YUNUSFORUM.NET

Growing Up With Giants

Muhammad Yunus on 4 February 2006

Now we are at the outset of a new year which is going to be a critical year for Bangladesh democracy. Whole country is abuzz with one single question: Can we hold a peaceful and fair election on schedule as required by the constitution and desired by the nation? We see many bad signs. They upset the citizens. Despite all the bad omens, the nation must express its resolve by saying: “We shall hold the election on time. We shall make it more peaceful, more credible than any other election ever held in the past. Despite all shortcomings still remaining, we shall accept the result of the election and move on to build the nation unitedly.”

Election is the overriding agenda

Let holding a peaceful and fair election be the overriding agenda for 2006 for our nation. Holding the national election on time is a necessary condition to keep the process of democracy alive and strong. Any derailment from this course will be a disaster for the nation. Getting derailed is easy and, sometimes, attractive, but it becomes costlier by the day to stay derailed. Getting back on the rail is an extremely painful and slow process, and exhausts the nation by consuming all the energy and attention of the nation.

Despite outstanding accomplishments recorded by Bangladesh, people of Bangladesh feel unsettled, unhappy and frustrated. Our politics is killing our spirit. It has led to our major national crises: 1) limitless corruption, 2) rise of unprecedented terrorism, and 3) fast deterioration of the public service structure. They are all inter-connected and linked to politics.

From all indications, it is absolutely clear that Bangladesh has quietly and steadily built a very strong foundation to make the big leap forward. But our non-stop political bickering does not give a respite to celebrate or get inspired by our enormous successes to prepare ourselves to reach out to still higher levels of accomplishments. We are ready to launch ourselves into a path to cross $1,000 per capita income, 8 percent GDP growth rate, and reducing poverty level to under 25 percent in the near future. But our political attention remains riveted to day to day party politicking rather than strategic national issues.

Lucky to have two giants as our neighbours

India and China are almost there. They have already reached the 8 percent growth rate and 25 percent poverty level. They are becoming such political powers and economic power-houses that the whole world is gathering around them to get their attention.

Bangladesh is lucky to have two globally sought-after giants as her next door neighbours. These giants are not sleeping giants. They are super-active, and growing very fast. We must learn how to take advantage of fast growing giants. We must assess our best interest in building our relationship with them. In their turn, they’ll assess their best interest in having us as their neighbour.

Obviously, they will look at us as their market, their competitor, their partner, and also as a potential trouble-maker. From our side we must make it absolutely clear that we have no intention to be trouble-maker for our neighbours, nor do we want to see them as trouble-maker for us.

But a section of our politics finds it a very attractive theme to impress on the common people of Bangladesh that India is behind all the terrible things that happen in Bangladesh. If you don’t vote for our party, India will turn Bangladesh into her client state.

Countries are not made of saints only or angels only. There are bad people in India, who can dedicate themselves to do bad things to Bangladesh. Similarly, there are bad people in Bangladesh committed to do bad things to India. Both countries must remain vigilant to catch the bad people and punish them forthwith to uphold the friendship between the two countries.

Growing up with giants

When our giant neighbours bring the whole business world to their door-steps, our door-steps come very near to the business world. Visibility and contacts are very important factors in business. They come to us easily because of having important neighbours. If we play our cards right, our economy can pick up the speed of our neighbours.

Growing neighbours are also sources of technology and experience. Expanding economies keep moving towards more and more high-profit products and services, leaving behind low- profit, labour intensive items. This creates opportunities for neighbours. This is not to suggest that Bangladesh has to satisfy herself only with the markets and the products which giant neighbours are not interested in. What Bangladesh can do will depend on our level of efficiency and management skill. Bangladesh can find niche to provide high value specialised products and services to her giant neighbours.

I am emphasising on the fact that having two fast growing giant neighbours is a great boon for us. Let us dispel the fear that living between two giants is a scary prospect — that we may be stepped on from any side, any minute! On the contrary, we’ll be the beneficiary of coasting effect of having two giants next to us. We can get a ride on the fast train with them.

An open-door, open-arm country

Future of Bangladesh lies in being an open-door, open-arm country. We must not live under the fear of the Indian wolf. We must get the constant fear of the Indian wolf out of our system. If it is a real threat, we’ll have to prepare for it and get on with our lives. If it is imaginary, we’ll have to get our minds cleansed out. Frequent cries of Indian wolf is a sign of our political emptiness.

In the world today domination does not come through sneaky conspiracies. Domination comes from economic power. If we remain a poor country, everybody will dominate us, not just India. Moving up the economic ladder quickly is the best protection from all dominations. Let us not confuse this issue.

In order to move up the ladder quickly we should open all our doors, invite everybody in, encourage our people to spread themselves all over the wide world, show their talents and win over the confidence and appreciation of the whole world. Hiding behind closed doors is no protection at all.

Let’s make Bangladesh the cross-roads of the region

Let’s envision Bangladesh as the cross-roads of the region, if not the world. Let people, products, investments from all over the world flow into Bangladesh, and out of Bangladesh, with utmost ease, safety, and efficiency. Let’s make our laws, institutions, bureaucracy, travel and transportation facilities, financial system most friendly to the movement of people, investments, goods and services in and out of Bangladesh. Let’s build everything in Bangladesh in such a way that Bangladesh becomes the natural first choice of hard-nosed investors and traders. Let Bangladesh be Bangladesh International. Let us all agree on this vision and then move forward unitedly to make it a reality at the fastest possible speed.

To make Bangladesh an international cross-roads we’ll have to address the following:

i) Reduce corruption level drastically.
ii) Provide reliable electricity all over the country.
iii) Open up ICT and make Bangladesh a very attractive country in terms of state-of-the-art ICT.
iv) Build a mega-port in a suitable location along the Chittagong coastline capable of serving the following countries: Bangladesh, Nepal, Bhutan, Eastern India, Myanmar, and South-Western China.
v) Build highways to connect the mega-port with all six countries.

We must visualise Bangladesh as the ICT, industrial and trading hub of the region. On the first day of 2006 we have signed a document which has the potential to change the economy of SAARC region. The document we signed was the document relating to SAFTA agreement. Now Bangladesh should take the lead, rather than wait for initiatives to come from other countries, to move SAFTA forward. We can be smart, open our doors, convert disadvantages into opportunities, and change our destiny.

Geographically, Bangladesh is strategically located to provide access to international shipping to Nepal, Bhutan, Eastern India, Myanmar, and South-Western China. We should start making appropriate preparations, in consultation with these countries, to create facilities for access. Again, it’ll to be our call to draw attention of our neighbours. We’ll have to do our home-work well to show them the benefits accruing to them by opening up the access to the sea-routes through Bangladesh, and doing business with Bangladesh. We’ll have to resolve formidable political and technical issues with India. Remaining passive is not at all to our interest. It is actually very costly in terms of gains foregone. True leaders not only have visions, they have to have the burning drive to push through the solid walls of obstacles to make their visions come true. Vision must be backed up by hard work and dedication.

Mega-port at Chittagong

Mega-port at Chittagong is the key to making Bangladesh the cross-roads of the region. With the economy of the region growing at a sustained high speed, demand for the access to a well-equipped well-managed port will keep on growing. A region, which includes two giant economies, will be desperately looking for direct shipping facilities to reach out to the world. Chittagong will offer the region the most attractive option. Even today, despite the problems of present Chittagong port, Kunming is requesting permission to utilise this facility.

With global competition becoming more fierce shorter and shorter lead time for delivery will become the magic formula to attract business. An efficient mega-port at Chittagong will be in high demand. This port can be built and owned by a national or international company with government participation in equity. It can contract out the management of the port to a professional port management company.

International airport

Mega-port may support an international airport in its proximity. With appropriate aircraft servicing facilities and hotels, this airport can become an airline hub. It has the advantage of cutting distances to many Asian cities like Tokyo, Osaka, Beijing, Shanghai, etc, and taking off the pressure from important SAARC airports.

Highway network

During the SAARC Summit held in Dhaka recently, Dr. Manmohan Singh, Prime Minister of India, proposed to build a highway network to connect the SAARC countries. We should enthusiastically welcome this proposal and offer our plan to build highways connecting Nepal, Bhutan, Eastern India, and Pakistan. We should make sure that our highway network extends upto Cox’s Bazar, so that it can be connected with Myanmar, Thailand, and China in the eastern side.

Regional water management plan

With borders opening up, highways criss-crossing the region, businesses growing, we can create mutual trust among our neighbours, leading to right kind of political climate to engage them to work towards preparing a regional water management plan in conjunction with the plan for regional production and distribution of electricity. Fortunately, this region has an enormous capacity to produce hydro-electricity. With political understanding Bangladesh can meet her ever growing electricity need from a mutually beneficial arrangement with Nepal, Bhutan, and India.

$100 lap-tops for school children

Bangladesh has a very young population. Half the population is under the age of 18! If we pay serious attention to them we can create a dramatically different next generation. Some countries are already signing up with MIT Media Lab to provide $100 lap-top to each school student, just like text books. Lap-top to a child gives a message. Message is: Discover yourself, discover the world, create your own world. There is no reason why we cannot sign up with MIT Media Lab to do exactly the same and give lap-tops to our students. Let us not miss this world-changing opportunity.

One way to let all children, poor or rich, boy or girl, urban or rural, feel equal is to ensure access to computer and internet. This connectivity also takes off some of the unevenness in our educational facilities. We have already witnessed a telecommunication revolution. Within a short span of five years mobile phones have reached every village in Bangladesh. At the end of 2006, one in every eight persons in Bangladesh will have a telephone! With $100 lap-top, every school student will have access to internet telephony.

Our young people can be role model

I meet many Bangladeshi young people when I am visiting foreign countries. Many of us are used to meeting Bangladeshis in New York. But it is a quite different experience to meet young Bangladeshis in a small town of Spain, or in an island in Italy, or in Argentina, Chile, Columbia. They show up to meet me at the hotel or in the conference where I am speaking. They discover my presence in the town from the newspaper reports. They come individually. They come in groups. Among everything else they express their worry about the political situation in the country. I ask them how they got there. Each tells a horror story. Each time it is a story of perseverance, tenacity, and high risk adventure. It is quite an experience to hear them tell the story of how they moved from one country to the next, how they switched from one livelihood to another. They are doing well now. They have learnt the local language and understand the local way of life. They are at ease with local people. Story one gets from a migrant worker working in an Asian country is different, but not too different. It is the story of how they are cheated by the man-power agents, and how they are mistreated by the airport officials at the time of departure as well as at the time of visits.

Bangladeshi young people reached out to all corners of the world with basically individual and family initiative, using network of friends and relatives. Government has built some facilities to help them by making it easy for them to go out. But you hear more about the harassment, bribes, extortion and unresponsiveness of the government officials than nice things about these arrangements. These young people who live under extreme difficulties are making a big contribution to the national economy. They have been sending a very substantial amount of money as remittances.

Overseas remittance

The piece of information that amazed me is: in 2004, Bangladesh received $3.4 billion in remittances, compared to India’s $21.7 billion (and China’s $21.3 billion). That is quite an achievement! With nine times larger population, India’s share would have been $30.6 billion if she had received the same per capita remittance. Bangladesh remittance earning rate compares well with Pakistan too ($3.9 billion). Total remittance to Bangladesh constituted one-third of the total foreign exchange earnings of the country. Despite all the problems faced by Bangladeshi migrant workers, this is a very significant chunk of foreign exchange earning contributed by them.

More important than the quantum of foreign exchange earning, remittances go directly into poverty reduction. The World Bank Global Economic Prospects Report says this remittance inflow has helped cut poverty by 6 percent in Bangladesh and given a boost to the rural economy.

Building up respectability as a nation

Bangladesh is a rather new name in the list of nations. It came to world’s media attention mostly through disasters — floods, cyclones, tidal-waves, etc. Reporting on disasters always highlights poverty, and helplessness. That’s the image of Bangladesh that sticks in people’s mind. Two recent negative images have been added to that. One, Bangladesh has been repeatedly found to be the most corrupt country in the world, and two, suicide bombers are killing innocent people in Bangladesh.

Image of a country is very important when it comes to dealing with the world. The better the image a country has, the better is the deal it gets. To be successful in international relationships we’ll have to build up respectability as a nation. Luckily for us Bangladesh has a very strong positive side which counters the negative image to a large extent.

Bangladesh is enormously respected globally for being the birth place of microcredit. Every country in the world feels the need for microcredit. No country can ignore it. They study microcredit in academic institutions, discuss it in meetings, conferences and workshops. Most countries, rich or poor, have active microcredit programs. They all pay respect to Bangladesh for being the originator country. Bangladesh, microcredit, Grameen have become synonymous in the minds of people around the world.

Bangladesh is remembered as the country which gave the world oral saline to combat diarrhea.

Bangladesh earned respectability by demonstrating her skill and efficiency in disaster management. World media publicly suggested that tsunami affected countries and the US, after devastating Katrina, should learn from Bangladesh in disaster management.

Bangladesh is cited as a success story in producing enough food to feed her people despite doubling the population in 35 years.

In terms of human development indicators Bangladesh is third from the top

Bangladesh birth rate has declined significantly. Fertility rate declined from 6.3 percent in 1975 to 3.3 percent in 1999 - 2000, reduced almost to half. This is cited as a global success story.

Economic performance and human development indicators of Bangladesh have been moving upwards since early 1990s. GDP growth has been over 5 per cent during this period.

Bangladesh has very impressive performance in terms of the human development indicators. In terms of these indicators Bangladesh came out in number three position in the developing world, after China and Cave Verde.

Life expectancy of women in Bangladesh used to be lower than men. Now it is higher than men, a better performance compared to South Asia as a whole.

Female labour force participation rate increased dramatically between 1983 and 2000, both for rural and urban, with sharper increase in rural, than in urban. Female labour force participation rate in rural area increased from 7 per cent in 1983-84 to 22 per cent in 1999-2000. Urban rate increased from 12 per cent to 26 per cent during the same period.

Child and infant mortality have been falling at more than 5 percent a year, malnutrition among mothers has fallen from 52 percent in 1996 to 42 percent in 2002. Primary school enrolment rates have reached 90 percent, up from 72 percent in 1990. Enrolment in secondary education has been rising. Bangladesh has already eliminated gender disparity in primary and secondary school enrolment and has made remarkable progress in providing universal basic education.

In the past decade, Bangladesh reduced infant mortality by half, at a rate faster than any other developing country has done, increased adult literacy rates by 8 per cent for women, and 6 per cent for men.

In terms of infant mortality rate and female primary enrolment, Bangladesh is ahead of West Bengal, Punjab, and Uttar Pradesh of India.

Progress towards achieving millennium development goals (MDG) in Bangladesh is surprisingly on track. According to data on current trends, Bangladesh has either met or is expected to meet most of the MDG targets. If right policies are pursued dedicatedly there is a good chance that Bangladesh will reduce poverty by half by 2015.

Capacity has been built, we are ready to go

Bangladesh has outstanding accomplishment in reducing child labour. According to UNICEF, percentage of child labour in Niger is the highest (66 percent). Bangladesh has one of the lowest percentages (7 percent). Nepal is 31 percent, India 13 percent.

The list of our accomplishments is long and very impressive. We notice the admiring eyes of international delegates focused on Bangladeshi delegates when we attend international conferences, be it microcredit, disaster management, health, education, renewable energy, environment, women empowerment, or child labour.

When we visit capitals of SAARC countries we are always asked: “How did you do it? What must we do to catch up with you?”

I am not saying that Bangladesh is on top of everything. Far from it. Our list of failures is much longer than the list of successes. I bring up the list of successes to point out how wrong we are when we throw up our hands in the air to say in frustration that we’ll never make it. This list of successes will convince anybody that not only will we make it, we have already made it in many respects, and will do better than many others around us, and like us.

Good news that comes out from these successes is that we have created the capacity to address all our problems roundly and solidly. Not only we have gained self-confidence, we are ready to earn the confidence of the world. Soon a Bangladeshi passport can bring out admiration and respect from others, rather than suspicion and disrespect.

It is hard work to score points in respectability. It is easy to lose points. One tiny incident, one tiny misstep, one tiny callous decision can push us down quite a bit in respectability. Let us hold on to what we already have, and add to it, as much as we can. It is our very precious capital in facing the world.

Here are our two most important tasks at the moment: we must combine all our efforts: 1) to make sure we hold our election on time with the participation of all major political parties, and 2) make sure we reduce corruption sharply and immediately.

Voters must unite to say no to corrupt candidates

Yes, Bangladesh has done very well so far. We may thank our luck for it. But let us not get used to relying on our luck alone. If we do, everything around us will crumble soon.

This year, 2006, is the year for the nation to sit up and make a desperate attempt to put our house in order. People have to wake up to the fact that they are the boss. People have to make their minds known to the politicians who want their votes to run the country on their behalf. This is the election year. This is the best time to get heard. Voters should not allow themselves to be treated as absentee owners who do not have any knowledge of their own properties. All that the absentee owners are offered by their employees, is to sign on the dotted lines. No question is allowed.

Voters must refuse to sign on the dotted line. When political parties nominate their candidates, they do not consult the voters. Voters are not given any real choice, such as a choice of voting for an honest person, for a person who is committed to work for people, for someone who is not known to have amassed wealth by using his power as a member of parliament or as a party official or a worker. Only choice voters are given, is the choice of voting or not voting.

Voters want to vote, and want to vote for a person they admire, rather than be compelled to vote out of party loyalty, or on some other considerations. Voters must create their own choice. If political parties offer corrupt candidates, people will put up their own clean candidates. If we don’t do that we’ll continue to be the most corrupt country in the world, and our dreams will never get a chance.

Voters can organise campaign for clean candidates

I propose that this year the voters create their own option. They tell the political parties who is to be nominated in their constituency. Supporters of each political party or alliance of political parties will organise themselves to prepare a three member panel of clean candidates of their choice, in order of their priority, and give it to the political party/parties to nominate one out of them. If none of their candidates are nominated voters will be free to submit blank ballots as a protest, unless they actually ask one of their candidates to run as an independent candidate. Similarly, voters who do not vote on party lines will organise themselves and suggest to all parties who they should nominate.

Voters must start speaking out their minds from now on. Rather than speculating about who is going to get which party’s nomination, party supporters and independent voters have to start speaking out who they think should be nominated. This year people should get themselves heavily involved in the nomination process. This will be the only way to get the bad people out, and good people in.

Core agenda of the voters and non-voters this year will be to eliminate corrupt candidates from the ballot-paper. If they still get on the ballot-paper, it has to be ensured that they’ll not be the only ones on the ballot-paper. Honest persons as protest candidates will be put on the ballot-paper as people’s choice. The loudest message the voters must give to the political parties is : “We shall not give votes to a candidate who is known to be corrupt, who is known to have amassed wealth by misusing his power and authority or using his power to terrorise people.”

All civic groups, associations, professional bodies (teachers, doctors, journalists, etc.), youth groups, farmer groups, women groups, business groups, student groups, political parties, individuals, both voter and non-voters, can prepare and submit their panels to the political parties. They can make a panel for each alliance of political parties. Groups can share these panels among each other, can come up with common panels to make their cases stronger. If the clean candidates within the party do not want to run against the party candidates, voters can select an independent clean candidate to run.

When sending the chosen names for party nominations to respective party, voters should give those names also to the press. Voters should keep lobbying with the parties to let them know how strongly they feel against the potential party candidate and promote the case of their own candidate. Voters should tell the party that if they nominate the person that voters reject, then that candidate will not get their vote. Voters will vote for their own candidate instead. Even if their candidate does not win, voters will have a tally of protest votes. If these protest votes add up to be a significant number, it may have an impact on the outcome of the election. Some protest candidates may even win.

I invite the media to launch their own Clean Candidate Campaign. They can start a series of reports identifying and highlighting at least three potential clean candidates for each contesting political party, in each constituency. They may refrain from publishing speculative news about possible nomination of non-clean candidates who are usually considered as front-runners. Media can play a decisive role in bringing out support for clean candidates, and destroy the chances of non-clean candidates in getting nominated or elected.

Students can play a vital role in this Campaign for Clean Candidates. But they’ll have to start building up the campaign organisation right from now. They can work in the constituencies where they appear as voters or volunteer in other constituencies. Electing clean people to the parliament is very important task this year.

A proposal to resolve election impasse

Opposition parties have put some conditions for their participation in the next general election. These conditions can be discussed and resolved if the two opposing sides can sit face to face. But given the past history, we do not expect this to happen.

Here is my proposal. I request both sides to find a Respected Person, accepted by both sides, who will come up with a solution package in consultation with both sides. He will be given 30 days. If both sides agree time can be extended. The Respected Person can co-opt two persons of his choice to help him prepare the solution package.

There may be other proposals to resolve this impasse. Let us all put them on the table to see if any one of them can interest both the parties. Although ruling party’s position on those conditions is clear and constitutionally correct, there is nothing wrong or unconstitutional about making attempts to bring all parties on board to hold a peaceful, credible national election.

Our media, and individual or groups of citizens can suggest names of the possible Respected Person. Ruling and opposition alliances can come up with their own choices and pass on to the other side.

Important thing is to hold the election in the right manner, and right mood, to uphold our democracy and move forward.

Tremendous energy waiting to be mobilised

World is changing very fast. If we are late by a day we’ll fall behind by years. We have come a long way and we are ready to go forward with speed. Bangladesh has the fire in her belly to keep pace with her giant neighbours. Let us not allow ourselves to slow down. We need the right politics and the right leadership to mobilise the tremendous energy in Bangladeshi young people.

Let us think and work hard to make it happen.

Muhammad Yunus won the Nobel Peace prize in 2006. Here is the full text of his nobel lecture.

Nobel lecture presented by Prof Muhammad Yunus at the Nobel Peace Prize ceremony on Dec 10, 2006 in Oslo

– Your Majesties, Your Royal Highnesses, Honorable Members of the Norwegian Nobel Committee, Excellencies, Ladies and Gentlemen.
Grameen Bank and I are deeply honoured to receive this most prestigious of awards. We are thrilled and overwhelmed by this honour.

Since the Nobel Peace Prize was announced, I have received endless messages from around the world, but what moves me most are the calls I get almost daily, from the borrowers of Grameen Bank in remote Bangladeshi villages, who just want to say how proud they are to have received this recognition.

Nine elected representatives of the 7 million borrowers-cum-owners of Grameen Bank have accompanied me all the way to Oslo to receive the prize. I express thanks on their behalf to the Norwegian Nobel Committee for choosing Grameen Bank for this year’s Nobel Peace Prize. By giving their institution the most prestigious prize in the world, you give them unparalleled honour. Thanks to your prize, nine proud women from the villages of Bangladesh are at the ceremony today as Nobel laureates, giving an altogether new meaning to the Nobel Peace Prize.

All borrowers of Grameen Bank are celebrating this day as the greatest day of their lives. They are gathering around the nearest television set in their villages all over Bangladesh , along with other villagers, to watch the proceedings of this ceremony.

This years’ prize gives highest honour and dignity to the hundreds of millions of women all around the world who struggle every day to make a living and bring hope for a better life for their children. This is a historic moment for them.

Poverty is a Threat to Peace
Ladies and Gentlemen:

By giving us this prize, the Norwegian Nobel Committee has given important support to the proposition that peace is inextricably linked to poverty. Poverty is a threat to peace.

World’s income distribution gives a very telling story. Ninety four percent of the world income goes to 40 percent of the population while sixty percent of people live on only 6 per cent of world income. Half of the world population lives on two dollars a day. Over one billion people live on less than a dollar a day. This is no formula for peace.

The new millennium began with a great global dream. World leaders gathered at the United Nations in 2000 and adopted, among others, a historic goal to reduce poverty by half by 2015. Never in human history had such a bold goal been adopted by the entire world in one voice, one that specified time and size. But then came September 11 and the Iraq war, and suddenly the world became derailed from the pursuit of this dream, with the attention of world leaders shifting from the war on poverty to the war on terrorism. Till now over $ 530 billion has been spent on the war in Iraq by the USA alone.

I believe terrorism cannot be won over by military action. Terrorism must be condemned in the strongest language. We must stand solidly against it, and find all the means to end it. We must address the root causes of terrorism to end it for all time to come. I believe that putting resources into improving the lives of the poor people is a better strategy than spending it on guns.

Poverty is Denial of All Human Rights
Peace should be understood in a human way ? in a broad social, political and economic way. Peace is threatened by unjust economic, social and political order, absence of democracy, environmental degradation and absence of human rights.

Poverty is the absence of all human rights. The frustrations, hostility and anger generated by abject poverty cannot sustain peace in any society. For building stable peace we must find ways to provide opportunities for people to live decent lives.

The creation of opportunities for the majority of people ? the poor ? is at the heart of the work that we have dedicated ourselves to during the past 30 years.

Grameen Bank
I became involved in the poverty issue not as a policymaker or a researcher. I became involved because poverty was all around me, and I could not turn away from it. In 1974, I found it difficult to teach elegant theories of economics in the university classroom, in the backdrop of a terrible famine in Bangladesh. Suddenly, I felt the emptiness of those theories in the face of crushing hunger and poverty. I wanted to do something immediate to help people around me, even if it was just one human being, to get through another day with a little more ease. That brought me face to face with poor people’s struggle to find the tiniest amounts of money to support their efforts to eke out a living. I was shocked to discover a woman in the village, borrowing less than a dollar from the money-lender, on the condition that he would have the exclusive right to buy all she produces at the price he decides. This, to me, was a way of recruiting slave labor.

I decided to make a list of the victims of this money-lending “business” in the village next door to our campus.

When my list was done, it had the names of 42 victims who borrowed a total amount of US $27. I offered US $27 from my own pocket to get these victims out of the clutches of those money-lenders. The excitement that was created among the people by this small action got me further involved in it. If I could make so many people so happy with such a tiny amount of money, why not do more of it?

That is what I have been trying to do ever since. The first thing I did was to try to persuade the bank located in the campus to lend money to the poor. But that did not work. The bank said that the poor were not creditworthy. After all my efforts, over several months, failed I offered to become a guarantor for the loans to the poor. I was stunned by the result. The poor paid back their loans, on time, every time! But still I kept confronting difficulties in expanding the program through the existing banks. That was when I decided to create a separate bank for the poor, and in 1983, I finally succeeded in doing that. I named it Grameen Bank or Village bank.

Today, Grameen Bank gives loans to nearly 7.0 million poor people, 97 per cent of whom are women, in 73,000 villages in Bangladesh. Grameen Bank gives collateral-free income generating, housing, student and micro-enterprise loans to the poor families and offers a host of attractive savings, pension funds and insurance products for its members. Since it introduced them in 1984, housing loans have been used to construct 640,000 houses. The legal ownership of these houses belongs to the women themselves. We focused on women because we found giving loans to women always brought more benefits to the family.

In a cumulative way the bank has given out loans totaling about US $6.0 billion. The repayment rate is 99%. Grameen Bank routinely makes profit. Financially, it is self-reliant and has not taken donor money since 1995. Deposits and own resources of Grameen Bank today amount to 143 per cent of all outstanding loans. According to Grameen Bank’s internal survey, 58 per cent of our borrowers have crossed the poverty line.

Grameen Bank was born as a tiny homegrown project run with the help of several of my students, all local girls and boys. Three of these students are still with me in Grameen Bank, after all these years, as its topmost executives. They are here today to receive this honour you give us.

This idea, which began in Jobra, a small village in Bangladesh, has spread around the world and there are now Grameen type programs in almost every country.

Second Generation
It is 30 years now since we began. We keep looking at the children of our borrowers to see what has been the impact of our work on their lives. The women who are our borrowers always gave topmost priority to the children. One of the Sixteen Decisions developed and followed by them was to send children to school. Grameen Bank encouraged them, and before long all the children were going to school. Many of these children made it to the top of their class. We wanted to celebrate that, so we introduced scholarships for talented students. Grameen Bank now gives 30,000 scholarships every year.

Many of the children went on to higher education to become doctors, engineers, college teachers and other professionals. We introduced student loans to make it easy for Grameen students to complete higher education. Now some of them have PhD’s. There are 13,000 students on student loans. Over 7,000 students are now added to this number annually.

We are creating a completely new generation that will be well equipped to take their families way out of the reach of poverty. We want to make a break in the historical continuation of poverty.

Beggars Can Turn to Business
In Bangladesh 80 percent of the poor families have already been reached with microcredit. We are hoping that by 2010, 100 per cent of the poor families will be reached.

Three years ago we started an exclusive programme focusing on the beggars. None of Grameen Bank’s rules apply to them. Loans are interest-free; they can pay whatever amount they wish, whenever they wish. We gave them the idea to carry small merchandise such as snacks, toys or household items, when they went from house to house for begging. The idea worked. There are now 85,000 beggars in the program. About 5,000 of them have already stopped begging completely. Typical loan to a beggar is $12.

We encourage and support every conceivable intervention to help the poor fight out of poverty. We always advocate microcredit in addition to all other interventions, arguing that microcredit makes those interventions work better.

Information Technology for the Poor
Information and communication technology (ICT) is quickly changing the world, creating distanceless, borderless world of instantaneous communications. Increasingly, it is becoming less and less costly. I saw an opportunity for the poor people to change their lives if this technology could be brought to them to meet their needs.

As a first step to bring ICT to the poor we created a mobile phone company, Grameen Phone. We gave loans from Grameen Bank to the poor women to buy mobile phones to sell phone services in the villages. We saw the synergy between microcredit and ICT.

The phone business was a success and became a coveted enterprise for Grameen borrowers. Telephone-ladies quickly learned and innovated the ropes of the telephone business, and it has become the quickest way to get out of poverty and to earn social respectability. Today there are nearly 300,000 telephone ladies providing telephone service in all the villages of Bangladesh . Grameen Phone has more than 10 million subscribers, and is the largest mobile phone company in the country. Although the number of telephone-ladies is only a small fraction of the total number of subscribers, they generate 19 per cent of the revenue of the company. Out of the nine board members who are attending this grand ceremony today 4 are telephone-ladies.

Grameen Phone is a joint-venture company owned by Telenor of Norway and Grameen Telecom of Bangladesh. Telenor owns 62 per cent share of the company, Grameen Telecom owns 38 per cent. Our vision was to ultimately convert this company into a social business by giving majority ownership to the poor women of Grameen Bank. We are working towards that goal. Someday Grameen Phone will become another example of a big enterprise owned by the poor.

Free Market Economy
Capitalism centers on the free market. It is claimed that the freer the market, the better is the result of capitalism in solving the questions of what, how, and for whom. It is also claimed that the individual search for personal gains brings collective optimal result.

I am in favor of strengthening the freedom of the market. At the same time, I am very unhappy about the conceptual restrictions imposed on the players in the market. This originates from the assumption that entrepreneurs are one-dimensional human beings, who are dedicated to one mission in their business lives ? to maximize profit. This interpretation of capitalism insulates the entrepreneurs from all political, emotional, social, spiritual, environmental dimensions of their lives. This was done perhaps as a reasonable simplification, but it stripped away the very essentials of human life.

Human beings are a wonderful creation embodied with limitless human qualities and capabilities. Our theoretical constructs should make room for the blossoming of those qualities, not assume them away.

Many of the world’s problems exist because of this restriction on the players of free-market. The world has not resolved the problem of crushing poverty that half of its population suffers. Healthcare remains out of the reach of the majority of the world population. The country with the richest and freest market fails to provide healthcare for one-fifth of its population.

We have remained so impressed by the success of the free-market that we never dared to express any doubt about our basic assumption. To make it worse, we worked extra hard to transform ourselves, as closely as possible, into the one-dimensional human beings as conceptualized in the theory, to allow smooth functioning of free market mechanism.

By defining “entrepreneur” in a broader way we can change the character of capitalism radically, and solve many of the unresolved social and economic problems within the scope of the free market. Let us suppose an entrepreneur, instead of having a single source of motivation (such as, maximizing profit), now has two sources of motivation, which are mutually exclusive, but equally compelling ? a) maximization of profit and b) doing good to people and the world.

Each type of motivation will lead to a separate kind of business. Let us call the first type of business a profit-maximizing business, and the second type of business as social business.

Social business will be a new kind of business introduced in the market place with the objective of making a difference in the world. Investors in the social business could get back their investment, but will not take any dividend from the company. Profit would be ploughed back into the company to expand its outreach and improve the quality of its product or service. A social business will be a non-loss, non-dividend company.

Once social business is recognized in law, many existing companies will come forward to create social businesses in addition to their foundation activities. Many activists from the non-profit sector will also find this an attractive option. Unlike the non-profit sector where one needs to collect donations to keep activities going, a social business will be self-sustaining and create surplus for expansion since it is a non-loss enterprise. Social business will go into a new type of capital market of its own, to raise capital.

Young people all around the world, particularly in rich countries, will find the concept of social business very appealing since it will give them a challenge to make a difference by using their creative talent. Many young people today feel frustrated because they cannot see any worthy challenge, which excites them, within the present capitalist world. Socialism gave them a dream to fight for. Young people dream about creating a perfect world of their own.

Almost all social and economic problems of the world will be addressed through social businesses. The challenge is to innovate business models and apply them to produce desired social results cost-effectively and efficiently. Healthcare for the poor, financial services for the poor, information technology for the poor, education and training for the poor, marketing for the poor, renewable energy ? these are all exciting areas for social businesses.

Social business is important because it addresses very vital concerns of mankind. It can change the lives of the bottom 60 per cent of world population and help them to get out of poverty.

Grameen’s Social Business
Even profit maximizing companies can be designed as social businesses by giving full or majority ownership to the poor. This constitutes a second type of social business. Grameen Bank falls under this category of social business.

The poor could get the shares of these companies as gifts by donors, or they could buy the shares with their own money. The borrowers with their own money buy Grameen Bank shares, which cannot be transferred to non-borrowers. A committed professional team does the day-to-day running of the bank.

Bilateral and multi-lateral donors could easily create this type of social business. When a donor gives a loan or a grant to build a bridge in the recipient country, it could create a “bridge company” owned by the local poor. A committed management company could be given the responsibility of running the company. Profit of the company will go to the local poor as dividend, and towards building more bridges. Many infrastructure projects, like roads, highways, airports, seaports, utility companies could all be built in this manner.

Grameen has created two social businesses of the first type. One is a yogurt factory, to produce fortified yogurt to bring nutrition to malnourished children, in a joint venture with Danone. It will continue to expand until all malnourished children of Bangladesh are reached with this yogurt. Another is a chain of eye-care hospitals. Each hospital will undertake 10,000 cataract surgeries per year at differentiated prices to the rich and the poor.

Social Stock Market
To connect investors with social businesses, we need to create social stock market where only the shares of social businesses will be traded. An investor will come to this stock-exchange with a clear intention of finding a social business, which has a mission of his liking. Anyone who wants to make money will go to the existing stock-market.

To enable a social stock-exchange to perform properly, we will need to create rating agencies, standardization of terminology, definitions, impact measurement tools, reporting formats, and new financial publications, such as, The Social Wall Street Journal. Business schools will offer courses and business management degrees on social businesses to train young managers how to manage social business enterprises in the most efficient manner, and, most of all, to inspire them to become social business entrepreneurs themselves.

Role of Social Businesses in Globalization

I support globalization and believe it can bring more benefits to the poor than its alternative. But it must be the right kind of globalization. To me, globalization is like a hundred-lane highway criss-crossing the world. If it is a free-for-all highway, its lanes will be taken over by the giant trucks from powerful economies. Bangladeshi rickshaw will be thrown off the highway. In order to have a win-win globalization we must have traffic rules, traffic police, and traffic authority for this global highway. Rule of “strongest takes it all” must be replaced by rules that ensure that the poorest have a place and piece of the action, without being elbowed out by the strong. Globalization must not become financial imperialism.
Powerful multi-national social businesses can be created to retain the benefit of globalization for the poor people and poor countries. Social businesses will either bring ownership to the poor people, or keep the profit within the poor countries, since taking dividends will not be their objective. Direct foreign investment by foreign social businesses will be exciting news for recipient countries. Building strong economies in the poor countries by protecting their national interest from plundering companies will be a major area of interest for the social businesses.

We Create What We Want
We get what we want, or what we don’t refuse. We accept the fact that we will always have poor people around us, and that poverty is part of human destiny. This is precisely why we continue to have poor people around us. If we firmly believe that poverty is unacceptable to us, and that it should not belong to a civilized society, we would have built appropriate institutions and policies to create a poverty-free world.

We wanted to go to the moon, so we went there. We achieve what we want to achieve. If we are not achieving something, it is because we have not put our minds to it. We create what we want.

What we want and how we get to it depends on our mindsets. It is extremely difficult to change mindsets once they are formed. We create the world in accordance with our mindset. We need to invent ways to change our perspective continually and reconfigure our mindset quickly as new knowledge emerges. We can reconfigure our world if we can reconfigure our mindset.

We Can Put Poverty in the Museums

I believe that we can create a poverty-free world because poverty is not created by poor people. It has been created and sustained by the economic and social system that we have designed for ourselves; the institutions and concepts that make up that system; the policies that we pursue.

Poverty is created because we built our theoretical framework on assumptions which under-estimates human capacity, by designing concepts, which are too narrow (such as concept of business, credit- worthiness, entrepreneurship, employment) or developing institutions, which remain half-done (such as financial institutions, where poor are left out). Poverty is caused by the failure at the conceptual level, rather than any lack of capability on the part of people.

I firmly believe that we can create a poverty-free world if we collectively believe in it. In a poverty-free world, the only place you would be able to see poverty is in the poverty museums. When school children take a tour of the poverty museums, they would be horrified to see the misery and indignity that some human beings had to go through. They would blame their forefathers for tolerating this inhuman condition, which existed for so long, for so many people.

A human being is born into this world fully equipped not only to take care of him or herself, but also to contribute to enlarging the well being of the world as a whole. Some get the chance to explore their potential to some degree, but many others never get any opportunity, during their lifetime, to unwrap the wonderful gift they were born with. They die unexplored and the world remains deprived of their creativity, and their contribution.

Grameen has given me an unshakeable faith in the creativity of human beings. This has led me to believe that human beings are not born to suffer the misery of hunger and poverty.

To me poor people are like bonsai trees. When you plant the best seed of the tallest tree in a flower-pot, you get a replica of the tallest tree, only inches tall. There is nothing wrong with the seed you planted, only the soil-base that is too inadequate. Poor people are bonsai people. There is nothing wrong in their seeds. Simply, society never gave them the base to grow on. All it needs to get the poor people out of poverty for us to create an enabling environment for them. Once the poor can unleash their energy and creativity, poverty will disappear very quickly.

Let us join hands to give every human being a fair chance to unleash their energy and creativity.

Ladies and Gentlemen,

Let me conclude by expressing my deep gratitude to the Norwegian Nobel Committee for recognizing that poor people, and especially poor women, have both the potential and the right to live a decent life, and that microcredit helps to unleash that potential.

I believe this honor that you give us will inspire many more bold initiatives around the world to make a historical breakthrough in ending global poverty.

Thank you very much.