus first learnt about winning the prize from a Norwegian TV
station, which called him to say he might get the award and then told
him to hold the telephone line. Soon after, a voice from the other
end confirmed he had won the Nobel Peace Prize. Asked why the Nobel
Foundation had given him the peace prize and not the one for
economics, Mr Yunus said: "Economics and peace is directly linked.
Unrest in many parts of the world is linked to economics." Mr Yunus
was rumoured to be in the running for the Nobel prize in economics
for the past three years. 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.
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