Follow-up on Yunus/Grameen post

I finally had a chance to read the full text of Muhammad Yunus' Nobel Peace Prize acceptance speech. I was glad to see Yunus make explicit the link between pverty and peace. Back in October, when it was announced that Yunus/Grameen had won, I posted an entry summarizing what various people were saying about Yunus and about the Nobel committee's decision.

In that post, I quoted an editorial from The Economist that argued that Grameen and Yunus did not deserve an award reserved for peacemakers: "This year’s winner is an admirable anti-poverty campaigner, but it is a stretch to call him or the Grameen bank peacemakers." I then went on to argue that The Economist must not understand that peace is much more than the absence of war. Yunus' speech, from which I quote at length, made this point beautifully:

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.

I believe terrorism cannot be won over by military action ... 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.

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.

Finally, Yunus revealed his sociological intellect when he described the self-fulfilling prophecy of poverty:

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.

In my previous post on microfinance, I sung its praises without also acknowledging its limits. For example, microfinance is not ideally suited to complete capital-intensive infrastructure projects (e.g., water provision, sanitation, road construction and maintenance, etc.). But Yunus, in his speech, elaborated on the concept of social businesses. Such businesses, when focused on needs other than microfinance, may develop the capacity to deliver larger-scale infrastructure projects. According to Yunus, social businesses

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 ... 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.

In Grameen, Yunus has already given us a social business that provides financial services to the poor. Let's hope that in another five or ten years we're celebrating a Noble Prize winner who, following in Yunus' footsteps, pioneered a social business that educated or provided health care for the world's poor. Such achievements are vital to a future world in which peace prevails.

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