Bangladesh’s Muhammad Yunus, Grameen Bank Win Noble Peace Prize

Earlier this morning, the Norwegian Nobel Committee announced that it had awarded this year’s Peace Prize to Muhammad Yunus and the Grameen Bank. The response among most of the media was “Who?” Economists and banks usually don’t get the Peace Prize; the Royal Swedish Academy of Sciences, which awards all the other Nobel Prizes, usually hands out economics awards. However, there is very little that is usual about the professor or his bank, and this goes far beyond economics.

What Professor Yunus came up with in 1976, while a professor of economics at Chittagong University in Bangladesh, is “microloans.” The idea is to give small sums to the poor to start businesses. At Citibank, Barclays or the Bank of America, such borrowers couldn’t even pay for the loan application fee. Yet, by giving unsecured credit to people able to use it, Grameen [which means “village”] Bank has given millions of poor, mostly women, a shot at becoming masters and mistresses of their own economic fate. The repayment rate is almost perfect; the borrower is often so grateful for the chance that she will move mountains to repay the debt. As a result, Grameen Bank is, according to its economist founder, in its “strongest position ever.”

Professor Yunus has won fame before. In 1999, he won Indira Gandhi prize for peace, disarmament and development in India for the idea of microloans. The following year, he introduced Bill and Hillary Clinton to the idea of micro-financing, which they brought to some of the poorest parts of their former home state of Arkansas. Indeed, the Bangladeshi economist taught the Americans something about finance.

“Micro-credit is something which is not going to disappear... because this is a need of the people,” Professor Yunus told the BBC’s Bengali service. “Whatever name you give it you have to have those financial facilities coming to them because it is totally unfair . . . to deny half the population of the world financial services . . . . [This prize is] recognition of our movement to ensure the rights of the poor. With this recognition, we expect that the model we have developed will spread across the world.”

Poverty is one of the chief causes of conflict, though not the exclusive cause. Rich countries have their share of war and violence. However, when the only career path is carrying a gun, that is what most people will do. When there are options, the supply of warriors drops. Having fewer warriors around doesn’t guarantee peace, but it doesn’t hurt. For that reason, this is one of the Committee’s better choices: certainly better than giving the Peace Prize to a Christmas Bomber like Henry Kissinger or a jumped up gangster like Yasser Arafat.

© Copyright 2006 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Fedora Linux.

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