This year’s Nobel Peace Prize has been awarded to Muhammad Yunus and the Grameen microcredit bank which he founded.
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.
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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.
The Nobel Peace Prize has had a sketchy history with some of the candidates sometimes seeming to have started as many wars as they’ve stopped, but in this case it seems like a very deserved award.
A well-deserved award. Microcredit is a wonderful idea, which will save millions from poverty and help give hopeful entrepeneurs a better chance in life. My utmost congratulations to Mr Yunus, and I hope he carries on the good work.
Indeed, the Nobel Committee done good this year. Microcredit seed finance groups have made an incredible difference in so many countries, especially to poor widowed women but also to poor men and whole communities.
Great choice – how innovative economics can enable and liberate.
The Economist argues that the peace prize should’ve been withheld, as the committee again failed to award it to a candidate who has been working directly towards peace. They also cite Wangari Maathai, arguing that environmentalism is not the same as peace promotion. I think it’s a fair point: poverty and conflict are by no means inextricably linked.
Fipe,
Well its an interesting point. The link to peace is of course slightly tenuous. Nobel’s will stated
Which this doesn’t meet the criteria for, but it seems to have long since become a humanitarian award rather than peace. None of this of course takes away from the value of the contribution of microcredit.
A great story is microcredit. There is something of value in it for lefties, libertarians, feminists and conservatives.
lefties- poverty reduction and dignity for the lower classes
libertarians- self help and small scale private enterprise
feminists- the major focus of microcredit is loans to women because women have proven to be more responsible than men with the money. Microcredit has also raised the status and decision making authority of women in highly patriachal communities
conservatives- This is the contentious one. I think Conservatives should embrace microcredit because it helps break down the stifling patriachy, poverty and sense of hopelessness that provide a fertile ground for Islamofascism in the Muslim world.
“poverty and conflict are by no means inextricably linked.”
Yes they are. Rich nations don’t physically fight eachother anymore. They’re got too much to lose. Whether you’re a country or person, the poorer you are the more likely you are to resolve disputes with a stick instead of lawyers.
All good points Steve M. Seldom does a story like this come along – ie everybody wins.
To answer critics such as The Economist, I personally think Yunus would’ve been a better winner for the Nobel Prize for Economics for actual economic contribution instead of abstract theorising
I am with Fipe et. al. – while the recepient and his program are doing amazing things, it doesn’t actually fit the catagory. Nor did last year’s winner. Does this mean there are no individuals or organisations working towards conflict resolution that are worthy of the award?? (And I am sad to see Gareth missed out AGAIN).
The sad thing is, the only peace deal that’s held up over the last year has been the Acehenese peace accord. And that took a Tsunami.
Thanks for posting this excellent news of Muhammad Yunus’ honor. At Grameen Foundation, we’re excited to see the word spread about microfinance, as we’re working to bring the Grameen Bank microfinance model to the poorest of the poor around the world.
And to the comments about microfinance and peace, while evidence is largely anecdotal, we certainly hope that strengthening and empowering poor women ultimately leads to less conflict in the world, along with the other positive effects of microfinance.
For those new to microfinance: Learn more about microfinance and a bit about what we do to help the poor worldwide. For more details on the Grameen Bank in Bangladesh, Muhammad Yunus has published the very useful Grameen Bank at a Glance.
The effectiveness of this ‘financial product’ highlights how our own socialist financial system falls down. And how a free enterprise banking sector could create great wealth and alleviate poverty.
Another thing this highlights is the pro-poverty nature of income taxes.
Because if micro-credits, for poor people to buy income-enhancing capital goods, is the way to go to build wealth, then requiring poor folks to pay income tax would therefore be akin to bringing their interest rate on these loans above loan-shark levels.
“Yes they are. Rich nations don’t physically fight eachother anymore. ”
Now why would that be Nabs? Have we got to the end of history?
Or is it just the fact of defense-welfarism combined with the fact that its those poor oil-rich slobs that are trying to murder us all.
You don’t want to jump to conclusions Nabs.
We haven’t had a chance to fight eachother for the fact of all these commie or jihadist barbarians were after our throats.
Thanks for stopping by, Ken@Grameen. My boss travels to Bangladesh every year to provide advocacy training for members of the Bangladesh Bar, so I’ve been taking a more active interest in all things Bangladeshi this year. It could be that the Nobel committee has realised that economic and environmental activism may lead to more lasting peace than simple diplomacy.
In any case, agree that Yunus probably would have been a reasonable candidate for the Economics Prize, although his system is principally a practical version of some of the ideas Hayek articulated many years ago.
I mentioned this last time Grameen came up and I point to it again for the sake of providing a contrary view – Gina Neff wrote a critique of Grameen in LBO in 1996.
Darryl Rosin has cherry picked a 10 year old article by hard Left writer Gina Neff who has written an unbridled criticism of microfinance laced with lemon-mouthed bitterness. This does not constitute a “critique” in the usual sense of the word. Lets just go through a few of the points raised by Neff:
“Rather than job creation, education, or training, the Yunus solution focuses on jump-starting self-employment…”
-The folk who take on the loans mostly live on about one dollar a day or less. They need to generate an income now in order to live. They don’t have the luxury of going through any sort of time consuming education program. However supporters of the Grameen Bank note that the income generated by their scheme allows parents to ensure their children get an education. (1,2,3)
A World Bank study “found that Grameen had no significant impact on women’s wages in rural villages, although it did boost men’s and children’s wages. “
- A 1998 World Bank study says that the Grameen Bank is helping 10,000 Bangladeshis escape poverty each month. Another World Bank Bank Study re Bangladesh says women in the program see a rise in household consumption of 18% pa and that 5% escape poverty each year. (1,2)
“Grameen-style lending elsewhere in the Third World, promoted by the World Bank, isn’t scoring any great successes.”
-This is rubbish. A recent CGAP report compiles the results of studies that show microfinance has had successes in Indonesia, Ghana, Zimbabwe, Bolivia, India and Bangaldesh. (3)
I’ll give the CGAP the final word:
“No single intervention can defeat poverty. Poor people need employment, schooling, and health care. Some of the poorest require immediate income
transfers or relief to survive. Access to financial services forms a fundamental basis on which many of the other essential interventions depend. Moreover, improvements in health care, nutritional advice, and educationm can be sustained only when households have increased earnings and greater control over financial resources. Financial services thus reduce poverty and its effects
in multiple concrete ways.” (3)
(1) http://www.grameenfoundation.org/what_we_do/microfinance_in_action/faqs/#5
(2) http://www.grameenfoundation.org/pubdownload/~pubid=35
(3)http://www.cgap.org/portal/binary/com.epicentric.contentmanagement.servlet.ContentDeliveryServlet/Documents/FocusNote_24.pdf
Hi.
Can my previous comment pls be taken out of moderation. It has 3 links, so I guess tha’s why its there.
cheers
Muhummad Yunus
The Nobel Prize committee should be congratulated for interpreting “peace” in its ancient and orginal meaning.
The meaning of peace is not an absence of violence but a feeling of belonging and right relationship with others.
The small section of the Left object to Grameen Bank puely because it shows how the market can be used to raise and benefit people in poverty.
A more pragmatic view would be look at results. The results are simple ..it lifts the economic position of people and more importantly develops a feeling of self worth and optomism.
Well, if for no other reason than to show I can pick stonefruit from multiple citrus-mouthed 10 year sources from the political fringes, here’s one from the hard right.
They were talking about Grameen on Radio Netherlands last week. The expert said that microfinance of this type had not worked well so far in South America or Africa. He stressed that its success depended on “horizontal accountability” and that the scheme may need to be culturally adapted in other parts of the world.
This morning they ran an ancient interview of Yunus by Norman Swan on Life Matters. Yunus stressed that loans were made to groups of five and that the element of collaboration and cooperation between the five was important. Repayments were on a weekly schedule and collected in person by bank staffer to maintain contact and communication.
Wikipedia has a more sympathetic portrayal than the link Daryl provided.
You can read the 16 decisions here.
Along the way someone said that 70% of the poor in the world are women.