22 October 2006
Younus deserves more than the Nobel
At the time when North Korea was launching its first nuclear test and its dictator Kim Jong-il was threatening world peace with such a destructive device, Bangladeshi economist and banker Mohammad Younus was celebrating his winning of the world’s most prestigious award for his role in saving millions of people from poverty and slavery.
The significance of the coincidence is that while some arrogant leaders such as Kim have led their people to the edge of starvation by allocating their countries’ entire resources to developing weapons of mass destruction, figures like Younus have dedicated their entire lives to the issue of economic and social development from below.
It was not surprising that the 2006 Nobel Peace Prize went to Younus. The surprise was that a man like him had not been awarded it earlier. Some were surprised because he won the Nobel Prize for peace rather than economics. But this must be viewed within the Nobel Organization’s policy in recent years of viewing efforts by activists to help large population groups find ways out of poverty as being important for world peace and stability as efforts by diplomats and politicians to help end regional or global conflicts.
This is exactly the issue towards which Younus has directed his efforts since the mid-1970s when he introduced his notion of microcredit. The notion is simply based on loaning tiny sums of money to poor people looking to escape poverty by starting businesses. It first came to Younus in 1974 when he bumped into a woman weaving bamboo stools with calloused fingers. He learned from her that she could not make more than the equivalent of US$ 0.02 per day, owning to the exploitation by a middleman from whom she borrowed to buy bamboo. To Younus, this was a kind of slavery that if she could liberate herself from, her entire life would be changed. Based on this finding, he gave US$27 to some poor women, telling them to buy their own materials and cut out the middlemen and pay him back whenever they could. Younus then sat waiting for the result which was as excellent as expected.
This encouraged him to approach conventional banks for the adoption of his microcredit scheme. Faced by their refusal, he decided in 1976 to employ his varied qualifications and experience in establishing a unique bank called the Grameen, which means village or rural in the Bengali language.
Grameen, therefore, was the first bank in the world to hand out unrestricted small loans to poor people, who did not qualify for loans from conventional banks. By doing this, it not only defied conventional lending rules and helped poor Bangladeshis start small businesses that improved their social lives but also challenged cultural taboos in overwhelmingly Muslim Bangladesh by directing most of its loans to women. The argument has been that women spend their money more carefully and pay back the loans in far higher percentage than men do.
According to Younus, Grameen with its over 2,200 branches in Bangladesh has so far loaned US$ 5.7 billion to 6.6 million Bangladeshis, 97 percent of whom were women. It has a 98 percent repayment rate compared with only 10 percent in the case of state-run industrial development banks which provide loans against some form of guarantee.
More important, however, was that the Grameen Bank model has been duplicated in more than 100 states, including some developed countries like the United States, something that has improved the lives of nearly 95 million families. It was said that former US president Bill Clinton had sought Younus’ assistance in introducing the Grameen model to the state of Arkansas in the 1980s when he was the state’s governor.
Younus, the first Nobel Prize laureate from Bangladesh, represents the determination rooted in the people of this country, one of the poorest in the world despite a notable growth of its per capita income from $280 in 1985 to $440 in 2005. Born in 1940 in Chittagong to a father, who had a jewellery business, Younus’ first sign of genius was securing the 16th position among 39,000 students in the matriculation examination. Following his graduation in 1957 from Chittagong College, where he was prominent in cultural activities, he joined Dhaka University, from where he obtained both his BA and MA degrees in economics. His high scores and unlimited ambition led him to wining a Fulbright scholarship to study at Vanderbilt University, Tennessee, from where he obtained his PhD in economics in 1969. Younus returned home in 1972 to join Chittagong University as professor of economics, but before that he had worked for nearly 3 years as assistant professor at Middle Tennessee State University.
To conclude, a gifted man like Younus with such high qualifications, magnificent records, and brilliant achievements should be given a prominent role in running his politically-divided country, if not the top post.
*Academic researcher and lecturer on Asian affairs